Company and Industry Summary Company Overview - The company operates in the pharmaceutical industry, focusing on various segments including prescription drugs and health consumer products. The overall market is experiencing pressure, with a decline in hospital markets and a shift towards online sales growth [1][2]. Key Financial Performance - In 2024, the company reported a revenue of 4.435 billion yuan, a decrease of 2.59% year-on-year. However, net profit increased by 9.67% to 788 million yuan [2]. - The weighted average return on equity was 19.58%, up by 1.9 percentage points year-on-year, indicating improved profitability [2]. - Research and development (R&D) investment intensity reached 10.82%, an increase of 0.53 percentage points year-on-year, reflecting a commitment to innovation [2]. Industry Dynamics - The pharmaceutical industry is facing overall pressure with localized breakdowns. The consumer market is growing cautiously, while the hospital market is expected to decline [1]. - The online market is maintaining rapid growth, presenting both opportunities and challenges for the company [1]. Product Performance - The pharmaceutical industrial revenue decreased by 2.79%, but the gross margin remained stable. Key products in the gastrointestinal and respiratory categories contributed over 60% of total revenue [2]. - The company’s health consumer products segment is undergoing restructuring, with a focus on high-end and functional products. However, this segment has seen a decline in revenue due to increased competition [6]. Cost Management - Sales expenses decreased by approximately 8.89% to 1.495 billion yuan, with a sales expense ratio of 33.7% [3]. - Management expenses remained stable at 229 million yuan, with a management expense ratio of 5.16% [3]. Strategic Initiatives - The company is enhancing R&D capabilities, with a 9.31% increase in R&D investment and a focus on building strategic partnerships with research institutions [8]. - A digital transformation strategy is being implemented to improve operational efficiency and enhance marketing capabilities [10]. - The company is committed to sustainable practices, aiming for carbon neutrality and increasing the use of green energy [9]. Future Outlook - For 2025, the company aims to achieve double-digit growth in both revenue and profit, focusing on strengthening core competitiveness and optimizing business operations [11]. - The company plans to accelerate investment and acquisition opportunities to enhance external growth capabilities [11]. Additional Insights - The company maintains a robust dividend policy, with a cumulative cash dividend payout exceeding 60% since its listing [3]. - The health consumer products segment is adopting a strategic model to enhance brand positioning and operational capabilities [6]. This summary encapsulates the key points from the conference call, highlighting the company's financial performance, industry challenges, strategic initiatives, and future outlook.

Core Insights - Jiangzhong Pharmaceutical achieved a revenue of 4.435 billion yuan in 2024, a year-on-year decrease of 2.59%, while the net profit attributable to shareholders was 788 million yuan, an increase of 9.67% [1] - The OTC segment showed strong demand with a revenue of 3.266 billion yuan, reflecting a year-on-year growth of 7.07% [1] OTC Segment Performance - Key products in the gastrointestinal field, such as the core product "Gastrointestinal Digestive Tablets," saw a double-digit revenue growth, with sales reaching 169 million boxes, up by 10.91% year-on-year [1] - In the throat and cough segment, core products like "Compound Fresh Bamboo Liquid" and "Compound Grass Coral Tablets" contributed to double-digit growth, with sales of "Compound Grass Coral Tablets" reaching 37 million boxes, up by 4.05% year-on-year [1] - The nutritional supplement segment saw a revenue of over 200 million yuan, with sales of "Multivitamin Tablets" at 12 million boxes, down by 10.30% year-on-year [1] Health Business and Prescription Drug Segment - The health segment reported a revenue of 345 million yuan, a significant year-on-year decline of 47.30%, attributed to intensified industry competition and restructuring efforts [2] - The prescription drug segment generated a revenue of 793 million yuan, down by 3.50% year-on-year, with the decline narrowing due to the consolidation of traditional Chinese medicine pieces [2] Profitability and Cost Management - The company's gross margin was 63.52%, a decrease of 0.51 percentage points year-on-year, with the OTC segment having the highest gross margin at 72.74% [3] - The sales expense ratio improved to 33.70%, down by 2.33 percentage points year-on-year, while the net profit margin increased to 17.77%, up by 1.99 percentage points year-on-year [3] Dividend Policy and Future Outlook - The company announced a cash dividend of 7 yuan per 10 shares, resulting in a cash dividend ratio of 55.86%, with an overall annual dividend ratio reaching 95.77% [3] - The company aims for double-digit growth in revenue and profit by 2025, supported by a dual-driven strategy of "internal growth + external expansion" [3][4]

Investment Rating - The investment rating for Jiangzhong Pharmaceutical (600750.SH) is "Buy" (maintained) [1] Core Views - The company is expected to achieve steady revenue and profit growth in 2024, with a projected revenue of 4.435 billion yuan (down 2.59% year-on-year) and a net profit of 788 million yuan (up 9.67% year-on-year) [4] - The report highlights the company's strong brand advantages in the gastrointestinal and intestinal medication sectors, which are expected to drive long-term growth potential [4] - The earnings forecast for 2025-2027 has been maintained, with net profits projected at 891 million yuan, 1.008 billion yuan, and 1.131 billion yuan respectively [4] Financial Performance Summary - In 2024, the company achieved a gross margin of 63.52% (down 1.79 percentage points) and a net margin of 19.40% (up 1.94 percentage points) [4] - The sales expense ratio decreased to 33.70% (down 3.38 percentage points), while the management expense ratio increased to 5.16% (up 0.37 percentage points) [4] - The company’s non-prescription drug business generated revenue of 3.266 billion yuan (up 7.07%) with a gross margin of 72.74% (up 1.04 percentage points) [5] - The prescription drug segment reported revenue of 793 million yuan (down 3.50%) with a gross margin of 39.30% (down 17.54 percentage points) [5] Business Segment Insights - The non-prescription drug segment continues to show robust growth, particularly in core products like Jianwei Xiaoshi Pian, which achieved double-digit growth [6] - The company is optimizing its brand positioning in health consumer products and focusing on self-developed products to drive future growth [6] - The prescription drug segment is targeting specific demographics and therapeutic areas, including elderly care, women's health, and gastrointestinal treatments [6] Financial Projections - Revenue is projected to increase to 4.820 billion yuan in 2025, with a year-on-year growth of 8.7% [8] - The earnings per share (EPS) is expected to rise from 1.25 yuan in 2024 to 1.42 yuan in 2025, and further to 1.80 yuan by 2027 [8] - The price-to-earnings (P/E) ratio is projected to decrease from 17.5 in 2024 to 12.2 by 2027 [8]