Summary of the Conference Call for Minsheng Health Company Overview - Minsheng Health focuses on the OTC (Over-the-Counter) health product market, with its core product being 21 Jinweita, which is expected to maintain mid-to-high single-digit growth [2][4] - The company has a significant market share in the OTC vitamin and mineral product sector, with a sales volume market share of approximately 36%, second only to Shancun [5][13] Financial Performance and Projections - For 2024, Minsheng Health's total revenue is projected to be around 6.41 billion yuan, with 21 Jinweita accounting for 69% of this revenue, approximately 4.42 billion yuan [3][6] - Revenue growth is expected to be between 24% and 25% in 2025, reaching around 8 billion yuan, with profit growth of about 16%, exceeding 1 billion yuan [6][24] - By 2026, revenue growth is anticipated to be around 30%, with profits nearing 1.4 billion yuan [6][24] Market Dynamics - The Chinese OTC vitamin and mineral product market is projected to grow from 160.6 billion yuan in 2016 to 283.4 billion yuan by 2024, with a CAGR of approximately 12% [10] - The overall OTC market in China is expected to grow from 128.9 billion yuan in 2010 to 221.4 billion yuan in 2024, with a CAGR of about 7%, significantly outpacing global growth [7] Product Development and New Launches - The company is expanding its product matrix with new offerings, including B vitamins and calcium tablets, which are expected to contribute to a 10% annual growth in the vitamin and mineral segment [4][18] - Minsheng Health has acquired Zhongke Jiayi, a domestic probiotic raw material manufacturer, which is expected to contribute 70-80 million yuan in revenue in 2025 [2][8][19] - The company is also developing therapeutic drugs, including Minoxidil for hair loss and Varenicline for smoking cessation, with the latter projected to generate around 1 billion yuan in revenue [8][20][21] Competitive Landscape - The OTC vitamin and mineral market is characterized by a few dominant players, with Shancun holding a market share of about 48% and Minsheng Health around 25% based on sales [13] - The current regulatory environment has paused the approval of new OTC vitamin and mineral product licenses, giving Minsheng Health a competitive edge with its existing licenses [5][13] Sales Channel Trends - The online sales channel for OTC products has increased from 4.61% in 2017 to an expected 30.45% by 2024, although offline channels remain dominant at approximately 60.55% [12] - The ability to use health insurance for OTC vitamin and mineral products provides a natural advantage for offline sales channels [12] Future Growth Drivers - Key growth drivers include the aging population in China, which is expected to increase the demand for health products, and the rising health awareness among consumers [10][11] - The company aims to leverage its unique OTC licenses and product offerings to maintain stable growth in the long term [16] Valuation Considerations - Given the scarcity of OTC licenses and the significant revenue contribution from this segment, Minsheng Health is expected to command a valuation premium compared to peers in the health product sector [25]

Core Viewpoint - The company aims to diversify its revenue sources by reducing reliance on its flagship product "21 Jinweita" and achieving a balanced revenue distribution with other products within two years [1][2][4]. Product Focus - "21 Jinweita" has historically contributed up to 99.99% of the company's revenue, but the current ratio is approximately 64:36 in favor of "21 Jinweita" [2][3]. - The company is launching new products, such as "21 Jinweita Peach Blossom Bottle," specifically targeting adult women, and has successfully integrated advertising with popular dramas to enhance brand visibility [2][3]. Sales Channels - The company has shifted from a traditional offline sales model to a more balanced approach, with online sales expected to account for 40% of total sales by the end of the year [3]. - In the first half of 2025, the company reported revenue of 462 million yuan, a year-on-year increase of 16.37%, with net profit reaching 82.41 million yuan, up 6.65% [3]. New Growth Strategies - The company is addressing its over-reliance on "21 Jinweita" by implementing a four-pronged strategy focusing on new products, new business models, and new projects [4]. - The company is expanding into the smoking cessation market with the upcoming launch of "Lesuke," a varenicline product, which aims to provide a comprehensive smoking cessation solution [4][5]. Market Potential - The varenicline market in China is still underdeveloped, with only four companies holding relevant approvals, indicating significant growth potential [5]. - The company has partnered with experts to establish a gold standard for smoking cessation, positioning "Lesuke" as a first-line treatment [5]. Mergers and Acquisitions - The company has acquired Minsheng Zhongke Jiayi (Shandong) Bioengineering Co., enhancing its capabilities in the probiotic sector and establishing a full industry chain from raw materials to finished products [6]. - The probiotic market in China is projected to grow significantly, with a market size expected to approach 200 billion yuan by 2028 [6]. Probiotic Strategy - The company is focusing on a multi-engine strategy in the probiotic sector, promoting key strains for various health benefits [7]. - The company plans to develop a range of functional probiotic solutions tailored to the needs of the Chinese population [7]. International Expansion - The company aims to integrate into overseas markets rather than merely exporting products, with a focus on long-term strategic growth [8]. - The subsidiary has adopted a combination of direct sales and distribution to expand its probiotic business internationally, with products already reaching markets in the US, Canada, and Singapore [8].

Core Insights - The company held a two-year anniversary celebration and new product launch on September 4, 2025, highlighting its probiotic, smoking cessation, and medical beauty businesses, with a focus on differentiated product offerings and market expansion [1] Probiotic Business - The probiotic business is driven by multiple engines and aims to expand into overseas markets, focusing on three main areas: raw materials, ODM/OEM manufacturing, and proprietary brands [1] - In the raw materials segment, the company promotes five key strains targeting weight management, fatigue relief, constipation, and mental health, with a proprietary "Yanhuang Strain Library" containing over 6,500 valuable native strains from diverse ecological regions in China [1] - The ODM/OEM segment offers a comprehensive one-stop solution for probiotic products, leveraging over 20 years of industry experience and a robust innovation platform [1] - The proprietary brand segment targets direct-to-consumer sales, with products like Puribao, Purifiber, and Purichangbao, focusing on functional probiotic solutions tailored to Chinese consumers [1] Smoking Cessation Market - The upcoming smoking cessation product "Lesuke" (Varenicline Tartrate) is noted for its scarcity and differentiation in the market, with only four companies holding the necessary approvals in China [2] - The product effectively reduces smoking cravings without nicotine and stimulates dopamine release to alleviate withdrawal symptoms [2] - A comprehensive service system will be established, providing support from assessment to ongoing assistance in smoking cessation [2] - The product is backed by authoritative endorsements and aims to standardize the industry, being recognized as a first-line medication in the "Chinese Clinical Smoking Cessation Expert Consensus Gold Standard" [2] - Unique product design focuses on the "smoking control" market, avoiding homogenization with competitors [2] Medical Beauty Products - The medical beauty product "Jisuran" utilizes patented yeast peptide ingredients and medical-grade sodium hyaluronate, supported by research [3] - The product aims to leverage pharmacy traffic challenges by exploring new integration paths between medical beauty and pharmacies [3] Financial Projections - The company anticipates revenue growth from 792 million to 1.16 billion yuan from 2025 to 2027, with year-on-year growth rates of 24%, 22%, and 20% respectively [3] - Expected net profit for the same period is projected to grow from 106 million to 151 million yuan, with growth rates of 15%, 18%, and 21% respectively [3] - The company maintains a "recommended" rating based on the competitive strength of its probiotic business, the scarcity of smoking cessation drug approvals, and the differentiated approach in medical beauty products [3]

Group 1: Company Overview and Performance - The company achieved a revenue of 2,025 million yuan in the first half of 2025, representing a year-on-year growth of 4.62% [2] - Net profit reached 82.41 million yuan, with a year-on-year increase of 6.65% [3] - The adjusted net profit (扣非净利润) was 79.33 million yuan, showing a growth of 6.40% [3] Group 2: New Product Introductions - The medical beauty product "肌素然" focuses on skin repair and anti-aging, utilizing peptides as a core component [3] - The smoking cessation product "乐速克" offers a comprehensive solution for smoking control, aiming to help smokers manage their cravings scientifically [3] - The probiotics business leverages over 20 years of local strain research experience, showcasing strong R&D capabilities and product innovation [3] Group 3: Strategic Initiatives and Market Expansion - The company has made significant moves in extending its industrial chain through the acquisition of 民生中科 (Shandong) and exploring overseas markets [4] - The strategy emphasizes maintaining focus on major products while pursuing synergies through acquisitions [4] - The overseas market is viewed as having substantial potential, with plans to integrate into local markets rather than merely engaging in trade [4] Group 4: Competitive Advantages and Market Position - "肌素然" differentiates itself with patented ingredients and innovative membrane materials, targeting the medical beauty market [4] - The smoking cessation product "乐速克" is recognized as a first-line medication in clinical guidelines, with a unique full-cycle service model [5] - The probiotics segment is driven by a multi-engine strategy, focusing on raw materials, ODM/OEM, and proprietary brands [6] Group 5: Research and Development Capabilities - The "炎黄菌株库" (Yanhua Strain Library) is a proprietary resource established to support the development of probiotics tailored to the Chinese population [7] - The library has been built over several years, with a focus on local strains and their health benefits, ensuring a strong foundation for future innovations [7]

Financial Performance - The company achieved a revenue of 641 million yuan in 2024, representing a year-on-year growth of 10.23% [11][19] - The net profit attributable to shareholders was 91.83 million yuan, with a growth of 7.24% compared to the previous year [11][19] - In Q1 2025, the revenue was 271 million yuan, showing a growth of 15.70%, while the net profit was 62.71 million yuan, increasing by 6.51% [11] Market Challenges - The company's market value and stock price have decreased significantly, with a drop of two-thirds since the IPO [2][4] - Despite overall market growth, the company's stock has either declined or remained stagnant, raising concerns about its market management [4][12] Investment and R&D Strategy - The company emphasizes the importance of R&D, planning to enhance its innovation capabilities and product matrix [3][35] - In 2024, the company focused R&D investments on developing complex nutritional supplements and OTC drugs [15] - The company plans to expand into new areas such as sleep health and sports nutrition [16] Shareholder Engagement and Value Management - The company has implemented a share buyback plan to enhance investor confidence and maintain market value [19][20] - Cash dividends have consistently exceeded 30% of net profit since the IPO, reflecting a commitment to shareholder returns [19][20] - The company actively participates in investor relations activities to improve market recognition and trust [5][19] Product and Market Expansion - The company is focused on the health sector, with a product matrix that includes vitamins, OTC drugs, and probiotics [12][24] - Plans are in place to enter the medical beauty market with a new brand, "肌素然" [9] - The company is exploring international markets and has established an international business department to facilitate this expansion [17][19] Competitive Positioning - The company maintains a strong competitive edge through a diverse product range and a robust marketing network [22][24] - It aims to enhance its market share by leveraging strategic partnerships and acquisitions, particularly in the probiotic sector [19][20]

Core Insights - Minsheng Health reported a revenue of 641 million yuan for 2024, marking a year-on-year growth of 10.23%, with a net profit of 91.83 million yuan, up 7.24% [1] - The company continues to show strong growth in Q1 2025, achieving a revenue of 271 million yuan, a 15.70% increase year-on-year [1] - The brand "21 Jin Weita" has solidified its position as a leading name in the mineral and vitamin sector, with product revenue surpassing 600 million yuan for the first time in 2024 [1][4] Financial Performance - For 2024, the company achieved a net cash flow from operating activities of 108 million yuan [1] - The first quarter of 2025 saw a net profit of 62.71 million yuan, reflecting a 6.51% increase compared to the same period last year [1] Research and Development - In 2024, the company invested 23.98 million yuan in R&D, accounting for 3.74% of its revenue [2] - The company and its subsidiaries obtained 1 new drug approval, 3 invention patents, and 4 utility model patents during the reporting period [2][5] Market Strategy - Minsheng Health is expanding its product matrix in the health sector, focusing on treatment OTC drugs and probiotics, in line with the "New Products, New Business, New Models, New Projects" strategy [3] - The company aims to enhance its core competitiveness in the health sector by exploring new areas such as gastrointestinal health, medical aesthetics, and smoking cessation [2][3] Brand Development - The brand "21 Jin Weita" has gained recognition, ranking among the top three brands in the Chinese market for multivitamins in 2024 [4] - The company is reviving the "Minsheng Tongchun" brand, which dates back to 1926, to cater to modern health needs [4] Industry Trends - The health product market in China is expected to grow significantly, with current consumption levels of dietary supplements being only one-fifth of those in developed countries [3] - The probiotics market is projected to grow at an annual rate of 11-12%, potentially reaching a market size of 137.7 billion yuan by 2026 [7] Strategic Partnerships - Minsheng Health signed a strategic cooperation agreement with Zhongke Jiayi to enhance its capabilities in the probiotics sector [7][8] - The partnership aims to develop a comprehensive probiotics platform, enhancing the company's market position and technical capabilities [8] Product Innovation - The company launched a new product "Jisuran" targeting the skin repair market, utilizing peptide technology [9] - A new liquid formulation of aluminum magnesium carbonate has been developed to meet the needs of younger consumers [9][10] Future Outlook - The company anticipates that the introduction of new products and business lines will lead to substantial growth in its operations [11]