Core Viewpoint - Longjin Pharmaceutical has received a delisting notice from the Shenzhen Stock Exchange due to continuous financial losses and insufficient revenue, marking a significant decline in its operational performance over the years [1][2]. Company Overview - Longjin Pharmaceutical was established in 1991, initially focusing on the development of injectable drugs, particularly the injection of Ligusticum wallichii, which became its flagship product [3]. - The company has a long history of clinical use for Ligusticum wallichii, with over 11,000 related research papers published [3]. Financial Performance - The company reported a negative net profit for the fiscal year 2023, with operating revenue falling below 1 billion yuan, leading to a delisting risk warning [2]. - Longjin Pharmaceutical's annual revenue has fluctuated between 100 million to 300 million yuan, with a peak of 700 million yuan in 2021, but adjusted revenue was only around 200 million yuan [7]. - The net profit has shown a downward trend, with the adjusted net profit turning negative for the first time in 2019 and remaining negative for six consecutive years until 2024 [7][8]. Business Challenges - The company attributes its poor performance to policy impacts on its main product, including restrictions on medical insurance coverage and centralized procurement policies [9]. - Longjin Pharmaceutical has struggled to diversify its product line beyond its flagship product, despite efforts in research and external investments [9]. - The company has attempted to pivot towards pharmaceutical promotion services and personal care products, but these ventures have not yet turned profitable and face high operational costs [9].

Core Viewpoint - The safety concerns surrounding traditional Chinese medicine (TCM) injection solutions, particularly the case of a patient who died after receiving a Schisandra injection, have reignited discussions about the risks associated with these products and the need for improved regulatory oversight [1][3][11]. Industry Overview - The market for TCM injection solutions has seen a significant decline, with total market size dropping from 831.3 billion in 2015 to 479.8 billion in 2023, a nearly 50% reduction [7]. - Major companies in the sector, such as ST Longjin and Dali Pharmaceutical, have faced severe financial difficulties, with ST Longjin's revenue declining by 36.19% to 0.48 billion in 2024 [8][9]. - Despite the challenges, some companies remain optimistic about the potential for TCM injections, with predictions that products like Kanyuan Pharmaceutical's Hot Toxic Ning injection could benefit from increased insurance coverage and expanded indications [5]. Regulatory Environment - The National Medical Products Administration (NMPA) has been actively revising the instructions for TCM injections, adding warnings about severe allergic reactions and requiring monitoring after administration [11][12]. - Recent changes in the 2023 medical insurance drug directory have relaxed some payment restrictions on TCM injections, allowing for broader use in clinical settings [13][14]. - However, the existing risk management system still has shortcomings, such as delayed implementation of revised instructions and insufficient training for medical staff on proper medication use [12]. Safety Concerns - Reports indicate that adverse reactions to TCM injections, particularly allergic reactions, are common, especially among older patients [3][6]. - The complexity of TCM injection formulations and the potential for contamination during production contribute to safety risks [6][10]. - The industry faces ongoing scrutiny regarding the quality control of TCM injections, with calls for stricter regulations and better monitoring of adverse reactions [10][15]. Future Outlook - The TCM injection industry must navigate its way out of the current downturn by focusing on product upgrades, regulatory compliance, and enhancing safety monitoring systems [10][16]. - Companies are encouraged to adopt modern scientific methods to assess the safety of TCM injections and to implement stricter quality control measures [16].

Core Viewpoint - ST Longjin is facing delisting due to a net profit loss in the recently disclosed 2024 annual report and revenue falling below 300 million, triggering delisting conditions [2][14]. Company Overview - Longjin Pharmaceutical was established in September 1996, focusing on the research, production, and sales of modern traditional Chinese medicine and high-end chemical generics [2]. - The company’s representative products include injection of Ligusticum Chuanxiong, injection of fibrinolytic enzyme, and injection of Bivalirudin, with Ligusticum Chuanxiong being the core product [2]. Stock Performance - Longjin Pharmaceutical was listed in 2015 during a bull market, with its stock price peaking at 135 yuan before experiencing a significant decline, dropping to around 6 yuan within two years [2]. - In 2019, the company invested 15 million yuan to acquire a 51% stake in Yunnan Muya Agricultural Technology Co., which focuses on large-scale industrial hemp cultivation, leading to a stock price surge from 5 yuan to 23.5 yuan in two months [4]. - The stock was heavily speculated upon due to the industrial hemp concept, achieving multiple trading halts in 2021, earning the title of the "first industrial hemp stock" [4]. Financial Performance - From 2021 to 2024, Longjin Pharmaceutical's revenue showed a drastic decline: 702.5 million, 123 million, 86.62 million, and 66.48 million respectively, with net profits of 3.093 million, -56.12 million, -70.94 million, and -41.44 million, indicating three consecutive years of losses [7]. - The company was placed under delisting risk warning by the Shenzhen Stock Exchange in the previous year due to a negative net profit and revenue below 100 million [8]. Recent Developments - Following the delisting risk warning, Longjin Pharmaceutical's stock faced a series of trading halts, with the price plummeting to around 1 yuan after multiple trading suspensions [9][11]. - Currently, there are nearly 30,000 shareholders, many of whom are stuck with high-priced shares and reluctant to sell [14]. Industry Context - The number of listed companies in A-shares has exceeded 5,000, with an increasing number of delistings each year, highlighting the importance of avoiding poorly performing stocks [16].

Core Viewpoint - The newly revised financial delisting indicators have effectively identified a number of main board companies with net profit losses and revenue below 300 million yuan, highlighting their weak operational sustainability and leading to delisting risk warnings for some companies [1][4]. Group 1: Financial Delisting Indicators - A total of 48 main board companies have triggered the new financial delisting indicators as of April 29, with industries such as social services, machinery, and textiles being the most affected [1]. - The new rules have raised the revenue threshold for delisting from 100 million yuan to 300 million yuan, directly impacting companies like Aiai Precision Engineering, which has struggled with revenue below the new threshold [2][4]. Group 2: Company Performance and Risks - Aiai Precision Engineering has reported continuous revenue below 300 million yuan since its listing in 2017, with a net profit loss of 8.8461 million yuan in 2024 due to poor operational performance and asset impairment [2]. - Other companies such as Weitai, Xingguang Co., and Sitong Co. have also faced delisting warnings due to similar financial issues, indicating a broader trend among underperforming firms [2][4]. Group 3: Regulatory Impact - The new delisting regulations are expected to accelerate the elimination of "shell" companies, thereby improving the overall quality of listed companies on the main board [1][4]. - Companies like *ST Longjin have been warned of delisting due to continuous losses and revenue below 100 million yuan, reflecting the stringent enforcement of the new rules [4]. Group 4: Broader Market Implications - The tightening of delisting criteria is seen as a mechanism to redirect capital towards more stable and profitable companies, enhancing the overall market quality [5][6]. - The regulatory framework aims to create a balanced and orderly exit for underperforming companies, facilitating a shift of resources towards high-quality enterprises [5][6].

Operating Overview - The total operating revenue of ST Longjin (002750) for 2024 was 66.48 million yuan, a year-on-year decrease of 23.25% [2] - The net profit attributable to shareholders was -41.44 million yuan, an increase of 41.58% year-on-year; the net profit after deducting non-recurring gains and losses was -50.46 million yuan, up 37.78% year-on-year [2] - Despite poor annual performance, the fourth quarter showed improvement with total operating revenue of 19.87 million yuan, a year-on-year increase of 27.65% [2] Profitability Analysis - The company's profitability improved in 2024, with a gross margin of 64.25%, an increase of 5.53% year-on-year [3] - The net profit margin was -70.66%, an increase of 27.36% year-on-year, indicating that the company remains in a loss position [3] Cost and Expense Analysis - Total sales, management, and financial expenses amounted to 66.58 million yuan, accounting for 100.15% of revenue, a decrease of 7.73% year-on-year [4] - The reduction in sales expenses was primarily due to the implementation of centralized procurement price linkage policies in non-centralized procurement provinces [4] Cash Flow Situation - The operating cash flow per share was -0.09 yuan, an increase of 12.8% year-on-year, indicating some improvement [5] - However, the average operating cash flow over the past three years relative to current liabilities was -78.8%, suggesting ongoing concerns regarding cash flow [5] Asset and Liability Situation - The company's cash and cash equivalents amounted to 262 million yuan, a year-on-year increase of 24.2%, indicating a healthy cash position [6] - Accounts receivable decreased by 27.86% year-on-year to 8.75 million yuan, reflecting improved collection [6] Development Prospects and Risks - The company has been deeply involved in the pharmaceutical manufacturing industry for many years, holding nearly 40 domestic and foreign invention patents [7] - However, the product structure remains single, with revenues from other chemical generic drugs being relatively small [7] - The company faces multiple risks, including industry policy changes, research and development innovation, management, and safety and environmental protection [7] Summary - Overall, ST Longjin showed some recovery in profitability in 2024, but the overall operating condition remains under significant pressure [8] - The company needs to further optimize its product structure, enhance market competitiveness, and strengthen cash flow management and risk prevention for sustainable development [8]

Core Viewpoint - *ST Longjin is facing the risk of delisting due to continuous financial losses and regulatory challenges in the traditional Chinese medicine injection market, particularly affecting its main product, the injection of lamp flower extract, which previously accounted for over 90% of its revenue [1][4][11]. Company Overview - Longjin Pharmaceutical was established in September 1996 and listed on the Shenzhen Stock Exchange in 2015, focusing on the development, research, production, and sales of therapeutic drugs for cardiovascular and metabolic diseases, with its leading product being the injection of lamp flower extract [3][4]. - The company was the first in China to produce and list the injection of lamp flower extract, achieving sales of 34.52 million bottles in 2013. However, since 2018, the company's profitability has sharply declined, with continuous losses from 2019 to the present [3][5]. Financial Performance - The 2024 performance forecast indicates that Longjin Pharmaceutical expects a net profit loss of between 29.82 million yuan and 44.38 million yuan, with a non-deductible net profit loss ranging from 38.00 million yuan to 56.56 million yuan. This is attributed to a 67% price drop of the lamp flower extract due to centralized procurement policies [4][5]. - From 2019 to 2023, the company's net profit has been negative for five consecutive years, with losses of 39.89 million yuan, 2.53 million yuan, 1.03 million yuan, 57.34 million yuan, and 81.10 million yuan respectively [5]. Market Challenges - The injection of lamp flower extract has seen a significant decline in sales, dropping from 2.858 million bottles in 2017 to 1.278 million bottles in 2021, largely due to stricter regulations and limitations on its use in medical insurance [7][8]. - The traditional Chinese medicine injection industry is experiencing a downturn, with the market size for hospital use of traditional Chinese medicine injections plummeting over 50% from 2016 to 2022, from 88.06 billion yuan to 40.61 billion yuan [11]. Regulatory Environment - The regulatory landscape has tightened, with the National Medical Insurance Directory limiting the reimbursement and usage of traditional Chinese medicine injections, particularly affecting the lamp flower extract [8][11]. - The company has faced challenges such as safety re-evaluation pressures, market competition, and public trust issues due to adverse reactions associated with traditional Chinese medicine injections [13][14]. Strategic Adjustments - Experts suggest that traditional Chinese medicine companies should enhance product quality through re-evaluation, strengthen clinical research, and optimize product structures to adapt to market demands and regulatory changes [15][16]. - Longjin Pharmaceutical has attempted to diversify its product offerings and increase research and development investments, but has yet to find new growth points [9][16].