Core Viewpoint - Baiyang Pharmaceutical (301015.SZ) is experiencing a significant decline in financial performance, with a 6% drop in revenue and a 55.8% decrease in net profit for the first half of 2025, raising concerns about its growth sustainability and financial health [2][4]. Financial Performance - For the first half of 2025, Baiyang Pharmaceutical reported revenue of 3.75 billion yuan, down 6% year-on-year, and a net profit of 163 million yuan, down 55.8% year-on-year [2]. - The company plans to distribute a cash dividend of 7.62 yuan per 10 shares, totaling 400 million yuan, despite the declining profits [2]. Debt Situation - As of June 30, 2025, the company's debt-to-asset ratio reached 65.88%, significantly higher than its peers, indicating substantial repayment pressure [4]. - Baiyang Pharmaceutical's interest-bearing debt has surged, with short-term loans increasing to 1.797 billion yuan and long-term loans reaching 495 million yuan [4]. Acquisition Concerns - The company made a high-premium acquisition of 60.2% of Baiyang Pharmaceutical for 880 million yuan, raising regulatory scrutiny regarding the necessity and valuation of the deal [5]. - The Shenzhen Stock Exchange has issued a letter of concern regarding the acquisition, questioning the rationale and potential for profit transfer [5]. Product Performance - The sales of the "Dijiao" calcium series products fell by 14.22% to 905 million yuan in the first half of 2025, indicating a slowdown in growth momentum [7]. - The "Hailu" artificial tear product, once a popular item, saw its sales growth decelerate, with revenue of 376 million yuan in the first half of 2025, a 14.86% increase, down from previous years' growth rates [7]. Cost Management - Despite declining revenues, sales expenses have risen sharply, with 1.517 billion yuan and 807 million yuan in sales expenses for 2024 and the first half of 2025, respectively, reflecting a 15.4% and 22.94% increase [8]. - The company's growth challenges highlight the broader issues faced by the pharmaceutical CSO model in a competitive market environment [8].