Core Viewpoint - Fujilai (301258) held an online performance briefing on August 25, 2025, discussing its financial performance, business plans, and R&D investments with 28 participating institutions [1][2]. Performance and Business Planning - The company reported a significant increase in net profit for the first half of the year, turning a profit, although non-recurring gains and losses had a substantial impact [3]. - Key traditional businesses, including alpha-lipoic acid, carnosine, and phosphatidylcholine, will be consolidated and optimized to enhance profitability [3]. - R&D expenses decreased, prompting the company to optimize resource allocation and focus on high-quality projects while ensuring technological innovation and product competitiveness [3]. - The company plans to optimize core product processes and expand applications to mitigate concentration risks associated with high sales revenue from alpha-lipoic acid products [3]. - The "Fujilai (Shandong) Specialty API and Intermediate CMO/CDMO Construction Project" is expected to be completed by the end of June 2026, supporting R&D results transformation and industrialization [3]. - In response to declining prices and weak demand for alpha-lipoic acid products, the company will closely monitor market dynamics and adjust sales strategies accordingly [3]. - For the first half of 2025, the company reported operating revenue of 223.91 million yuan, a year-on-year increase of 3.36%, driven by a rebound in R-alpha-lipoic acid sales and continued growth in the API Eribulin [3]. - The net profit reached 43.08 million yuan, benefiting from cost reduction and efficiency improvements in core operations and capital allocation [3]. - The company has strengthened accounts receivable management through credit assessments and tracking, resulting in a significant decrease in accounts receivable balance [3]. - Inventory management has been optimized based on market demand, leading to a reduction in inventory scale and lower inventory impairment provisions [3]. - The company aims to enhance competitiveness and profit margins for alpha-lipoic acid products through process optimization and innovation [3]. - The commercialization of Eribulin is progressing steadily, with ongoing process innovations and potential for new indications to drive sales growth [3]. - R&D expenses decreased due to reduced spending on the alpha-lipoic acid tablet project and fewer pilot projects compared to the previous year [3]. - The company currently does not consider investing in innovative drugs in the primary market due to the scarcity of quality projects and high valuations [3]. - Alpha-lipoic acid has been used as a dietary supplement in the U.S. for over 30 years and is included in the Class B medical insurance directory in China, indicating low substitution risk [3].

Group 1: Financial Performance - In the first half of 2025, the company achieved a revenue of 223.91 million yuan, a year-on-year increase of 3.36% driven mainly by the rebound in sales of R-lipoic acid and continuous growth in the raw material drug, Eriocoxib [5] - The net profit attributable to shareholders was 43.08 million yuan, marking a turnaround from loss to profit, primarily due to cost reduction and efficiency improvements in core business operations [5] - The company's accounts receivable at the end of the period showed a significant decrease compared to the beginning of the year, indicating effective measures in receivables management [5] Group 2: Business Strategy and Development - The company plans to enhance its core traditional businesses, focusing on lipoic acid, carnosine, and phosphatidylcholine, while optimizing production processes and expanding application fields [3][4] - A new project, "Fujilai (Shandong) Specialty Raw Materials and Intermediates CMO/CDMO Construction Project," is expected to be completed by June 2026, which will support the transformation of R&D results and expand the product pipeline [4] - The company aims to mitigate product concentration risks by diversifying its product structure and focusing on high-potential products in the raw materials and intermediates market [4] Group 3: Research and Development - R&D expenses decreased in the first half of 2025 due to the completion of high-cost commissioned research projects and optimization of resource allocation [6] - The company is committed to balancing cost control with R&D investment to ensure future product innovation and market competitiveness [3][6] - Eriocoxib's sales volume increased by over 50% year-on-year, and the company is actively working on expanding its production and market reach [6] Group 4: Market Dynamics and Challenges - The company is closely monitoring market dynamics and customer demand for lipoic acid products, adjusting sales strategies accordingly to address price declines and weak demand [4][5] - There are concerns regarding the potential substitution risk for lipoic acid; however, the company believes the risk is low due to its established presence in the market and inclusion in medical insurance [6]