Group 1: Company Overview - Recently, a well-known private equity firm, Xiangju Capital, conducted research on a listed company, Shanhe Pharmaceutical Auxiliary [1] - Shanhe Pharmaceutical Auxiliary expects a 22% growth in sales revenue for cellulose products in 2024, with a slight decline in overall prices [1] - The company anticipates stable prices in 2025 and strong demand for its products [1] Group 2: Financial Performance - Last year's gross margin slightly decreased, but there is potential for improvement this year [1] - The capacity utilization rate for four main products in the fundraising projects is between 60% and 70% [1] - The company expects significant growth in the sales of hard fumaric acid sodium in 2024, with over 100 domestic customers already using the product [1] Group 3: Market Dynamics - The auxiliary materials industry has vast potential, with many categories and significant room for import substitution, accelerated by the China-US trade war [1] - The new drug production quality management regulations will be implemented on January 1, 2026, which is expected to accelerate industry consolidation, benefiting leading companies [1] - The demand for plant capsules is strong, with good order prospects in the next six months, and there is potential for domestic gelatin capsules to be replaced [1] Group 4: International Business - The increase in tariffs by the US has not yet affected exports, as the export volume to the US is relatively small, and some products fall within the tariff exemption range [1] - Overseas business is expected to maintain rapid growth, although the gross margin is slightly lower due to fewer differentiated products being sold abroad [1]

Group 1: Financial Performance - The sales revenue of cellulose products in 2024 reached 474 million CNY, representing a year-on-year growth of 22% [2] - The overall gross margin slightly decreased last year, but the decline was minimal, influenced by market structure adjustments [2] - The utilization rate of new production capacity for four main products is currently between 60%-70% [2] Group 2: Market Demand and Trends - The demand for hydroxypropyl methylcellulose is currently strong, with no signs of decline, particularly in the plant capsule and pharmaceutical adhesive markets [5][6] - The market for excipients is broad, with over 1,000 types used internationally and around 500 types in China, while the company currently produces only over 40 types [3] - The import substitution space remains significant, accelerated by the US-China trade war [3] Group 3: Regulatory Impact - The new drug production quality management standards will be implemented on January 1, 2026, which includes the management of pharmaceutical excipients [4] - The company has conducted a comprehensive self-inspection to meet the new management requirements [4] Group 4: International Business and Export - The company expects to maintain high growth in overseas markets, with plans to expand the overseas management and sales team in 2025 [8] - The export volume to the US is relatively small, not exceeding 10 million CNY, and is currently unaffected by increased tariffs [7] - The gross margin for overseas sales is slightly lower due to fewer product categories compared to domestic offerings [8]