Core Viewpoint - The company reported a revenue of 2.157 billion yuan for the first half of 2025, which aligns with market expectations despite slight fluctuations compared to the previous year, indicating a solid foundation for long-term growth through structural optimization and innovation breakthroughs in its core business [1] Group 1: Business Strategy - The company is restructuring the industry value chain through a three-dimensional strategy of "upstream product control, midstream empowerment, and downstream terminal capture" leveraging over 20 years of experience in the outpatient market [2] - The company is building a moat around scarce resources by utilizing the MAH model, exclusive agency for ethnic and traditional Chinese medicines, and investments in medical devices, thereby securing pricing power for core products [3] Group 2: Digital Transformation - The establishment of a wholly-owned subsidiary, Shutan Artificial Intelligence, marks a significant breakthrough in the company's digital ecosystem and big data strategy, enhancing operational efficiency across various business systems [4] - The company has provided financing services to over 5,100 small and micro clients, with accounts receivable turnover days reduced from 68 to 52 days, leading to a 25%-30% increase in procurement [4] Group 3: Market Reach - The company achieved 150 million yuan in revenue from Chongqing Yaoda Mai in the first half of 2025, representing 77.73% of the total revenue for 2024, with its "Viagra" series products ranking first in the e-commerce prescription drug category [5] - The company operates 451 chain pharmacies, including 1,474 franchise stores, and has implemented O2O smart drug warehouses in Chengdu, achieving a 67% increase in O2O order volume [5] Group 4: Ecosystem and Capital Empowerment - The company has injected new vitality into its ecosystem through dual-driven strategies of industrial funds and data asset operations, completing investments in five pharmaceutical varieties and three equity projects [6] - The company has accumulated 134.1TB of data resources, with over 20 data products listed on the Shanghai Data Exchange, positioning itself advantageously in the data circulation sector [6] Group 5: Long-term Value Proposition - Despite a temporary adjustment in net profit, the company's forward-looking investments in MAH reserves, digital system development, and C-end ecosystem construction are expected to create significant barriers in the pharmaceutical internet industry [8] - The company's comprehensive supply chain and digital technology-driven model has transitioned it from traditional pharmaceutical distribution to a leader in the technology-driven health industry, with a robust ecosystem closing in on completion [8]

Group 1: Financial Performance - The company's net increase in cash and cash equivalents improved from -143 million in 2023 to 43 million in 2024, a total increase of 186 million [2] - Net cash flow from operating activities rose from -115 million in 2023 to 128 million in 2024, an increase of 243 million, attributed to better management of supplier prepayments and accounts payable [2] - Net cash flow from financing activities decreased from 107 million in 2023 to -35 million in 2024, primarily due to enhanced capital turnover and repayment of bank loans [2] - Net cash flow from investing activities improved from -135 million in 2023 to -50 million in 2024, with the previous year's outflow largely due to bank guarantee deposits [2] Group 2: Investment Strategy in Ethnic and Traditional Medicine - The company is leveraging policy support for ethnic medicine, as outlined in the Traditional Chinese Medicine Law, which includes the integration of ethnic medicines into the national healthcare system [3] - The company has secured exclusive sales rights for several ethnic medicines, including a partnership with Kashgar Kunlun Uyghur Pharmaceutical Co. for a unique rose oral liquid product [3] - The company is actively pursuing investments in traditional Chinese medicine (TCM) through equity cooperation and exclusive distribution agreements, such as a strategic partnership with Suzhou Yusen New Drug Development Co. for a TCM product [3] - Future strategies include deepening investments in ethnic and TCM industries through equity partnerships and exclusive operations to foster innovation and efficient development [3]

Group 1: Future Development Direction - The company's core future development direction is to master the pricing power of key products through various pharmaceutical models, including MAH and exclusive "custom" investments, aiming to create a product ecosystem in specific disease areas [1] - Key product selections focus on unique and scarce items in traditional Chinese medicine, special dietary products, medical devices, and synthetic biology, which are difficult for competitors to replicate [1] Group 2: Product Matrix Expansion - The company has a product matrix that includes exclusive items such as the national exclusive "Wei Ge" series trademark products and various traditional medicine products, with plans to continuously expand this matrix to enhance profitability [2] Group 3: Mergers and Acquisitions - The company does not rule out the possibility of mergers and acquisitions to expand its business scope, especially in the context of the recent active merger market following the release of the "Six Opinions on Mergers and Acquisitions" by the China Securities Regulatory Commission [3] Group 4: Intelligent Layout and Digital Transformation - As the first listed pharmaceutical internet enterprise in China, the company is fully promoting digital transformation and intelligent upgrades, including numerous updates and iterations on its pharmaceutical supply chain system and e-commerce platform [4] - The company is leveraging artificial intelligence to enhance operational efficiency, with applications such as automatic stock reminders and price alerts, and is deploying top domestic AI models for various innovative applications [4]