Core Viewpoint - The stock of Shouxiangu has shown a slight increase in recent trading sessions, with a notable rise in trading volume and a positive net inflow of funds, indicating investor interest despite a decline in revenue and profit year-on-year [1][2]. Company Overview - Shouxiangu Pharmaceutical Co., Ltd. is located in Wuyi County, Zhejiang Province, and was established on March 3, 1997. It was listed on May 10, 2017. The company specializes in the breeding, cultivation, processing, and sales of valuable traditional Chinese medicinal materials such as Ganoderma and Dendrobium [2]. - The main business revenue composition includes: Ganoderma spore powder products (71.92%), Dendrobium products (15.57%), other products (10.88%), and supplementary products (1.63%) [2]. Stock Performance - As of November 14, the stock price of Shouxiangu increased by 2.16%, reaching 21.30 CNY per share, with a trading volume of 33.55 million CNY and a turnover rate of 0.80%. The total market capitalization is 4.22 billion CNY [1]. - Year-to-date, the stock price has risen by 1.72%, with a 3.60% increase over the last five trading days, a 3.40% increase over the last 20 days, and a 3.75% decrease over the last 60 days [2]. Financial Performance - For the period from January to September 2025, Shouxiangu reported a revenue of 430 million CNY, a year-on-year decrease of 8.88%. The net profit attributable to the parent company was 76.34 million CNY, down 35.67% year-on-year [2]. - Since its A-share listing, Shouxiangu has distributed a total of 436 million CNY in dividends, with 218 million CNY distributed in the last three years [3]. Shareholder Information - As of September 30, 2025, the number of shareholders for Shouxiangu was 22,700, a decrease of 4.31% from the previous period. The average circulating shares per person increased by 4.51% to 8,727 shares [2]. - Among the top ten circulating shareholders, the Rongtong Health Industry Flexible Allocation Mixed A/B fund holds 1.2823 million shares, an increase of 82,300 shares compared to the previous period [3].

Core Viewpoint - The stock of Zhejiang Shouxiangu Pharmaceutical Co., Ltd. has shown fluctuations, with a recent increase of 2.03% on November 7, 2023, despite a year-to-date decline of 1.58% [1][2]. Financial Performance - For the period from January to September 2025, the company reported a revenue of 430 million yuan, representing a year-on-year decrease of 8.88%. The net profit attributable to shareholders was 76.34 million yuan, down 35.67% compared to the previous year [2]. - Cumulative cash dividends since the company's A-share listing amount to 436 million yuan, with 218 million yuan distributed over the past three years [3]. Shareholder Information - As of September 30, 2025, the number of shareholders decreased by 4.31% to 22,700, while the average circulating shares per person increased by 4.51% to 8,727 shares [2]. - The eighth largest circulating shareholder is Rongtong Health Industry Flexible Allocation Mixed A/B, holding 1.2823 million shares, an increase of 82,300 shares from the previous period [3]. Market Activity - On November 7, 2023, the stock price reached 20.61 yuan per share, with a trading volume of 23.39 million yuan and a turnover rate of 0.58%. The total market capitalization stood at 4.086 billion yuan [1]. - The net inflow of main funds was 2.3019 million yuan, with large orders accounting for 21.12% of purchases and 11.28% of sales [1]. Business Overview - The company, established on March 3, 1997, and listed on May 10, 2017, specializes in the breeding, cultivation, processing, and sales of precious Chinese medicinal materials, including Ganoderma lucidum and Dendrobium officinale [1]. - The revenue composition includes 71.92% from Ganoderma spore powder products, 15.57% from Dendrobium products, and 10.88% from other sources [1]. Industry Classification - Shouxiangu is classified under the pharmaceutical and biological industry, specifically in the traditional Chinese medicine sector [1]. The company is associated with concepts such as traditional Chinese medicine, cancer treatment, industrial hemp, pharmaceutical e-commerce, and digital economy [1].

Core Viewpoint - The company has successfully completed the re-registration of its "Shouxiangu Brand Ganoderma Spore Oil Soft Capsules," ensuring stable production and sales, while aiming for product transformation and upgrading in the traditional Chinese medicine sector [1][14]. Group 1: Company Performance - From 2017 to 2022, the company's total revenue increased from 370 million to 829 million, with net profit rising from 89 million to 278 million [3]. - However, in 2024, the company experienced a revenue decline of 11.81% to 692 million and a net profit drop of 31.34% to 175 million [3][6]. - In the first half of 2025, the company reported a revenue of 300 million, down 16.51%, and a net profit of 66 million, down 33.99% [10]. Group 2: Product Structure and Strategy - The sales revenue from Ganoderma spore powder products accounted for 70.87%, 69.27%, and 65.75% of the company's main business income from 2022 to 2024, indicating a reliance on a single product line [1]. - The company is focusing on diversifying its product offerings while maintaining its core business, with plans to enhance research and development of rare traditional Chinese medicinal materials [1][2]. - The company has initiated marketing reforms and established a national distributor system to improve sales performance [11]. Group 3: Market Outlook - The company anticipates that Ganoderma spore powder could become the leading product in the health supplement market, surpassing other products like Cordyceps and bird's nest [7]. - The company aims to reach a scale of 10 billion by 2035, despite recent setbacks in growth [7].

Macro - In the first half of the year, listed companies achieved operating income of 35.01 trillion yuan, a year-on-year increase of 0.16%; net profit reached 3 trillion yuan, with a year-on-year growth of 2.54%, an increase of 4.76 percentage points compared to the previous year's full-year growth [3][4] - In August, the manufacturing PMI was 49.4%, up 0.1 percentage points month-on-month; the non-manufacturing business activity index was 50.3%, up 0.2 percentage points month-on-month; the composite PMI output index was 50.5%, up 0.3 percentage points month-on-month [3] - Several banks indicated that they continued to support the stabilization of the real estate market in the first half of the year by increasing mortgage loan issuance, with the second-hand housing loan issuance increasing by over 20% year-on-year [4] Convertible Bonds - In August, the convertible bond market continued to be active, with the convertible bond index rising by 4.32%, underperforming the overall market index which rose by 10.74% [6] - The high-priced convertible bond index outperformed low-priced and mid-priced indices, with an increase of 8.92% in August, indicating stronger performance in a rising equity market [6][9] - The dual-low strategy underperformed in a strong market, with only a 2.48% increase in August, while the high-priced low-premium strategy rose by 7.07% [9] Traditional Chinese Medicine Industry - Shouxiangu reported a 16.51% decrease in operating income to 300 million yuan in the first half of 2025, with a net profit decline of 33.99% to 65.56 million yuan [14] - The company expects performance to improve in the third quarter, as July saw a return to positive growth in revenue [15] - The company is expanding its online channels, with internet sales increasing by 15.14% year-on-year, while traditional sales channels are being enhanced through strategic partnerships [16] Innovative Drug Industry - Sanofi's half-year report showed a revenue of 4.36 billion yuan, a slight decrease of 0.8%, while net profit increased by 24.6% to 1.36 billion yuan [20] - The company is focusing on innovative therapies, with several products in clinical trials, including SSGJ-707, which has potential for significant market value [21] - Existing products are performing steadily, with a notable increase in sales in the hair loss segment, while other segments are experiencing slight fluctuations [22] Medical Equipment - Ruimait's half-year performance was strong, with a revenue of 544 million yuan, a year-on-year increase of 42.30%, and a net profit of 131 million yuan, also up 42.19% [25] - The company has improved its expense ratios significantly, with a sales expense ratio of 10.43%, down 2.24 percentage points year-on-year [26] - The rebranding to "Ruimait" is expected to enhance brand value and market penetration, aligning the company's identity with its core products [28]

Investment Rating - The report maintains a "Buy" rating for the company, indicating an expected stock price increase of over 20% relative to the benchmark index within the next six months [7][11]. Core Insights - The company reported a revenue of 300 million yuan for H1 2025, a decrease of 16.51% year-on-year, with a net profit of 66 million yuan, down 33.99% [3]. - Despite the revenue decline, there is a noticeable improvement in the second quarter, with a year-on-year revenue drop of only 6.64%, compared to a 22.68% decline in the first quarter [3]. - The gross margin for H1 2025 was 80.81%, showing a slight increase of 0.43 percentage points, while the net profit margin decreased to 21.88%, down 5.79 percentage points [3]. Financial Performance - The company’s sales expenses ratio for H1 2025 was 44.41%, with management expenses at 15.31% and R&D expenses at 9.93% [4]. - Internet sales showed a positive trend, with revenue from online channels reaching 77 million yuan, an increase of 15.14% [5]. - The company has initiated a marketing reform that has begun to yield results, including strategic partnerships and the establishment of a nationwide distributor network [6]. Revenue and Profit Forecast - Revenue projections for 2025 to 2027 are 656 million, 711 million, and 777 million yuan, respectively, with net profits expected to be 158 million, 178 million, and 206 million yuan [7][9]. - The current price-to-earnings (P/E) ratios for the forecasted years are 27, 24, and 21, indicating a potential for growth as the company expands its market reach [7][9].

Core Viewpoint - The company reported a decline in revenue and net profit for the first half of 2025, but there are signs of potential recovery in the third quarter due to improved sales performance in July [1][2] Financial Performance - In H1 2025, the company achieved revenue of 300 million yuan, a decrease of 16.51% year-on-year, and a net profit attributable to shareholders of 65.56 million yuan, down 33.99% year-on-year [1] - Q2 2025 revenue was 129 million yuan, a decline of 6.64% year-on-year, with a net profit of 7.18 million yuan, down 67.61% year-on-year [1][2] - The company's expense ratio increased, with a total expense ratio of 70.24% in H1 2025, up 12.04 percentage points year-on-year [2] Market and Product Performance - The decline in revenue was primarily attributed to weak consumer demand, although there was a notable improvement in Q2 compared to Q1 [2] - Revenue from Lingzhi spore powder products was 216 million yuan, down 17.79% year-on-year, while revenue from Dendrobium candidum products was 46.66 million yuan, down 24.25% year-on-year [3] - Internet sales showed growth, with revenue of 76.78 million yuan, an increase of 15.14% year-on-year [3] Strategic Initiatives - The company is expanding its market presence through flagship stores and traditional channels, with successful construction of flagship stores in several provinces [3] - A national strategic cooperation agreement was signed with Jiuzhoutong Pharmaceutical to enhance reach to retail pharmacies [3] - The company is focusing on new media channels, particularly influencer live streaming, to attract a younger customer demographic [3] Competitive Advantages - The company’s core competitive advantages include a full industry chain, superior variety breeding, and advanced processing technology for Lingzhi spore powder [4] - The company has established a comprehensive industry chain model and has developed 12 superior varieties, including 4 Lingzhi and 4 Dendrobium varieties [4] - Unique technologies for breaking and purifying Lingzhi spore powder ensure high absorption rates and product safety [4] Future Outlook - Due to slower-than-expected recovery in demand and rising expense ratios, the company has adjusted its revenue and profit forecasts for 2025-2027 [5] - Projected revenues for 2025, 2026, and 2027 are 697 million, 778 million, and 859 million yuan, respectively, with corresponding net profits of 138 million, 172 million, and 205 million yuan [5]

Investment Rating - The investment rating for the company is "Accumulate" (maintained) [2] Core Views - The company experienced a decline in revenue and net profit in the first half of 2025, primarily due to weak consumer demand, but there are signs of improvement in the third quarter [5][6] - The company is expanding its new media channels, with a notable performance in the internet segment, which saw a revenue increase of 15.14% year-on-year [6] - The company has established a competitive advantage through a full industry chain, excellent variety selection, and unique processing technologies [7][8] Summary by Sections Financial Performance - In H1 2025, the company achieved revenue of 300 million yuan, a decrease of 16.51% year-on-year, and a net profit of 65.56 million yuan, down 33.99% year-on-year [5] - The Q2 2025 revenue was 129 million yuan, a decline of 6.64% year-on-year, with a net profit of 7.18 million yuan, down 67.61% year-on-year [5] Market Expansion - The company is focusing on expanding its presence in provinces outside of Zhejiang through flagship stores and traditional channels, with positive sales results reported in July and August [6] - The internet channel's revenue growth is attributed to the development of new media channels, particularly influencer live streaming, which has attracted a younger customer base [6] Competitive Advantages - The company has developed a comprehensive industry chain model that ensures product safety and effectiveness, along with a resource library for superior medicinal materials [7][8] - Unique technologies for processing products, such as low-temperature supersonic airflow breaking and purification, enhance product quality and absorption rates [8] Future Projections - The revenue forecasts for 2025-2027 are adjusted to 697.14 million yuan, 777.59 million yuan, and 859.25 million yuan, with expected growth rates of 0.79%, 11.54%, and 10.50% respectively [8]

Core Viewpoint - The company experienced a significant decline in revenue and net profit in 2024, attributed to weak consumer demand, particularly affecting high-end products [1][2]. Financial Performance - In 2024, the company achieved revenue of 692 million yuan, a decrease of 11.81% year-on-year, and a net profit of 175 million yuan, down 31.34% from the previous year [1]. - For Q1 2025, revenue was 171 million yuan, a decline of 22.68% year-on-year, with a net profit of 58.37 million yuan, down 24.32% [1]. Product Category Analysis - High-end product sales, particularly Lingzhi spore powder, saw a more significant decline compared to mid- to low-end products. Lingzhi spore powder sales dropped by 16.46% to 446 million yuan in 2024 [2]. - Specific sales figures for Lingzhi spore powder products include: - Broken wall Lingzhi spore powder: 102 million yuan, down 20.23% - Broken wall Lingzhi spore powder: 221 million yuan, down 9.46% - Broken wall Lingzhi spore powder granules: 104 million yuan, down 24.46% - Broken wall Lingzhi spore powder slices: 18.63 million yuan, down 21.53% [2]. - Iron-clad Dendrobium products generated 113 million yuan in sales, a decrease of 11%, with specific declines in sales of Iron-clad Dendrobium granules and extracts [2]. Sales Volume and Pricing - The sales volume of Lingzhi spore powder products in 2024 was 25.72 tons, down 13.84%, with an average price of 17.33 yuan per gram, down 3.04% [3]. - Iron-clad Dendrobium products had a sales volume of 13.91 tons, up 7.33%, but the average price fell to 8.11 yuan per gram, down 17.08% [3]. Market Expansion and Strategy - The company reported that 65.23% of its revenue came from Zhejiang province, with only 9.61% from outside the province and 25.16% from online sales [3]. - Revenue growth rates for different regions showed declines: Zhejiang province down 7.52%, outside Zhejiang down 18.81%, and online sales down 19.51% [4]. - The company is restructuring its distributors and plans to enhance its presence in the provincial market through traditional and flagship store channels [4]. Competitive Advantage - The company has established a comprehensive supply chain model and developed proprietary technologies for its products, ensuring safety and efficacy [5]. - The company has cultivated 10 superior varieties of medicinal materials, including three types of Lingzhi and three types of Iron-clad Dendrobium [5]. - The unique low-temperature supersonic airflow breaking technology significantly enhances the absorption rates of active ingredients in its products compared to traditional methods [5]. Future Projections - Revenue projections for 2025-2027 are 732 million yuan, 815 million yuan, and 899 million yuan, representing year-on-year growth rates of 5.9%, 11.4%, and 10.2% respectively [6]. - Net profit forecasts for the same period are 191 million yuan, 219 million yuan, and 244 million yuan, with corresponding growth rates of 9.3%, 14.8%, and 11.4% [6].

Investment Rating - The investment rating for the company is "Buy" (maintained) [2][15] Core Views - The company achieved a revenue of 692 million yuan in 2024, a year-on-year decrease of 11.81%, with a net profit attributable to shareholders of 175 million yuan, down 31.34% [7] - The gross margin for 2024 was 80.72%, a decrease of 2.00 percentage points, while the net margin was 25.26%, down 7.19 percentage points [7] - The company is expected to see growth driven by marketing reforms in provinces outside of Zhejiang, despite short-term sales pressure [7] Financial Performance Summary - Revenue for 2024 was 692 million yuan, with a year-on-year decline of 11.81% [11] - Net profit attributable to shareholders for 2024 was 175 million yuan, down 31.34% [11] - The company forecasts net profits of 208 million yuan, 240 million yuan, and 274 million yuan for 2025, 2026, and 2027 respectively [7][11] - The earnings per share (EPS) are projected to be 1.05 yuan, 1.21 yuan, and 1.38 yuan for 2025, 2026, and 2027 respectively [7][11] Product and Market Analysis - Revenue from Ganoderma lucidum spore powder products decreased by 16.53% to 445 million yuan in 2024 [8] - Revenue from Dendrobium candidum products fell by 11.00% to 113 million yuan [8] - The company plans to enhance its sales model and marketing strategies to expand its market presence outside of Zhejiang [8] Clinical Research and Internationalization - Clinical research on the anti-tumor effects of Ganoderma lucidum spore powder is progressing well, involving 17 top-tier hospitals [9] - The company is collaborating with the Mayo Clinic on research related to cardiovascular disease treatment using its products [9]

Investment Rating - The investment rating for the company is "Buy" (maintained) [2] Core Views - The company achieved a revenue of 692 million yuan in 2024, a year-on-year decrease of 11.81%, with a net profit attributable to shareholders of 175 million yuan, down 31.34% [7] - The company is expected to experience growth driven by marketing reforms outside its home province, despite short-term sales pressure [7] - The projected net profits for 2025, 2026, and 2027 are 208 million yuan, 240 million yuan, and 274 million yuan respectively, with corresponding EPS of 1.05 yuan, 1.21 yuan, and 1.38 yuan [7] Financial Performance Summary - In 2024, the gross margin was 80.72%, down 2.00 percentage points, and the net margin was 25.26%, down 7.19 percentage points [7] - The sales expense ratio increased to 43.89%, while the management expense ratio rose to 12.60% [7] - The company’s total revenue is projected to recover to 728 million yuan in 2025, with a growth rate of 5.2% [11] Product and Market Analysis - Revenue from Ganoderma lucidum spore powder products decreased by 16.53% to 445 million yuan, while revenue from Dendrobium candidum products fell by 11.00% to 113 million yuan [8] - The company plans to enhance its sales model and marketing strategies to expand its market presence outside Zhejiang province [8] Clinical Research and Internationalization - Clinical research projects are progressing well, including studies on the anti-tumor effects of Ganoderma lucidum spore powder [9] - The company is collaborating with top medical institutions, such as the Mayo Clinic, to advance the internationalization of its products [9]