Summary of Tianyu Co., Ltd. Conference Call Company Overview - **Company**: Tianyu Co., Ltd. - **Period**: First half of 2025 - **Key Financials**: - Net profit: 150 million yuan, up 180.96% YoY [2][4] - Non-recurring net profit: 141 million yuan, up 125.11% YoY [2][4] - Revenue: 1.567 billion yuan, up 23.87% YoY [4] Core Business Segments 1. Textile Medicine, Raw Materials, and Intermediates - Revenue reached 1.13 billion yuan, driven by non-sartan raw materials and intermediates [2][4] - Significant growth attributed to market expansion and cost control, leading to improved gross margins [4][5] - Non-sartan product gross margin increased to nearly 30%, with expectations to reach over 40% in the future [5][12] 2. CDMO (Contract Development and Manufacturing Organization) - Revenue exceeded 200 million yuan, a 44% increase YoY, surpassing expectations [2][4][9] - Gross margin maintained above 50%, benefiting from scale advantages in projects [9] - Anticipated continued growth in customer demand for the second half of 2025 and beyond [9] 3. Formulation Business - Revenue of 180 million yuan, up 84.72% YoY, with sales volume surpassing 500 million tablets, a 71% increase [2][4] - Gross margin improved to 58%, with losses reduced by 20 million yuan [4][10] - Despite not being profitable yet, the speed of loss reduction is accelerating [4] Regulatory and Market Developments - Approved 12 new drug specifications in the first half of 2025, totaling 65 approvals across 40 varieties [2][6] - Successfully participated in centralized procurement projects in Jiangsu and Guangdong [6] - Rapid growth in sales channel networks, including medical, retail, and online platforms [6] Future Outlook - Non-sartan products expected to see significant growth as original drug patents expire, with a larger pipeline than sartan products [7][12] - CDMO business projected to maintain strong growth, with optimistic profitability outlook [9] - Anticipated improvements in cash flow management and operational efficiency in the second half of 2025 [14] Challenges and Risks - Increased impairment provisions totaling 72.16 million yuan due to credit and inventory impairments [5][11] - Competitive pressures in the sartan product market, leading to slight revenue declines despite stable sales volumes [15] - Overall product prices have decreased slightly but are expected to stabilize [16] R&D and Innovation - R&D expenses for the first half of 2025 were approximately 600 million yuan, maintaining focus on raw materials and CDMO sectors [19] - New collaborations and patent acquisitions in the field of psychotropic drugs, with plans for further development [13] Conclusion - Tianyu Co., Ltd. demonstrated robust growth across its business segments in the first half of 2025, with significant improvements in profitability and market presence. The company is well-positioned for future growth, particularly in non-sartan products and CDMO services, while navigating challenges in competitive pricing and cash flow management.

Performance Forecast - The company expects a net profit attributable to shareholders of approximately 130 million to 180 million yuan, representing an increase of 144.29% to 238.25% compared to the same period last year, which was 53.2152 million yuan [1] - The net profit after deducting non-recurring gains and losses is expected to be between 121 million and 171 million yuan, an increase of 92.79% to 172.45% compared to last year's 62.764 million yuan [1] Reasons for Performance Change - The significant growth in performance is driven by the company's proactive market engagement, expansion of customer channels, and enhanced refined management, which have strengthened its core competitiveness [1] - The company has optimized its product structure, improved market layout, and strengthened cost control, leading to increased revenue and gross profit in its non-sartan raw materials, intermediates, CDMO business, and formulation business [1] - The company has effectively reduced losses by significantly cutting back on foreign exchange derivative trading [1] Non-Recurring Gains and Losses - The estimated impact of non-recurring gains and losses on the net profit attributable to shareholders is approximately 9 million yuan, primarily from government subsidies [2] Audit Status - The performance forecast has not been audited by an accounting firm, and specific financial data will be disclosed in the company's 2025 semi-annual report [1][2]

Core Viewpoint - Tianyu Co., Ltd. (300702) expects a significant increase in net profit for the first half of 2025, projecting a profit of between 130 million to 180 million yuan, representing a growth of 144.29% to 238.25% compared to the same period last year [1] Financial Performance - The net profit attributable to shareholders is projected to be between 130 million to 180 million yuan, compared to 53.2152 million yuan in the same period last year [1] - The net profit after deducting non-recurring gains and losses is expected to be between 121 million to 171 million yuan, an increase from 62.764 million yuan year-on-year, reflecting a growth of 92.79% to 172.45% [1] Growth Drivers - The company's performance growth is driven by actively seizing market opportunities, expanding customer channels, and enhancing refined management [1] - Measures such as optimizing product structure, improving market layout, and strengthening cost control have effectively increased revenue and gross profit in non-sartans raw materials and intermediates, CDMO business, and formulation business [1]