Core Viewpoint - The inclusion of Fangsheng Pharmaceutical's innovative traditional Chinese medicine, Yangxue Qufeng Zhitong Granules, in the "2025 Medical Insurance Catalog" is expected to enhance the company's growth momentum and positively impact its market promotion, hospital access, and sales scale [1] Group 1: Product Development and Market Impact - Yangxue Qufeng Zhitong Granules, developed independently by the company, has been included in the "2025 Medical Insurance Catalog" after negotiations, which is anticipated to boost the company's future operating performance and market share [1] - In addition to Yangxue Qufeng Zhitong Granules, other innovative traditional Chinese medicines developed by the company, such as Xiaoyi Jingxing Zhikou Granules and Xuanqi Jiangu Pian, are also included in the "2025 Medical Insurance Catalog" [1] - The company has received clinical approval for Xiangqin Jiere Granules and Ziying Granules in July and August 2025, further expanding its product portfolio [1] Group 2: Strategic Direction - The company has established a development strategy to become a health industry group centered on innovative traditional Chinese medicine [1] - There will be a continuous increase in research and development investment and market cultivation efforts for innovative traditional Chinese medicine to enhance core competitive advantages [1] - The initial coverage of the company has been rated as "Buy" [1]

Investment Rating - The report assigns a "Buy" rating for the company, marking its first coverage [1]. Core Insights - The inclusion of the innovative traditional Chinese medicine product, Yangxue Qufeng Zhitong Granules, in the 2025 National Medical Insurance Directory is expected to enhance market promotion, hospital access, and sales scale, positively impacting the company's future operating performance and market share [4]. - The product has demonstrated good efficacy and safety in clinical trials, showing advantages over Western medicine in treating recurrent tension-type headaches [5]. - The company has additional innovative traditional Chinese medicine products included in the insurance directory, indicating a strong pipeline for future growth [6]. - Revenue forecasts for 2025-2027 are projected at 1.828 billion, 2.023 billion, and 2.247 billion yuan, with net profits of 301 million, 364 million, and 439 million yuan respectively, suggesting a favorable valuation with current PE ratios of 16, 13, and 11 times [7]. Company Overview - The latest closing price of the company's stock is 11.11 yuan, with a total market capitalization of 4.9 billion yuan [3]. - The company has a total share capital of 439 million shares, with an asset-liability ratio of 46.9% and a current PE ratio of 18.83 [3].

Core Viewpoint - Fangsheng Pharmaceutical has launched a new traditional Chinese medicine (TCM) product, "Yangxue Qufeng Zhitong Granules," which is the first TCM innovation drug targeting frequent tension-type headaches in China, enhancing the company's competitive edge in TCM innovation [1][2] Group 1: Product Launch and Development - The "Yangxue Qufeng Zhitong Granules" was officially launched on December 21, 2025, and is a significant achievement after over ten years of research and clinical trials [1] - This new drug is based on the classic formula "Shengxian Decoction" by renowned physician Zhang Xichun and received its drug registration certificate from the National Medical Products Administration in June 2025 [1] - Fangsheng Pharmaceutical has successfully developed three TCM innovation drugs since 2016, showcasing its leading capabilities in TCM innovation [1] Group 2: Sales and Future Plans - The company aims for the new TCM innovation drug to achieve over 100 million yuan in sales within two years and plans to launch 1-2 new TCM innovation drugs every 2-3 years [2] - The goal is to create a product matrix with multiple products generating annual sales of 300-500 million yuan, targeting a compound growth in performance over the next 3-5 years [2] Group 3: Ongoing Research and Development - Fangsheng Pharmaceutical has several TCM innovation drugs under development, including "Yiqi Xiaoliu Granules," "Ziying Granules," and "Fuke Zhi Xue Xiaotong Granules," with clinical trial approvals received [2] - Other ongoing projects include "Zhulong Tongluo Tablets," "Jianwei Qutong Pills," and "Sanhua Jiegou Pills," with "Xiaoer Jingxing Zhitong Granules" expanding to adult indications and "Jianwei Qutong Pills" currently in phase III clinical trials [2] Group 4: Strategic Focus on Industrial Hemp - Industrial hemp is a key focus in the company's development strategy, with its subsidiary, Yunnan Fuya Biotechnology Co., achieving large-scale production of high-purity CBD and related products [2] - The subsidiary has begun overseas sales, with revenue nearing 20 million yuan in the first three quarters of 2025, showing significant growth and a reduction in operating losses [2] - The company anticipates that its annual revenue will exceed 30 million yuan for the first time [2]

Core Viewpoint - Fangsheng Pharmaceutical (603998) announced that its wholly-owned subsidiary, Yunnan Fangsheng Ronghe Pharmaceutical Co., Ltd., has received the clinical trial approval notice from the National Medical Products Administration for the innovative traditional Chinese medicine, Xiangqin Jietuo Granules, which is intended for the treatment of adult influenza with damp-heat syndrome [1] Company Summary - The innovative drug Xiangqin Jietuo Granules is classified as a Category 1 traditional Chinese medicine and is currently not available in domestic or international markets [1] - As of June 30, 2025, the cumulative research and development investment for this drug project is approximately 16.0569 million yuan [1] Industry Summary - Traditional Chinese medicine is widely used in the treatment of respiratory diseases, with sales of traditional Chinese medicine for respiratory conditions exceeding 80 billion yuan across three major terminals and six major markets in China in recent years [1]