Core Viewpoint - The leading dietary supplement company, Tongrentang, reported significant growth in Q3 2023, with revenue reaching 1.383 billion yuan, a year-on-year increase of 23.45%, and net profit attributable to shareholders at 170 million yuan, up 861.91% [1] Financial Performance - In Q3 2023, Tongrentang achieved a revenue of 1.383 billion yuan, marking a 23.45% increase year-on-year - The net profit attributable to shareholders was 170 million yuan, reflecting an 861.91% increase year-on-year - The non-recurring net profit was approximately 133 million yuan, showing a 652.64% year-on-year growth - For the first nine months of 2023, the net profit attributable to shareholders increased by 4.45% compared to the same period last year, while the non-recurring net profit rose by 2.44% [1] Product Innovation - Tongrentang launched 71 new products in the first three quarters of 2023, with new product sales accounting for over 20% for the first time - The company is focusing on user needs, with 68% of consumers under 35 preferring products based on "scenario-based functions" rather than brand alone [3] - The new "multi-layer tablet" product achieved sales of over 10 million yuan within 45 days of launch, showcasing effective market positioning [3] - The company is adapting to industry innovation trends, shifting from merely adding new ingredients to ensuring scientific validation and scenario relevance [4] Channel Reconstruction - Tongrentang is addressing the common industry issue of online and offline channel conflicts by implementing separate inventory strategies for each channel - The offline strategy targets the mass market with high cost-performance products, while the online strategy focuses on professional, niche, and high-end products [7] - The company is enhancing channel service by training pharmacy staff to become "health consultants," improving both user experience and store revenue [8] Industry Insights - The dietary supplement (VDS) industry is experiencing a "Matthew Effect," where leading brands are gaining market share through R&D and channel strategies, while smaller brands struggle with price competition [9] - The market share of the top five brands in the VDS industry is projected to increase to 38% by 2025, up 6 percentage points from 2023 [10] - Tongrentang's international business has become a new growth point, with overseas revenue reaching 720 million yuan, a year-on-year increase of 13.64% [10] Future Outlook - The company plans to adopt a "re-entrepreneurial" mindset over the next five years, focusing on long-term brand investment despite short-term profit sacrifices [11] - Tongrentang emphasizes the importance of responding quickly to user needs and maintaining operational quality to sustain growth in a challenging market [13]