SHINEWAY PHARM (02877) announced its interim results, with profit of 469 million yuan during the period, a decrease of 23.7% year-on-year.

SHINEWAY PHARM (02877) announced its mid-term results for 2026, reporting a revenue of RMB 1.181 billion, a year-on-year decrease of 28.5%; profit for the period was RMB 469 million, down 23.7% year-on-year; basic earnings per share were 62 cents; the company proposed to distribute a second interim dividend of 80 cents. Due to the decline in sales volume and price reductions arising from centralized procurement, as well as persistently high production costs, the overall gross profit margin of the group decreased from 72.2% in the same period last year to 69.9%. During the period, the group actively implemented cost control and efficiency measures, resulting in a significant reduction in selling and distribution costs and administrative expenses by 51.8% and 15.5% year-on-year, respectively. However, due to the drop in both sales revenue and gross profit margin, a decrease in investment income, and an increase in R&D expenditure, the groups net profit for the period fell by 23.7% year-on-year to RMB 469 million. Basic earnings per share also declined from RMB 0.81 in the same period last year to RMB 0.62. The group continues to focus on expanding oral formulations as a key development strategy. In the first six months of 2026, the proportion of oral products accounted for 72.9% of total sales, while injection products accounted for 27.1%. The country continues to promote centralized procurement policies for medicines, with several provinces including traditional Chinese medicine injections within the scope of centralized procurement or secondary negotiation, leading to a significant price drop. At the same time, hospital procurement volumes are strictly limited, and hospitals are cautious about the use of traditional Chinese medicine injections under the total budget management of medical insurance. Several core products, such as Qingkailing injection, Shenmai injection, and Shuxue Ning injection, have experienced significant declines. Additionally, due to tighter medical insurance payment standards and destocking at the end-user level, the sales revenue of the group's injection products decreased from RMB 566 million in the same period last year to RMB 320 million, a drop of 43.4%. Sales revenues for Qingkailing injection and Shenmai injection decreased by 49.0% and 51.3% compared to the same period last year, respectively, while sales revenues for Shuxue Ning injection, Guanshen Ning injection, and Danshen injection also decreased by 39.1%, 23.7%, and 34.5%, respectively.