GUSHENGTANG (02273) reports impressive mid-term results for 2026! The interim dividend is proposed at 210 million yuan, delivering shareholder returns alongside a dual commitment to global expansion.

On August 28, GUSHENGTANG (02273) released its interim results for 2026. During the reporting period, the company achieved operating revenue of 1.65 billion yuan, a year-on-year increase of 10.6%; net profit reached 220 million yuan, a significant increase of 44.2% year-on-year; and it plans to distribute dividends of 210 million yuan for the interim period of 2026. Driven by both endogenous growth and external expansion, the company has made comprehensive leaps in profitability quality, shareholder return capacity, and industry competitiveness. GUSHENGTANG holds the 2026 interim results press conference At the results press conference, GUSHENGTANG Chairman Tu Zhiliang highlighted the structural changes in the traditional Chinese medicine (TCM) treatment market: as the country restricts the unchecked expansion of top-tier hospitals and promotes the distribution of high-quality medical resources to grassroots levels, the demand and supply for TCM treatments are accelerating towards these grassroots areas. The "14th Five-Year Plan for the Revitalization and Development of Traditional Chinese Medicine" explicitly states that the proportion of total TCM treatment visits should increase from 20.2% in 2025 to 23% by 2030, while the share of grassroots TCM should rise from 26.07% to 27%. Policy continuously opens up space for industry growth. Chairman Tu Zhiliang stated that GUSHENGTANG's overall paradigm is shifting from "differentiated supplementation to top-tier hospitals" to "relay coordination with grassroots community health service centers." Compared to grassroots community hospitals, GUSHENGTANG has built three layers of differentiated barriers: first, a top-tier expert network composed of masters of traditional Chinese medicine, nationally recognized TCM experts, and Qi Huang scholars. Second, it has solved the promotion challenges for doctors in grassroots medical institutions due to limited county financial resources, with 50 doctors successfully promoted since the beginning of 2026. Third, it has established 152 renowned physician inheritance studios, allowing young doctors to learn by following masters, which creates a soft power that is difficult for grassroots medical institutions to replicate. In the first half of 2026, the contributions from new doctors at GUSHENGTANG increased by 50% year-on-year, indicating a significant "talent siphon effect" from the influx of full-time doctors. High dividends + strong buybacks, unprecedented shareholder returns The company continues to give back to investors through generous dividends and stock buybacks. It plans to distribute 210 million yuan in dividends for the interim period of 2026; by the end of 2025 and the interim period of 2026, the total dividends will reach 350 million yuan, achieving a dividend yield of 6.8%, leading the Hong Kong medical sector. At the same time, the company continues to enhance shareholder equity through share buybacks, utilizing 360 million Hong Kong dollars for 51 buybacks in the first half of 2026, with a total of 13.192 million shares repurchased, demonstrating the management's high regard for shareholder returns and strong confidence in the companys value. On the financial front, the overall operating quality of the company continues to improve, with ample cash flow and strong risk resistance. By the first half of 2026, the company's cash reserves reached 1.19 billion yuan, providing solid financial support for future domestic and international mergers and acquisitions, product research and development innovation, and market channel expansion. Acceleration of expansion, continuous growth of domestic and international business footprint The company adheres to a dual-driven strategy of "intensive domestic cultivation + overseas expansion," continuously expanding its domestic and international business footprint. In the first half of 2026, the company added 18 stores, successfully entering the Jinan market, bringing the total number of global stores to 119, covering 22 cities in China and Singapore. The company has maintained steady endogenous growth, becoming the core support for revenue growth. In the first half of the year, revenue from offline stores reached 1.54 billion yuan, an increase of 12.5% year-on-year; the number of outpatient visits reached 2.972 million, a year-on-year increase of 17.5%, with same-store outpatient visits growing by 12.9%. Mature stores have demonstrated strong operational resilience, and the capability for endogenous growth continues to solidify. Internationalization has seen several breakthrough developments, with the overseas model being effectively validated. In the first half of 2026, revenue from the Singapore market increased by 1409.8% year-on-year, with 26 stores achieving island-wide coverage, and the store profit model has been validated, confirming the replicability and scalability of the company's overseas model. In August this year, GUSHENGTANG's internationalization efforts accelerated once again, entering the markets of Hong Kong and Malaysia. On August 12, four clinics in Hong Kong simultaneously opened, located in key business districts in Shau Kei Wan, Prince Edward, Tuen Mun, and Wan Chai; on August 27, the company fully acquired Malaysia's Yongsheng TCM Group, which includes 10 stores. Following Singapore, GUSHENGTANG has successfully opened its second overseas market, and with Hong Kong serving as an international gateway, the companys internationalization strategy has transitioned from "single-point breakthroughs" to a new phase of scaled development. Gathering top physicians, dual upgrade in physician reserve and product capability The physician team continues to expand, forming a solid competitive barrier. As of the first half of 2026, the total number of collaborating doctors reached 44,400, an increase of 2,657 year-on-year, with 1,296 new offline doctors added. The physician team continues to grow and the talent structure continues to optimize. By the first half of this year, the number of in-house doctors reached 1,208, representing a year-on-year increase of 42.6%, showing impressive growth. Among the newly added offline doctors in the first half of the year, 40.3% were in-house doctors, illustrating the rapid expansion of the full-time physician team. The competitiveness of the product side is simultaneously upgrading, with a self-priced product matrix taking shape and market momentum being strong. In the first half of the year, the company successfully recorded 20 internal formulations, many of which experienced rapid sales growth, with sales of the Spleen-Strengthening and Fat-Reducing Paste increasing by 202.2% year-on-year and the Pregnancy Protection Paste rising by 169.9% year-on-year, reflecting a continuous increase in market recognition. At the same time, four formulations received certification from the Singapore Health Sciences Authority (HSA), injecting new momentum into the internationalization of traditional Chinese medicine. User trust, steady improvement in member stickiness and purchasing power The user operation system continues to improve, with member stickiness steadily rising. In the first half of 2026, the total number of outpatient visits reached 3.162 million, a year-on-year increase of 15.1%. The effectiveness of the membership system operations has been particularly significant, with revenue from members accounting for 46.8% of total revenue, and the number of member visits reaching 1.381 million, an increase of 27.9% year-on-year. The growth and retention ability of users continue to climb. In the first half of the year, the company added 168,000 new members, a substantial year-on-year increase of 53.5%, with member return rates reaching a high of 87%, reflecting consumers' strong recognition of the GUSHENGTANG brand. The referral effects from third-party platforms like Meituan have been significant, with Meituans first-visit upsell rate reaching 69%, and the high conversion rates continuously driving an increase in average transaction value and overall revenue. AI empowerment, dual upgrade in physician growth and patient service GUSHENGTANG actively embraces AI technology, collaborating with top academic research teams from Tsinghua University, Beijing University of Chinese Medicine, and the China Academy of Chinese Medical Sciences to build a large AI model for traditional Chinese medicine, working with 19 experts to develop the "National Medicine AI Avatar," covering 10 major specialties, with an AI prescription payment rate nearing 90%. Leveraging AI technology and digital platforms, the company has established a complete closed loop of "expert experience accumulationempowerment of young physiciansfull-cycle patient service." The companys AI-enabled refined labels cover around 5 million users and have launched specialized and chronic disease management services, with AI-related revenue surpassing 90 million yuan in the first half of the year.