Revenue and Profits Declined, Expect a Rebound in 2026
发布时间:2026-03-24 来源:华泰证券
KPC Pharmaceuticals has reported 2025 revenue/attributable net profit(NP)/recurring NP of RMB6.58/0.35/0.11bn,down by 22/46/74%YoY,chiefly owing to channel transformation,delayed coverage execution,and downstream pharmacy consolidation,in our view.We think that 2025 was the trough year for pharmaceutical revenue.With management changes and channel destocking under way,we expect operations to gradually return to normal in 2026.Over the long term,we remain optimistic about the silver economy healthcare segment and the broad market potential of clot-busting medicine and mood-related product categories.BUY.
Pharmaceutical revenue dented on internal and external factors
Pharmaceutical revenue declined by 30%YoY to RMB3.00bn in 2025,mainly affected by falling retail foot traffic,delayed volume-based procurement(VBP)for Chinese patent medicines,and channel restructuring,in our view.Specifically:1)We estimate revenue of the 1951 Division grew YoY on alow base(injections/orthopedics revenue+13/+5%YoY),mainly owing to relatively stable performance after the renewal of VBP contracts for freeze-dried injections;2)We estimate that revenue of the 1381 Division declined significantly YoY(gynecology/digestive products-24/-43%YoY),chiefly owing to reduced retail terminal traffic;3)We estimate that revenue of the 777 Division also declined notably YoY(sales of Xuesaitong soft capsules-26%YoY),mainly owing to stricter prescription controls on pooled insurance payments and restrictions on chronic disease coverage in multiple regions.We think that 2025 marks the trough year for pharmaceutical revenue.With management changes(new chairman and president appointed in January 2026)and channel destocking,we expect revenue to improve sequentially through 2026,and we anticipate aYoY rebound within the year.
Profit margins under pressure
1)For 2025,the gross margin was 38.5%(-4.0pp YoY),mainly owing to pressure on high-margin pharmaceutical revenue.The sales/administrative/RMB expense ratios were 26.0/5.8/1.6%(-0.5/+1.4/+0.3pp YoY).The net profit margin was 6.4%(-2.5pp YoY),while the recurring net profit margin was 1.6%(-3.4pp YoY).2)Bills receivable,accounts receivable,and receivable financing totaled cRMB3.5bn for 2025,slightly lower YoY.Inventory was RMB1.38bn,the lowest level in the past five years.3)Cash received from merchandise sales reached RMB7.16bn in 2025,with acash collection ratio of 109%,the highest in the past five years.Net operating cash flow was RMB290mn,lower than the net profit.
Multiple innovative drug R&D projects progressing steadily
As of March 2026,Class 1natural drug KYAZ01-2011-020(for ischemic stroke)and Class 2innovative drug dihydroartemisinin tablets(for systemic lupus erythematosus)were in Phase II clinical trials;Class 1innovative drugs KYAH01-2018-111(THR-βtarget for nonalcoholic fatty liver disease)and KYAH01-2016-079(IDH1 inhibitor for solid tumors)were in Phase Iclinical trials.
Maintain BUY
Considering the decline in retail foot traffic,delayed VBP for Chinese patent medicines,and the impact of channel restructuring on future revenue,as well as pressure on high-margin pharmaceutical manufacturing affecting gross margins,we lower our earnings forecasts for 2026-2027 and introduce our 2028 forecast.We project 2026/2027/2028 attributable NP at RMB0.35/0.39/0.44bn(2026/2027E revised down by 51/52%vs our previous estimates).We value the stock at 35x 2026E PE,above its peers’average of 20x on Wind consensus,citing the company’s forward-looking five-year strategy and expectations of clearing internal and external pressures.Our target price is RMB16.15(previous:RMB21.36,based on 2025E attributable NP of RMB0.62bn and 26x PE).Maintain BUY.
Risks:slower OTC drug promotion than we expect;unfavorable policies on prescription drugs.