【1099 Performance】China National Pharma Earned 1.5% More Last Year, Declares Final Dividend of 0.69 Yuan RMB, Market Expected to Stabilize with Modest Growth This Year

China National Pharmaceutical Group (01099) announced its annual results for the year ending December 2025, with a net profit of 7.155 billion yuan (RMB), up 1.5% year-on-year; earnings per share were 2.29 yuan, with a final dividend of 0.69 yuan. General Manager Zhao Bingxiang expects the overall market in 2026 to remain stable, showing a trend of steady growth and structural optimization.

Chairman Jin Bin added that since the company’s listing, it has consistently rewarded shareholders with annual dividends, and this policy will continue.

Zhao stated that the group will focus on five key development areas this year to ensure stable and orderly operations. First, to continue improving the nationwide distribution and logistics network, strengthen pharmaceutical circulation infrastructure, integrate operations, select quality projects for mergers and acquisitions, streamline non-core low-efficiency assets, and improve capital asset structure. Second, to stay aligned with digital transformation trends by increasing technology investment, connecting data, and developing supply chain platforms to achieve digital control over procurement, warehousing, distribution, and sales processes, while using big data to optimize resource allocation.

He also mentioned that third, the focus will be on providing comprehensive vertical full-cycle services and horizontal one-stop services to establish a full-chain collaborative ecosystem; fourth, to strengthen cost management and control competitiveness with a focus on “improving efficiency, managing risks, and enhancing quality”; and fifth, to strictly adhere to compliance standards, building a robust and regulated operational capability.

Medical Device Distribution Revenue Rises in the Second Half

During the period, revenue was 575.168 billion yuan, a decrease of 1.6% year-on-year, mainly due to declines in pharmaceutical distribution, medical device distribution, and other business segments. Among these, pharmaceutical distribution revenue was 435.391 billion yuan, down 2.02%; medical device distribution revenue was 115.538 billion yuan, also down 2.02%; retail pharmacy revenue was 38.383 billion yuan, up 6.67%.

Executive Director and President Lian Wanyong said that medical device distribution revenue increased in the second half compared to the first half, mainly benefiting from the shift in policy focus from “price reduction and expansion” to “stabilizing prices and improving quality,” which has driven medical device prices to become more rational. Additionally, hospitals are increasing demand for supply chain management (SPD) and centralized distribution projects to reduce costs, leading to double-digit growth in related revenue. He believes the overall growth momentum in medical device distribution can continue this year.

He is optimistic about the development of the pharmaceutical industry this year, citing China’s large and uneven market. The group will balance local economic conditions, healthcare spending, and demographic changes, including expanding further in cities with surplus medical insurance funds, and increasing supply of innovative and high-value products for national medical insurance negotiations.

No Large-Scale Store Closures Planned This Year

Gross profit margin decreased by 0.32 percentage points year-on-year to 7.25%. As of the end of last year, Guoda Pharmacy operated 8,221 stores, a net decrease of 1,348 stores compared to the previous year; professional pharmacy stores numbered 1,461, a net decrease of 183 stores.

Vice President and Company Secretary Wu Yijian explained that store reductions are to adapt to changes in industry competition, emphasizing that closures are mainly of underperforming stores, which account for nearly 20% of total stores. Currently, Guoda and professional pharmacies together have about 10,000 stores, which is a healthy level. The company will continue to “improve quality and increase efficiency” this year, with no plans for large-scale closures.

Recently, the U.S. has again raised concerns about China’s monopoly over the local pharmaceutical market, leading to worries that the pharmaceutical industry could become a new battleground in China-U.S. tensions. Jin Bin stated that China exports many innovative drugs, and U.S. restrictions on Chinese drug imports are a double-edged sword. If implemented, they could impact the local pharmaceutical ecosystem and somewhat affect China’s pharmaceutical industry, but will not impact the group.

Additionally, Zhao Bingxiang resigned from his roles as non-executive director and chairman of the board in November last year. He reassured stakeholders that his departure signifies that the group’s development is improving and becoming more stable, with “risks cleared and foundations solid.” His successor, Chairman Jin Bin, has been with China National Pharmaceutical Group for over 20 years and is very familiar with the company’s operations.

Source: HKEX Announcement

(Second edition includes earnings conference content)

Financial Hot Talk

Is the “Lobster Farming” craze over, and has the “Removal Trend” and AI agent concept been played out?