On August 28, Buchang Pharma (603858) released its 2024 semi-annual report. During the report period, the company realized operating income of 5.432 billion yuan; realized attributable net profit of 231 million yuan; net cash flow from operating activities was 497 million yuan, an increase of 85.62%, the company's cash reserves are more adequate.

In the context of general industry pressure, Buchang Pharma still shows the strong operating resilience of leading enterprises. During the reporting period, the company actively carried out research and development of multiple types of drugs and gradually perfected the big health industry.

Since its establishment, Buchang Pharma has become an important force in promoting local economic development. As of July 2024, Buchang Pharma has accumulated more than 30 billion yuan in national tax payments, making significant contributions to the sustainable and sound development of the local economy.

According to statistics, since the listing of eight years, Buchang Pharma cumulative dividends of 7.536 billion yuan, repurchase of 1.406 billion yuan, dividends, repurchase a total of nearly 9 billion yuan, and actively return to investors.

The second quarter results continue to be better than the core product research and development investment has increased significantly.

According to Buchang Pharma 2024 semi-annual report shows that in the first half of this year, the company realized operating income of 5.432 billion yuan; realized attributable net profit of 231 million yuan; net cash flow from operating activities was 497 million yuan, an increase of 85.62%, the company's cash reserves are more adequate.

Among them, in the second quarter, the company achieved operating income of 2.791 billion yuan, an increase of 150 million yuan compared with the first quarter; to achieve attributable net profit of 117 million yuan, an increase of 0.03 billion yuan compared with the first quarter; to achieve net profit after deducting non-commercial income of 120 million yuan, an increase of 0.2 billion yuan compared with the first quarter. Various performance indicators are showing a steady improvement in the trend.

In addition, the company's operating capacity compared with the quarter also improved significantly, the report period, the company's accounts receivable turnover rate of 4.20 times, an increase of about 2.20 times; inventory turnover rate of 0.48 times, an increase of 0.26 times. Not only that, the company in the industry boom is not high, still insist on increasing R & D efforts.

During the reporting period, the company's R & D expenses amounted to 122 million yuan, an increase of 21.6% year-on-year. Among them, the R&D investment in the second quarter was as high as 76.01 million yuan, an increase of 65.15% over the first quarter, showing that the company attaches great importance to R&D investment. During the reporting period, the company actively conducted research and development of multiple types of drugs to gradually improve the big health industry chain. Among them, in the field of cardiovascular and cerebrovascular medicines, the company has successfully developed and cultivated three well-known exclusive varieties, namely, Cerebro-Cardiac Capsules, Stabilized Heart Pellets and Danhong Injections, whose combined sales revenues in the first half of 2024 reached RMB 2.570 billion.

For a long time, the company has always attached importance to the protection of intellectual property rights of products, as of the end of the reporting period, the company has 469 valid patents. The company's leading products, such as Cerebro-Cardio-Tongue Capsules, Stabilizing Heart Granules, Danhong Injection, Prostate Shutong Capsules, Headache Ning Capsules, Kangwuyan Capsules, Eliminating Milk Dispersing and Junction Capsules, and Tongxin Sugar Reducing Capsules, etc., are all exclusive varieties. The company currently has 213 products under research and development, and will have more patented products with further research and development. For these patented products, the company is also constantly developing new patents to extend the period of protection.

Besides insisting on high investment in R&D, the company has also made great efforts in brand management and marketing. At present, the company has established Buchang Pharma's unique brand identification system, built specific product names, logos and trademarks around a series of patented products, and formed a brand building model covering TV, newspapers and magazines, radio, Internet, outdoor advertising, car advertising and other three-dimensional dissemination of corporate brand and product brand.

The brand building mode of the brand. After years of operation, the company has established a good reputation in the pharmaceutical industry, the leading products in the field of cardiovascular and cerebrovascular drugs have a certain reputation and influence.

The academic advantages of the products will be transformed into market advantages.

Strengthening the strategic layout of overseas markets and insisting on the synchronized development of multi-category drugs

It is worth paying attention to, previously Buchang Pharma announcement shows that its holding subsidiary Luzhou Buchang Pharma intends to sign a “distribution and license agreement” with the Russian company LANCET, licensing LANCET in the Eurasian Economic Union and Uzbekistan, as the holder of the product listing license on the injection of BC001 for the registration of the product, packaging and quality control, as well as as as the exclusive distributor in the territory of the product commercialization. commercialization, etc. The cooperation between the controlling subsidiary of Buchang Pharma and the Russian company LANCET is an important breakthrough and milestone in the internationalization process in respect of the strategic layout of Buchang Pharma's biopharmaceuticals, which will bring economic benefits to it and at the same time help to enhance the brand value of the Company. The signing of this agreement aims to rapidly transform the company's R&D achievements into benefits for the company through commercial cooperation and licensing, which will help broaden the overseas market for BC001 for injection and further enhance the company's performance.

As a matter of fact, Buchang Pharma has long insisted on the equal importance of independent research and development and open cooperation, and has strengthened international cooperation on the basis of endogenous development to achieve rapid transformation of R&D results, cover overseas markets with the help of international partners and maximize product value, which creates favourable conditions for Buchang Pharma's internationalization strategy and enhances its core competitiveness with a good promotion effect.

As a head enterprise of traditional Chinese medicine that started with cardiovascular and cerebrovascular proprietary medicines, Buchang Pharma's main position is traditional Chinese medicine, and the cardiovascular and cerebrovascular industry is the main layout field. 2023, Buchang Pharma's revenue in the cardiovascular and cerebrovascular industry was 9.172 billion yuan, accounting for nearly 70% of the company's total revenue, and the total revenue of the three exclusive varieties of cerebral and cardiac capsule, stabilized heart granule and Danhong injection in 2023 amounted to 7.428 billion yuan. The rankings of the market share of cardiovascular and cerebrovascular proprietary medicines in 2022 are the 4th, 7th and 10th respectively. In the gynecological and urological fields, Buchang Pharma has developed exclusive varieties such as Red Core Gynecological Cleansing, Kang Gynecological Inflammation and Prostate Shutong Capsule accordingly. Among them, Red Core Gynecological Cleansing and Kang Gynecological Yan are ranked among the Top 20 generic names in China, with the rankings of 13 and 16 respectively.

In addition, Buchang Pharma responded quickly to the global public health challenges by developing and stockpiling exclusive varieties of XuanLongSuoToxin Granules in the field of respiratory system. At present, the product has been registered in Canada in accordance with the standard of natural health products, in Kazakhstan in accordance with the standard of health food, and in Uzbekistan in accordance with the standard of drugs and is allowed to be marketed and sold.

At the same time, Buchang Pharma is expanding into high-tech industries such as biopharmaceuticals and vaccines, adhering to the development direction of “focusing on large industries and cultivating large varieties”. In the field of chemical drugs, Buchang Pharma has cultivated a number of injectable and oral dosage forms of chemical drugs, including Compound Cerebropeptide Steroid Injection and Ginkgo Biloba Honey Ring Oral Solution as exclusive varieties, and Grain Red Injection and Compound Tretinoin Injection as exclusive and patented varieties.

In the field of biopharmaceuticals, 12 biologics are under research and development, and some of the projects have entered the clinical phase I to III stage, covering the therapeutic areas of tumor, blood diseases and osteoporosis. In the field of vaccines, the controlling subsidiary of Buchang Pharma owns 4 vaccine products, including 2 influenza virus lysate vaccines, group A group C meningococcal polysaccharide vaccine and group ACYW135 meningococcal polysaccharide vaccine, and other products such as tetravalent influenza virus lysate vaccine, tetravalent influenza virus lysate vaccine, chickenpox live attenuated vaccine and herpes zoster live attenuated vaccine are under research and development.

Over the years, Buchang Pharma has been operating in good faith, responsible for shareholders and society, cultivating internal strength and seeking development, in order to improve its comprehensive strength and create substantial value for the majority of investors. The company will continue to do practical things, and strive to improve profitability and operating results to return the trust of investors.

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