Zhongzhi Pharmaceutical Holdings Limited reported first-half 2026 revenue of RMB790.00 million, a 10.3% year-on-year decline driven by softer demand in both its manufacturing and retail pharmacy businesses. Gross profit retreated 13.3% to RMB418.19 million and the overall gross margin slipped 1.9 percentage points to 52.9%.

Profit attributable to shareholders edged up 3.8% to RMB9.12 million, lifting the net margin to 1.2% (1H25: 1.0%), supported by tighter expense management. Selling and distribution costs fell 16.3% to RMB339.74 million while administrative expenses dropped 16.1% to RMB41.49 million.

Segment performance • Pharmaceutical manufacturing contributed 67.2% of group revenue, sliding 12.2% to RMB530.73 million as channel partners reduced inventory. Segment gross margin improved to 62.3% (1H25: 61.9%) on product-mix changes. • Chain pharmacies generated 32.8% of revenue, down 6.0% to RMB259.24 million amid lower in-store traffic. Gross margin contracted to 33.8% from 39.2% a year earlier, reflecting a higher share of online sales.

Cash flow and balance sheet Operating cash inflow reached RMB112.52 million (1H25: RMB123.33 million). Cash and bank balances stood at RMB161.56 million with net current assets of RMB349.35 million. Interest-bearing borrowings were trimmed to RMB10.00 million, reducing the gearing ratio to 0.9% from 4.4% at end-2025. Capital expenditure was RMB15.50 million, mainly for property, plant and equipment.

Operational highlights • Subsidiary Guangdong Caojinghua obtained FSSC 22000 food-safety certification, reinforcing quality credentials. • The “Caojinghua” cell-broken herb line expanded to more than 40 SKUs; cell-broken Astragalus remained a nationwide top-seller for the fifth consecutive year. • Yunzhi Herbal Pieces won supply contracts for 57 specifications in the National TCM Decoction Pieces Alliance tender. • Retail transformation continued, adding 60 “prevention-nourishment-regulation” service stations and nine benchmark health hubs.

The board declared no interim dividend, citing the need to preserve cash. Management will focus on leveraging policy tailwinds in traditional Chinese medicine, deepening the “manufacturing + retail” model and further improving cost efficiency in the second half.