On August 20, YSB (09885), a leading out-of-hospital digital pharmaceutical distribution platform, released its interim results for the first half of 2026. During the period, the company reported total revenue of RMB 10.283 billion, marking a year-on-year increase of 4.5%, while net profit surged 47.1% to RMB 109 million.

Driven by its dual-engine model combining marketplace and self-operated businesses, YSB achieved simultaneous growth in both revenue and profitability. The expansion of higher-margin operations, coupled with the advancement of full-chain digitalization, has led to an improved earnings structure and a continuously deepening competitive moat.

In its marketplace segment, enhanced end-user stickiness solidified the company's foundational base. For the first half of 2026, YSB recorded an average of 460,000 monthly active buyers, with 430,000 monthly paying buyers, maintaining a stable payment conversion rate of 94%. Paying buyers placed an average of 29 orders per month, reflecting steady increases in purchase frequency and repurchase depth. On the supply side, the platform expanded its catalog to over 4.3 million monthly available SKUs, a 9% increase year-on-year. During the reporting period, YSB also added new cooperative production areas for authentic herbs such as Tianqi and Gouteng, bringing its proprietary Traditional Chinese Medicine formula varieties to 372, with 1,266 grade standards. Herbal decoction piece sales reached 20,000 tons, up 10% year-on-year.

For its self-operated business, continuous supply chain innovation improved fulfillment efficiency. The company deepened collaborations with leading industry brands, bringing its total upstream supplier count to over 12,000. By continuously refining its integrated "procurement-warehousing-delivery" intelligent supply chain system, YSB achieved an on-time delivery rate of 97.4%. Thanks to meticulous supply chain management, the company's accounts payable turnover period stood at approximately 78.9 days, inventory turnover at roughly 37.5 days, and accounts receivable turnover at just 2.4 days. This resulted in a negative cash conversion cycle of about -39.1 days, with operating cash flow maintaining a consistent net inflow.

High-margin business lines emerged as key profit drivers. The manufacturer-brand first-push business, leveraging its digital marketing system to provide pharmaceutical companies with precise and efficient online channels, recorded a transaction volume of RMB 1.281 billion during the period, up 18.6% year-on-year. Meanwhile, the private-label business, characterized by high margins and differentiated competitiveness, served as the core engine for profit growth. It continued to lift the overall gross margin of the self-operated segment. During the reporting period, the private-label division offered over 1,200 spot products, served 10% more end-customers year-on-year, and achieved a transaction volume of RMB 1.111 billion, representing a robust 30.4% increase.

On the digital infrastructure front, YSB's software and hardware deployments are delivering cost and efficiency benefits across the value chain. Within its SaaS services, the Yuncangtong solution for upstream sellers surpassed 10,000 users. The Zhangdianyi platform for downstream buyers exceeded 81,000 users, with direct system integrations with social security departments in over 200 cities. For primary healthcare institutions, the Spectrum Cloud Clinic paid user base surpassed 4,000, with medical insurance functionality now covering more than 100 cities. Additionally, the "PHDS Pharmacy Health Diagnostic System," developed for retail pharmacy chains, has served approximately 1,000 chain headquarters users. In smart hardware, the Future Spectrum series devices have reached around 25,000 end-users, with sales of roughly 38,000 units, as penetration into primary-level terminals continues to rise.

Furthermore, reflecting strong confidence in the company's long-term value and growth prospects, YSB actively executed share buybacks. Between March 23 and July 21, the company utilized HK$159 million to repurchase over 35 million shares, representing 5.1% of its total share capital. The board has also approved a new buyback program of up to HK$100 million, to be implemented opportunistically based on market conditions, aiming to further optimize the capital structure and enhance shareholder returns.