Sihuan Pharmaceutical 2025 Annual Results Conference
[AI Key Takeaways]
Financial Performance
- Achieve total revenue of RMB 2.618 billion, operating profit of RMB 0.607 billion, and profit attributable to owners of the company of RMB 0.185 billion in 2025, successfully turning losses into profits.
- Revenue from the medical aesthetics business reached RMB1.485 billion, up 100% year on year, with segment profit of RMB0.818 billion, up 226% year on year; the revenue share exceeded 50% for the first time, reaching 57%.
- Revenue from the Innovative Drugs and Other segment reached RMB 0.176 billion, up 206% year on year, while the loss narrowed from RMB 0.948 billion to RMB 0.68 billion, a year-on-year reduction of 32%.
- Cash resources of RMB 4.27 billion, total assets of RMB 11.632 billion, and a final cash dividend of HKD 1.09 per share
Business Progress
- The medical aesthetics business has become the Group's largest source of revenue and profit, with annual sales of LediBao botulinum toxin exceeding 1.2 million vials, a year-on-year increase of 50%, and a market share of 22%.
- Successfully launched several benchmark products, including the "Hongyan" needle, "Girl's Needle," and "Dynamic Factor" series, covering more than 8,000 institutions nationwide and achieving 100% coverage among the top 500 institutions.
- Xuanzhu Bio successfully listed on the Hong Kong Stock Exchange, with three independently developed innovative drugs now on the market, two of which have been included in the National Medical Insurance Scheme.
- Huisheng Bio has received marketing approval for 17 products; empagliflozin has been included in the National Medical Insurance Reimbursement List; and semaglutide has completed Phase III clinical trials for its weight-loss indication.
Next Quarter Performance Guidance
- Growth is expected to be stronger in 2026 than in 2025, with the medical aesthetics business's market share expanding.
- Huisheng Bio aims to achieve breakeven in 2026, while Xuanzhu Bio hopes to nearly reach breakeven.
- It is expected that 3–4 more medical aesthetic products will be launched in 2026, bringing the total to over 7 products in the next two years.
- The medical aesthetics business has the potential to surpass the 2 billion revenue threshold, and the innovative drug segment's gliflozin monomer is expected to achieve 2-3 times rapid growth.
Opportunity
- Product Innovation: Over the next two years, more than seven medical aesthetic products will be launched, with over 30 pipeline products gradually advancing to commercialization; innovative drugs such as semaglutide are entering the commercialization phase.
- Market Expansion: Accelerating global deployment, with a focus on expanding into emerging markets such as Southeast Asia and Latin America, while consolidating footholds in mature markets in the EU and North America.
- Strategic Partnerships: Entered into an exclusive commercialization agreement with Tonghua Dongbao for insulin products and partnered with Huadong Medicine to promote canagliflozin.
- Operational Efficiency: Establish a full-chain digital compliance management system and deploy an AI-powered personalized anti-aging solution platform.
Risk
- Market Competition: Intensified competition in the medical aesthetics industry necessitates maintaining a competitive edge through product quality and brand building.
- Regulatory Compliance: The generic pharmaceutical business is subject to the centralized procurement policy's stringent monitoring, which will continue to put downward pressure on future revenue.
[AI Conference Transcript]
Host
Dr. Guo Weicheng, Chief Executive Officer; Ms. Liao Guili, Deputy CEO and Chief Financial Officer; Ms. Zhang Yahui, Director of Investor Relations; Ms. Cao Haiyan, CEO of Jilin Huisheng Biotechnology; Mr. Ma Song, Sales Director of Meirong Space; Ms. Pan Hui, Marketing Director of Meirong Space; and Ms. Xu Yanjun, Chairperson of Xuanzhu Biotechnology.
Next, please join me in giving a warm round of applause as we welcome General Manager Che to deliver his welcoming remarks.
The sound of the wind by the car
Thank you, everyone. Distinguished shareholders, investors, partners, and members of the media: my name is Che Fengsheng. It is a great pleasure to meet with all of you here in Shanghai—this also marks the first investor conference we have held in Shanghai since our listing.
First and foremost, on behalf of the Board of Directors and the entire management team of Sihuan Pharmaceutical, I would like to extend a warm welcome and heartfelt gratitude to all attendees at this meeting, as well as to our shareholders and partners who have consistently placed their trust in and supported the company, and to every dedicated and hardworking colleague at Sihuan.
2025 is a pivotal year for upgrading the quality of China's health industry, with regulatory compliance driving industry development and high-quality, compliant companies reaping growth dividends. In the innovative pharmaceutical sector, domestic substitution is accelerating, with globalization and commercialization emerging as the core strategic priorities.
Both of the company's two core business segments have entered a phase of high-quality development. After more than a decade of focused, in-depth cultivation and strategic realignment, Sihuan Pharmaceutical has achieved a qualitative breakthrough in its transformation, successfully transitioning from the investment phase to the value-realization phase.
The company has not only successfully turned around from loss to profit, establishing a clear inflection point for profitability with strong sustainability, but has also seen a significant improvement in the quality of its earnings. In addition, it has achieved a strategic breakthrough in its revenue mix: for the first time, the medical aesthetics segment's share of total revenue has exceeded 50%, reaching 57%, thereby officially becoming the Group's largest source of both revenue and profit.
The innovative pharmaceutical business has entered a commercialization harvest phase, while the generic pharmaceutical segment is accelerating the divestiture of non-core businesses. With each of the three major business segments focusing on its respective strengths and leveraging synergies, the medical aesthetics business serves as the core growth driver, and the strategic positioning of the innovative pharmaceutical segment has firmly established a value-creation trajectory.
The company's core operating data demonstrate an increasingly stable foundation for growth. In 2025, the Group achieved total revenue of RMB 2.618 billion and operating profit of approximately RMB 0.607 billion.
As the core business, the medical beauty business achieved total revenue of RMB 1.485 billion for the year, a year-on-year increase of 100%, with segment profit of about RMB 0.818 billion, up 226% year on year, making it the core engine driving the company's performance growth.
The innovative drug sector has achieved breakthroughs at a critical stage, with Xuanzhu Bio successfully listing on the Hong Kong Stock Exchange on October 15 last year, marking an important milestone in the realization of the sector's value. Meanwhile, the generic drug sector has steadily advanced the divestiture of non-core businesses, generating revenue of approximately RMB 0.956 billion for the year.
Currently, more than 30 pipeline assets are advancing steadily; the weight-loss indication for semaglutide has completed Phase 3 clinical trials; and the pipeline for regenerative materials such as PHA is progressing scientifically, ensuring robust near-term growth momentum.
Financially, the company is relatively stable. As of December 31, 2025, the Group's cash resources amounted to approximately RMB 4.2 billion, with total assets of about RMB 11.632 billion. This ample cash reserve has laid a very solid foundation for future successful transformation and business development, including international expansion.
In 2025, all business segments of Sihuan Pharmaceutical steadily implemented their strategic plans, with a solid organizational setup and impressive core performance metrics that fully underscore the forward-looking nature of the company's development strategy and its strong execution capabilities.
Next, our Group Management Team will systematically break down the key performance highlights of each of the company's core business segments for 2025, as well as the core capabilities and strategic initiatives that underpin these achievements.
In summary, there are three key points: first, the core business has experienced a comprehensive boom, leading to a holistic enhancement of corporate value; second, the medical aesthetics segment has achieved compliant, full-category deployment in the beauty-enhancement space; and third, sales of core products—including the successful global debut of our flagship offering—have resulted in three major breakthroughs.
We are the only company in the industry—excluding foreign-invested firms—to have achieved compliant, full-category coverage across all product segments while maintaining top-tier revenue. Our Ledibao products posted a 50% year-over-year increase in sales volume, with a market share of 22%.
Our products—including the Youthful Face Needle and other silicone-based items, last year's recycled-material offerings, and our premium "Dynamic Factor" line—are being launched one after another and are rapidly gaining market traction.
Our distribution channels now span 34 provinces nationwide, covering 370 cities, and our products are currently available at more than 8,000 institutions. Among the top 500 institutions, we can confidently say that we have achieved 100% coverage.
We aim to leverage our strengths in R&D and marketing, as well as our expertise in medicine and institutional partnerships. Through the acquisition of a stake in Swiss C-Sales, we have established a strategic product portfolio in Europe and are currently pursuing CE certification, with the goal of entering the European market.
Of course, we're also expanding into Southeast Asia, Brazil, and South America. Recently, I visited South Korea to finalize our sales address there, and our products have already achieved a breakthrough in overseas revenue.
As everyone knows, we acquired an equipment company in the U.S. quite some time ago, and we are currently undertaking several critical initiatives, including obtaining new certifications for our overseas operations.
The innovation segment has adopted professional management, with several core products under its umbrella. Secondly, the company maintains sound capital and financial health, pursuing both shareholder returns and investment in growth in tandem.
Having been listed since 2019—less than 23 years in total—this is a rather unique sector, and our primary objective is to ensure that investors truly realize investment returns.
Third, we will continue to enhance our core capabilities, fostering synergistic development between our medical aesthetics and innovative pharmaceutical businesses to create integrated competitive advantages. Looking ahead, the Group's primary focus will be on medical aesthetics as our core business, with the innovative pharmaceutical segment—alongside other business lines—serving as a key driver of synergy.
Finally, I would like to outline our company's milestone roadmap for future products. Going forward, our core strategy will be to align our product development priorities with market demand.
In this market, we have already made strategic arrangements for new materials such as PHA. Specifically, our PHA project has now been officially approved, as the world's largest company in the field of fillers and other applications has provided us with significant impetus and valuable recommendations, making it the first to do so.
Whether it's our innovative drugs or our fund initiatives, why are we focusing on weight management? After all, weight management is a critical component of global physical health. As you may have seen recently, some trials—including mid-stage studies—have encountered setbacks; however, our ongoing development of semaglutide is progressing extremely smoothly, and we are collaborating closely with our U.S. partners.
Of course, the adenovirus vectors we have introduced will also undergo clinical trials, as will CAR-T cell therapy at an appropriate therapeutic dose.
Core product and pipeline planning: From 2026 to 2027, we will continuously advance the regulatory submission and clinical development of our core products, swiftly converting our first-mover advantage into a market advantage.
Building on our existing portfolio of products such as the "Baby Face" and "Young Girl" injectables, we plan to launch more than seven new offerings over the next two years—and I'm confident the number will far exceed seven.
Product-based medical aesthetic offerings, including semaglutide for weight loss, constitute a crucial foundation for future growth and are the driving force behind our international expansion. Our primary strategy is to gradually penetrate this market through product innovation and localized operations.
There are also many areas for innovation in the innovative-drug sector, including breakthroughs, and the two senior executives will deliver extensive briefings on these.
More importantly, the company has clearly defined its core strategic priorities for the future: deepening the development of its core medical aesthetics business, leveraging the stable value of its innovative pharmaceutical strategy, accelerating the comprehensive rollout of its internally developed products, and enhancing the capital efficiency of its listed entity.
This encompasses five key areas, the first of which is to establish a full-chain, digital compliance management system with compliance as the cornerstone, proactively participate in the development of national standards in the medical aesthetics sector, and consolidate our competitive advantages.
As you can see, we are making significant strides in artificial intelligence, which is also a key area of R&D for the future. Secondly, we are intensifying our R&D investment in the medical aesthetics sector, with a product-centric approach that focuses on regenerative materials. We have four major growth areas—collagen-based weight management, high-end hydrafacial treatments, and others—and will continue to expand and enrich our product portfolio.
Third, leveraging technology as the driving force, we are developing an AI-powered personalized anti-aging solution system. These systems deepen the synergistic development of photonic and injectable products, establish a digital marketing platform, and foster collaboration with end-user institutions for education and training.
As you all know, we have an outstanding three-wave product that seamlessly integrates into both the market and everyday life—and it's the only one of its kind to be launched in both the U.S. and South Korea. Moreover, thanks to its unique mechanism of action, this product works exceptionally well in conjunction with our Four-Ring series, particularly for treating melasma, a condition that has long lacked effective therapeutic options. Looking ahead, expanding the application scope of this device will remain a key priority for us.
We are now located at the former site of Beijing's Fourth Ring Road, and we warmly invite everyone to visit and offer guidance. Our R&D operations are currently based in what was once the Fourth Ring Road industrial park, now known as the Fashion Technology Industrial Park, which will in the future foster collaborative development with both the broader community and the industry at large.
Fourth, orienting efforts toward globalization, we will consolidate the EU's and North America's mature markets, prioritize the expansion into emerging markets such as Southeast Asia and Latin America, and promote the international rollout of innovative pharmaceuticals and medical aesthetic products.
Fifth, we will leverage industrial-chain integration as a key lever to establish upstream capabilities for the independent production of core raw materials. As you know, we have three companies dedicated to raw-materials supply. Downstream, we will provide integrated support to end-user institutions, continuously deepen industry-wide synergy between the medical-aesthetic and innovative-drug sectors, and build differentiated competitive advantages.
Dear shareholders, investors, and partners, the dual strategic drivers of the health economy and Healthy China are unlocking substantial long-term growth opportunities for the medical aesthetics and innovative pharmaceutical sectors. Over the past 11 years, Sihuan Pharmaceutical has strategically positioned itself across product development, technology, distribution channels, and regulatory compliance, thereby establishing robust competitive barriers and entering a high-growth cycle characterized by the sustained realization of value.
Looking ahead, Sihuan will remain committed to its vision of building a leading, globally renowned medical aesthetics and biotechnology group in China. With unwavering strategic focus, pragmatic execution, and an open, collaborative mindset, the company will continue to concentrate on its core growth areas, deepen innovation and R&D, accelerate its global expansion, and consistently deliver long-term, stable value to shareholders. At the same time, Sihuan will empower industry development and provide consumers and patients with higher-quality products and services.
Finally, once again, we would like to express our sincere gratitude for your trust and support. We look forward to working hand in hand with you in the years ahead to write a new chapter of high-quality development for Sihuan, and to continue delivering strong investment returns to all our shareholders who have placed their trust in us.
Next, our management team will provide an update on our 2025 performance and financial progress. To begin, Mr. Ma Song, Head of Investment and also Head of Sales at Meiyan Space, will present the latest developments in our medical aesthetics business segment.
Ma Song
Thank you, everyone. Thank you, President Che, and distinguished investors and analysts—good afternoon. First of all, it is a great honor to gather here in Shanghai, China, to attend the 2025 Annual Investor Conference of Sihuan Pharmaceutical. I am the Head of Sales for the Beauty Space Division at Sihuan Pharmaceutical.
In 2025, amid profound transformation in China's medical aesthetics industry, the Beauty Space business achieved a 100% increase in revenue and a 226% increase in profit. I will now provide an update on the progress of our medical aesthetics business.
In 2025, the medical beauty and beauty enhancement segment is expected to generate revenue of RMB1.485 billion, a year-on-year increase of 100%, with segment profit reaching RMB0.818 billion, up 226% year on year. These results not only far exceed the industry average but also set a new company record since its inception.
In 2025, revenue from the medical aesthetics segment will account for over 50% of the group's total revenue for the first time, officially making it the group's largest source of revenue and profit. The core product, LediBao botulinum toxin, has seen annual sales exceed 1.2 million vials, a year-on-year increase of more than 50%, with a market share of nearly 22%, firmly placing it among the top three in the market.
Meanwhile, Sihuan Pharmaceutical's Meirong Space is the first domestic company to simultaneously offer both the "Girl's Needle" and the "Red Beauty Needle," as well as the country's first LG-peptide–based composite solution approved for facial indications. Its products have been warmly received by the market, truly achieving rapid volume growth immediately upon approval.
Meanwhile, optoelectronic devices will be deployed in a dual-wave configuration to achieve nationwide coverage, thereby establishing an integrated treatment system that combines injection therapy with optoelectronic therapies.
Meiyan Space's remarkable achievements stem from the establishment of four core capabilities: a comprehensive, category-agnostic compliance framework; global R&D and implementation; an end-to-end marketing network; and high-standard production quality control. These capabilities reinforce one another, creating a robust, hard-to-replicate competitive ecosystem.
Meiyan Space has consistently adhered to a product-driven growth strategy and a R&D-powered approach to future innovation, leveraging a dual-engine model anchored in its global, in-house R&D hubs to build a comprehensive product portfolio that fully addresses the lifecycle needs of beauty enthusiasts.
Meiyan Space has established three layers of R&D barriers, comprising five major R&D platforms, more than 30 pipeline products, and globally efficient collaboration. The five R&D platforms are the International Innovative Materials R&D Platform, the Recycled Materials Product R&D Platform, the HA-Based Products R&D Platform, the Biomacromolecule Product R&D Platform, and the Composite Innovative Materials R&D Platform.
The clinical pipeline encompasses more than 30 products across categories such as injectables, photon-based devices, contouring treatments, and weight-loss pharmaceuticals. Currently, the Meirong Space product pipeline covers core non-surgical aesthetic categories, including dermal fillers for volumization and contouring, photon-based devices, and skin-care treatments.
Meiyan Space boasts a dedicated R&D team of 80 professionals, bringing together industry-leading technical expertise and compliance specialists. In 2025, the company successfully launched several benchmark products, including the Hongyan Needle, the Girl's Needle, and the Dynamic Factor, while continuing to incubate high-potential pipeline products to sustain long-term, rapid growth.
LediBao's annual sales of botulinum toxin have exceeded 1.2 million vials, up more than 50% year on year, with a market share of nearly 22%, firmly ranking among the top three in China. It is available in over 8,000 medical beauty institutions nationwide and has become an absolute star product in the market thanks to its high purity, high efficacy, high quality, and cost-effectiveness.
Regenerative materials are experiencing explosive growth, with products such as the "Red Beauty" and "Youthful Beauty" injectables receiving approval one after another—and immediately scaling up production to serve more than 1,500 medical aesthetic institutions nationwide. The microspheres feature more uniform particle size and even dispersion, enabling the "Red Beauty" injectable to rapidly resorb within seconds for a more convenient procedure, which has been warmly embraced by the market.
Innovative breakthrough in active ingredients: Dongyin Su, the nation's first LG-peptide–based composite solution approved for facial indications, received approval in September and was officially launched in November, immediately garnering an enthusiastic market response.
Our optoelectronic devices are deployed nationwide, and our dual-wavelength radiofrequency microneedling system has cumulatively been adopted by more than 200 institutions across the country. Our pioneering dual-wavelength approach has received authoritative certifications from the U.S. and South Korea, positioning us as a leader in integrated repair-and-anti-aging treatment technologies and establishing a synergistic therapeutic framework that combines injection-based and optoelectronic interventions.
In addition, Meiyan Space boasts another 20 approved products, including Anrun hyaluronic acid and mesotherapy injection needles, creating complementary product categories and building a comprehensive, full-category ecosystem.
Beauty Space builds differentiated competitive barriers through integrated treatment protocols. This comprehensive anti-aging system comprises three core strategies, six collaborative treatment plans, and a diverse array of therapeutic approaches. The three core strategies are: tiered anti-aging, time-based anti-aging, and multi-dimensional anti-aging—each precisely addressing distinct client needs.
Six major joint initiatives and institutions have co-created benchmark combination treatment protocols, such as the "Magic Youthful Face" program, to deliver standardized, integrated treatment pathways. Personalized treatments—including phototherapy combined with injectables and regenerative therapies paired with botulinum toxin—meet patients' individual needs.
Through extensive preliminary clinical research and collaborative innovation with institutional operators, Meiyan Space has developed two premium product combinations that perfectly align with market demand.
Lebao's "Golden Duo" leverages its core products to drive category-wide synergy, while forging deep partnerships with leading medical aesthetics institutions, resulting in a channel structure where 25% of institutions account for 75% of sales.
The Magical Youthful Glow Gold Combo sets a new benchmark for comprehensive anti-aging treatment by combining the Red Beauty Needle with dynamic factors: the Red Beauty Needle enhances collagen regeneration and reinforces the skin's biological barrier, delivering multiple benefits in a single injection to address diverse skin types and a wide range of anti-aging needs.
By promoting integrated treatment solutions, we have not only enhanced the value of individual products but, more importantly, provided healthcare institutions and consumers with more comprehensive and effective solutions.
In 2025, Meiyan Space continued to implement its Version 3.0 marketing strategy by strengthening strategic partnerships with leading medical aesthetics institutions, increasing investment in directly operated outlets to expand market coverage, and refining agency management. Leveraging the synergistic drive of both direct operations and agency channels, the company has established a nationwide medical aesthetics marketing network, thereby achieving further sales growth across multiple fronts.
In 2025, Meiyan Space will comprehensively strengthen its deep collaborations with leading corporate groups and regional market leaders, expand its network of distributors in underserved areas, and achieve nationwide coverage across 34 provinces and more than 370 cities, with key core hospitals in over 1,600 facilities.
More than 250 chain groups and standalone institutions have annual cooperation agreements with Meiyan Space, bringing the total number of covered medical institutions to over 8,000.
Closer and deeper collaboration between the beauty-enhancement platform and hospitals will continue to deliver more comprehensive and long-term marketing services to medical-aesthetic institutions.
Meanwhile, the Meiranshi marketing team boasts many years of proven sales management expertise gained at multinational pharmaceutical companies such as Allergan, Galderma, and other foreign firms. As its in-house R&D products continue to receive regulatory approval, Meiranshi is steadily rolling out a comprehensive sales strategy that combines direct operations with distribution channels.
Currently, the Beauty Space division boasts a direct-sales and agency team of more than 700 members under Ledibao, a direct-sales and agency team of over 100 under Black Obsidian Dual Wave, and a sales team of more than 50 under Red Beauty Needle Dynamic Factors, along with supporting teams. Notably, 50% of these teams have extensive industry experience in international regenerative materials.
Amid the 2025 wave of public medical aesthetic institutions establishing dedicated medical aesthetic departments, Meirong Space swiftly mobilized its group's public-hospital team and agency resources to establish a standalone public-hospital division focused on the application of its products in public hospitals, collaborating closely with relevant projects to achieve precise channel penetration and targeted market breakthroughs.
Meanwhile, the Beauty Space Marketing Team is robustly supported by a dedicated direct-sales team, fostering seamless synergy with the sales organization. The central strategy team comprises more than 30 members, while the medical strategy and promotional-education teams together number nearly 20. With continuous expansion across all these teams, we have established a solid and reliable foundation that underpins the company's market expansion, strategic deployment, and service quality.
Meiyan Space has always remained committed to a medical-centric, market-oriented approach. In the medical aesthetics industry, academic influence is one of a company's core competitive advantages. Each year, Meiyan Space invests substantial resources in academic development: we actively participate in top-tier industry conferences, invite numerous renowned experts to share their latest research findings, and build our academic influence on the medical front.
Throughout the year, nearly 20 academic sponsorship conferences were held, reaching a total of over 8,000 participants. In addition, more than 730 training events were organized nationwide, cumulatively engaging 13,000 injectable dermatologists.
We have comprehensively launched six post-marketing investigator-initiated studies in collaboration with top industry KOLs and, in partnership with KOLs nationwide, developed and updated more than 50 sets of comprehensive product-specific medical training programs.
At the same time, Beauty Space has consistently adhered to the philosophy of growing together with its partners, delivering comprehensive, multi-dimensional support to medical aesthetics institutions through a wide range of marketing initiatives and events. On the market front, the company provides end-to-end product empowerment; this year alone, Beauty Space hosted more than 80 online and offline conferences, reaching over 100,000 participants and strengthening brand awareness across the board.
A total of 300 promotional events were launched for five major new product lines, with the participation of more than 3,000 institutions and sustained, cyclical promotion reaching over 1,300 key institutions.
We have established in-depth partnerships with more than 70 online experts and operational consulting speakers, leveraging professional academic exchanges to expand our brand influence. To date, we have cultivated over 200 key benchmark institutions, conducted more than 1,500 empowerment initiatives for these priority organizations, and hosted over 500 branded events, delivering comprehensive, high-impact capacity-building support.
In 2025, Beauty Space achieved remarkable results in expanding its presence across overseas channels and deepening its internationalization. By acquiring a stake in the Swiss brand C-Sales, Beauty Space secured the exclusive, perpetual distribution rights for Sales Booster's hyaluronic acid booster serum in China and leveraged C-Sales' well-established sales network spanning 43 countries to introduce its proprietary regenerative technology to the European Union.
At the same time, Beauty Space has established deep partnerships with international medical aesthetics companies, including those in South Korea, to integrate global resources. As a result, we have achieved impressive results in product globalization, channel development, and localized operations.
Prioritize the expansion of domestically developed materials, recycled materials, and optoelectronic equipment—key areas of competitive advantage—into high-potential overseas markets, thereby successfully establishing a global development model that is rooted in the domestic market and extends internationally.
From the present to the future, Beauty Space has a clear strategy. In 2024, the company will consolidate its foundation by managing the import agency for the botulinum toxin product Letybo, thereby establishing an extensive and robust distribution network that will lay a solid groundwork for subsequent product approvals and market access.
In 2025, we will achieve a comprehensive breakthrough: aesthetic medicine revenue will reach RMB 1.485 billion, up 100% year on year; aesthetic medicine revenue will account for over 50% of the Group's total revenue for the first time, making the aesthetic medicine business the Group's largest revenue and profit driver. We will also make a strategic equity investment in the leading brand C-Sales, marking a crucial step in our global expansion.
In 2026, we will continue to drive innovation, systematically launch future products, and progressively bring our 30 pipeline products to market. Our goal is to establish partnerships with more than 9,000 institutions nationwide, while accelerating our global expansion by initiating operations in emerging markets such as Southeast Asia and Latin America.
Starting in 2027 and beyond, the company will globally lead the development of a forward-looking, cash-flow-driven, tiered product portfolio to ensure sustained growth. While consolidating its presence in North America and Europe, it will also fully launch a global expansion strategy in markets such as Southeast Asia and Latin America.
Meiyan Space's vision is clear: to become a global provider of comprehensive medical aesthetic solutions. This is not only our goal but also our mission. We are confident that, through relentless effort and continuous innovation, Meiyan Space will undoubtedly realize this vision.
The foregoing is the 2025 performance report for the medical aesthetics segment. Next, we will invite President Guo to provide an overview of the generic pharmaceuticals situation.
Guo Weicheng
Thank you to all our investors, analysts, and online attendees. Hello, my name is Guo Weicheng, CEO of Sihuan Pharmaceutical Group. I will now provide an update on the current status of our generic pharmaceutical business and outline the Group's strategic initiative to accelerate the spin-off and divestiture of non-core generic operations, with a focused commitment to our core growth areas.
The generic drug business provides a stable cash flow for the group, with segment revenue of 0.56 billion and profit of 0.121 billion in 2025, offering solid financial support for the innovative pharmaceutical and medical aesthetics businesses.
We offer nearly 100 generic drug products and maintain robust cash flow; however, due to the government's centralized procurement program and associated monitoring policies, our future revenue is expected to remain under sustained pressure. Given that the industry has entered a phase of stock-based competition, the Group's strategy in the generic pharmaceutical segment is clear and unwavering: proactively streamline operations and focus on core value propositions.
We will accelerate the spin-off and divestiture of generic drugs and related non-core specialty businesses that fail to meet operational expectations and are inconsistent with our long-term strategy, while retaining core, market-competitive products and striking a balanced approach to cash-flow management and business development.
In 2025, we have achieved phased results in this work: we have signed the equity transfer agreement for Jilin Sihuan Aokang with Changchun Xiangtong Lianjiao Ke, finalized the Memorandum of Understanding on Asset Restructuring in Inner Mongolia, and steadily advanced the spin-offs of several non-core projects, including the related creditor and debtor claims of Tonghua Angel.
While divesting, we are continuously building up our product pipeline; in 2025, 16 generic drugs are expected to receive marketing approval, which will help replenish cash flow during the strategic realignment transition period.
Meanwhile, the resources freed up through divestiture will be fully concentrated on the two high-growth core segments of innovative medical aesthetics drugs, enabling increased R&D and marketing investments to build robust long-term competitive barriers.
In 2026, we will continue to deepen the divestiture of non-core assets and align with industrial capital, advance the restructuring and disposal of related businesses, and spin off and divest our non-core generic pharmaceutical business as a strategic move to optimize the Group's asset structure, ultimately driving the Group toward high-quality, more sustainable development.
That concludes my briefing on the generic pharmaceutical business. I will now turn the floor over to Ms. Cao Haiyan, CEO of Huisheng Biotechnology, who will provide an update on the company's business progress.
Cao Haiyan
Good morning, investors and analysts. My name is Cao Haiyan, CEO of Huisheng Biotech. I will now provide an update on the company's business progress.
As we all know, the size of China's diabetes drug market is 70 billion, and it continues to grow every year. Focusing on this therapeutic area, HS Biotech has built a product portfolio that covers the entire course of diabetes, including oral hypoglycemic agents, novel insulins, and core therapeutic drugs such as GLP-1.
In 2025, Huisheng Biotechnology made significant progress in product commercialization, international market expansion and collaboration, and the advancement of core product R&D. With its brand influence and market competitiveness steadily increasing, the company is well-positioned for robust growth in its operating performance over the next three to five years.
By the end of 2025, Huisheng will have established a fully integrated product supply chain. To date, we have obtained marketing approval for a total of 17 drug products across 24 specifications, encompassing 26 marketing authorizations, thereby ensuring that our product pipeline can comprehensively address patients' therapeutic needs at all stages of care.
Meanwhile, the company's production and supply system is designed and built in accordance with international standards, with ample capacity for traditional Chinese medicine. The current annual production capacity is 25 million units, and the planned capacity for Phase II is 50 million units, providing sufficient capacity to support both the expansion of the domestic market and the development of international markets.
Huisheng Bio's current growth is primarily driven by three major product categories within its pipeline. The first is our innovative drug, gleevecetin, a Class 1 innovative SGLT-2 inhibitor independently developed by the company. It was approved for marketing in January 2024 and was subsequently included in the National Medical Insurance Reimbursement List that same year, providing a solid foundation for sustained volume expansion.
The second category comprises China's first domestically developed and commercially launched degludec insulin and degludec-aspart dual-action insulin. As the nation's first approved novel insulins, they offer clear advantages in terms of domestic substitution. In 2025, full-scale marketing initiatives for both products will be launched, with steady progress in market expansion.
The third category is our GLP-1 product pipeline, with the NDA for semaglutide for the indication of glycemic control having been accepted for review. Following completion of the registration inspection and GMP on-site inspection in 2025, approval for market launch is expected by the end of 2026.
The weight-loss indication has successfully completed a Phase 3 clinical trial involving 376 patients and has now entered the follow-up phase. Commercial application is expected to be submitted by the end of 2027, with marketing approval anticipated by the end of 2028.
Meanwhile, the company's independently developed dual-target innovative drug has now been approved for clinical trials for the treatment of type 2 diabetes and obesity. Preclinical data indicate that its glucose-lowering and weight-reducing effects demonstrate differentiated advantages compared with similar products.
Overall, the company's core product pipeline is comprehensive and well-defined. Over the past year, the company's primary focus has been on accelerating market access and scaling up production for its key products.
Through a diversified marketing approach, we have organized nearly 1,000 academic events, reaching over 30,000 clinical experts and rapidly enhancing Huisheng's brand awareness and academic influence.
The first-in-class innovative drug, canagliflozin, has been licensed to Huadong Medicine for exclusive sales and marketing in the Greater China region. 2025 marked its first full commercial year, during which it had, by year-end, achieved coverage of 4,785 hospitals nationwide, including 1,015 tertiary hospitals and 1,094 secondary hospitals.
By 2025, the cumulative coverage of degludec–aspart dual insulin will exceed 3,200 hospitals, with degludec insulin covering nearly 700 hospitals.
In February 2026, we granted Tonghua Dongbao the exclusive commercialization rights for the aforementioned two products in Mainland China. This collaboration will leverage the respective strengths of both parties: drawing on Tonghua Dongbao's two decades of well-established commercial distribution channels in the insulin market, it will enable rapid hospital access, comprehensive end‑user coverage, and accelerated market penetration for these two products, thereby significantly accelerating volume ramp‑up and enhancing the certainty of market penetration.
Through collaborative efforts between the two parties, product value realization can be accelerated, while the company can also optimize resource allocation, enhance overall operational efficiency, and secure robust support for sustained future growth.
In 2025, Huisheng fully launched its internationalization efforts, with degludec insulin and degludec-aspart insulin as the initial core products. Leveraging its first-mover advantage in the domestic market, the company swiftly established flexible partnerships with leading players in emerging markets worldwide.
Subsequently, the company will comprehensively roll out its overseas commercialization strategy for key innovative drugs such as canagliflozin and semaglutide, with a focus on expanding into emerging markets in Eastern Europe, the United States, Southeast Asia, the Middle East, and North Africa, thereby achieving full coverage of the Belt and Road Initiative's designated strategic regions.
To date, we have established partnerships with nearly ten countries, including Brazil and India, and are fully advancing the registration and commercialization of our relevant products.
Notably, our company has successfully obtained GMP certification from the Brazilian Health Regulatory Agency, a PIC/S member state, and has been awarded the corresponding certificate. As one of the world's most important emerging markets—and also one with exceptionally stringent registration and market-access requirements—Brazil's approval underscores that Huisheng's GMP quality management system has fully met the international PIC/S standards.
Following Brazil's certification, many key emerging markets will open up varying degrees of fast-track access for us: Jordan will waive the certification process altogether; Colombia, Mexico, Paraguay, Uruguay, the Philippines, and other countries will shift from on-site audits to document reviews or even eliminate audits entirely; and Indonesia, Thailand, and several other nations will substantially streamline their inspection procedures.
This will provide substantial support for product registration in the Asia-Pacific, Middle East, Latin America, and Central and Eastern Europe regions. With GMP approval now secured in Brazil, the pace of expansion into many key markets has already accelerated markedly, which will serve as a milestone in the company's efforts to rapidly advance commercialization in other emerging markets going forward.
Looking ahead, Huisheng will continue to deepen its expertise in the field of diabetes treatment, steadily advance the commercialization of its core products, strengthen R&D innovation, and expand into international markets.
We are confident that, with its robust product pipeline, well-established commercialization platform, globally aligned quality system, and sustained capacity for technological innovation, Huisheng will serve as a key driver of the Group's performance growth in the years ahead.
That concludes my briefing on Huisheng. Next, we will welcome Mr. Xu, Chairman of Xuanzhu Bio, to share an update on Xuanzhu's business progress.
Xu Yanjun
Thank you, President Cao. Distinguished investors and analysts, good afternoon. My name is Xu Yanjun, Chairman of Xuanzhu Bio. I will now share with you Xuanzhu Bio's achievements over the past year and our outlook for the future.
As a R&D-driven, AI-powered commercial-stage innovative pharmaceutical company, Xuanzhu Bio has achieved two major milestones over the past year: listing on the Hong Kong Stock Exchange and the commercial launch of two mainstream innovative drugs. The company has now officially entered a phase of accelerated value realization.
Based on our current achievements, I would like to summarize the core highlights of Xuanzhu Bio as follows:
First, we possess mature and proven commercialization capabilities. To date, the company has successfully launched three independently developed innovative drugs, two of which have been included in the National Medical Insurance Reimbursement List, and a well-established, comprehensive sales system is now in place.
Second, we boast a well-structured product pipeline with strong development prospects. We are actively advancing the expansion of indications for our marketed products and the development of our early-stage clinical pipeline, which is expected to achieve multiple key milestones in the near to medium term, thereby providing robust momentum to support future growth and value realization.
Third, we are fully entering a new phase in which AI empowers the entire R&D lifecycle. We are establishing cutting-edge technology platforms for small nucleic acids, adenoviruses, gene therapy, and other emerging areas, thereby creating a multi-platform-driven innovation ecosystem alongside small-molecule and large-molecule therapies and continuously driving breakthroughs in the company's R&D.
IV. We maintain robust, healthy finances that underpin the company's long-term growth. In 2025, the company achieved substantial revenue growth, significantly narrowed its losses, continued to optimize its cost structure, and ended the year with ample cash reserves.
In 2025, we can summarize the key highlights at the business level as three major breakthroughs. The first is a breakthrough in product launch and commercialization: in May 2025, the CDK4/6 inhibitor ribociclib was approved for market launch, followed by the ALK inhibitor tirofiban, which also received approval in August of the same year.
With this, we have officially established a commercial model driven by both oncology and gastroenterology, with three core pillars operating in tandem.
Second, there was a breakthrough in capital operations. On October 15, 2025, the company was successfully listed on the Main Board of the Hong Kong Stock Exchange, raising HK$0.78 billion. In February and March this year, the company was also successively included in the Hang Seng Composite Index and the Stock Connect program, which has further enhanced its recognition and liquidity in the capital market, enabling it to reach a new level.
Third, there has been a breakthrough in医保 (basic medical insurance) access. By the end of 2025, brolucizumab was launched and immediately included in the National Reimbursement Drug List. Meanwhile, anlotinib successfully renewed its医保 coverage with no price change, thereby opening the most critical pathway for full-scale volume expansion in 2026.
Leveraging the three major breakthroughs achieved, the company's financial performance in 2025 has improved across the board, operational quality has been significantly enhanced, and profit potential is being unlocked at an accelerated pace.
In 2025, the company achieved operating revenue of RMB 51.77 million, a substantial increase of 72% over 2024, with gross profit reaching RMB 33.37 million, doubling year on year. The commercialization of core products has yielded remarkable results.
On the profit front, in 2025, with rapid revenue growth, continuous improvement in operational efficiency, and ongoing optimization of the cost structure, the company's loss will be 0.246 billion yuan, a significant year-on-year reduction of 56%, exceeding expectations in terms of loss reduction.
In terms of expenses, administrative spending fell sharply by 37% year on year, reflecting a significant improvement in management efficiency. At the same time, as all core products have entered the commercialization phase and begun generating revenue, R&D expenditures have temporarily declined.
In terms of cash reserves, the company held 0.652 billion yuan in cash and cash equivalents at year-end, a year-on-year increase of 382%. This ample cash flow provides strong support for the company's commercialization and scale-up in 2026 as well as the continued advancement of R&D.
Overall, the company's financial condition has entered a healthy growth trajectory, with clear and positive momentum and a well-defined upward trend.
On the commercialization front, the company has evolved from a single-pillar model to a three-pronged structure that synergistically leverages its gastroenterology and oncology businesses.
The company has now established a professional, commercialized team of more than 200 members and has developed differentiated sales strategies for its three products, thereby maximizing resource efficiency.
Anarattana employs a distribution model, with a sales team of more than 40 members and partnerships with 90 distributors, covering over 2,000 medical institutions. Following the renewal of the original Medicare pricing in 2025, volume is expected to continue expanding.
Biroxili adopts a direct-sales model and has assembled a dedicated team of more than 150 professionals, achieving coverage across 31 provinces and 500 hospitals nationwide, including 300 core Grade-III hospitals. Supported by favorable reimbursement policies under the national medical insurance scheme, the product's volume is expected to accelerate even further in 2026, positioning it as a key driver of the company's future revenue growth.
Tiroac shares a sales team with Biroxili and currently serves 200 hospitals and 200 pharmacies in key markets such as Beijing, Shanghai, and Guangzhou. The company is fully committed to advancing its 2026 national medical insurance negotiation efforts; once the agreement is finalized, it will swiftly unlock significant market growth potential.
R&D has always been the core of Xuanzhu Bio and its long-term competitive moat. In 2025, you will see the progress of our R&D pipeline and the achievement of key milestones, while 2026 will mark the gradual realization of several critical milestones.
For example, with regard to the indication of gastroesophageal reflux disease for Anarlatna, we submitted the application for a Phase 3 clinical trial in May 2025. To date, we have completed the enrollment of all study participants and plan to submit the New Drug Application (NDA) in the second quarter of this year.
Meanwhile, the indication for eradicating Helicobacter pylori will also be launched for Phase III clinical trials, which will be fully initiated this year.
With respect to birelizumab, the second-line and later-line indication for HR-positive, HER2-negative advanced breast cancer was granted priority review in 2025, and the first-line indication was officially approved in early March of this year.
The Biroxili formulation has also become the first and only domestically developed drug of its kind to provide comprehensive, full-course treatment—covering first-line, second-line, and later-line therapies—for HR-positive, HER2-negative advanced breast cancer, giving it a distinct competitive advantage.
Following the approval and launch in 2025 of the company's second innovative oncology drug, Tirorac, as first-line therapy for ALK-positive advanced non-small cell lung cancer, the application for its postoperative adjuvant therapy indication was also accepted that same year, thereby opening up greater potential for the product's long-term growth.
In addition, the company is advancing the development of its early-stage clinical pipeline: the next-generation HDAC inhibitor XZP-797 received clinical approval in 2025 and initiated a Phase I trial, with patient enrollment completed and the Phase II dose determined in 2026.
Overall, the company boasts a well-defined pipeline with smooth progress and robust reserves, providing sustained innovation-driven momentum for long-term growth.
In 2026, we will focus on three key priorities: achieving full-scale commercialization and volume growth, optimizing innovation and R&D, and strengthening cost control. By leveraging AI to empower end-to-end R&D, we aim to enhance quality and efficiency, thereby accelerating our transition toward sustainable profitability.
In terms of accelerating commercialization and scaling up production, we will leverage our differentiated product features, combined with our strong coverage through national medical insurance and key hospitals, to rapidly ramp up volume and consolidate our leading market position.
Tiroak is fully advancing healthcare insurance negotiations, deepening academic promotion, and steadily cultivating the market. Following the renewal of Anna Ratna's healthcare insurance contract, Tiroak is strengthening in-hospital medical promotion, expanding distribution channels to increase coverage, and continuously exploring the potential for further expansion of these three products.
In terms of continuously deepening innovation and R&D, the company has steadily advanced key milestones, propelled several pivotal drug candidates into the regulatory submission stage, and leveraged AI to accelerate drug discovery and development. Additionally, the company has established platforms for adenovirus-based therapies and small nucleic acid therapeutics, thereby solidifying the foundation for its long-term innovative growth.
In terms of comprehensively strengthening operational and cost management, we will, on the one hand, expedite the filing of new manufacturing sites and raw-material suppliers for our three currently marketed products, thereby establishing a diversified and stable supply chain, improving first-pass yield, and reducing production costs.
On the other hand, we will continue to optimize sales expense management, ensure that resources are precisely allocated to high-potential markets, refine our operations, and enhance overall operational efficiency.
Looking ahead, we will remain R&D-driven and AI-powered, transforming Xuanzhu into an innovative pharmaceutical company that leverages multiple technology platforms to build a diversified product pipeline and achieve sustained commercialization.
That concludes my introduction. Thank you for your attention, and I look forward to working with all of you as we grow together. Now, please welcome Mr. Liao, the Group's Deputy CEO and CFO, to present the Group's financial performance for 2025.
Liao Guili
Thank you, Mr. Xu. Distinguished investors, good morning. I am Liao Guili, CFO of Sihuan Pharmaceutical. I will now present the Group's financial performance outlook for 2025.
2025 is a pivotal year for our group's development. Through the optimization and upgrading of our strategic business portfolio and the meticulous control of expenses, we have achieved comprehensive improvements in our core financial metrics, resulting in an overall strengthening of our financial position and the realization of value.
In terms of revenue, our group achieved 2.618 billion yuan for the full year. Among the three major business segments, the medical aesthetics business recorded 1.485 billion yuan, while the innovative drugs and other businesses experienced rapid growth with a substantial year-on-year increase. The generic drugs business was affected by the industry environment, but we have effectively addressed this through process control going forward.
On the profitability front, we achieved our best annual performance, with the Group recording an operating profit of RMB 0.607 billion and the profit attributable to owners of the company reaching RMB 0.185 billion, marking a turnaround in all three key profitability metrics.
Turning to our cash position, we have 4.27 billion yuan in cash resources, up year on year. We have successfully achieved the Group's phased strategic objectives.
To thank our investors for their support, we will distribute a final cash dividend of HK$1.09 per share, equivalent to approximately RMB 0.01, with a total payout of HK$99.65 million, or RMB 84.8 million.
The positive changes in all of the above key financial metrics validate the soundness of our Group's dual-engine strategy of medical aesthetics and innovative pharmaceuticals, marking a successful transformation from a traditional, single-business model in the investment phase to one led by high-growth, high-margin medical-aesthetic operations, and signaling the commencement of a high-quality development cycle.
Next, we will highlight the performance of our medical aesthetics business segment. This fiscal year marked the first year of revenue growth for our medical aesthetics business, and in 2025 we achieved a comprehensive improvement in both overall revenue and gross margin.
The key data show that during the period, the medical aesthetics segment achieved annual revenue of RMB 1.485 billion, a year-on-year increase of 100%. From 2023 to 2025, the revenue of this segment grew from RMB 0.45 billion to RMB 1.485 billion this year, more than tripling in size.
Our segment performance increased from 0.25 billion in 2023 to 0.25 billion in 2024, and then surged to 0.818 billion in 2025. Our profitability has been steadily improving, with gross margins consistently reaching new highs.
We observed that our gross margin increased from 65.4% in 2023 to 67.5% in 2024, and then surged to 79.5% in 2025—a year-over-year increase of 12 percentage points.
At the same time, we see that this growth is underpinned by the effective implementation of the management team's precise business strategies. By establishing a comprehensive product portfolio that covers all categories and complies with all regulatory requirements, and by fully rolling out a multi-product co-selling model across our distribution channels, we have driven robust, all-round expansion in aesthetic-medical sales.
Currently, revenue from the medical aesthetics business has surged by more than 57%, making it the Group's largest source of revenue and laying a solid foundation for the Group's turnaround to profitability and for steady performance growth over the next three years.
Next, let's examine the performance of the Innovative Drugs and Other segment. This year, the segment posted rapid revenue growth, a substantial reduction in losses, key breakthroughs in commercialization, and continued expansion of long-term profitability potential.
In terms of revenue, our innovative drugs and other segments achieved total annual revenue of 0.176 billion, a year-on-year increase of 206%. This represents a threefold increase from 58 million in 2024 to 0.176 billion in 2025, with the revenue share rising by 4 percentage points year on year.
Our core growth drivers are also very clear: first, sales of Hesheng's diabetes drugs continue to grow, with mature products steadily scaling up; second, three approved product pipelines under Xuanzhu have officially entered commercialization, gradually contributing incremental revenue to the Group.
We can see that, in terms of profit and R&D investment, the loss of our innovative drug division has narrowed from 0.948 billion in 2024 to 0.68 billion in 2025, a year-on-year reduction of 32%, indicating a very obvious trend of profit improvement.
Overall, our innovative pharmaceuticals segment has entered a virtuous growth trajectory characterized by revenue expansion and improving profitability.
On this page, let's examine the results of our expense control in 2025. Throughout the year, we achieved highly effective cost management by substantially optimizing administrative and financial expenditures while strategically allocating distribution expenses, which was a key factor in turning the Group from loss to profit.
Let's start with the administrative expenses, which dropped from 0.74 billion in 2024 to 0.197 billion in 2025, a reduction of 0.28 billion. This decline is mainly attributable to two major breakthroughs in our market: first, the Group has promoted refined internal management to enhance operational efficiency; second, following the IPO of Xuanzhu Bio, its expenses have further decreased, contributing to the overall cost reduction.
In terms of financial expenditures, we reduced them from 0.27 billion in 2024 to 20 million in 2025. After Xuanzhu's revenue is listed, the interest on liabilities for redeeming subsidiary shares will decrease, optimizing the financial structure and further reducing financial costs.
Regarding distribution expenses, we observed that our expenses increased from RMB 0.43 billion in 2024 to RMB 0.62 billion, an increase of RMB 0.19 billion.
This increase is not an indiscriminate expansion; rather, it represents a strategic investment in our two high-growth, innovation-driven aesthetic-medicine drug businesses. All of these funds are earmarked for channel development and promotion as well as new-product R&D, ensuring close alignment with revenue growth in these two segments and paving the way for sustained volume expansion in our future operations.
In terms of R&D spending, the Group has continued to optimize its R&D investment, with a year-on-year decline in 2025. This reflects a shift in our R&D strategy: following the successful commercialization of our core R&D achievements, we have moved from large-scale expansion to more targeted and efficient allocation of resources. This approach ensures that, while reducing R&D costs and improving efficiency, we can also fully safeguard the rapid advancement of R&D initiatives across our core businesses.
We can see that from the Hong Kong IPO in 2020 to 2025, the Group's cumulative total R&D expenditure reached RMB 5.9 billion.
Overall, our group has achieved greater efficiency in R&D, administrative, and financial expenditures, while continuously optimizing our financial spending, ensuring precise allocation of distribution expenses, and maintaining robust cost control.
Finally, we would like to provide an overview of our Group's shareholder returns and cash flow outlook for 2025. The Group has consistently prioritized cash flow management as a core objective of its financial governance, while placing great emphasis on delivering strong shareholder returns and continuously demonstrating unwavering confidence in the Company's future growth.
In terms of shareholder returns, we will repurchase shares worth 0.189 billion in 2025, a significant increase compared with 34 million in 2023 and 20 million in 2024.
I would also like to add here that, from the time our group went public to 2025, the total amount of funds used by our group for share repurchases and additional purchases through trusts has reached 1.08 billion yuan.
The company's proactive share repurchase program underscores management's strong confidence in the optimization of the business mix and the growth potential of its core operations, as well as their unwavering belief in the company's future prospects.
Meanwhile, our group has always placed great emphasis on shareholder returns in terms of cash dividends. Over the five years from 2021 to 2025, the total amount of cash dividends we distributed reached RMB 1.88 billion.
If we look at the period from the 2010 IPO to the present, our total dividends have reached RMB 7.7 billion, which is a very high figure.
We can see that if we add the dividend payout ratio in 2025, the total annual dividend payout in 2025 will reach 0.2 billion.
At this critical stage when the group has turned losses into profits, it is actively creating value for shareholders. In terms of cash flow, cash reached 4.27 billion yuan, an increase of 0.12 billion yuan from 3.976 billion yuan in 2024.
Our cash flow has consistently remained robust, providing a solid foundation for us to focus on the emerging segment of innovative aesthetic-medicine drugs, further refine our product portfolio, and expand our distribution channels.
In terms of market recognition, the price-to-book ratio has risen from 1.1 times in 2024 to 1.5 times in 2025. This shift fully underscores the capital market's strong endorsement of the Group's turnaround to profitability in 2025, its optimized business mix, and the high growth potential of its core businesses, while also reflecting market expectations for the Group's future development.
Overall, we have achieved comprehensive optimization across our business structure and financial metrics. The medical aesthetics business has emerged as the core growth engine, commercialization of our innovative pharmaceuticals is accelerating, cost and expense control has been significantly strengthened, our financial position is robust, and our risk resilience has improved.
Going forward, the Group will continue to focus on high-growth sectors, optimize its product portfolio and channel development, maintain rigorous cost and expense control, consistently deliver strong performance, and create greater value for shareholders.
The foregoing constitutes our report on the 2025 financial performance. We now welcome questions and discussions from all investors.
Host
Thank you,各位 leaders, for your insightful presentations, and congratulations on delivering results that far exceeded expectations. My name is Zhang Wang, and I'm an analyst at GF Securities. Today we have a large number of investors in the room, and I'd like to take this opportunity to exchange a few questions with you. We'll now move on to the Q&A session—please each introduce yourself, including your name and affiliation.
Guangfa Securities Analyst
Good afternoon, Mr. Che, and hello to all members of the management team. I'm an analyst at GF Securities. Thank you very much for the outstanding presentation just now, and congratulations on the company's excellent performance.
First, I'd like to start by asking two questions that are of particular concern. The first is this: given the breadth and diversity of our business today, I believe everyone is most eager to hear our full guidance for each of our business segments in 2026, including our overall development plan. Could you please share that with us?
In addition, how are we to implement such guidance—what specific measures and approaches should be adopted? That is the first question.
As for the second question, since we launched Ledibao in 2021, it has now been more than five years, and our entire medical aesthetics business has continued to grow stronger.
At this current juncture, I'd like to ask about the company's overall strategic direction for the medical aesthetics business, including whether there are any new ideas or adjustments to the organizational structure.
My second question is also for President Che: Over the next three to five years, or from a medium- to long-term perspective, what direction do you envision for the development of our medical aesthetics business? Thank you.
The sound of the wind by the car
We expect 2026 to deliver stronger growth than 2025, with medical aesthetics accounting for an increasing share of that growth. As for HSBC's revenue, we aim to achieve breakeven this year. For Xuanzhu Bio, our goal is to reach near-term breakeven going forward. Overall, we remain confident.
As I mentioned earlier about that company, our top priority is talent—talent. This encompasses both our international expansion and domestic growth, because today it's crucial that we build a robust pool of marketing talent, as well as strengthen our IT infrastructure and, for example, ramp up efforts to expand our support teams.
This is a key focus for us. As you can see, the medical aesthetics industry is trending toward diversified approaches—such as rapid franchising and fast replication—which drive transformative changes across the entire supply chain, management systems, and marketing strategies. We, too, are adopting this very approach.
Among the 8,000 institutions in our network, roughly 1,000 account for nearly 90% of our sales share. Therefore, we allocate our entire sales resources based on these key accounts.
What is particularly important here are the central market and market resources, including our medical training physicians and scientific resources—this is the first point.
As for the second area—R&D—we expect to launch three to four new products this year, with even more slated for next year. As everyone knows, the R&D process encompasses everything from quality assurance and project initiation to the entire development cycle, product differentiation, and, ultimately, the marketing strategy for the product once it hits the market.
Over the past five years, we have developed a particularly in-depth understanding of the medical aesthetics industry and its market, as well as the management of each individual product. More importantly, we have established close and collaborative relationships with several key clinical departments and institutions.
This, then, is a crucial foundation for achieving our objectives. Going forward, we aim for steady and robust growth over the next three to five years.
As for the five-year outlook, let me summarize: as we just outlined—particularly our finance team—by then we aim to be a domestically leading, internationally recognized provider of medical aesthetics solutions, offering comprehensive solutions that go beyond the many medical aesthetics products currently available.
I think so. As you know, especially in the medical beauty industry, our successful breakthrough this year is that we have the opportunity to surpass the revenue threshold of 2 billion in 2026.
Once we achieve this breakthrough in revenue, it will not only establish China's medical aesthetics industry as a sizable market, but also provide us with additional advantages across a broader range of products and distribution channels. On this foundation, we are confident that our product portfolio is the most comprehensive and our channel coverage is the widest.
Therefore, when a company enjoys the dual advantages of robust product distribution channels and triple scale advantages, its subsequent momentum, growth, and even exponential expansion become inevitable—unless an exceptionally large black-swan event occurs. This is a virtuous cycle.
Let's all pay close attention to future revenue growth.
Ma Song
Thank you for the question just now. It's also a great honor to represent the marketing team in sharing with everyone our current approach to the medical aesthetics segment and to Sihuan Pharmaceutical's Beauty Space product line, as we mentioned earlier.
First, let's talk about the product segment. As we've seen, our product lineup boasts strong technological advantages this time around—particularly our flagship product, which has been getting a lot of attention lately.
In March, we also held a nationwide launch event, during which our benchmark institutions in key cities provided physician operations consulting and ensured comprehensive coverage of relevant promotional content.
Of course, from the product launch event all the way to the meticulous operations at each individual institution—covering everything from product launch and sales to consumer-facing campaigns—we will deliver in-depth, integrated operational support. That's the product module.
As for the second component, it pertains to the brand module. In collaboration with Sihuan, we will implement a closed-loop marketing strategy that targets both consumers (C-end) and businesses (B-end).
If it is convenient for you, you can open the Meituan app on your phone. Recently, we have been cooperating with Meituan on a "youthful face" needle campaign, which has delivered remarkable marketing results in terms of GPV, UV, and other metrics.
So what lies behind this? It's that, for all of 4i's partner clients, there is not only a well-defined mechanism for implementing this project, but also a clear sense that the project will deliver a highly targeted customer base.
On the branding front, in addition to our end-to-end closed-loop marketing efforts targeting both B2B and B2C audiences, we have also launched a wide range of corporate social responsibility initiatives. These include deep collaborations with domestic industry associations, academic societies, and legal organizations, among others.
As for the third point, it concerns the evolving consumer mindset over the years. We've observed that medical aesthetics has gradually shifted from being a niche pursuit to becoming mainstream.
In fact, this is closely tied to compliance. As you can see, our current portfolio in the medical aesthetics space is now far more diverse—ranging from photon-based and injectable treatments to skin-management procedures—which reflects the increasingly diversified and personalized nature of consumers' medical-aesthetic spending.
In this process, our physicians, our operations team, and even our entire organization need to develop a broader portfolio of products and more integrated solution packages to meet the diverse needs of different consumer segments and income groups.
Currently, Sihuan's products are designed to comprehensively and precisely address consumer needs in a multi-faceted, deep-level manner.
The fourth point concerns our comprehensive market empowerment. As you may have just seen in our sales presentation and video, we currently offer not only training for physicians but also deep, on-the-ground engagement with healthcare institutions.
In particular, as General Manager Che mentioned regarding our centralized strategy, we have established very deep collaborations with our key account (KA) clients—whom we currently prioritize for maintenance—in areas such as healthcare and others.
In addition to skill-based education provided by physicians, we also offer hands-on training in injection techniques, as well as more in-depth instruction on the treatment of relevant indications.
In summary, we focus on four key dimensions: first, the product's absolute competitive advantage; second, brand building; third, deep market insights and understanding of end consumers; and fourth, an overarching market strategy coupled with comprehensive market enablement.
Ma Song
Thank you for your question. As I just outlined in my report on the changes that occurred in 2025, you'll notice that over the course of a year, there has been a shift away from single-therapy approaches, while the broader demand among beauty-conscious individuals has increasingly focused on safety and long-lasting results.
In recent years, you may have noticed significant changes at Meirong Space, a subsidiary of Sihuan Pharmaceutical. The brand has evolved from its earlier incarnation as Ledibao to become China's first medical aesthetics label that simultaneously offers Red Beauty Needle, Girl's Needle, and Dynamic Factor treatments, along with our high-end dual-wavelength radiofrequency photonic equipment.
Currently, Sihuan Pharmaceutical's Beauty Space boasts a comprehensive portfolio of medical aesthetic products across all categories, effectively addressing the anti-aging needs of a broad range of beauty-conscious consumers.
Moreover, the Four-Ring Beauty Space upholds the pharmaceutical heritage of our healthcare group, with the sole purpose of ensuring rigorous quality control for every single medical-aesthetic product we manufacture. For instance, our regenerative products feature more uniform microsphere particle sizes and even distribution, while the Youth-Enhancing Injection can be rapidly re-dissolved in just one minute, making the procedure both quicker and more convenient—features that have been warmly embraced by the market.
Every one of our medical-aesthetic products is manufactured under pharmaceutical-grade quality control, ensuring the highest standards of safety for the institutions that use them and for the beauty-conscious women who trust them.
Going forward, Sihuan Pharmaceutical will not only continue to offer six major injectable products and photonics devices, but also bring more than 30 additional pipeline assets in the medical aesthetics space to market one by one.
Looking ahead, we aim to offer our leading institutions—and the top standalone facilities in our local regions—a co-branded product that provides a comprehensive, full-face solution to meet our clients' aesthetic needs.
That may define what kind of company we will be over the next five years. I'd also like to highlight a few key words: thanks to our solid foundation built through Ledibao, we now have deep partnerships with 8,000 medical aesthetics institutions.
Today, we have achieved a comprehensive breakthrough: we are the first domestic medical aesthetics brand to offer botulinum toxin, hyaluronic acid, Red Beauty Injection, Girl's Needle, dermal fillers, and photoelectric radiofrequency treatments all under one roof.
Looking ahead, we aspire that, through our global expansion, we will lead the industry in truly transforming from a mere supplier of aesthetic-medical products into a comprehensive provider of end-to-end aesthetic-medical solutions.
CITIC Securities analyst
Good morning, members of the management team. My name is Xu Xiaofang from CITIC Securities. First of all, I would like to congratulate the management on delivering such outstanding results in 2025—no doubt the outcome is the result of tremendous effort and relentless exploration. We have two questions.
The first question was touched upon in the management's response just now, but I'd like you to elaborate a bit further. First, let's talk about our medical aesthetics business: several of our key products have delivered very strong sales growth, with LediBao, in particular, posting relatively rapid expansion.
What methodologies do we employ for these flagship products, and what underlying logic underpins them—essentially, what is the current situation? In addition, we'd like to understand what scale these flagship products are expected to achieve by around 2026. That's the first major question.
The second major issue concerns product R&D. By the time 2021 had passed and the year drew to a close, after many years of exploration in the medical aesthetics field, we have undoubtedly established extremely high standards and robust R&D capabilities in product development.
So how do we gain deep insights into consumer needs? As General Manager Che just mentioned, we conduct extensive, in-depth research during the early stages of product development. Could you please provide more details on this?
The sound of the wind by the car
Let me address the second question first: how I approach product R&D project initiation, as well as the future structure of our products.
Head of R&D
Thank you for your question. I believe that's exactly the case—this is indeed a very good question. From the perspective of our product development, we certainly aren't working in isolation behind closed doors anymore.
That's precisely what we steadfastly uphold: a research-and-development approach that starts with the end in mind. Why do we say "start with the end in mind"? Because our ultimate goal is to serve beauty seekers, so we place unwavering emphasis on understanding their needs and gaining deep insights into those needs.
At the same time, this is actually very important. Another key consideration during R&D is our attention to clinical needs. In this way, we take a holistic, integrated approach—considering our products from these three major dimensions—to ensure they meet real-world clinical requirements.
Only in this way can our products ultimately meet the needs of our consumers. This is something we are deeply committed to and have been consistently working on—specifically, how to effectively capture and address these needs.
That's because our entire Four-Ring Beauty Space has been deeply rooted in the medical aesthetics industry for many years. As a result, we not only stay attuned to global trends and developments in the field, but also, thanks to our longstanding, in-depth collaborations with leading expert institutions, continuously gain a deep understanding of clinical practices and the evolving needs of beauty seekers.
This, in turn, establishes a crucial premise for us. As we will also outline later, under this premise and leveraging our five core technology platforms, we have developed a wide array of products.
First and foremost, on the R&D front, our ultimate goal is to deliver products that deliver real value. To that end, we have already made extensive progress in developing and deploying a wide range of product offerings.
We not only cover a wide range of materials to meet diverse needs—ranging from our PDRN products, ECM, and hydroxyapatite, to our recombinant human collagen, certain collagen formulations based on agarose, and even hyaluronic acid—but we have also established strategic positions in these areas. This represents one aspect of our approach.
In fact, another important aspect we've observed is that beauty seekers' demand for anti-aging extends far beyond the face—it encompasses the neck and hands, as well as larger areas of the body. Moreover, there are emerging areas worth exploring in the future, such as the scalp and intimate aesthetics.
All of this is what we are focused on. As we've mentioned, our ultimate goal is to become a full-fledged solutions provider. To achieve that, our solutions must be holistic and comprehensive—going beyond just the facial domain. This, in turn, has become a key direction for our R&D efforts.
Of course, that's from the R&D perspective. But beyond R&D, on the actual application side in the market, what we really want to do—what we've been emphasizing—is to deliver a truly end-to-end solution.
In fact, our product portfolio offers a wide range of combinations and approaches, primarily tailored to each client's unique aesthetic needs and to the nuanced layers of clinical dermatology. Our ultimate goal is to deliver truly personalized, forward-looking solutions that meet the individualized requirements of every client.
The sound of the wind by the car
As everyone can see, this is the kind of situation where a four-ring pharmaceutical patch, after two years of development, has achieved sevenfold growth. So who exactly is doing what in the middle? The best marketing expenses—and, of course, the core expenses—are crucial.
The challenge we face now is whether we can keep up as the market may eventually see ten or even more such products. I believe a key objective in paying attention to this type of product is to ensure it delivers consistent value or content.
For example, this product will have a second one, because of its unique characteristics—such as the potential for further growth over the next four to six months—so we need to incorporate more metrics to better capture the product's value proposition.
The third organization has undertaken extensive promotion of this product, including outreach to education groups and local authorities—entities that play a crucial role in advancing education. More importantly, looking ahead, we must all work together to ensure that the overall "pie" of educational opportunities continues to grow.
Of course, he can see that compared with previous generations of the same age group, everything is now different—things are becoming increasingly youth-oriented and smaller in scale, and consumer demand is growing. That's why I was in Shanghai yesterday, engaging in exchanges with everyone: if they partner with me, they'll benefit from customized, exclusive offerings, including five existing products as well as future product launches.
Therefore, it's simply impossible for him to be swayed just because someone put on a stage for him—this is my most significant advantage. After all, as we all know, when it comes to our flagship products and their long-standing track record, we consistently deliver exceptional product quality.
Another point is the opportunities our institution has, including leveraging the strengths of our product portfolio—for example, we're currently promoting a product called "Hongyan Needle," while another resource segment is dubbed "He Li." These two can be seamlessly integrated with our core driving factors.
First, the clinical outcomes of the products we are advancing will undoubtedly be superior; second, this approach can help mitigate the market impact associated with relying on a single product.
Another point is that, throughout the ongoing process of use, physicians and institutions will, in turn, provide us with what they consider to be excellent treatment protocols. Based on these revised protocols, we can then conduct new trials, which is, after all, crucial for the future development of the core product.
Our marketing department, particularly our medical affairs team, engages with experts and physicians through educational outreach and other initiatives.
Analyst
Thank you for this opportunity to ask a question—good morning, everyone. Building on what General Manager Che just shared, I'd like to follow up: many of us here feel the intense competition, and when we talk about "finding a second growth driver," specifically in the context of our Fourth Ring business, how can we sustain our high-growth trajectory? And what are the fundamental, core competencies that underpin this?
As General Manager Che just mentioned, we do have product solutions. But when it comes to specific products, how should we set pricing at the retail level to maintain price stability at the point of sale? That's roughly my take on this issue.
The sound of the wind by the car
That's a good question. As everyone knows, we may be allocating more of our budget to product branding. Second, we collaborate with institutions to help address their pain points—for example, by organizing hospital forums, various conferences, and other events.
We will be hosting city-level events, focusing on key markets such as Beijing, Shanghai, Changsha, and Chengdu. Through these initiatives, we aim to encourage both beauty institutions and consumers to choose our products—rather than relying solely on price, although price remains an important factor.
The most important thing is whether you can truly address its needs, how you go about doing so, and, as mentioned earlier, leveraging product combinations to mitigate its price sensitivity.
Another point I also advocate is that I place great importance on the view held by some—that we should avoid excessive competition and refrain from pushing institutions to undertake initiatives that may not be in their best interest simply for the sake of profit.
In that case, I don't think it's a long-term, responsible approach—problem solved.
CITIC Securities analyst
Good morning, members of the management team. My name is Yan Jinhui, an analyst at Guotai Junan Securities. Thank you for the opportunity to ask this question, and congratulations on the company's outstanding performance in 2025.
On my end, I have two questions I'd like to ask. First, I've noticed that in the past our partner has engaged in quite a bit of international collaboration across its medical aesthetics pipeline. And as General Manager Che just shared, you also have some international expansion initiatives in the U.S. and Brazil.
Therefore, my first question is: Could management please share with us the detailed strategies and plans for our future global expansion and overseas operations, as well as a rough timeline for their implementation?
My second question is: given our historically generous dividend payouts, it's clear that our company places great emphasis on delivering strong returns to shareholders and providing robust employee incentives.
In that case, I'd like to follow up with management on this point: Looking ahead, particularly for this year, what are your plans regarding dividend payouts, share repurchases, and employee incentive programs?
Liao Guili
Let's start by addressing this important and pivotal dividend question. As you can see from the historical data I have here, with the sole exception of 2023, we have distributed dividends every year since 2011, albeit at varying levels.
The largest dividend is this amount. I saw that it was 1 billion in 2011, then 1 billion in 2016, 1.4 billion in 2020, and 1 billion in 2021. This is what we have seen, and we will distribute dividends in 2022.
In other words, it's quite common for us to announce such substantial dividend payouts. If you compare the amount with the stock price at the time, you'll see that it was paid out when the share price was very low—back then, I even had another investment where the stock was trading at only 60 cents per share, yet the dividend payout was 20 cents, which was an exceptionally large payout at the time.
What I'd like to emphasize is that Sihuan has always been a company that is very committed to delivering value to its shareholders. Although our dividend payout ratio may not be fixed at a specific percentage, historically we have consistently distributed substantial dividends.
Then in 2025, we will achieve a total of about 0.199 billion, and basically all of it will be distributed as dividends—two hundred million Hong Kong dollars. As you can see, this also shows our sincere commitment.
The sound of the wind by the car
On the topic of internationalization, as you can see, Sihuan now launches numerous new products every year. In addition, less than 12 years after we founded Ledibao, we began negotiating overseas partnerships; in 2014 we entered the hyaluronic acid market, and by 2016 we had embarked on a full-scale transformation into the medical aesthetics sector—meaning we've already been pursuing this strategy for a decade.
As for our international expansion, we acquired a U.S. company about three to four years ago. More recently, I was in South Korea, where we established a local base and registered a subsidiary; we've also set up operations in Switzerland, as well as in France and Italy, as you may know.
Why pursue internationalization? A key reason is that, once our products have reached a certain stage of development, we must build our own brand—after all, they are consumer goods. Internationalization is therefore a critically important component of our strategy.
Of course, there are various ways to get product approvals through mergers and acquisitions in the meantime—for example, with our own products. If we're talking about similar products, we could leverage a Swiss brand, or collaborate with Xinyun, or even repackage the product ourselves.
For example, in South Korea, thanks to our extensive clinical data, we are well positioned to pursue regulatory approvals. I believe the next five years will undoubtedly be a period of rapid growth for the medical aesthetics industry. That said, while the sector does face certain barriers—though not as stringent as in other fields—it places very high demands on brand reputation and credibility.
Therefore, we need to build our brand—both domestically and on the international stage. Our second goal is to evolve over time from being a Chinese provider of medical aesthetic products into a global provider of such products.
Within this framework, we have undoubtedly engaged in both in-house R&D and collaborative acquisitions subject to regulatory approval; moreover, we have continuously strengthened our sales presence in overseas markets—indeed, many of our products are already being launched in these regions.
The bulk of our offerings are device-based, such as microneedling devices; the rest are predominantly from overseas—some from the U.S. and Europe, with the others mainly focused on sales. Going forward, this is likely to be a key area of focus for us.
As for the key intermediate aspect—for example, when we produce triple-helical collagen—the triple helix structure indeed cannot deliver very strong structural support. In such cases, we may turn to international markets to source materials like this.
That said, China remains quite stringent in its regulatory approach. Once substantial evidence demonstrates that the product is indeed effective, we will proceed with launches in Europe and the United States first—this is precisely what we aim to accomplish.
In that case, we can view this year as the inaugural year for our true international expansion. With a focus on acquisitions and product launches, this year will be a critical priority for us.
Analyst
Thank you very much for this opportunity. I'm an analyst at Shanghai Securities, and I'd like to ask about the status of your innovative-drug business. As you know, management just mentioned that by 2026, we expect your innovative-drug segment to be on a strong path toward achieving breakeven as soon as possible.
My question is: Could you please share with us the sales performance of our key products for the 2025 fiscal year? Additionally, could you outline how you project the revenue peak and sales trajectory for these core product categories over the medium to long term, specifically through 2026 and beyond? Thank you.
Xu Yanjun
Thank you for your question—after all, we're all old friends. Let's start with Xuanzhu; I'll get that covered first. Now, thank you, Professor Han, for your question. As for innovative drugs, let me first brief you on the situation at Xuanzhu.
As you all know, our first product in the digestive field under the Anna Ratna brand was approved in 2023, and as of 2025, we have entered a period of intensive product delivery and harvest.
As I just outlined in the PowerPoint presentation, our three product lines this year have achieved a dual-engine growth model driven by both gastroenterology and oncology, creating a robust "three-horse carriage" momentum. This commercialization strategy has been fully rolled out starting last year and continuing into this year.
First of all, as you can see, our initial market positioning for these three products was based on the assumption that they would tap into a market with enormous potential—specifically the three major therapeutic areas of gastrointestinal diseases, breast cancer, and lung cancer. In China, the incidence of these conditions continues to rise year after year.
In addition, we are actively expanding into overseas markets with these three product lines, with a primary focus on the Eurasian economies and, more broadly, on emerging markets such as Southeast Asia.
This includes the ongoing negotiations on agreements with the five member states of the Eurasian Economic Union. Once the agreements are formally signed, we will promptly announce the details to the public. This represents our first strategic direction: the market potential is enormous.
Secondly, the three products we offer each have distinctive differentiating features, and their clinical value is highly significant. We hope you will understand that, for example, our first product, AnnaLatna, boasts multi-enzyme metabolism and dual-channel excretion; however, these characteristics make it unsuitable for patients with hepatic or renal insufficiency, as well as for elderly patients.
We have also been progressively incorporating guidelines on geriatric medications into our practices, which not only reflects clinical recognition of our products but also provides strong assurance of their sales performance.
In our Biroxili program, we have now achieved comprehensive patient coverage across the entire treatment continuum—first-line, second-line, and later-line—for HR-positive, HER2-negative breast cancer, and our product is the first and only one of its kind in China to offer such full-chain coverage.
No other comparable products offer such comprehensive, end-to-end coverage. Moreover, multiple sets of clinical data for our product have been published in leading international journals and at major international conferences, earning high recognition from both clinicians and patients.
Take tirofiban as an example: although it is indicated as first-line therapy for non-small cell lung cancer, its unique characteristics—namely, a favorable safety profile and robust efficacy—also enable sequential treatment in patients who develop resistance after first-line therapy or in those receiving second-line or subsequent lines of treatment.
By leveraging the product's unique differentiating features, we can also ensure its clinical value.
Thirdly, thanks to the support of basic medical insurance, we are continuously unlocking our production capacity and sales volume for these three products.
For example, our Biroxili in the second- and third-line settings has already been included in the national medical insurance scheme, and Anarattana, which was added last year, also successfully renewed its inclusion this year.
As of this year, we still need to conduct negotiations on first-line医保 coverage for ceritinib, as well as negotiations on医保 coverage for tirofiban, which is indicated for ALK-positive non-small cell lung cancer.
As more drugs are progressively included in the national medical insurance scheme in 2026, 2027, and 2028, our overall sales volume is expected to experience very substantial growth.
Based on the three aspects mentioned above, our three products generated nearly RMB 50 million in sales revenue last year.
This year, our sales revenue is expected to increase by at least four to five times. Our target for this year aligns with our 2026 goal, and over the next two years, as the indications for several of our products are included in national medical insurance, we are poised to achieve sales growth of at least RMB 1 billion for these three product lines.
Now, let's welcome Mr. Cao from Huisheng to provide an update on the sales performance of the innovative drug canagliflozin. Our strategic plans and expectations do not necessarily reflect our exact execution; nonetheless, we will spare no effort to deliver on them.
Cao Haiyan
Thank you, Mr. Han, and thank you all for your attention to our innovative drugs, which are progressing relatively quickly. In 2025, Huisheng is expected to generate product revenue of 0.119 billion, although it will also incur a loss of 0.18 billion.
Furthermore, in 2026, we anticipate that the innovative drug canagliflozin will benefit from strong market access achieved in 2025, given that, as mentioned earlier, we secured hospital inclusion for a total of 4,485 institutions throughout the year, with more than 1,000 of these being tertiary and secondary hospitals.
Building on this strong hospital access, the gliflozin monotherapy is expected to achieve rapid growth of two to three times in 2026.
In addition, as you can see, in February we entered into an exclusive commercialization partnership with Tonghua Dongbao for degludec and degludec-aspart. This deep collaboration leverages Dongbao's two-decade-long, highly mature commercialization platform in the insulin field, which will be of tremendous assistance in rapidly scaling up the production and sales of degludec and degludec-aspart.
In summary, we are confident and optimistic that Huisheng will achieve profitability in 2026. Thank you, everyone.
CICC analysts
Hello, Mr. Chen, and hello to all the management. My name is He Jingchen from CICC's Medical Beauty Specialist Group. I'd like to raise another question regarding our distribution channels.
We've also observed the rapid scaling of botulinum toxin services in China, with coverage expected to reach over 8,000 institutions by 2025—nearly half of all such facilities nationwide. In light of this, we'd like to ask: what specific initiatives do you plan to implement going forward to further expand your distribution channels?
In addition, regarding recycled materials, we've seen an exceptionally rapid surge in growth since last year. Let's take a look at the current channel landscape for recycled materials—it's roughly as follows.
Finally, on the third sub-question: as we just mentioned, following the significant trend observed in public hospitals last year, we made a highly beneficial strategic realignment. I would like to ask whether there are any available data on the relative proportions of private versus public institutions, or whether you could share some specific insights into our operations within the public sector.
Ma Song
Taking the issue of the three systems as an example, let's address it from a psychological perspective due to your question. As for the category of regeneration products, when it comes to beauty-enhancing spaces, we should first return to the product itself, because successful marketing is always about achieving a synergy where 1 plus 1 is greater than 2.
First and foremost, this product can achieve explosive growth only if it boasts exceptionally stringent quality control combined with a comprehensive marketing system. However, Sihuan Pharmaceutical's regenerative product features more uniform microsphere particle size and, as mentioned earlier, can rapidly reconstitute within just one minute, earning widespread recognition and favor from our extensive network of partner institutions and physicians.
Therefore, it is possible that, as of now—just under six months after our product received marketing approval last year—we have already established deep strategic partnerships with more than 1,500 customers nationwide for our regenerative products.
Of course, the majority of these clients are still chain-based corporate groups. At the same time, we have observed a significant trend emerging in 2025: many public hospitals are progressively establishing medical aesthetics departments.
In response, the Group promptly established our medical aesthetics public-sector team, which currently comprises nearly 90 colleagues.
At the same time, whether within private-sector teams or public-sector teams, we have consistently maintained highly efficient collaboration across our market, medical, and sales functions.
Over the next five years, through 2026, we will continue to expand our execution team while significantly increasing our investment in public hospitals. To date, we have already achieved several phased breakthroughs in public hospitals in Shanghai.
Ma Song
As for our distribution channels, as you can see today, Sihuan Pharmaceutical's Beauty Space business has established a solid foundation centered on Ledibao. We currently collaborate with more than 8,000 institutions nationwide, and an additional key statistic is that virtually all of China's leading beauty-space chain operators have entered into deep strategic partnerships with our Beauty Space platform.
Going forward, we will continue to build on the solid foundation of our partnership with Ledibao to progressively onboard our recycled products and, in particular, those that have already been approved—such as the active ingredients approved last year—as well as the additional products that are soon to receive approval.
Building on the solid foundation of Ledibao, we will progressively leverage our comprehensive product portfolio to provide all-round empowerment to our deeply partnered chain institutions and leading local providers, delivering a more comprehensive, safer, and more comfortable treatment experience—and tailored treatment plans—to the patients we serve.
The sound of the wind by the car
To add to that, we can report as follows: we have currently divided our work into three major areas, with the second area being private institutions, which we are prioritizing. Since last year, we have also been placing particular emphasis on public hospitals.
As for the third segment, as many of you know, several of Double Beauty's agencies—such as Jiesika, Angelia, and numerous others—are also a key focus. In other words, agencies like Double Beauty's Meili Tian and similar ones are all strategic priorities for us.
The key approach here is to collaborate with these markets—building on the points we just discussed—to co-create better solutions and explore options such as joint prepayments.
Founder Securities Analyst
Thank you for your question. Hello, and greetings to all members of the management team. My name is Zhou Xin, an analyst at Founder Securities. I'm very pleased to note that, in 2025, we are indeed witnessing a robust surge in the company's performance in the medical aesthetics sector.
As a consumer, I'm truly delighted to see so many new products being unveiled in 2025. That said, I'd like to follow up with a more specific question about medical aesthetics.
First, following up on the earlier question about our distribution channels, I'd like to probe a bit further. Given that we now offer a broad portfolio of products across multiple price tiers, and that our channel network has expanded significantly to over 8,000 outlets, have we implemented any strategic segmentation or tiering of these products within our existing channel base? This brings us to the issue of channel strategy differentiation.
My second question is that, in 2025, I believe we will see a shift in our sales strategy—specifically, we have launched numerous co-branded solutions, such as the Lebao Family and Magic Youth Face. I was wondering if you could share some relatively quantifiable data to illustrate the performance of these products, particularly with regard to these two specific questions about medical aesthetics. Thank you.
The sound of the wind by the car
Regarding the strategic layering you mentioned, let's just address the layering issue together since it's been somewhat overlooked. After all, this is how the product must be structured: among the roughly 8,000 institutions in this space—though the actual number currently alive may be closer to 16,000 or even higher—these constitute our target institutions. And within that pool of target institutions, we're aiming to capture 20% or some other specific percentage.
One issue is product-related; the same applies to that particular institution. If I were to say, for example, that other institutions in Shanghai offer the same product, then we might focus on the core institution and leverage its influence. For instance, this is why we adopt a direct-sales-and-agency model.
That's very important—without it, it would be difficult for us to reach the lower-tier regions, such as prefecture-level cities and counties. In those cases, we can leverage local agents and their strengths to expand our coverage. At the same time, we'll focus on key, high-growth professional hubs, major institutions, and prominent chain businesses. These are some of our defining characteristics.
In this context, there may be some differences in the resources available to various stakeholders under different market policies. As for the second question, let's discuss a joint solution: for example, we could develop our "Dual-Star" initiative while leveraging data from other components to drive meaningful changes.
Ma Song
First, regarding our channel strategy, as General Manager Che mentioned, we have implemented a tiered and segmented approach. As the 80/20 rule suggests, the top-tier institutions with which we maintain close, in-depth partnerships account for the vast majority of our sales performance.
Back then, last year, we also made significant adjustments to the marketing team's staffing. We swiftly established a dedicated Key Account (KA) team and a full-time marketing and medical functions team, creating a tightly integrated "market–medical–sales" triad that collaborates synergistically to empower our top-tier KA accounts. This was on the channel front.
Secondly, it's true that, as we've adapted to the evolving trends in China's medical aesthetics industry, today's clients are no longer satisfied with single-modality treatments; they increasingly prioritize safety, long-lasting results, and comfort.
Today, for those seeking aesthetic enhancement, achieving facial anti-aging often requires a comprehensive, product-based approach. In fact, when we first launched our Lebao and Magic Youth Face products, we undertook extensive preparatory work—starting with in-depth clinical research conducted by our regional and marketing teams.
Over the past six months, we conducted rigorous clinical validation within our Medical Department, and as a result, we officially launched our flagship product, "Magic Youthful Complexion," earlier this year.
At present, at Magic Youth Face, we have already held our grand launch events across the country—covering the east, west, south, north, and center—and have also collaborated with numerous partner organizations to extend invitations.
Meanwhile, in April, we may also see many of our top key-account agencies collaborating with our "Magic Youthful Face" initiative to launch major secondary marketing campaigns and trending events.
As for the specific market implications and how these two products will empower our future initiatives, we'd now like to invite President Pan to provide a detailed breakdown.
Pan Hui
Alright, first of all, this is a very good question. To provide some additional context, from both the market and medical perspectives, we actually have two key areas of focus: one is KA-focused strategy, and the other is joint product promotion.
Under these two focal areas, we actually have some effective tools and approaches. For example, although we are dealing with 8,000 institutions, these entities can in fact be categorized and classified.
For example, the model we are currently running is the "Benchmark Institution Development and Replication Model." Under this model, we categorize our approaches into four types: the first is the chain-store model; the second is the conventional KA model that we are all familiar with; the third is the large-scale single-entity model; and the fourth is the physician IP model.
Under these models, we have primarily focused on the "Hongyan" acupuncture treatment. Over the past six months of operation, we've successfully rolled out nearly 20 to 30 such institutional models nationwide.
Moreover, when these institutional models are aligned with the distinct stages of development across the east, west, south, north, and central regions—taking into account factors such as the institution's years in operation, its customer base, and customers' repurchase frequency—they demonstrate a certain degree of replicability.
Now, aligning this with the focus on our KA accounts and product promotion we just discussed, the fact that there are 8,000 such accounts actually reflects a very well-organized situation in our view. That's the first point.
The second question is that we will also align with the core product categories we just discussed. For example, with products like the LediBao Hongyan Needle—whose driving factors are currently in focus—we are, in fact, employing a broad-market coverage strategy.
As for this segment, there's no need to say more about Ledibao—we've built over five years of brand equity, and our base of key accounts is exceptionally solid. Building on what General Manager Zhou just outlined, we're leveraging our established public-channel partnerships, including Shuangmei and other leading channels, to drive even faster expansion.
As for the "Red Beauty" needle, we've already discussed many of its key features, including its particle size and reconstitution characteristics. Importantly, these features are designed not only with end consumers in mind, but also with B2B users' operational convenience in focus.
Behind this lies our strategic entry into the market with dermatology-based customized "childlike" skin treatments. We then expanded to "red-faced" injections—starting with your very first "childlike" treatment, your first in life—and gradually introduced versatile "childlike" options. As everyone in the dermatology field knows, these treatments generally have a relatively low average transaction value per client at clinics.
By offering product categories like the "Hongyan Needle" treatment, we've not only increased average order value but also fostered strong customer loyalty—both of which are critical metrics for the long-term operational success of dermatology departments at today's medical aesthetic institutions.
One is customer satisfaction, another is the frequency of repeat purchases, and the third is their profitability.
So, regarding the Hongyan Needle product line, we are currently leveraging various market trends—such as the ongoing upward adjustments in segmentation—as well as deep collaborations with key institutions. These partnerships have, to a certain extent, broadened and accelerated our overall institutional development efforts. That's one point.
Now let's turn to the active ingredient. As we just mentioned, this is China's first functional ingredient specifically formulated for facial use. What's more, this product boasts exceptional versatility. And as we all know, collagen is a hot topic—well, the active ingredient in this product doesn't just support collagen synthesis; it also promotes more effective collagen regeneration.
At the same time, it helps reduce the rate of collagen loss, which opens up even more avenues for research and product development. As you can imagine, this kind of product delivers a bouncy, plump texture while also providing robust protection for the skin barrier.
When collagen supplementation helps slow down the rate of collagen loss, such products can play a highly effective promotional role across many "age-defying" initiatives—including the Magic Youthful Complexion program we just discussed.
As for the Hongyan needle and the dynamic factor, we actually position these two products as our company's brand-strategic offerings. These two products are primarily marketed through select distribution channels—namely, medical institutions and physicians. Such physicians possess significant advantages in injection expertise, brand stewardship, brand building, and maintaining a high retention rate among premium clients.
Therefore, the key drivers of our Hongyan needle and other growth factors in the future will be the sustained, large-scale expansion of our brand's sales over the long term.
In addition, as we just discussed, our Obsidian product has also received extremely positive feedback in the market.
For all the products mentioned above, we not only have individual product strategies for each offering, but also coordinated cross-product strategies tailored to specific combinations. The benefit of this approach lies in the fact that, as I just discussed, end-consumer demand is never singular—it's about delivering tangible results.
Beyond the commonly discussed points about authenticity and safety, what matters most is the outcome of the treatment. In other words, if I undergo a single treatment session, I expect to see twice the results—or even more.
Currently, the entire product matrix of the Four Rings—including the solutions we've co-developed with our partners—is highly aligned with the evolving needs of this market.
Now, let's talk about Magic Youthful Face and Lebao Family. As we just mentioned, our Red Beauty Needle is primarily designed to stimulate the regeneration of Type III collagen, which is exceptionally soft and supple and does not lead to skin hardening or other such issues.
At the same time, it can also help slow down collagen loss. Through such approaches, we have not only conducted clinical trials but have also carried out relevant animal and clinical studies at a very early stage in collaboration with many leading domestic physicians.
As mentioned earlier, we will also conduct preliminary clinical trials, operational tests, sales tests, and promotional trials at several model institutions. Once we have developed a comprehensive solution, we will then proceed with replicating the four types of benchmark institutions as discussed.
Under these circumstances, the fact that 8,000 stores have been rolled out demonstrates, in our view, a highly well-organized rollout.
Host
To clarify, we're adding this management team because time is rather limited today, so we may only have time for one final question. That said, we'd still like to pose a few questions, as we've observed that the overall conditions in the medical aesthetics sector are not expected to grow, and there may also be some discrepancies in how we assess the company's market capitalization.
In this regard, one might also have such concerns; however, it is believed that this deviation could potentially be addressed later through certain measures, thereby further enhancing the value—though there is still some ambiguity on this point. We should do our best to provide a response.
Liao Guili
The management team has also provided an update on the overall growth prospects across our various business segments. As you can see, both our medical aesthetics and innovative pharmaceutical businesses are experiencing explosive growth. In fact, we already turned around from a loss to profitability last year, and this year we are enjoying robust revenue expansion. Moreover, with the launch of new products in our medical aesthetics segment, we expect even stronger growth going forward.
Indeed, given our current market capitalization, our existing cash holdings, and the value of our stake in Xuanzhu Bio, our company's market cap is unduly undervalued. We therefore aim to enhance our engagement with investors in order to facilitate a more sustainable reversion of this significant valuation discount.
As our performance continues to grow over the next few years, we also hope to gain recognition from the capital markets, thereby achieving a return to intrinsic value and further amplifying that value.
Ultimately, I hope to become a leading, high-performing company in the medical aesthetics and innovative pharmaceutical industries.
Of course—this is precisely why we've been investing significant effort in promotion for quite some time. In the past, our focus on generic drugs resulted in losses, and market attention was relatively limited. That's why, this year, we've made a major strategic realignment.
Similarly, we have been engaging in exchanges with domestic investors. Going forward, we aim to move beyond mere dialogue and actively invite more investors to gain deeper access to our channels, enabling them to engage in higher-level interactions, learning opportunities, and meaningful exchanges with our management team.
This will enable investors to gain a deeper understanding of our strengths in the medical aesthetics and innovative pharmaceutical sectors. At the same time, we sincerely hope that investors will continue to follow our progress, experience our high-quality medical aesthetic products, develop a preference for our offerings, and, in doing so, better appreciate the intrinsic value of our company.
I am confident that in the future we will continue to deliver strong returns to our investors through robust business growth and superior capital returns.
From a financial perspective, I'd like to conclude by emphasizing that, when evaluating a company, the most critical factor is certainty—specifically, the certainty of growth. I believe this is precisely what I want to underscore and highlight for everyone at the end.
That's because people often ask why, with pharmaceuticals and medical aesthetics seemingly experiencing widespread declines, your company is achieving such high growth. The simple answer is that our growth is driven by new products.
This is because we launch new products every year, and these new products are in a ramp-up phase, so their growth is inevitable. In addition, our innovative drugs are also introduced as new products.
Therefore, what sets us apart from many other companies in the same industry is that our growth is driven by new products, it is high-quality growth, and it is inevitable growth.
Therefore, we would like to conclude by reminding everyone that the value of the Fourth Ring Road is underpinned by a very clear and compelling growth certainty over the next few years.
Of course, we also have our solid financial position—our ample cash reserves, the improvement in profitability, and the turning point in our performance, among other factors. These are the key areas I'd like to emphasize for your attention.
Host
Thank you very much for all your questions. Today's investors have been exceptionally enthusiastic. To wrap up, we'd like to invite President Che to provide a brief summary, and we'd also like to ask you: if you were to use just a few words to encapsulate our future strategic initiatives, what would they be?
The sound of the wind by the car
First of all, I'd like to express my sincere gratitude for gathering here in Shanghai. I recall that at last year's earnings conference, I made a bold statement: 2025 will be the most critical year for us—we must turn losses into profits this year, and it must mark the beginning of high growth.
I am truly delighted that we have achieved this, but I would like to express my heartfelt gratitude to all of you here today for your unwavering support over the years.
As for our future roadmap, our goal is to become a leading domestic and internationally recognized medical aesthetics company—specifically, a provider of medical aesthetic services—within the next three to five years. While this may sound somewhat abstract or ambitious, in reality, we have already put in place a comprehensive set of strategic initiatives to support this vision.
For example, which markets should we target internationally, what R&D initiatives should we pursue, which of our products should be exported, how large a sales force do we need to maintain domestically, how should we align our sales capacity with market demand, how many key-account experts and key-account customers do we have, and what budget should be allocated for central-market and regional-market activities?
There is a wealth of data supporting or benchmarking comprehensive budget management; therefore, I would like to emphasize that, starting now, both Sihuan and Meiyanspace have entered a highly positive and rapid growth phase.
As you have all heard, Huisheng is hopeful that this year its business will soon reach a strong starting point for the development of innovative drugs nationwide.
I just emphasized the importance of comprehensive summarization here. All of you in the room are highly experienced—whether you're analysts or investors—and I truly hope that in the future you will both go global and attract international talent and investment.
As for our R&D, we have two hubs—one in California and one in Beijing. The Beijing team comprises roughly 80 people, and you're welcome to visit our R&D facilities and engage in discussions with our team.
Currently, in addition to our overseas production bases, we have facilities in Jilin and Hebei provinces in China, as well as in Beijing, where we are about to submit our application. As you can see, we are also developing what we call a "Fashion Industry Park," under which we will establish joint ventures and collaborations with numerous international institutions and companies.
There's another very important point: as the saying goes, "Seeing is believing." Even if you've seen it, you still need to put it to use. I'd like to invite everyone to try it out for themselves, because this is the second time a teacher who previously invested in us has asked me, "You keep saying your product is great—this and that—but why don't you use it yourself?"
So a couple of days ago, I was in Hangzhou—a city of such vast scale—and we launched ECM. Of course, we're not yet sure how effective it will be, but I'm hopeful that you, too, will lend your support as our association's president.
In the future, we hope to establish experience zones like ours in key regions, including in several of our major cities and at important conferences.
I recall that there was a meeting in Beijing some time ago—was it the Shanghai meeting? I know everyone attended the Beijing meeting, right? As I remember, a colleague named Brother Feng took part, and after the meeting his impressions were quite different from ours.
After all, the most important thing is to listen to the voices from the front lines—listening to doctors and to healthcare institutions. I believe this is perhaps the most critical aspect.
In summary, once again, thank you all for your continued support and assistance to Sihuan. We also hope that each of us will continue to thrive and grow. Thank you all.
Host
Thank you, President Che, for your insightful remarks. With that, we have now brought to a successful close the 2025 Investor Presentation for Sihuan Pharmaceutical. We would like to express our sincere gratitude to all our investors for your continued support over the years. Following the session, you are welcome to engage in further discussions with Sihuan Pharmaceutical's Investor Relations team and our GF Securities team. Thank you all, and we will be hosting a dinner afterward.
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