What could the OTC conversion of Quyu Jianpi Tea change?

  • Quyu Jianpi Tea, an exclusive product of Wantong Pharmaceutical, has entered the public consultation stage for OTC conversion after passing technical review on 20 September. The product targets people with hyperlipidemia associated with obesity, and its sales rose 180.51% year on year in 2024.
  • Soochow Securities says the product generated annual sales of approximately ten million yuan as a prescription drug. OTC conversion could open up out-of-hospital retail and the nationwide market, and the company expects sales volume to multiply substantially within 2–3 years. Guizhong Pharmacy's 942 stores and chain distribution network can provide sales channels.

How far has the epilepsy drug in which the company holds an indirect stake progressed, and what is its potential?

  • Liuzhou Pharmaceutical Group subscribed for a 10.56% equity stake in Suninflam in December 2024. Its core pipeline candidate, SIF001, targets epilepsy by inhibiting neuroinflammation and has entered Phase II clinical trials in the United States.
  • In a clinical study initiated by Chinese investigators, median seizure frequency fell 65% after 6 patients with drug-resistant epilepsy received treatment for 28 days; 1 patient experienced no seizures. No serious adverse events were observed during the study.
  • Under a neutral scenario, Soochow Securities estimates peak global sales of SIF001 at approximately 23 billion yuan. The company also has priority rights for commercialization and contract manufacturing in China.

Where is growth in the existing business coming from?

  • In the first half of 2026, DTP pharmacy sales reached 1.658 billion yuan, up 47% year on year, driving retail revenue growth of 31%. Soochow Securities considers the expansion of the out-of-hospital prescription market and coverage across hospitals, DTP and dual-channel arrangements important supports for retail growth.
  • Over the same period, net operating cash flow improved 53% year on year, and accounts receivable were reduced by 870 million yuan. The convertible bonds were redeemed and delisted in January 2026, and finance costs began to decline.

When will the growth initiatives show up in profits?

  • Soochow Securities expects Liuzhou Pharmaceutical Group's net profit attributable to shareholders to be 695 million yuan in 2026, down 2.02% year on year; it expects 778 million yuan and 852 million yuan in 2027 and 2028, respectively, representing year-on-year growth of 11.94% and 9.47%.
  • For shareholder returns, cash dividends for 2025 totaled 263.8 million yuan, and share repurchases amounted to a further 198.6 million yuan. Together, they represented 65.19% of net profit attributable to shareholders for that year. The report highlights risks from retail competition, policy adjustments and failure in innovative drug development.