On the evening of August 27, Shijiazhuang Yiling Pharmaceutical Co.,Ltd. released its 2025 interim report. Core profitability indicators showed comprehensive improvement: the company achieved operating revenue of 4.04 billion yuan and net profit attributable to shareholders of 669 million yuan, representing a year-on-year increase of 26.03%. Additionally, Shijiazhuang Yiling Pharmaceutical plans to distribute cash dividends of 3 yuan per 10 shares (including tax). Beyond the impressive financial figures, the market is more focused on the company's growth potential: the underlying logic of R&D-driven innovation.
R&D is Not "Burning Cash" but Building Strength
Among traditional Chinese medicine (TCM) companies, Yiling has always been an "atypical representative": over the past three years, Shijiazhuang Yiling Pharmaceutical has maintained its position among the industry's top three with an average annual R&D investment of 900 million yuan. Particularly in 2024, R&D expenses accounted for 13.94% of revenue, significantly higher than the industry average.
Based on such research capabilities, Shijiazhuang Yiling Pharmaceutical's innovative TCM pipeline has delivered frequent results. Currently, the company owns 17 patented Chinese medicines covering multiple disease areas including cardiovascular, respiratory, and neurological conditions.
In recent years, the company has maintained a pace of applying for 1-2 Class 1.1 new TCM drugs annually. Moreover, as of last year, Yiling had 9 TCM projects and 3 chemical drug projects in clinical stages.
This rhythm of "launching one batch, applying for one batch, researching one batch" is uncommon among domestic TCM companies.
The Overlooked Logic of "R&D-Driven Growth"
Such a pace is rare among domestic TCM companies, making Shijiazhuang Yiling Pharmaceutical more like an innovative pharmaceutical company wearing traditional Chinese attire.
Looking back, over the past five years, Shijiazhuang Yiling Pharmaceutical has had 5 Class I new drugs approved for market launch, with 4 of them included in the national medical insurance catalog. The Qifang Bitong Tablets approved this year is expected to enter national negotiations by year-end.
Looking forward: Shijiazhuang Yiling Pharmaceutical's innovation cycle is sustainable, developing 1-2 new varieties annually, which would be impressive even among chemical drug biotech companies.
In fact, on June 16 this year, the National Medical Products Administration released the "Notice on Optimizing Clinical Trial Review and Approval for Innovative Drugs (Draft for Comments)." It stated: Applications included in the 30-day channel for innovative drug clinical trial review and approval should be Class 1 innovative drugs for TCM, chemical drugs, and biological products.
This shows that in regulators' view, TCM innovative drugs have always been an indispensable part of innovative pharmaceuticals. However, the market has yet to reflect this recognition.
TCM International Expansion Should Not Be Underestimated
On another front, Yiling's collateral disease theory is evolving from a Chinese concept to a global research topic: for instance, Tongxinluo's RCT study for myocardial infarction treatment was published in JAMA, and multiple products including Shensong Yangxin and Qili Qiangxin have successively published evidence-based results in international top journals - this is not "self-validation" but evidence output recognized by modern medical discourse systems.
To date, Yiling has registered and launched over 10 TCM varieties in more than 50 countries and regions. TCM international expansion is no longer a concept but concrete registration and sales actions.
Valuation: Time for a New Model
Shijiazhuang Yiling Pharmaceutical, with the dual advantages of "innovative drugs" and "international expansion," has already demonstrated performance results in its interim report. However, the current market valuation for Yiling still largely follows traditional TCM PE frameworks, rarely giving premium valuations to its R&D pipeline.
From a segmented valuation perspective: - Mature business annual profit of approximately 1.6 billion yuan at 15x PE equals 24 billion yuan market value; - Just two near-launch varieties in the chemical drug pipeline (such as Anilinophen Injection and XY0206 tablets), assuming each contributes 1 billion yuan in revenue at 3x PS valuation, could support 6 billion yuan market value;
This means Shijiazhuang Yiling Pharmaceutical could reach a 30 billion yuan market value, not yet including innovative TCM in development, health sector, and internationalization potential, representing a 20%-30% deviation from current market consensus.
Policies are warming up, reviews are accelerating, and TCM innovative drugs are experiencing an unprecedented development window. With its solid R&D foundation and clear pipeline layout, Shijiazhuang Yiling Pharmaceutical is no longer a traditional "TCM company" but a truly modern innovative pharmaceutical enterprise with research capabilities and international vision. Under the current market value, Yiling's "innovation premium" is barely priced in. As performance emerges, value reassessment may only be a matter of time.
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