Sinco Pharma Posts 18.4% Drop in 1H 2026 Net Profit as Revenue Falls; Cash Flow Turns Positive

Sinco Pharma reported first-half 2026 revenue of RMB1.03 billion, down 13.7% from RMB1.20 billion a year earlier, as lower volumes and pricing pressure in core blood products weighed on sales. Turnover from pharmaceutical products slipped 13.5% to RMB1.03 billion, while medical-beauty service revenue contracted 28.4% to RMB6.84 million.

Gross profit eased 5.0% to RMB124.09 million, but the gross margin widened to 12.0% (1H 2025: 10.9%) on lower procurement costs and a stronger renminbi. Selling and distribution expenses rose to RMB37.37 million, reflecting higher marketing outlays, while administrative costs inched up to RMB41.56 million. Finance costs fell 25.4% to RMB13.77 million on reduced borrowings and guarantee fees.

Net profit attributable to shareholders declined 18.4% to RMB19.91 million, translating into basic and diluted EPS of RMB0.0098 (1H 2025: RMB0.0120). The board did not declare an interim dividend.

Liquidity improved: operating activities generated RMB119.16 million of net cash (1H 2025: RMB-13.26 million outflow), aided by higher trade payables and lower interest payments. Cash and cash equivalents closed at RMB254.58 million, while pledged deposits stood at RMB114.89 million. Bank borrowings dropped to RMB111.80 million from RMB179.72 million six months earlier, lifting net debt to RMB1.02 billion and nudging the gearing ratio to 58.9% (FY 2025: 52.2%).

Total assets increased 14.3% to RMB2.11 billion, driven by higher inventories, which rose 29.4% to RMB335.91 million; inventory turnover lengthened to 60 days. Trade receivables expanded to RMB730.0 million, with RMB562.09 million backed by letters of credit.

Management cited ongoing industry restructuring, intense price competition and softer demand in China’s blood products market as key headwinds. The company aims to deepen participation in volume-based procurement, tighten cost and risk controls, and enhance supply-chain efficiency. In medical aesthetics, the polycaprolactone injectable “Girl Needle Type S” completed on-site registration inspection in 1H 2026; marketing approval is anticipated in 2027.

Post-period, founder Huang Xiangbin passed away on 24 July 2026, prompting termination of his personal guarantee agreement with the company. Sinco Pharma is arranging replacement guarantees and does not expect material operational impact.