Recent policy support has been favorable for both traditional Chinese medicine and innovative drugs this year. During the Two Sessions, the government work report emphasized "advancing the inheritance and innovation of traditional Chinese medicine and promoting the integration of Chinese and Western medicine," highlighting the core themes of "inheritance," "innovation," and "integration" for the sector's development. The understanding and preference of mainland capital for pharmaceutical stocks, particularly those involving traditional Chinese medicine and proprietary formulas, represent a significant positive for Consun Pharma (01681), which boasts robust fundamentals and has recently gained eligibility for the Stock Connect program.
Stable fundamentals, coupled with the company's high dividend payout, are supported by the strong performance of its core product, Niaoduqing Granules, and contributions from multiple specialty areas. In 2025, Consun Pharma maintained its steady growth trajectory and continued its generous dividend policy. During the reporting period, the company achieved operating revenue of RMB 3.417 billion, a year-on-year increase of 15.2%. Revenue from renal drugs reached approximately RMB 2.402 billion, up about 20.3% year-on-year. The flagship product, Niaoduqing Granules, continues to lead the modern Chinese medicine category for kidney disease. Concurrently, the renal product portfolio has been enriched with the approvals of Roxadustat Capsules and Empagliflozin Tablets.
The company reported a gross profit of RMB 2.667 billion for the period, an increase of 19.0% year-on-year, with a gross profit margin of 78.0%. Corresponding net profit attributable to shareholders reached RMB 1.078 billion, growing 18.4% year-on-year. Basic earnings per share were RMB 1.27, up 14.4% compared to the previous year. Furthermore, the company proposed a final dividend for 2025 of HKD 0.40 per share. Combined with an interim dividend of HKD 0.33 per share, the annual dividend payout ratio exceeds 50%.
Within the Hong Kong stock market's traditional Chinese medicine sector, all 17 companies had disclosed their 2025 annual report data by April 7th. Among them, only five achieved positive year-on-year revenue growth, continuing the performance divergence trend observed since 2024. Compared to its peers, Consun Pharma's revenue growth rate, net profit growth, gross profit margin, and net profit margin all surpassed the industry median. The company's return on equity (ROE) also significantly exceeded the median level for the sector.
The confirmation of its inclusion in the Stock Connect program is expected to bring incremental capital inflows. On March 9th, following the latest review of eligible securities, 42 companies were newly added to the Stock Connect list, including Consun Pharma. Typically, inclusion helps broaden the shareholder base and enhance trading liquidity. This effect is particularly significant given ongoing external uncertainties and the consistent role of southbound capital as a key source of incremental funds for Hong Kong stocks. Statistical data indicates that the average trading volume for the 42 stocks added on March 9th increased by approximately 3.2 times, underscoring mainland capital's recognition of the long-term value of core assets. Incremental funds tend to track high-quality targets. A company like Consun, with its stable performance, quality assets, and high returns on assets, is highly attractive to domestic capital. Since its inclusion, and as of March 31st, southbound holdings in the company have exceeded 18 million shares. Despite this, the company's current price-to-earnings (PE) ratio stands at only 11.97 times, significantly lower than the industry average PE of 27.61 times. This comparative valuation gap highlights Consun's prominent investment value, which is likely to attract further interest.
Beyond the steady growth and high dividends reflected in the annual report, Consun Pharma has consistently boosted investor confidence through a combination of share buybacks and continuous share purchases by management. In July 2025, major shareholder and Board Chairman An Meng increased his holdings four times, acquiring a total of 464,000 shares with a total consideration of HKD 5.3271 million. Additionally, in June of the previous year, the company's board announced a plan to repurchase up to HKD 200 million worth of shares on the secondary market. Data shows that over the past nearly 12 months, Consun has conducted 59 buybacks, repurchasing 13.68 million shares for a cumulative amount of HKD 185 million. On January 29th this year, the board resolved to add an additional HKD 100 million to the share repurchase plan, bringing the total authorized amount to no more than HKD 300 million.
Benefiting from its steady performance and the practical implementation of its "high dividend + share buyback + management share purchases" strategy, Consun Pharma's organic growth capability and risk resilience have gained significant market recognition. Considering the company's strong commercial execution and steadily improving fundamentals, its long-term value trajectory aligns well with the current investment themes in the Hong Kong pharmaceutical sector. Once market sentiment stabilizes and a sector-wide uptrend is confirmed, the company's share price is poised to break out of its volatile range, accelerating valuation recovery and demonstrating considerable upside potential for investors.
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