As one of China's time-honored brand representatives, Dong-E-E-Jiao Co.,Ltd. has consistently remained at the center of public attention and market scrutiny in recent years. From frequent management changes and aggressive strategic adjustments to repeated involvement in negative incidents such as "return flow drugs" and "insurance fraud," this veteran pharmaceutical company's recovery path has been far from smooth. Although the company delivered a report card showing both revenue and net profit growth in the first half of 2025, the underlying risks of weak growth momentum, single product category dependence, and trust crisis still warrant high market attention.
**Slowing Growth Momentum, High Dividend Cannot Mask Growth Fatigue**
The 2025 half-year report shows that Dong-E-E-Jiao achieved operating revenue of 30.51 billion yuan, up 11.02% year-over-year, and net profit attributable to shareholders of 8.18 billion yuan, up 10.74%. While the performance appears steady on the surface, a closer examination of quarterly performance reveals that second-quarter revenue was only 13.32 billion yuan, down approximately 3.87 billion yuan from the first quarter, with growth rate plummeting from 18.24% to 2.91%, indicating significantly weakened growth momentum.
More notably, the company plans to distribute 12.69 yuan per 10 shares, totaling 8.17 billion yuan in dividends, essentially using nearly all of its first-half net profit for dividend distribution. Although high dividends help attract shareholders, consistently distributing all profits long-term will inevitably weaken the company's reinvestment capacity, affecting investments needed for long-term development such as R&D, channels, and new product promotion.
**Single Product Structure, Second Growth Curve Yet to Form**
Dong-E-E-Jiao has long relied on its ejiao product series, which generated revenue of 28.45 billion yuan in the first half of this year, accounting for as much as 93.24% of total revenue. Other pharmaceuticals and health products generated only 1.42 billion yuan in revenue, representing less than 5% of the total. Although the company has launched new products such as "Peach Blossom Princess" and "Royal Paddock 1619" in recent years, attempting to expand into the health consumer goods sector, the results have been limited, failing to form a strong second growth curve.
Over-reliance on a single product category not only weakens the company's risk resistance but also constrains its breakthrough capability in fierce market competition. If growth in the core ejiao business peaks, Dong-E-E-Jiao will face greater performance pressure.
**Marketing Compliance Gaps, Brand Trust Under Impact**
Since 2024, Dong-E-E-Jiao has been penalized multiple times for marketing violations. Its wholly-owned subsidiary, Dong-E-E-Jiao E-commerce Company, claimed in live streams that ejiao is suitable for "children aged 6 and above," lacking scientific basis and suspected of false advertising. Additionally, the company has been penalized for price violations including fabricating original prices and misleading consumers.
More seriously, in November 2024, the National Healthcare Security Administration reported duplicate traceability code issues with Compound Ejiao Oral Liquid, involving 46 medical institutions across 11 provinces. Although the company stated it was not responsible, the incident still reflects channel management vulnerabilities and brand trust crisis.
**Insurance Fraud Controversy and Pricing Disputes, Public Trust Urgently Needs Repair**
Dong-E-E-Jiao's relatively high product pricing has made it a frequent target in "insurance fraud" incidents. While the duplicate traceability code issue was not directly attributed to the company, it reflects weaknesses in supply chain and terminal control. Combined with previous penalties for price misleading, the public has questioned the brand's price transparency and integrity.
In an era where consumers increasingly value brand reputation and genuine product value, Dong-E-E-Jiao may struggle to rebuild market confidence unless it can thoroughly reform its marketing system and strengthen compliance management.
**Conclusion: Can This Time-Honored Brand "Simmer" Its Way to Real Transformation?**
Although Dong-E-E-Jiao has gradually emerged from its trough since 2020 through marketing reforms and product inclusion in medical insurance, it still faces multiple challenges including slowing growth, single product category dependence, and compliance risks. Without quickly cultivating new growth drivers and strengthening internal controls and brand building, relying solely on high dividends to maintain shareholder confidence may not achieve sustainable recovery.
"Simmering" ejiao for this time-honored brand is not easy, and "simmering" toward the future requires even more strategic determination and reform courage. Dong-E-E-Jiao's transformation journey remains long and challenging.
Comments