YSB (09885.HK) announced its 2025 financial results. The company recorded revenue of approximately 20.97 billion yuan, representing a year-on-year increase of 17.13%. Adjusted net profit was about 237 million yuan, up 51.2% year-on-year, while net profit attributable to shareholders reached 153 million yuan, surging 409.7% compared to the previous year. The board proposed a dividend of 0.11 yuan per share, equivalent to 0.125 Hong Kong dollars per share, with a cash dividend payout ratio of approximately 50%.
In terms of revenue structure, self-operated business revenue reached 20.066 billion yuan in 2025, an 18% year-on-year increase. Within this segment, the manufacturer-preferred business achieved a transaction volume of 2.445 billion yuan, growing 111% year-on-year. The own-brand segment under the manufacturer-preferred business reported a transaction volume of 1.937 billion yuan, soaring 283% year-on-year. This rapid growth was driven by new momentum from the integration of "Yikuai Yiyao" and sustained growth in individual product categories. Platform business revenue was 866 million yuan, down 1.7% year-on-year, primarily due to pressure from a sluggish retail drug market affecting third-party sellers. Other revenue amounted to 38 million yuan in the first half of 2025, a decrease of 23% year-on-year, mainly because of operational and service model adjustments for the Spectrum Cloud Inspection business.
Profitability improved in 2025. The company's adjusted net profit margin increased by approximately 0.26 percentage points year-on-year to 1.13%, while the net profit margin attributable to shareholders rose by about 0.56 percentage points to 0.73%. This improvement was largely attributed to a 0.87 percentage point increase in the gross profit margin, which reached 11% for the year. The enhancement in overall gross margin was mainly driven by the rapid growth of the higher-margin manufacturer-preferred business, which pushed the gross margin of the self-operated segment up by about 1.56 percentage points to 7.71%.
Platform activity continued to strengthen. The average monthly active buyers on the platform reached 461,000 in 2025, a 6.5% year-on-year increase, while the average monthly paying buyers grew 8.5% year-on-year to 435,000. The business development team comprised approximately 2,700 members, excluding the Yikuai Yiyao team, with each member managing around 200 pharmacies. By the end of 2025, the company had reached 376,000 primary healthcare institution users, adding about 50,000 during the year. Registered buyers covered 98.9% of the country's counties and 91.5% of its townships.
The manufacturer-preferred business is expected to maintain robust growth. With a transaction volume of 2.445 billion yuan in 2025, YSB has successfully established multiple own brands, including Leyaoshi, Yuandian, Huitai, Antaibang, Futai, Bowei, Peitong, Shizhenling, and Xinglintai. These brands cover high-potential categories such as traditional Chinese medicine, gynecological medications, medical devices, consumables, and wellness herbal products, with over 1,200 SKUs. The supply of own-brand products helps pharmacies optimize their product mix and improve their gross margins. Further expansion of the own-brand portfolio, combined with enhanced ground promotion activities, presents significant growth opportunities for this segment.
Strong cash flow supports dividends and business expansion. The company's cash conversion cycle was negative 35 days in 2025, with inventory days of 32.6, accounts receivable days of 1.9, and accounts payable days of 69.6. Cash and cash equivalents totaled 3.948 billion yuan, a 17% year-on-year increase, while net operating cash flow reached 638 million yuan. This solid financial position underpins the proposed dividend. Additionally, YSB is actively promoting the adoption of point-of-care testing devices in primary healthcare institutions. By the end of 2025, over 22,000 terminals were equipped with these devices, with sales exceeding 33,000 units.
Profit forecasts and investment rating: Revenue for 2026-2028 is projected to be approximately 23.46 billion yuan, 26.224 billion yuan, and 29.184 billion yuan, representing year-on-year growth rates of about 12%, 12%, and 11%, respectively. Net profit attributable to shareholders is expected to be 252 million yuan, 362 million yuan, and 476 million yuan for the same periods, with growth rates of approximately 64%, 44%, and 32%. Based on the share price as of March 26, 2026, the corresponding price-to-earnings ratios are estimated at 13 times, 9 times, and 7 times. The "Buy" rating is maintained.
Risk factors include a potential wave of pharmacy closures exceeding expectations, intensified competition in the B2B market, drug quality and compliance issues, reduced user loyalty leading to attrition, slower-than-expected penetration rate growth, and weaker-than-anticipated performance in the manufacturer-preferred business.
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