Sunshine Lake Pharma Co., Ltd. (“Sunshine Pharma”) released its unaudited 2026 interim report showing a sharp downturn in performance following a slump in demand for its flagship influenza treatment Kewei (oseltamivir).
Revenue for the six months ended 30 June 2026 fell 44.50% year-on-year to RMB 1.08 billion, driven chiefly by lower anti-infective drug sales as the domestic influenza outbreak eased. Gross profit dropped 60.60% to RMB 578.17 million, pulling gross margin down to 53.77% from 75.74% a year earlier.
Operating metrics deteriorated markedly: an operating loss of RMB 462.56 million replaced a 2025 interim operating profit of RMB 209.90 million, while loss before tax reached RMB 568.87 million. Loss attributable to equity shareholders widened to RMB 603.72 million from RMB 46.37 million in the prior-year period. Earnings per share slipped to a basic loss of RMB 1.09.
Expense controls partly offset the revenue contraction. Distribution costs declined 31.33% to RMB 491.43 million, and R&D spending fell 19.63% to RMB 279.88 million as several pipeline drugs moved into later-stage trials and capitalization began. Nevertheless, lower Kewei volumes more than outweighed cost savings.
Operational cash flow turned negative, with a RMB 893.20 million outflow versus a RMB 20.34 million inflow in the comparable period. The Group’s gearing ratio rose to 135% (31 December 2025: 105%) on higher borrowings, which totaled RMB 5.22 billion. Net assets declined to RMB 3.87 billion from RMB 4.34 billion at year-end 2025.
Capital commitments stood at RMB 167.50 million, and the company maintained significant R&D investment, highlighting progress across infection, chronic disease, and oncology pipelines. Key developments included January 2026 China approval of the SGLT-2 inhibitor Olorigliflozin Capsules and April 2026 FDA clearance for Insulin Glargine Injection, with first U.S. commercial shipment completed in July.
During the period Sunshine Pharma repurchased 201,600 H shares for HKD 8.88 million (approximately RMB 7.94 million) to be held as treasury shares for potential employee incentives. No interim dividend was declared.
Management reiterated its strategic focus on innovation-led growth, overseas commercialisation, and operating efficiency improvements to restore profitability amid shifting market demand.
Comments