From a 22% plunge to a 1.5% slight increase! After a major management overhaul, has the leading circulating company stabilized its performance?

Sinopharm Holdings, the pharmaceutical distribution giant on the scale of trillions, has finally stepped out of the shadow of the “worst performance in history.”

On March 23, Sinopharm Holdings released its 2025 annual performance report, delivering an answer sheet of “increasing profit without increasing revenue.” For the full year, it achieved operating revenue of 575.17 billion yuan, down 1.6% year over year; attributable net profit to shareholders of 7.155 billion yuan, up 1.5% year over year.

Although structural pressures still remain, this result is far from easy for Sinopharm Holdings. In 2024, the company saw its first “double decline in revenue and net profit” since listing in 2009. Attributable net profit fell sharply by 22.14% year over year, leaving it temporarily trapped in a “growth stagnation” dilemma.

Entering 2025, Sinopharm Holdings “pressed on without stopping” in its adjustments amid pressure: leadership reshuffling, rollout of strategic partnerships on the scale of billions, large-scale closure of pharmacies, digital transformation and upgrades… judging from the current performance showing growth against the trend, the company has finally managed, for now, to “stabilize its footing.”

From the intra-year trend, Sinopharm Holdings’ performance has rebounded steadily since the third quarter. In the first half of 2025, among the “four distribution giants,” it was the only company whose revenue declined. Revenue was 286.043 billion yuan (-2.95%), while attributable net profit was 3.466 billion yuan (-6.43%). In the third quarter, attributable net profit turned from decline to growth; by year-end, after the new management took office, it further drove full-year attributable net profit to grow 3.94% year over year.

As is well known, the pharmaceutical distribution industry is stepping into a cycle of peak growth and thin profits. The “the strong do better and the bigger stay stronger” pattern continues to be reinforced, and smaller distribution companies are facing an unprecedented survival crisis. The industry has entered a critical stage of deep adjustment and a tough transformation.

As the “No. 1 distributor,” what signals does Sinopharm Holdings’ “difficult turnaround” release?

Segment performance diverges; “retail” is the biggest bright spot

Sinopharm Holdings has three main business segment plates: pharmaceutical distribution, medical device distribution, and pharmaceutical retail. In 2025, their revenue mix accounted for 72.79%, 19.32%, and 6.42%, respectively. Overall, all three segments move into a structural adjustment period at the same time, but they show clear differentiation in development.

First, look at the pharmaceutical distribution segment, the “ballast stone” for performance. Under the policy direction of “stabilizing prices and improving quality” in centralized procurement, price pressure and market competition have continued to intensify. The segment’s revenue for the full year was 435.39 billion yuan, down 2.02% year over year.

Looking over a longer cycle, this marks the first time revenue from the pharmaceutical distribution business has shown a slight decline. Before 2023, Sinopharm Holdings’ pharmaceutical distribution business kept growing. In 2024, the growth rate noticeably slowed but still stayed slightly positive. In 2025, the segment entered negative growth for the first time, making the policy-driven pressure characteristics even more apparent.

However, in the second half of 2025, segment revenue improved quarter on quarter, demonstrating strong operational resilience. By optimizing the product mix, expanding coverage in core regions, and advancing refined customer management, the full-year revenue decline narrowed significantly compared with the first half’s level of 3.52%, and the quarter-on-quarter improvement trend became clear.

Next, consider the medical device distribution segment. Its revenue for the full year was 115.54 billion yuan, also down 2.02% year over year. Among them, sales of medical consumables products supported by expanded primary healthcare capacity and clinical rigid demand achieved continued stable growth. Sales of IVD products and medical devices, however, declined due mainly to lower prices under centralized procurement and the normalization of compliance supervision; the pace of trade-in for equipment and the speed of centralized procurement also clearly slowed.

In 2025, profit margins in the traditional distribution model continued to shrink. Sinopharm Holdings made deep structural adjustments to the medical device distribution segment. By controlling low-efficiency businesses and focusing on smart supply-chain projects such as SPD, the segment is shifting from “scale expansion” to “quality and efficiency.”

The effect of this adjustment has already shown in performance. In 2024, driven by changes in terminal demand structure and declines in high-gross-margin categories, the medical device distribution segment’s revenue fell sharply by 9.44%. Now, the revenue decline has narrowed significantly, indicating that the structural adjustment has started to take effect.

The biggest operational highlight for the year came from the pharmaceutical retail segment. In 2025, this segment achieved a historic strategic turnaround from loss to profit. Full-year revenue was 38.38 billion yuan, up 6.67% year over year, and its revenue contribution hit a three-year high.

Over the past year, Sinopharm Holdings launched system-wide reforms, from closing low-efficiency stores and raising the proportion of centralized procurement to deepening synergy between wholesale and retail—rolling out a set of “combination punches.”

Through a series of adjustments, the company’s earnings structure underwent a qualitative change: Guoda Pharmacy substantially reduced losses, and specialty pharmacies became the core growth engine. At the same time, against the backdrop of the full rollout of the “Three Streams into Retail” policy for centrally procured drugs, retail pharmacies are accelerating their capture of prescription outflow dividends. As a result, Sinopharm Holdings’ wholesale-retail synergy strategy has entered a phase of value realization.

What’s worth noting is that over the past two years, the retail pharmacy industry has seen a large-scale closure wave. As the national leader, Guoda Pharmacy’s store closure actions have been particularly pronounced.

The closure wave can be traced back to the first half of 2024, when Guoda Pharmacy began closing stores in batches. However, the actions were relatively restrained in that period: it closed 176 company-owned stores and 67 franchise stores, and the total number of stores still remained at a “ten-thousand-store” scale. In the second half, the closure intensity increased markedly: company-owned stores and franchise stores were closed by 1,097 and 322 respectively. The number of stores closed was 5.84 times that of the first half.

In 2025, Guoda Pharmacy continued without easing the力度 of closing loss-making stores. The financial report shows that by the end of the reporting period, the number of stores of Guoda Pharmacy was 8,221, a net decrease of 1,348 stores compared with the same period last year, fully saying goodbye to the “ten-thousand-store” era.

In fact, behind these closure figures is Sinopharm Holdings’ strategic shift from pursuing scale expansion toward improving profitability on a per-store basis. It also reflects the rational return of leading chain operators during an industry shakeout.

Overall, in 2025 Sinopharm Holdings continued to promote optimization of its business structure, focusing on high value-added areas and proactively adjusting low-efficiency businesses. From defending market share despite a first slight decline in distribution revenue, to early signs of effectiveness from structural adjustments in the medical device segment, and then to a historic turnaround from loss to profit in retail—this performance of “increasing profit without increasing revenue” is a rare answer sheet delivered under the combined effects of cyclical pressure on the industry and Sinopharm Holdings’ deep structural adjustments.

However, the growth sluggishness of Sinopharm Holdings’ core businesses has not been fundamentally reversed. Much of the profit growth has been achieved by “saving”—creating time for structural adjustments by cutting low-quality assets, reducing expenses, optimizing liabilities, and so on. In the process of riding through the cycle, its transformation path remains full of challenges.

A giant braving winter?

Recently, several listed companies under Sinopharm Group have successively released their 2025 “performance scorecards,” including Sinopharm Modern, China Sinopharm, Sinopharm Concord, and Sinopharm Co., which published their performance reports one after another.

Overall, as a “super giant” spanning the entire pharmaceutical industrial chain, Sinopharm Group is facing a growth bottleneck, and many segments experienced varying degrees of growth weakness in 2025. Performance sluggishness has become the core issue the group must directly confront at present.

The distribution segment as a whole shows “increasing profit without increasing revenue,” and the base of the business is relatively stable. Sinopharm Holdings and Sinopharm Concord are the main players in distribution and retail; both companies’ revenue declined slightly (-1.60%, -1.29%). Although both achieved positive profit growth—especially Sinopharm Concord’s surge of 76.80%—the gains mainly came from reduced asset impairment and lower costs, rather than business expansion.

In addition, Sinopharm Co. is the core platform for distribution of drugs for addiction and psychotropic disorders. In 2025, it was “increasing revenue without increasing profits” overall. Revenue was 52.47 billion yuan, up 3.70%; attributable net profit was 1.997 billion yuan, down 0.18%.

The industrial segments are severely differentiated, especially traditional Chinese medicine, which suffered a “crash.” Sinopharm Modern, the chemical pharmaceutical segment, saw both revenue and profits decline. Revenue was 9.363 billion yuan (-14.40%), and attributable net profit was 944 million yuan (-12.85%). China Sinopharm, the traditional Chinese medicine segment, even experienced its first loss in a decade: revenue fell 10.70%, and attributable net profit was a loss of 342 million yuan. The size of this loss is extremely rare in Sinopharm Group’s history.

For Sinopharm Group, its scale advantage has not yet been effectively converted into profit growth. How to truly make the leap from being a “scale leader” to a “quality leader” will be its biggest test in the future.

Against this backdrop, Sinopharm Holdings—whose overall performance is relatively stable—becomes a sample worth watching.

In 2025, after three rounds of large-scale consolidations oriented toward centralization, the pharmaceutical distribution industry entered a “growth stagnation” phase. Centralized procurement deepened, regulation tightened, and profit margins continued to be squeezed—forming the tests that every distribution company must face.

As an industry leader, Sinopharm Holdings entered a critical year of tackling difficult issues. It pushed through a series of deep adjustments such as leadership changes, optimization of operating models, and smart/digital transformation, upgrading its strategic positioning from a traditional “pharmaceutical and medical supply-chain network operator” to a “smart-enabled distribution service provider.”

In 2025, Sinopharm Holdings completed a key management turnover. At the end of November, the company announced that Chairman Zhao Bingxiang resigned from all positions, including non-executive director and chairman, due to work arrangements. It also elected “Sinopharm Group” veteran Jin Bin as the new chairman and authorized representative, and nominated Li Ying as a non-executive director.

After the new management took office, it quickly established a strategic direction of “value orientation, lean management, and integrated operations,” and turned around the situation of profit decline in the first half.

At the same time, Sinopharm Holdings fully promoted integrated operations across procurement, logistics, and management—moving from “decentralized management” to “penetration-style control.” Specific results are as follows:

• The rate of unified procurement within provinces increased to around 55%, up significantly by nearly 16 percentage points year over year, effectively lowering procurement costs and enhancing inventory transparency.
• Integrated logistics consolidated national warehousing resources, with logistics costs falling significantly.
• In management, it implemented centralized management by bringing back-end functions of lower-tier companies into centralized control by higher-level companies, strengthening the headquarters’ ability to deliver management output.

In addition, the company positioned digitalization as a core engine for its transformation. At present, Sinopharm Holdings has completed governance of all business master data and formed a comprehensive data management system. Meanwhile, it has fully implemented the collection and upload work for traceability code data of all legal entities involved in the distribution segment that are responsible for医保追溯码 (medical insurance traceability codes).

It is also worth noting that Sinopharm Holdings has further deepened its upstream efforts, accelerating cooperation steps with the industrial side—especially increasing the introduction of innovative drugs, drugs negotiated under the national medical insurance agreement (guo tan), and high-value clinical products. In December this year, Sinopharm Holdings renewed a three-year 122 billion yuan distribution agreement with Sino Biopharmaceutical (Hisun? / 复宏汉霖).

In summary, in the new round of competition and cooperation across the industry, there are hardly any segments that can keep surviving simply by “living off past advantages.” In 2025, many traditional state-owned pharmaceutical enterprises entered a period of pains from transformation. The logic of traditional expansion is becoming ineffective, and the wave of change in the industry is pushing everyone out of their comfort zone.

While the industry winter has not fully passed, finding the direction of a lighthouse is the first step. The performance scorecard of Sinopharm Holdings, which “stabilized the situation,” may well be signaling that the navigation light ahead is already lit.