China Resources BoYa Biotech 2025 Annual Report Analysis: Revenue up 18.69%, Net Profit After Deducting Non-Recurring Gains and Losses Turns Negative, R&D Capitalization Rate Rises to 43.79%

Interpretation of Core Performance Indicators

Operating Revenue: Scale Expansion but Profit Under Pressure

In 2025, the company achieved total operating revenue of 2.059 billion yuan, a year-on-year increase of 18.69%, mainly benefiting from the sales growth of human serum albumin in the blood products business (+19.88%) and other categories of blood products (+23.81%), as well as the explosive growth of the pharmaceutical distribution business due to the merger’s full-year data, which led to a 9708.34% increase. However, looking at quarterly performance, the revenue in the fourth quarter was 585 million yuan, the highest for the year, but the net profit showed a loss of 230 million yuan, mainly due to an impairment charge of 308 million yuan on Glenmark’s intangible assets and goodwill.

Net Profit: Impairments Devour Earnings, Non-recurring Turns from Profit to Loss

The net profit attributable to shareholders of the listed company was 113 million yuan, a significant decline of 71.61% year-on-year; the non-recurring net profit incurred a loss of 7.7575 million yuan, turning from profit to loss year-on-year, with a decline rate of 102.57%. The substantial drop in profitability was mainly influenced by three factors: first, the downturn in Glenmark’s product market, which included an impairment charge of 308 million yuan for intangible assets and goodwill; second, an increase in amortization due to the acquisition of Green Cross; third, the blood product business faced pressure from centralized procurement and DRG/DIP reforms, leading to a year-on-year decline in gross profit margin of 11.48 percentage points to 53.63%.

Earnings Per Share: Profit Shrinkage Directly Reflected

Basic earnings per share were 0.22 yuan/share, a year-on-year decrease of 72.15%; non-recurring earnings per share were -0.02 yuan/share, turning from 0.60 yuan/share to a loss. The significant drop in earnings per share was closely aligned with the shrinkage of net profit, directly reflecting the deterioration of the company’s profit quality.

Interpretation of Expenses and R&D Investment

Expense Structure: Significant Increase in Management Expenses

In 2025, total operating expenses amounted to 688 million yuan, a year-on-year decrease of 0.56%, maintaining overall stability but with structural changes:

• Sales Expenses: 413 million yuan, a slight decrease of 1.65% year-on-year, mainly due to a reduction of 191 million yuan in market service expenses, with slight increases in employee costs and office expenses.
• Management Expenses: 239 million yuan, a year-on-year increase of 28.13%, mainly due to increases in employee compensation, amortization of intangible assets, and office expenses, with intangible asset amortization soaring by 102.97% year-on-year to 38.5506 million yuan.
• Financial Expenses: -19 million yuan, a year-on-year decrease of 27.02%, mainly due to a 53.74% year-on-year decrease in interest income to 13.6151 million yuan and an increase of 66,100 yuan in foreign exchange losses.
• R&D Expenses: 55 million yuan, a year-on-year decrease of 18.44%, but capitalized R&D expenditures increased significantly by 41.19% to 42.5014 million yuan, with the capitalization rate rising from 31.05% to 43.79%.

R&D Investment: Pipeline Advancement and Capitalization Increase

Total R&D investment for the year was 97.0557 million yuan, roughly in line with 2024. Key project progress includes: approval for intravenous human immunoglobulin (10%) and tetanus human immunoglobulin; clinical trials ongoing for factor for vascular hemophilia and C1 esterase inhibitor; Green Cross’s new IVIG-CAP process has been approved for supplementary applications. The increase in capitalization ratio reflects the company’s confidence in the commercialization of R&D outcomes, but attention should be given to the risks associated with subsequent project implementation.

Cash Flow and Asset-Liability Interpretation

Operating Cash Flow: Collection Pressure Highlights

The net cash flow from operating activities was 61.1627 million yuan, a year-on-year decrease of 79.60%, primarily due to a decrease in net cash flow from Green Cross and a reduction in sales collections by the parent company. Cash receipts from sales of goods totaled 1.796 billion yuan, a year-on-year increase of 12.07%, but cash paid for purchases of goods rose significantly by 62.25% to 768 million yuan, with collection speed lagging behind procurement expenditures.

Investment and Financing Cash Flow: Investment Scale Shrinking, Financing Pressure Easing

• Net Cash Flow from Investment Activities: -681 million yuan, a year-on-year decrease of 5.16%, mainly due to a 23.78% year-on-year decrease in cash receipts from investment recoveries to 5.227 billion yuan, with fixed asset expenditures increasing significantly by 170.82% to 535 million yuan.
• Net Cash Flow from Financing Activities: -155 million yuan, a year-on-year improvement of 48.90%, mainly due to a decrease in loan repayments and dividend payments, while new equipment replacement loans were added at 47.036 million yuan.

Asset-Liability Structure: Significant Increases in Accounts Receivable and Construction in Progress

• Accounts Receivable: The ending balance was 787 million yuan, a year-on-year increase of 75.56%, mainly due to slower collections affected by medical insurance cost control and market influences, with accounts receivable aged within one year accounting for 96.73% and a bad debt provision ratio of 5.45%.
• Construction in Progress: The ending balance was 939 million yuan, a year-on-year increase of 192.39%, primarily due to increased investment in the construction project of a 1,000-ton blood product smart factory, with project progress reaching 43%.
• Goodwill and Intangible Asset Impairments: The current period recorded an impairment of intangible assets of 198 million yuan and goodwill impairment of 110 million yuan, mainly targeting the franchise rights and goodwill of Anhui Glenmark, reflecting its business falling short of expectations.

Risk Factors and Related Transactions Interpretation

Main Risk Alerts

• Centralized Procurement and Medical Insurance Policy Risks: The blood products business is affected by centralized procurement from the Guangdong Alliance and the Beijing-Tianjin-Hebei “3+N” procurement, leading to price declines for products like albumin and fibrinogen, with potential further profit compression from future procurement expansions.
• R&D and Product Risks: Uncertainties exist regarding the clinical progress of projects under development like the C1 esterase inhibitor and factor for vascular hemophilia, and new products will face market competition upon launch.
• Subsidiary Performance Risks: Anhui Glenmark continues to incur losses, with a net profit loss of 8.1885 million yuan for the current period, a year-on-year increase of 347.04%; New Bai Pharmaceutical’s revenue decreased by 14.25% year-on-year, with net profit falling by 20.11%.

Related Transactions: Scale Expansion, Fair Pricing

In 2025, the total amount of related transactions was 354 million yuan, with sales of goods amounting to 265 million yuan, a year-on-year increase of 30.32%; purchases of goods were 88 million yuan, a year-on-year increase of 3.00%. The pricing of related transactions was negotiated based on market prices, with no apparent unfair conditions found. The total sales to the top five related customers amounted to 239 million yuan, accounting for 11.60% of the annual total sales.

Future Outlook and Recommendations

Company Strategic Planning

• Core Business in Blood Products: Promote the construction of smart factories, expected to be completed by June 2026; expand plasma stations, with a plasma collection volume of 662.31 tons in 2025, a year-on-year increase of 5.03%; optimize product structure, focusing on promoting high-value-added products.
• Adjustment of Non-blood Business: Divest New Bai Pharmaceutical to focus on the core business of blood products; explore collaborations in new technology fields to cultivate a second growth curve.
• International Layout: Promote international product registrations, with intravenous human immunoglobulin approved in the Dominican Republic and sales achieved in Pakistan; technical output projects are progressing in an orderly manner.

Investor Recommendations

• Short-term Risks: Pay attention to the subsequent impacts of centralized procurement policies, performance of Glenmark and New Bai Pharmaceutical, and progress of R&D projects.
• Long-term Value: As a blood product company under the central enterprise China Resources, it has advantages in plasma station resources and R&D capabilities; once the smart factory is completed, production capacity will be significantly enhanced, and if adaptability to centralized procurement improves, profitability is expected to recover.
• Warning Signals: The turn to loss in non-recurring net profit, significant decline in operating cash flow, and impairments of goodwill and intangible assets require close monitoring of the reasonableness of the company’s impairment provisions and business improvement conditions.

Overall, China Resources Boya Bio’s 2025 revenue scale expanded, but profit quality declined, with impairments being the main drag. Attention should be paid to the company’s handling of loss-making businesses, strategies for responding to centralized procurement, and the commercialization progress of R&D achievements to determine when the performance turning point may emerge.

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Editor: Xiaolang Express