China Medical System (867) H1 2025 earnings summary

Executive summary

• Turnover increased 10.8% year-over-year to RMB4,002.0 million, with profit for the period up 3.1% to RMB931.5 million.

• Growth driven by innovative and exclusive/branded products, which contributed 62.1% of revenue when all medicines are directly sold.

• The impact of National VBP has diminished, and the company is advancing its internationalization strategy, including a secondary listing on SGX-ST.

• Dermavon, the skin health business, saw revenue surge 104.3% and is proposed to be spun off and separately listed on SEHK.

• The product pipeline expanded, with five innovative drugs commercialized, several NDAs and INDs in progress, and new collaborations established.

Financial highlights

• Gross profit rose 7.2% to RMB2,891.9 million; gross margin was 72.3%, down 2.4 percentage points year-over-year.

• Basic EPS increased 4.2% to RMB0.3892; interim dividend per share declared at RMB0.1555, up 3.2%.

• Bank balances and cash stood at RMB3,454.1 million as of 30 June 2025; gearing ratio at 3.8%.

• R&D expenses increased 91.8% to RMB202.5 million, while total R&D expenditures decreased 8.2% due to lower capital payments.

• Selling expenses as % of turnover: 35.6% (down from 38.8%); administrative expenses as % of turnover: 10.8% (up from 10.0%).

Outlook and guidance

• Focus remains on product innovation, commercial model reform, and international expansion.

• Continued investment in specialty therapeutic areas and consumer healthcare, with a dual-hub model in China and Singapore.

• Plans to accelerate internationalization and unlock incremental growth in emerging markets.

• Acceleration of consumer healthcare and new retail models to drive future growth.