Jointown Pharmaceutical Group (600998) Q2 2024 earnings summary

Executive summary

• Revenue for H1 2024 was ¥77.17 billion, down 2.76% year-over-year; net profit attributable to shareholders was ¥1.21 billion, down 10.08%.

• Excluding the high base effect from last year's epidemic/flu, adjusted revenue grew 0.15% and adjusted net profit grew 9.5% year-over-year.

• Q2 net profit increased 24.6% sequentially from Q1, with cash flow from operations turning positive in Q2.

• The company continued to invest in digital transformation, new products, and talent, supporting its “Three New, Two Transformations” strategy.

Financial highlights

• Operating cash flow for H1 2024 was -¥3.2 billion, mainly due to slower receivables collection; Q2 saw a positive turnaround.

• Gross margin for H1 2024 was 8.5%, down from 9.2% year-over-year.

• Basic and diluted EPS were ¥0.25, down 3.85% year-over-year.

• Adjusted net profit margin (excluding non-recurring items) was 1.53%.

• Net assets attributable to shareholders at period-end were ¥24.34 billion, up 1.48% from year-end 2023.

• Total assets reached ¥98.7 billion, up 6.38% from year-end 2023.

Outlook and guidance

• Management expects full-year operating cash flow to be positive and in line with profit growth, with a focus on improving receivables collection in H2.

• The company will continue to invest in digitalization, new retail, and new medical initiatives, with planned R&D investment of ¥1.72 billion in H2.

• The “Three New, Two Transformations” strategy remains the core focus for growth.