Business Segment Adjustment Leads to Revenue Decline, Jianmin Group's Net Profit Slightly Down Year-over-Year

AI Business Restructuring: How Does Jianmin Group Optimize Its Business Model to Respond to Competition?

Recently, Jianmin Group disclosed its 2025 annual report. During the reporting period, revenue and net profit were 3.37 billion yuan and 360 million yuan, respectively, representing a decrease of 3.85% and 0.65% year-over-year. The pharmaceutical commercial segment declined by 23.37% year-over-year, mainly due to the contraction of low-margin, inefficient businesses. However, the core pharmaceutical manufacturing segment’s revenue grew by 15.92% year-over-year, offsetting some losses from the commercial segment decline, bringing net profit attributable to the parent roughly in line with last year.

Streamlining the Commercial Segment, Boosting the Industrial Segment

Jianmin Group’s current main businesses include pharmaceutical manufacturing and pharmaceutical commerce, involving drug production, health services, traditional Chinese medicine diagnosis and treatment, pharmaceutical distribution, and retail. The pharmaceutical manufacturing includes pediatric products under the “Longmu” brand and household medicines under the “Jianmin” brand.

By 2025, the pharmaceutical manufacturing segment achieved revenue of 2.025 billion yuan, up 15.92%; gross profit margin was 80.95%, an increase of 4.59%. Notably, pediatric, gynecological, and specialty Chinese medicines saw revenue growth of 4.59%, 7.83%, and 27.29%, respectively, with gross margins increasing by single digits. The pediatric exclusive product Longmu Bone Strength Granules has ranked first in the Chinese Non-prescription Drug (Chinese Patent Medicine) comprehensive ranking for pediatric digestive medicines for five consecutive years, published by the China Non-prescription Drug Association. Core products like Jianmin Bian Tong Capsules and Jianping Shengxue Granules have steadily increased sales through an “in-hospital + outside-hospital” model, with Bian Tong Capsules sales up 29% year-over-year and Jianping Shengxue Tablets/Granules up 20%.

The new product, Pediatric Zi Bei Xuan Lung Syrup, achieved sales exceeding 70 million yuan in its first year, but its contribution to overall revenue remains limited, and it has not yet broken the company’s reliance on core flagship products.

In the pharmaceutical commercial segment, intensified competition in traditional drug distribution has continuously compressed profit margins. Jianmin Group has proactively scaled back low-margin, inefficient businesses, resulting in revenue of 1.331 billion yuan in 2025, a 23.37% decline year-over-year, with a gross profit margin of 24.06%, reflecting the optimization of its subsidiary commercial operations.

The health and traditional Chinese medicine diagnosis and treatment sectors are new businesses, currently accounting for a small proportion of total revenue. The company did not disclose detailed figures in its annual report. These new sectors are unlikely to become secondary growth drivers in the short term, and cannot alleviate the growth pressure on core operations, leading to short-term performance pressure.

Intensified Competition and Increased R&D Investment

Currently, competition in pediatric medicines and OTC markets is fierce. How can companies avoid being eliminated in such a competitive environment? In recent years, with strong national support for innovative drug R&D, more pharmaceutical companies are increasing R&D investment, including Jianmin Group.

In 2025, Jianmin Group’s R&D expenditure totaled 116 million yuan, accounting for 3.43% of revenue. Of this, 98.68 million yuan was R&D expense, up 24.13% year-over-year, with 14.68% of R&D being capitalized. The company focuses on traditional Chinese medicine innovation, developing new drug series and secondary development projects, mainly targeting pediatrics, gynecology, and chronic diseases. Notably, in 2025, a Class 1.1 new pediatric drug, Xiaoer Niu Huang Fever-Reducing Paste, was approved for market. Jianmin plans to continue negotiations for medical insurance inclusion in 2026.

Additionally, a Class 1 Chinese medicine new drug, Tong Jiang Granules, is in Phase III clinical trials, with two other Chinese medicine Class 1 drugs entering clinical trials. Two chemical drug formulations received drug registration certificates, though both are Class 3 chemical drugs, not original innovative drugs, with two more applications submitted for marketing approval. The company notes that new product market entry requires time for cultivation, and sales performance in the short term is uncertain due to market demand, channel promotion, and consumer recognition factors.

Historically, Chinese medicine companies have been criticized for low R&D investment. As competition intensifies, leading firms are increasing innovation and secondary development of proprietary products, significantly raising R&D expenditure relative to revenue. Although Jianmin increased R&D investment in 2025, compared to six peer companies, its R&D-to-revenue ratio remains modest. For example, Fangsheng Pharmaceutical, Qianjin Pharmaceutical, China Resources Jiangzhong, and Kuaishou Pharmaceutical had R&D ratios of 7.83%, 6.46%, 4.82%, and 3.68%, respectively, in 2025, all higher than Jianmin.

With ongoing policy reforms in the pharmaceutical industry, the sector is entering a deep adjustment phase, with increased industry concentration, which will have profound impacts on development. Jianmin states it is closely monitoring policy changes, continuously improving internal controls, optimizing industry layout, refining business structure, and enhancing operational and risk resistance capabilities to ensure healthy, stable growth.

As market competition intensifies and new products, companies, and models emerge, Jianmin warns that these developments may impact its performance. The company plans to continue improving product quality, refining its product mix, expanding channels, optimizing business models, and exploring new growth avenues to strengthen and expand its market share.

By Wang Kala, The Beijing News

Edited by Wang Lu

Proofread by Mu Xiangtong