Hainan Shuangcheng Pharmaceuticals (Stock code: 002693) is a company focusing on the research and development of chemical synthetic peptides, committed to promoting the innovation of peptide drugs. The company occupies an important position in the pharmaceutical industry, especially in the field of peptide drugs. In recent years, although the pharmaceutical industry has faced challenges of economic downturn and policy adjustment, it has also ushered in new development opportunities. In 2023, the state issued multiple policies aimed at deepening the linkage reform of medicine, medical care, and medical insurance and promoting the healthy development of the industry. In particular, the multiple guidance principles and management methods issued by the State Drug Administration provide important guidance for the future research and development and business expansion of Hainan Shuangcheng Pharmaceuticals.

According to the Q1 2024 report of Hainan Shuangcheng Pharmaceuticals, the total assets at the end of the period were CNY 798 million, a slight decrease from the beginning of the period of CNY 803 million, with a decrease of 0.60%. The total liabilities at the end of the period were CNY 295 million, an increase from the beginning of the period of CNY 286 million, with an increase of 3.21%. The asset-liability ratio rose from 35.56% at the beginning of the period to 36.92% at the end of the period, indicating an increase in the company's debt level. Nevertheless, the company still maintains a relatively stable asset-liability structure.

In terms of profits, the operating income of Hainan Shuangcheng Pharmaceuticals for this reporting period was CNY 427.6 million, a year-on-year decrease of 47.52%. Operating profit was -CNY 141.8 million, a significant loss compared to CNY 0.121 million in the same period of the previous year. The net income was -CNY 141.9 million, while that of the same period of the previous year was CNY 10.35 million. The net margin decreased from 0.13% in the same period of the previous year to -33.19% in this reporting period. The gross margin has also decreased from 70.8% in the same period of the previous year to 60.06% in this reporting period. These data indicate that the company faces significant pressure in terms of sales revenue and profitability, mainly due to the decline in sales volume and price of pharmaceuticals.

In terms of cash flow, the net cash inflow from operating activities for this reporting period was CNY 46.29 million, a year-on-year decrease of 42.81%; the net cash outflow from operating activities was CNY 69.93 million, a year-on-year decrease of 30.63%. The net cash flow from operating activities was -CNY 23.64 million, which further expanded the loss compared to -CNY 19.88 million in the same period of the previous year. The company redeemed wealth management products and added bank loans during the reporting period, resulting in a 422.10% growth in monetary funds at the end of the period compared to the beginning of the year. However, the overall cash flow situation still needs to be monitored.

Overall, Hainan Shuangcheng Pharmaceuticals faced significant operational pressures in the first quarter of 2024, mainly reflected in the sharp decline in operating revenue and net income, as well as the deterioration of the cash flow situation. Although the company has significant advantages in the field of peptide drugs, it still needs to further optimize its business strategy, enhance market competitiveness and profitability under the current economic environment and industry policy adjustments. In the future, the company should continue to pay attention to policy trends, actively adjust its business layout, and respond to market changes and challenges.