Eagle Eye Warning: Tuoxin Pharmaceutical's Operating Revenue Declines

Sina Finance Listed Company Research Institute | Financial Report Hawk-Eye Alerts

On March 27, Tuo Xin Pharmaceutical Co., Ltd. released its 2025 annual report.

The report shows that the company’s operating revenue for the full year of 2025 was RMB 378 million, a year-on-year decrease of 10.28%; net profit attributable to shareholders was -RMB 69.661 million, a year-on-year decrease of 250.32%; net profit attributable to shareholders after deducting non-recurring gains and losses was -RMB 78.9381 million, a year-on-year decrease of 189.62%; basic earnings per share were -0.55 yuan per share.

Since it went public in September 2021, the company has implemented cash dividends 3 times, with a cumulative cash dividend implementation of RMB 94.6361 million.

The listed company financial report hawk-eye alert system conducts intelligent quantitative analysis of Tuo Xin Pharmaceutical’s 2025 annual report across four major dimensions: performance quality, profitability, capital pressure and safety, and operating efficiency.

I. Performance Quality

During the reporting period, the company’s operating revenue was RMB 378 million, a year-on-year decrease of 10.28%; net profit attributable to shareholders was -RMB 69.661 million, a year-on-year decrease of 250.32%; net cash flow from operating activities was -RMB 26.1869 million, a year-on-year decrease of 125.51%.

From the overall performance perspective, what needs special attention is:

• Operating revenue declined. During the reporting period, operating revenue was RMB 380 million, a year-on-year decrease of 10.28%.

• The growth rate of net profit attributable to shareholders continued to decline. In the past three annual reports, the year-on-year changes in net profit attributable to shareholders were -15.17%, -108.18%, and -250.32%, respectively, with the downward trend continuing.

| Item | 20231231 | 20241231 | 20251231 | | Net profit attributable to shareholders (yuan) | 2.43 billion | -19.8849 million | -69.661 million | | Net profit attributable to shareholders growth rate | -15.17% | -108.18% | -250.32% |

• The growth rate of net profit attributable to shareholders after deducting non-recurring gains and losses continued to decline. In the past three annual reports, the year-on-year changes in net profit attributable to shareholders after deducting non-recurring gains and losses were -16.07%, -111.75%, and -189.62%, respectively, with the downward trend continuing.

| Item | 20231231 | 20241231 | 20251231 | | Non-recurring profit attributable to shareholders (yuan) | 2.32 billion | -27.2554 million | -78.9381 million | | Non-recurring profit attributable to shareholders growth rate | -16.07% | -111.75% | -189.62% |

• Operating profit was negative for three consecutive quarters. During the reporting period, operating profit for the past three quarters was -0.2 billion, -0.2 billion, and -0.4 billion, continuously negative.

| Item | 20250630 | 20250930 | 20251231 | | Operating profit (yuan) | -17.3213 million | -15.3024 million | -35.3993 million |

• Net profit has been loss-making for two consecutive years. In the past three annual reports, net profits were RMB 240 million, -0.2 billion, and -0.7 billion, showing losses for two consecutive years.

| Item | 20231231 | 20241231 | 20251231 | | Net profit (yuan) | 2.43 billion | -19.8849 million | -69.661 million |

From the perspective of the cost structure and period expense matching, what needs special attention is:

• Operating revenue and taxes and surcharges moved in opposite directions. During the reporting period, operating revenue’s year-on-year change was -10.28%, while taxes and surcharges’ year-on-year change was 3.43%, showing a divergence between operating revenue and taxes and surcharges.

II. Profitability

During the reporting period, the company’s gross margin was 26.38%, down 11.68% year-on-year; net margin was -18.41%, down 290.46% year-on-year; return on equity (weighted) was -4.59%, down 264.29% year-on-year.

Combining with the company’s operating performance, what needs special attention is:

• The sales gross margin continued to decline. In the past three annual reports, sales gross margin was 57.88%, 29.87%, and 26.38%, respectively, with the downward trend continuing.

• The sales net margin continued to decline. In the past three annual reports, sales net margin was 29.09%, -4.72%, and -18.41%, respectively, with the downward trend continuing.

| Item | 20231231 | 20241231 | 20251231 | | Sales net margin | 29.09% | -4.72% | -18.41% | | Sales net margin growth rate | -20.33% | -116.21% | -290.46% |

Combining with the company’s asset base, what needs special attention is:

• Average return on equity has been below 7% for the last three years. During the reporting period, the weighted average return on equity was -4.59%, and the weighted average return on equity for the most recent three accounting years averaged below 7%.

| Item | 20231231 | 20241231 | 20251231 | | Return on equity | 16.35% | -1.26% | -4.59% | | Return on equity growth rate | -29.62% | -107.71% | -264.29% |

• Return on equity continued to decline. In the past three annual reports, the weighted average return on equity was 16.35%, -1.26%, and -4.59%, respectively, with the downward trend continuing.

| Item | 20231231 | 20241231 | 20251231 | | Return on equity | 16.35% | -1.26% | -4.59% | | Return on equity growth rate | -29.62% | -107.71% | -264.29% |

• Return on invested capital is below 7%. During the reporting period, the company’s return on invested capital was -4.57%, and the average value across the three reporting periods was below 7%.

| Item | 20231231 | 20241231 | 20251231 | | Return on invested capital | 15.58% | -1.26% | -4.57% |

Regarding whether there are impairment risk factors, what needs special attention is:

• The year-on-year change rate of asset impairment losses exceeds 30%. During the reporting period, asset impairment losses were -0.2 billion, a year-on-year decrease of 50.92%.

| Item | 20231231 | 20241231 | 20251231 | | Asset impairment losses (yuan) | -10.7682 million | -10.6784 million | -16.1164 million |

III. Capital Pressure and Safety

During the reporting period, the company’s asset-liability ratio was 10.88%, down 7.05% year-on-year; the current ratio was 4.01, and the quick ratio was 2.76; total debt was RMB 38.9765 million, of which short-term debt was RMB 38.9765 million; short-term debt accounted for 100% of total debt.

From the overall financial condition, what needs special attention is:

• The current ratio continued to decline. In the past three annual reports, the current ratio was 4.23, 4.1, and 4.01, respectively, indicating weakening short-term solvency.

From the short-term capital pressure, what needs special attention is:

• The short-term-to-long-term debt ratio increased significantly. During the reporting period, the short-term debt/long-term debt increased significantly to 0.45.

From the perspective of capital management and control, what needs special attention is:

• The interest income/cash ratio is less than 1.5%. During the reporting period, cash and cash equivalents were RMB 140 million, and short-term debt was RMB 1.01 million; the average ratio of interest income to cash and cash equivalents was 0.856%, lower than 1.5%.

• Prepayments to suppliers changed significantly. During the reporting period, prepayments to suppliers were RMB 7.395 million, with a change rate of 64.74% compared with the beginning of the period.

• The ratio of prepayments to current assets continues to grow. In the past three annual reports, the ratio of prepayments to current assets was 0.52%, 0.66%, and 1.26%, respectively, showing continuous growth.

• The growth rate of prepayments exceeds the growth rate of operating costs. During the reporting period, prepayments compared with the beginning of the period increased by 64.74%; operating costs increased by -5.82% year-on-year; the growth rate of prepayments exceeded the growth rate of operating costs.

| Item | 20231231 | 20241231 | 20251231 | | Prepayments compared with beginning of period growth rate | -33.93% | 5.31% | 64.74% | | Operating cost growth rate | 12.45% | -15.97% | -5.82% |

IV. Operating Efficiency

During the reporting period, the accounts receivable turnover ratio was 5.52, up 50.6% year-on-year; the inventory turnover ratio was 1.55, up 0.06% year-on-year; and the total asset turnover ratio was 0.22, down 5.73% year-on-year.

Regarding long-term assets, what needs special attention is:

• The total asset turnover ratio continued to decline. In the past three annual reports, the total asset turnover ratio was 0.45, 0.23, and 0.22, respectively, indicating weakening capability to generate revenue from total assets.

• There is a significant change in fixed assets. During the reporting period, fixed assets were 810 million yuan, up 63.77% compared with the beginning of the period.

• Fixed-asset income value per unit declines year by year. In the past three annual reports, the ratio of operating revenue to the original value of fixed assets was 1.75, 0.85, and 0.46, respectively, showing continuous decline.

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