In-Depth Analysis of the 53.1% Decline in Sunflower (300111.SZ)'s Net Profit for the First Three Quarters of 2025

Based on the collected information, I will conduct a systematic analysis of the underlying causes of the 53.1% decline in Sunflower (300111.SZ)'s net profit in the first three quarters of 2025.

• Operating Revenue: RMB 55.1043 million, down 20.64% YoY
• Net Profit Attributable to Parent Company Shareholders: RMB 0.1455 million, down 85.16% YoY
• Net Profit Excluding Non-Recurring Gains and Losses: -RMB 0.1381 million, down 112.98% YoY

• Weak Core Business
  : The company’s main products cover anti-infective drugs, cardiovascular drugs, digestive system drugs, etc., and its main operating revenue comes from APIs (active pharmaceutical ingredients) and preparations[1]. The 12.09% YoY decline in revenue in the first three quarters indicates significant pressure on the sales of core products.

• Intensified Market Competition
  : Against the backdrop of normalized centralized procurement in the pharmaceutical industry, drug prices are under pressure, and the company’s products face the risk of price cuts[2].

• Net Profit Excluding Non-Recurring Gains and Losses Turns from Profit to Loss
  : It fell from a profit of RMB 1.8739 million in the same period last year to a loss of RMB 0.0933 million, indicating that the company’s core business has a severe lack of cash-generating capability[1].

• Declining Gross Profit Margin
  : Although specific data has not been disclosed, combined with the decline in revenue and sharp drop in profit, it can be inferred that the gross profit margin is on a downward trend.

• Net Operating Cash Flow Plunged 79.4% YoY
  , which reflects the deterioration of the company’s operating quality, weakened cash collection capability, and reduced accounts receivable turnover efficiency.

Looking at historical data, the company’s profitability has been unstable:

It can be seen that the company’s performance has fluctuated drastically in recent years, lacking a stable profit foundation[3].

The company has attempted cross-border transformations multiple times, all of which ended in failure:

• 2023
  : Planned to re-enter the photovoltaic industry, investing RMB 1.5 billion in a TOPCon high-efficiency solar cell project, which was terminated in February 2024
• March 2024
  : Planned to cross into the metal-based ceramics field, and the cooperation was terminated in April 2025
• September 2025
  : Planned to acquire a semiconductor material company, which was terminated in January 2026 due to a CSRC investigation for suspected violations of information disclosure regulations[3]

These failed transformation attempts not only consumed the company’s resources but also diverted management’s energy, affecting the stable development of the core business.

On January 14, 2026, the company received a “Filing Notice” from the China Securities Regulatory Commission (CSRC) for a suspected violation of information disclosure regulations[1]. This means:

1. Termination of Major Asset Restructuring
   : The planned acquisition of 100% equity of Xipu Materials and 40% equity of Beide Pharmaceutical was forced to be terminated
2. Corporate Governance Risks
   : A letter of concern from the Shenzhen Stock Exchange (SZSE) pointed out that the restructuring plan is suspected of misleading statements, including inaccurate descriptions of the target companies’ production capacity
3. Litigation Risk for Actual Controller
   : Chen Chaoqi, the actual controller of Xipu Materials, is involved in a RMB 16.8 million commercial dispute lawsuit[3]

The 53.1% decline in Sunflower’s net profit in the first three quarters of 2025 is the result of

1. Direct Cause
   : A 12.09% decline in core business revenue and falling gross profit margin have compressed profit margins
2. Underlying Cause
   : Intensified competition in the pharmaceutical industry, pressure from centralized procurement policies, and falling product prices
3. Structural Cause
   : Repeated failed cross-border transformations in the company’s history, resulting in a lack of core competitiveness in its core business
4. Risk Events
   : CSRC investigation and failed restructuring have further hit market confidence

The company is currently in multiple predicaments, with sluggish core business growth, hindered transformation, rising regulatory risks, and significant uncertainty over its future development.

[1] Sina Finance - “Limit-Down at Open! Sunflower Under CSRC Investigation, Asset Restructuring Terminated” (https://finance.sina.com.cn/jjxw/2026-01-15/doc-inhhiyxz3455362.shtml)

[2] China.org.cn Finance - “Sunflower Under CSRC Investigation, Stock Plunges to Limit Down, Drawing Market Attention” (https://news.china.com/socialgd/10000169/20260115/49166539.html)

[3] CS Taurus - “20CM Limit Down! Under Investigation, Restructuring Terminated” (https://jnzstatic.cs.com.cn/zzb/htmlInfo/c7b73a03d232bd455fd8ecdd19c2d303.html)