Analysis of Performance Commitment Fulfillment by Subsidiaries of Buchang Pharmaceuticals

Based on public information, the performance commitment fulfillment of major subsidiaries of Buchang Pharmaceuticals (603858.SS) shows a

, with some subsidiaries facing significant performance pressure. The detailed analysis is as follows:

Indicator	2024 Data
Committed Performance	Approx. RMB 2,000,000 (minimum threshold)
Actual Fulfillment	RMB 998,200
Fulfillment Rate	49.91%
Performance Compensation	Required compensation: -RMB 298,100

Tonghua Guhong is a core subsidiary acquired by Buchang Pharmaceuticals at a high premium in 2015, with its main product being

. Affected by adjustments to the national medical insurance catalog, the sales volume of this product has plummeted:

• Guhong Injection revenue dropped from RMB 2.112 billion in 2021 to RMB 178 million in 2023,
  shrinking by over 90%
  [1]

Indicator	2024 Data
Actual Fulfillment	RMB 4,500,000
Fulfillment Rate	90.00%
Performance Compensation	No compensation required

Luzhou Xintianyu is an important layout of Buchang Pharmaceuticals in the biopharmaceutical sector, with relatively strong performance commitment fulfillment.

Indicator	2024 Data
Actual Fulfillment	RMB 3,760,000
Fulfillment Rate	75.20%
Status	In progress

Subsidiary	Operating Revenue	Operating Profit
Jilin Tiancheng Pharmaceutical	RMB 286.62 million	RMB 167.36 million
Tonghua Guhong Pharmaceutical	RMB 151.52 million	RMB 113.18 million
Luzhou Xintianyu Biopharmaceutical	RMB 120.21 million	RMB 97.98 million

---

Subsidiary	Original Goodwill	Impaired Amount	Remaining Goodwill
Tonghua Guhong Pharmaceutical	RMB 3.161 billion	RMB 2.825 billion	RMB 336 million
Jilin Tiancheng Pharmaceutical	RMB 1.836 billion	RMB 1.637 billion	RMB 199 million
Total	RMB 4.997 billion	RMB 4.462 billion	RMB 535 million

• 2024 Goodwill Impairment
  : RMB 853 million, accounting for 154% of the annual loss[1]
• Cumulative Provision from 2022 to 2024
  : RMB 4.467 billion
• As of the end of June 2025, the remaining goodwill is RMB 535 million, which still faces impairment risks in the future

---

Year	Net Profit
2020	RMB 1.861 billion
2021	RMB 1.162 billion
2022	-RMB 1.530 billion
2023	RMB 319 million
2024	-RMB 554 million
First three quarters of 2025	RMB 868 million (177.54% YoY growth)

1. Gross Profit Margin Decline
   : The 2024 gross profit margin was 60%, down 8.4 percentage points year-on-year
2. Core Product Pressure
   : Revenue from the cardiovascular and cerebrovascular segment fell 23.26% year-on-year
3. Fluctuations in Non-recurring Gains and Losses
   : 2024 non-recurring gains and losses were -RMB 61.10 million, a 323% decline from RMB 27.39 million in 2023[1]

---

• ✅
  Luzhou Xintianyu
  : 90% fulfillment rate, strong performance
• ⚠️
  Jilin Tiancheng
  : 75.2% fulfillment rate, basically meeting the standard
• ❌
  Tonghua Guhong
  : Fulfillment rate less than 50%, performance compensation required

1. Medical Insurance Policy Risk
   : Traditional Chinese medicine (TCM) injections and supportive drugs continue to be restricted
2. Goodwill Impairment Risk
   : The remaining RMB 535 million in goodwill still faces impairment pressure
3. Single Product Structure
   : Over-reliance on cardiovascular and cerebrovascular products

• Performance recovered in 2025, with net profit surging 177.54% year-on-year
• The amortization of valuation increments from previous acquisitions was completed by the end of 2024

---

[1] Caizhong Society - Buchang Pharmaceuticals’ Large-Scale Goodwill Impairment, Persistent Doubts about Kickback Sales (April 30, 2025)
[2] 2024 Annual Report of Shandong Buchang Pharmaceutical Co., Ltd.
[3] 2025 Semi-Annual Report of Shandong Buchang Pharmaceutical Co., Ltd.
[4] Taishan Finance - Shiliu Cloud Medical’s Stock Price Plunges 90%, Causing Buchang Pharmaceuticals to Suffer Approx. RMB 300 Million Floating Loss (January 13, 2026)