Anhui Huaren Health Pharmaceutical Co., Ltd.

Anhui Huaren Health Pharmaceutical Co., Ltd. is a retail-focused company listed on the ChiNext board of the Shenzhen Stock Exchange in 2023. The company operates primarily in the pharmaceutical sector, adopting a pharmaceutical agency marketing model that emphasizes product enhancement and empowerment. It has established a nationwide marketing network and is recognized as one of the top private service enterprises in Anhui Province. The company's main business lines include pharmaceutical agency, retail pharmacy, and terminal centralized procurement. Huaren Health has developed a diverse product matrix featuring over 700 SKUs, covering a wide range of pharmaceutical products, including active ingredients and health supplements. Its retail brand, GuoSheng Pharmacy, is influential in East China and has expanded its operations significantly in the region. The company also emphasizes digital transformation and has implemented a comprehensive informatization system to enhance its operational efficiency. With a strong focus on regional expansion and a robust ecosystem of services, Huaren Health aims to strengthen its competitive position in the pharmaceutical market.

1. Strategic Focus on Full chain symbiosis, Driving Growth Resilience through an Ecosystem Loop During 2024, Huaren Health continued to advance its "Dual-Power, Full chain symbiosis" 1234 Development Strategy, with a strategic focus on pharmaceutical terminals as the core anchor. By leveraging a dual-driven approach of product matrix and terminal network, and relying on three key engines—Pharmacy Business School, Digital Intelligence Research Institute,and Pharmaceutical Research Institute—the company built an integrated ecosystem encompassing retail terminal networks, pharmaceutical agency, terminal procurement, and R&D production. During the reporting period, the revenue ratio between retail and other business segments remained stable at 7:3, forming a unique ecological model of "retail as the foundation, agency as the synergistic force, procurement sinking procurement, and R&D efficiency enhancement." This has become the core engine for countercyclical growth. 2. Differentiated Product Matrix + All-Channel Network, Strengthening the Competitive Moat of Agency Business In the pharmaceutical agency sector, Huaren Health's "category + brand" dual-driven strategy, combined with a marketing model centered on "products + empowerment," has established a three-dimensional network covering over 200,000 stores nationwide (including standalone pharmacies) and collaborating with over 3,000 chain pharmacies. Through its self-produced and OEM-manufactured products, the company has developed an eight-category, multi-specification product matrix featuring over 700 SKUs, covering more than 80% of the common products found in pharmacy terminals. The company has systematically planned and developed several distinctive proprietary brands, including "Shenhua Weikang," "Gongneng Jian," "Fuman Yi," "Quanfang," "Guojin," "Kean Shu," and "Zhengyao." Additionally, the Huaren Pharmacy Business School, through its "management output + brand linkage + ecosystem共建 (co-construction)" model, has developed over 60 standardized service projects across seven key areas: professional development, talent incubation, operational techniques, performance growth, long-term development, category marketing, and digital pharmacies. The school has provided services to over 3,000 pharmaceutical retail companies nationwide. Its annual "Risi Conference" has become a benchmark for industry innovation, empowering partners to enhance their value. 3. Regional Deepening + Downmarket Breakthroughs, Strengthening the Retail Leadership Position In the pharmaceutical retail segment, Huaren Health adhered to its strategy of "deepening in Anhui, focusing on East China, and radiating to surrounding regions." Through a "honeycomb-style layout," the company achieved full coverage of Anhui Province's 15 prefecture-level cities. By combining new store openings and acquisitions, the company added 440 stores during 2024, including 70 newly built stores and 370 acquired stores, entering new markets such as Zhoushan and Huzhou in Zhejiang Province. By the end of 2024, the total number of stores exceeded 1,774, with a membership base surpassing 9 million, solidifying its position as the regional leader. The company continued to build a stereoscopic network of "strengthening core markets + positioning emerging markets," creating a dual barrier of cost leadership and brand value. 4. Digitization-Driven Full chain Upgrade, Leading the Industry in New Retail Huaren Health deeply implemented its digitalization strategy, achieving a leap from informatization to integrated digitization. The company established a "1245" informatization system—comprising one architecture, two platforms, four scenarios, and five informatization initiatives. Its self-developed POS system was upgraded, and the supply chain management system underwent intelligent transformation. The B2B marketplace, electronic signature system, and integrated financial and operational platform were fully launched. In the e-commerce and new retail sector, new retail business performed exceptionally well, with total online sales exceeding 658 million yuan, reflecting significant achievements in digital upgrades. Notably, the O2O business achieved sales of 321 million yuan, a year-on-year increase of 33.2%. Additionally, the "Kean Shu" women's health product series launched in the brand e-commerce sector has gained traction, with dedicated brand stores opened on platforms like Taobao, JD.com, and Douyin. Focused on professional standards for women's health, this initiative is expected to drive further rapid growth. 5. R&D and Manufacturing + Terminal Procurement, Innovation-Driven Sustainable Development Subsidiaries Shenhua Pharmaceutical and Zhengyao Technology continued to prioritize R&D and production, with R&D expenses reaching 29.3873 million yuan in 2024, a year-on-year increase of 21.46%. During 2024, 11 new patents were granted, and the registration and application for Sacubitril valsartan sodium tablets were completed. The company has nearly 40 ongoing R&D projects for pharmaceuticals. The terminal procurement business leveraged customized "Quanfang" series products and a self-built B2B platform to deeply penetrate county, village, and township markets, addressing the "last-mile" supply challenges in grassroots markets. This has become a powerful tool for expanding downmarket opportunities. The terminal procurement business now serves over 1,200 member stores, with the Quanfang B2B platform registering over 2,000.