China Traditional Chinese Medicine (570) investor relations material

Executive summary

• Revenue for the six months ended 30 June 2026 was RMB5,438.5 million, down 27.1% year-over-year, mainly due to policy adjustments and weaker demand in concentrated TCM granules.

• Gross profit fell 29.0% to RMB2,580.8 million, with gross margin down 1.2 percentage points to 47.5%.

• Loss for the period widened to RMB834.7 million from RMB141.8 million, driven by lower sales, goodwill impairment, and increased asset impairments.

• Basic and diluted loss per share was RMB-15.42 cents, compared to RMB-2.14 cents a year earlier.

Financial highlights

• Revenue by segment: Concentrated TCM granules RMB1,932.9m (-35.4%), TCM finished drugs RMB1,663.0m (-28.0%), TCM decoction pieces RMB1,559.6m (-2.3%), Chinese medicinal herbs integration RMB189.6m (-57.5%), TCM great health RMB93.4m (-23.5%).

• Gross profit margin: 47.5% (down 1.2pp); net profit margin: -15.3% (down 13.4pp).

• Goodwill impairment of RMB645.2m recognized, mainly in the concentrated TCM granules business.

• Selling and distribution expenses decreased 26.1% to RMB1,890.1m; administrative expenses rose 10.3% to RMB552.1m.

• R&D expenses dropped 26.8% to RMB187.5m.

Outlook and guidance

• The company will focus on reforming business models, quality improvement, and innovation-driven growth.

• Plans to strengthen market position in TCM decoction pieces, adapt to policy reforms in granules, and enhance academic promotion for finished drugs.

• Emphasis on digital transformation, operational efficiency, and compliance to drive long-term stability.