Hainan Haiyao Co., Ltd. (Hainan Haiyao) reported a double decrease in operating income and net profit attributable to the parent company in 2024, with a year-on-year decline of 33% and 191.25% respectively. This indicates that Hainan Haiyao has recorded negative adjusted net profit for 8 consecutive years.
According to the annual report released by Hainan Haiyao, during the reporting period in 2024, the company’s operating income was approximately 991 million yuan, a 33% decrease compared to the previous year. The net profit attributable to the parent company was -1.525 billion yuan, showing a significant increase in losses, while the adjusted net profit was -1.195 billion yuan, marking a 191.25% year-on-year decrease.
Hainan Haiyao attributed the decline in operating income to factors such as a decrease in sales volume of formulations, active pharmaceutical ingredients, and intermediates due to the implementation of industry policies during the reporting period. Additionally, compared to the same period last year, there was a decrease in demand for household emergency medicines and post-infection medication. The company also conducted a comprehensive review and impairment test of relevant assets within the scope of the consolidated financial statements, resulting in a total provision for impairment in 2024 of 749 million yuan. Furthermore, an estimated amount of approximately -400 million yuan due to changes in fair value also had a significant negative impact on the company’s profitability, directly leading to a substantial increase in losses.
According to a report by “Huaxia Times” on April 21st, from a revenue perspective, Hainan Haiyao’s revenue has been decreasing continuously from 2019 to 2023, with figures of 2.445 billion yuan, 2.2 billion yuan, 2.059 billion yuan, 1.779 billion yuan, and 1.479 billion yuan respectively. The net profit attributable to the parent company also shifted from profit to loss in 2019. From 2019 to 2024, the company only reported a profit of over 10 million yuan in 2022, while the remaining years all incurred losses.
Hainan Haiyao’s adjusted net profit has been negative since 2017. Specifically, the adjusted net profit for 2019, 2020, and 2021 were -624 million yuan, -851 million yuan, and -1.324 billion yuan respectively. Although the losses narrowed in 2022 and 2023, they remained negative at -247 million yuan and -410 million yuan.
In addition, Hainan Haiyao’s asset-liability ratio has been rising continuously. By the end of 2024, the asset-liability ratio reached 90.34%, a 28.83% increase compared to the previous year, with an interest-bearing asset-liability ratio of 56.47%. The company’s cash flow also experienced significant fluctuations, with a net cash flow from operating activities of -17.552 million yuan, a 116.95% year-on-year decrease.
An investor who has been closely following pharmaceutical stocks commented, “Hainan Haiyao seems to be like a huge ship trapped in a whirlpool of financial losses, which is truly regrettable.”
Public records show that Hainan Haiyao Co., Ltd. is a mixed ownership enterprise controlled by a central enterprise. It was listed on the Shenzhen Stock Exchange in 1994 and is a leading pharmaceutical company in Hainan Province.
As of 15:00:00 on April 22, Beijing time, Hainan Haiyao’s stock price was 5.52 yuan per share, with a total market capitalization of 7.161 billion yuan.