Price Hike Myth Shattered, Can "Pharma's Moutai" Drive Performance Through Younger Consumers? Dong-E-E-Jiao Posts Net Profit Exceeding 1.7 Billion Yuan Last Year as Revenue and Net Profit Growth Slows

Source: Times Finance Author: Du Sumin

In 2006, Dong-E E Jiao (000423.SZ) launched the “Value Return” strategy—continuously raising prices to position E Jiao as a high-end consumer product. Three years later, in 2009, China’s private equity tycoon Zhao Danyang brought a bottle of Maotai and a box of Dong-E E Jiao to a lunch with Warren Buffett. The nickname “Maotai among medicines” thus became closely associated with this “Chinese old brand.”

Over the following decade, the growth driven by price hikes continued to soar, but hidden risks also emerged. In 2019, the bubble finally burst, with Dong-E E Jiao’s revenue plummeting nearly 60%, and net profit attributable to shareholders recorded its first loss since listing, amounting to 444 million yuan.

Subsequently, Dong-E E Jiao embarked on a difficult restructuring: clearing channel inventories, reshaping the product matrix, and embracing young consumers. Meanwhile, China Resources (CR) gradually deepened its management of Dong-E E Jiao. From Cheng Jie’s appointment as CEO in 2022 to his becoming Chairman in 2024, with Sun Jinni taking over as CEO, CR fully took control of this old brand’s daily operations.

Recently, Dong-E E Jiao’s impressive performance and substantial dividend payouts have attracted market attention. The latest financial report shows that in 2025, the company achieved operating revenue of 6.7 billion yuan, an 8.83% increase year-over-year; net profit attributable to shareholders was 1.739 billion yuan, up 11.66%. Additionally, the company plans to distribute a cash dividend of 14.31 yuan per 10 shares (tax included), totaling 922 million yuan, with this dividend payout covering 100% of the undistributed net profit attributable to shareholders for 2025.

Times Finance notes that after emerging from the loss period, Dong-E E Jiao has also become increasingly youthful in brand image, transforming from “Maotai among medicines” to “a nourishing national product for young people.” What exactly has Dong-E E Jiao done right? And what is still lacking?

CR’s Transformation and Youthful Rebranding

Major corporate transformations often start with personnel changes. Since 2020, Dong-E E Jiao has experienced high-level turbulence, changing chairmen four times within five years. Frequent personnel adjustments once raised doubts about the company’s strategic continuity.

The real turning point came in January 2022. That year, Cheng Jie, with a strong background in China Resources Sanjiu, was appointed as CEO of Dong-E E Jiao. Born in 1979, Cheng Jie previously served as product manager for Ganmaoling at CR Sanjiu (000999.SZ), rising to deputy general manager of the marketing center, then party secretary and general manager of the professional brand division, party secretary and executive director of Anuo (China) Pharmaceutical Co., Ltd., and director and general manager of Sanjiu Sanofi (Shenzhen) Healthcare Industry Co., Ltd.

In October 2024, Cheng Jie was promoted from CEO to Chairman, with Sun Jinni, also from the CR system and born in 1983, taking over as CEO. Sun Jinni has a diverse background across multiple CR sectors, with extensive experience in pharmaceutical marketing and strategic operations.

Unlike the previous “local Chinese + CR” management pattern, this time both Chairman and CEO are from CR. This marks CR’s complete control over Dong-E E Jiao’s management.

Different from the past reliance on price hikes and a luxury logic, the new management, led by Cheng Jie, shifted focus back to consumer-centric health products, establishing a “medicine + health consumer goods” dual-driven growth model.

If Dong-E E Jiao only relies on traditional simmered jellies, young consumers will always be out of reach. In recent years, Dong-E E Jiao has been trying to innovate to attract younger markets. First, in product forms, it has expanded into “E Jiao+” and “+E Jiao” categories, launching snack-like, ready-to-eat products such as “Peach Blossom Princess” E Jiao cakes and instant E Jiao powders, as well as cross-industry products like E Jiao bird’s nest and E Jiao milk tea. These products share common features: lowering consumption barriers, simplifying usage, and aligning with young people’s lifestyles.

Recently, there are reports that Dong-E E Jiao plans to enter the low-alcohol liquor segment, with a new E Jiao wine scheduled to debut at the Chengdu Spring Liquor Fair on March 26. However, this has not been officially confirmed by the company.

In branding and marketing, Dong-E E Jiao is fully embracing youth. It has invited celebrities like Song Yi, Chen Lijun, Ni Ni, and Li Hao as brand ambassadors or spokespeople. In content marketing, it has collaborated with Bilibili for New Year’s galas, partnered with Xiaohongshu for the “Chinese Wellness Festival,” and co-branded with IPs like the Palace Museum, Disney, and Peacekeeper Elite. It also produces short videos that tell brand stories in ways young people enjoy, aiming to reach different age groups and social circles.

In distribution channels, Dong-E E Jiao successfully entered Sam’s Club in 2025. According to the third-quarter earnings call, the product sold over 50 million units within two months of launch, marking a breakthrough for CR’s industrial functional foods in Sam’s Club.

Beyond E Jiao, the company is also trying to create new growth engines. Notably, the men’s health brand “Royal Pasture 1619” has garnered attention. In 2025, Dong-E E Jiao completed acquisitions of 70% of Ma Ji Pharmaceutical and 80% of the Alxa Cistanche Group, making strategic moves in deer antler and Cistanche sectors. In January 2026, the deer antler deep-processing project of “Royal Pasture 1619” officially started operation, with a total investment of 53.3 million yuan and an expected annual revenue of 280 million yuan.

Financial data shows that these new strategies are beginning to bear fruit. In 2025, revenue from E Jiao and related products reached 6.198 billion yuan, an 11.80% increase, though the growth rate has slowed compared to previous years. Other medicines and health products earned 386 million yuan, a significant 63.65% increase.

According to the third-quarter 2025 performance briefing, “Royal Pasture 1619” experienced rapid growth from January to September 2025 and is actively expanding its distribution channels. The company has also outlined a comprehensive plan emphasizing “big brands, big products, big sales, and big categories.”

Slowing Growth and Raw Material Challenges

Despite the turnaround from losses to steady growth, there are still concerns behind the impressive financials.

First, the slowdown in growth is a real challenge. In 2025, Dong-E E Jiao’s revenue and net profit growth rates slowed compared to the previous two years. The 2023 and 2024 figures show revenue growth of 16.66% and 25.57%, and net profit growth of 47.55% and 35.29%, respectively. After a rapid rebound, maintaining high growth becomes more difficult as the scale increases.

Second, while the company has entered new segments like men’s health with noticeable growth, these segments still account for a small proportion of total revenue. In 2025, E Jiao and related products contributed 6.198 billion yuan, over 92% of total revenue, while “Royal Pasture 1619” and other new categories combined account for less than 6%.

E Jiao, with centuries of traditional reputation, remains the core. Although deer antler and Cistanche have traditional recognition, they are not as deeply ingrained in consumers’ minds as E Jiao. Market education and brand building will require ongoing investment, and creating a second growth curve will take time.

Additionally, the supply of donkey skins—the essential raw material for E Jiao—remains a critical issue. According to the “Shandong Province 2025 Donkey Industry Development Outlook,” the industry faces two major contradictions, one of which is a significant shortage of donkey skins. The domestic annual demand exceeds 1.5 million skins, with less than 20% produced domestically. High meat prices encourage slaughterhouses to sell donkey meat with skins, further tightening supply.

Dong-E E Jiao’s 2025 annual report also warns that as the utility of donkeys diminishes and free-range numbers decline, the price of donkey skins may rise sharply, increasing costs. In August 2024, the company disclosed that imported donkey skins account for about one-third of raw materials.

To ensure stable supply, Dong-E E Jiao is strengthening R&D, collaborating with top domestic universities to establish an “1 Academy + 3 Centers” innovation platform, and signing memoranda with some Belt and Road countries to develop donkey industry projects, aiming to build an integrated international supply chain for donkey skins.

Regarding these performance changes, raw material challenges, and strategic shifts, Times Finance repeatedly contacted Dong-E E Jiao’s securities department on March 20, but received no response.

From its first loss in 2019 to steady growth in 2025, Dong-E E Jiao has proven that tradition is not a burden but fertile ground for innovation. However, the transformation story of this Chinese old brand is far from over. How to sustain growth, break through the second growth curve, and solve raw material supply issues remain long-term challenges for Cheng Jie and Sun Jinni.