Research Express | Xiandian Pharmaceuticals Hosts 6 Institutions Including China International Capital and Yinhai: Details Response to Bulk Purchasing, Sales Reform and Hengqin Strategy

Jilin Xidian Pharmaceutical Technology Development Co., Ltd. (hereinafter referred to as “Xidian Pharmaceutical”) hosted a targeted investor research session on the afternoon of March 18, 2026, with six institutions including China International Gold and Silver Sea (Hong Kong) Fund and Zhongrun (Hong Kong) Fund. The company’s Deputy Manager and Board Secretary Zhang Yinji, along with Securities Affairs Representative Zheng Shengyu, discussed investor concerns in detail, including the impact of centralized procurement policies, sales model transformation, and strategic layout.

Basic Information of Investor Activities

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Key Content Analysis of the Research

Responding to Centralized Procurement: Multi-dimensional Measures to Offset Gross Margin Pressure

In response to investor concerns that “mental health drugs’ gross margins have declined due to centralized procurement,” the company stated that it has developed a systematic response strategy. This includes three aspects: first, increasing sales volume through market coverage and penetration to offset the impact of price reductions via scale effects; second, optimizing the supply chain by technological innovation and large-scale production to reduce unit production costs, leaving room for profit margins at winning bid prices; third, implementing lean production comprehensively, strictly controlling manufacturing costs, and leveraging the “zero commission” feature of centralized procurement to optimize sales expense structure. The company emphasized that although centralized procurement poses short-term pressure, a combination of strategies is expected to consolidate market share and gradually restore profitability.

Sales Model Reform: Transitioning Toward Specialization and Academic Promotion

Regarding sales model reform, the company is shifting from traditional marketing to specialized, academic marketing. The future impact on performance is expected to be reflected in three areas: first, deepening hospital market coverage by building self-operated teams, refining recruitment, and collaborating with commercial platforms to rapidly introduce different tiers of products into the market; second, improving the efficiency of sales expenses—short-term academic promotion investments may increase, but long-term ineffective expenditures will decrease. For bid-winning products in centralized procurement, direct connection with distributors will reduce intermediary costs; third, strengthening brand moat through academic exchanges to convey disease knowledge and treatment options, forming a positive cycle of “sales driving brand, brand feeding sales.”

Hengqin Subsidiary: Three Major Strategic Functions

Regarding the wholly-owned subsidiary Xidian (Hengqin) established in Hengqin, the company clarifies its strategic positioning as three core functions: first, building an innovative drug R&D platform, leveraging Hengqin’s geographical advantage near Hong Kong and Macau to attract international R&D talent; second, exploring overseas registration pathways by utilizing “cross-border office” and “Hong Kong-Macau medical device channel” policies to promote the internationalization of traditional Chinese medicine and chemical drugs; third, serving as an investment and financing management platform, utilizing Hengqin’s tax incentives and cross-border capital flow convenience to reduce management costs and provide low-cost funding support for the company’s main business.

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Editor: Xiao Lang Kuai Bao