Executive Summary
Modern Chinese Medicine Group Co Ltd posted QQ2 2025 results with modest revenue and earnings momentum, reflecting a cautious growth environment in Chinaβs proprietary Chinese medicines space. Revenue of 64.758 million CNY declined 5.77% year over year, while gross profit rose to 16.19 million CNY, delivering a gross margin of approximately 25.0%. Operating income was 2.03 million CNY (3.13% margin) and net income stood at 2.45 million CNY (3.78% net margin), with EPS of 0.004 for the quarter. Notably, the company maintains very healthy liquidity metrics (current ratio 8.53, quick ratio 7.80, cash ratio 7.09) and an extremely low debt profile (debt ratio ~0.0003). This implies substantial financial flexibility to pursue selective growth initiatives or potential deleveraging of non-core structures, should opportunities arise. The quarterly results show a meaningful divergence between top-line trends and profitability, underscored by a sharp year-over-year decline in operating income (β77.8%) and net income (β70.3%), while EBITDA remained positive at 6.56 million CNY and EBITDA margin near 10%. Absent a publicly disclosed earnings call transcript, management commentary for QQ2 2025 remains unavailable in this dataset, limiting the ability to quote specific guidance or color on strategy. Nevertheless, the balance of indicators suggests a cash-rich, low-leverage framework with latent growth opportunities in elderly-care diagnostics, distribution expansion, and expansion of proprietary Chinese medicines across mainland China.
Key Performance Indicators
Key Insights
Revenue: 64,757,998 CNY for QQ2 2025; YoY: -5.77%; QoQ: 0.00%
Gross Profit: 16,190,000 CNY; Gross Margin: 25.00%
Operating Income: 2,026,998 CNY; Operating Margin: 3.13%
EBITDA: 6,551,000 CNY; EBITDA Margin: 10.12%
Net Income: 2,453,000 CNY; Net Margin: 3.79%
EPS: 0.0040 CNY; Diluted EPS: 0.0040 CNY; Weighted Avg Shs: 600,048,923
Cash and liquidity: Current ratio 8.53; Quick ratio 7.80; Cash Ratio 7.09; Cash per share 0.472 CNY
Leverage and solvency: Debt Ratio 0.000259; Debt to Equity 0.000284;...
Financial Highlights
Revenue: 64,757,998 CNY for QQ2 2025; YoY: -5.77%; QoQ: 0.00%
Gross Profit: 16,190,000 CNY; Gross Margin: 25.00%
Operating Income: 2,026,998 CNY; Operating Margin: 3.13%
EBITDA: 6,551,000 CNY; EBITDA Margin: 10.12%
Net Income: 2,453,000 CNY; Net Margin: 3.79%
EPS: 0.0040 CNY; Diluted EPS: 0.0040 CNY; Weighted Avg Shs: 600,048,923
Cash and liquidity: Current ratio 8.53; Quick ratio 7.80; Cash Ratio 7.09; Cash per share 0.472 CNY
Leverage and solvency: Debt Ratio 0.000259; Debt to Equity 0.000284; Long-term debt to capitalization 0; Total debt to capitalization 0.000284; ROA 0.46%; ROE 0.51%; ROCE 0.41%
Efficiency: Receivables Turnover 2.54x; Inventory Turnover 1.679x; Days Sales Outstanding 35.45 days; Days Inventory Outstanding 53.60 days; Payables Turnover 16.98x; Cash Conversion Cycle 83.75 days
Valuation (as of QQ2 2025): Price-to-Sales 3.21x; Price-to-Book 0.428x; Price-to-Earnings 21.20x; Enterprise Value Multiple -11.47x; Price to Operating Cash Flows N/A; Price to Free Cash Flows N/A
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
64.76M |
-5.77% |
0.00% |
| Gross Profit |
16.19M |
-3.33% |
0.00% |
| Operating Income |
2.03M |
-77.78% |
0.00% |
| Net Income |
2.45M |
-70.31% |
0.00% |
| EPS |
0.00 |
-71.01% |
0.00% |
Key Financial Ratios
operatingProfitMargin
3.13%
Management Commentary
Note: No earnings call transcript was provided in the data. Consequently, management quotes and thematic highlights from an QQ2 2025 call are not available in this dataset. The analysis herein relies on disclosed financial metrics and peer benchmarks. If a transcript becomes available, key themes to extract would include: strategy execution for product portfolio, cost-control measures, channel expansion (distributors vs direct-to-consumer), regulatory updates, and commentary on near-term profitability drivers. In the absence of quotes, the following themes would be typical anchors for discussion: (1) strategy: expansion of proprietary medicines portfolio and eldercare products; (2) operations: cost structure optimization and supply chain resilience; (3) market conditions: growth trajectory in PRC healthcare demand and policy incentives for traditional Chinese medicines.
Forward Guidance
Public guidance for QQ3 and beyond is not provided in the dataset. Given the companyβs liquidity strength and minimal leverage, the downside risk to the dividend capacity or buyback flexibility appears low, should management opt to allocate capital to growth initiatives or selective acquisitions. Industry dynamics in China β including an aging population and ongoing interest in traditional Chinese medicines β support a modest-to-low growth backdrop with potential margin stabilization if SG&A costs are controlled and product mix shifts toward higher-margin proprietary formulations. A balanced baseline scenario would anticipate revenue flattish to modest growth in the 0β5% range, with operating margin stabilizing around 3β4% if cost pressures are contained. Key factors investors should monitor: (i) any disclosed guidance on product pipeline expansion and distribution partnerships; (ii) changes in regulatory environment affecting pricing or eligibility for elderly-care products; (iii) evidence of margin improvement from cost controls or product mix shifts; (iv) cash flow development and any capex tied to expansion plans.