La forte augmentation du bénéfice net de Sinopharm Yizhi d'environ 80 % : fermeture de magasins, réduction des dépréciations et fréquents changements de dirigeants

(Source: Beijing Business Daily)

After provisions for impairment losses decreased, Sinopharm Group achieved a significant increase in net profit. On April 1, Sinopharm Group released its 2025 performance report: net profit attributable to parent was 1.136 billion yuan, a year-on-year increase of 76.8%. The impressive net profit performance was mainly due to a reduction of 686 million yuan in goodwill and intangible asset impairment provisions, whereas in 2024, impairment provisions reached as high as 970 million yuan, causing net profit to plummet nearly 60% that year. Excluding this factor, the true profitability of Sinopharm Group still needs further verification.

Looking at the business segments, the retail sector has been the main factor dragging down overall performance in recent years. In 2025, revenue in this segment declined by 6.16%, and although net profit increased, it still recorded a loss of 217 million yuan. To “stop the bleeding,” Guoda Pharmacy closed over 2,000 stores in two years, reducing the total number of stores from 10,516 to 8,221. Meanwhile, management has been undergoing intensive adjustments. From large-scale store closures to frequent changes in senior management, Sinopharm Group seems to be experiencing a deep restructuring.

Narrowing impairment losses drove a rebound in net profit

Sinopharm Group’s 2025 annual report shows that during the reporting period, the company achieved operating revenue of 73.416 billion yuan, a decrease of 1.29% year-on-year; net profit attributable to parent was 1.136 billion yuan, up 76.8%; net profit after deducting non-recurring items was 1.096 billion yuan, up 88.53%.

In 2025, Sinopharm Group’s net profit rebounded sharply, partly due to a reduction in asset impairment losses. In 2024, the retail segment was affected by industry policy changes and intensified market competition, leading to a decline in performance. The performance gap with expectations caused the company to recognize impairment provisions of 970 million yuan for goodwill and acquisition-related intangible assets (brand rights and sales networks), reducing net profit attributable to parent by 561 million yuan that year, with only 642 million yuan recorded, a decrease of 59.83% year-on-year. In 2025, impairment provisions for goodwill and intangible assets decreased by 686 million yuan year-on-year, directly boosting Sinopharm Group’s net profit.

From the revenue structure perspective, Sinopharm Group’s main business is divided into pharmaceutical distribution and pharmaceutical retail. Among them, pharmaceutical distribution accounts for over 70% of revenue, with revenue of 53.321 billion yuan in 2025, up 0.64%; net profit of 949 million yuan, up 2.94%, showing steady performance.

The real issue lies in the retail sector, namely Guoda Pharmacy. Since 2024, the retail business’s net profit has shown a clear decline. Operating revenue decreased by 8.41% year-on-year, and net profit attributable to parent dropped by 388.83%, recording a loss of 1.072 billion yuan, directly dragging down the company’s overall performance.

In 2025, the retail segment stabilized somewhat, with operating revenue of 20.981 billion yuan, down 6.16% year-on-year; net profit still recorded a loss of 806 million yuan, but the loss narrowed to 217 million yuan.

Deng Yong, professor of health law at Beijing University of Chinese Medicine and doctoral supervisor, pointed out that the decline in Sinopharm Group’s revenue reflects pressure on growth in distribution and retail main businesses. Profitability improvement is more due to the alleviation of historical burdens and cost control, representing a “stop the bleeding” type of recovery rather than strong endogenous growth. The significant improvement in net profit after deducting non-recurring items indicates that clearing inefficient stores and initial cost management measures have taken effect, but sustainable profitability still depends on subsequent store efficiency, category structure, and the true recovery of distribution business.

Regarding performance-related issues, Beijing Business Daily reporters sent interview requests to Sinopharm Group but had not received a response as of press time.

Large-scale store closures and personnel adjustments

Another reason for the improvement in net profit is the reduction in rigid costs such as labor and rent resulting from store adjustments. Sinopharm Group’s annual report shows that in 2025, the company added 61 directly operated stores, closed 1,140 stores, added 65 franchise stores, and closed 334 franchise stores.

Beijing Business Daily noted that at the end of 2023, Guoda Pharmacy had over 10,500 stores, totaling 10,516. In 2024, Sinopharm Group began large-scale closures, and by the end of that year, the total number of stores was 9,569. As of December 31, 2025, Guoda Pharmacy had only 8,221 stores remaining, including 6,691 directly operated and 1,530 franchise stores, closing over 2,000 stores in two years.

In its annual report, Sinopharm Group stated that it is focusing on optimizing store layout. In 2025, Guoda Pharmacy accelerated the “stop the bleeding” process by closing unprofitable stores, initially completing the consolidation of loss-making stores.

Deng Yong pointed out that the chain pharmacy industry is shifting from scale expansion to quality improvement of existing assets, entering a deep adjustment period. The industry faces oversupply of stores, online-offline channel shifts, and rising rigid costs for rent and labor. The previous “opening stores equals profit” model is no longer sustainable, with many inefficient stores suffering losses, and the industry entering a phase of active clearance.

Meanwhile, management has also been undergoing intensive adjustments. On March 18, Sinopharm Group announced that Vice President Wang Chu had resigned due to work transfer, with Huang Minchun, Chi Guoguang, and Wang Hubiao from Sinopharm Holdings Guangzhou filling the vacancies. Wang Chu had only recently taken office in 2025. More critically, this is the second vice president to leave early within half a year; in November 2025, Chen Changbing, responsible for strategy and M&A, also left early, with a planned term until 2027. Over the past year, the senior management team has experienced multiple changes.

Deng Yong emphasized that Sinopharm Group’s approach of reducing costs and increasing efficiency through closing loss-making stores and optimizing network layout is pragmatic and aligned with industry trends. Short-term store closures and personnel adjustments may cause some pain, but fundamentally, it is a strategic correction to eliminate bubbles and improve quality. Future competition in chain pharmacies will focus on store profitability, supply chain efficiency, and professional service capabilities. Leading companies that complete structural optimization will have stronger resilience through cycles.