Analysis of Negative Q3 Revenue Growth and Inventory Turnover for Pien Tze Huang's Liver Disease Medication

According to the Q3 2025 financial report released by Pien Tze Huang, the company is facing significant performance pressure [0][1]. The latest quarterly financial performance is as follows:

Indicator	Actual Value	Market Expectation	Deviation
Earnings Per Share (EPS)	$1.14	$1.53	-25.49%
Revenue	$2.06B	$2.88B	-28.40%
Net Profit Margin	24.74%	-	-
ROE	16.51%	-	-

• Pien Tze Huang’s liver disease medication revenue still maintained a 9.7% growth in H1 2025 [1]
• Revenue decline started in Q3 2025
  , showing negative growth
• As the company’s core product, liver disease medications account for a high proportion of revenue

1. Macroeconomic Transmission Effect
   : Pien Tze Huang’s lozenges are similar to high-end baijiu and are greatly affected by the real estate cycle. In the first three quarters of 2025, the revenue of the baijiu sector decreased by 6.26% year-on-year, ending ten consecutive years of positive growth [1]
2. Channel Inventory Saturation
   : As of the end of Q3 2025, the company’s inventory increased
   3x
   compared to the same period in 2021 and
   34.90%
   compared to the same period in 2024 [1]
3. Increase in Accounts Receivable
   : Accounts receivable increased by
   22.25%
   year-on-year this year, indicating increased pressure on dealers to collect payments [1]

Indicator	Same Period in 2024	Q3 2025	Change Magnitude
Inventory Scale	Benchmark	Increased by 34.90%	Significantly Up
Accounts Receivable	Benchmark	Increased by 22.25%	Obvious Increase
Channel Inventory	Saturated	Continued Increase	Huge Pressure

1. Early Inertia Effect
   : Although real estate sales have declined since 2022, channel inventory played a buffer role of about 3 years [1]
2. Aftermath of 2023 Price Hike
   : In that year, the company increased the retail price from 590 yuan per lozenge to 760 yuan per lozenge (a nearly 30% increase), and dealers’ confidence increased, leading to active stockpiling [1]
3. Poor Terminal Sales
   : When channel inventory is saturated, dealers’ willingness to take goods decreases, and the company’s shipment volume reduces, leading to a significant increase in inventory on the report side instead [1]

• Current Ratio:5.00 (Very Healthy)[0]
• Quick Ratio:2.12 (Good)[0]
• Debt Risk: Low Risk[0]
• Gross margin and net margin remain at high levels

• Aggressive accounting policies (low depreciation/capital expenditure ratio)[0]
• Revenue significantly below market expectations by28.4%[0]
• Severe channel inventory backlog, requiring time to digest
• Price inversion occurred (dropped from around 1,000 yuan to 600-700 yuan)[1]

The surge in Pien Tze Huang’s inventory turnover days indeed reflects the channel backlog problem.

1. Channel De-stocking Cycle
   : Currently in the stage of active channel de-stocking; it is expected to take2-4 quarters to complete inventory digestion
2. Sustained Performance Pressure
   : Before channel inventory returns to normal levels, the company’s revenue growth rate will continue to face pressure
3. Focus on Consumption Recovery
   : The company’s future performance elasticity depends on the recovery of high-end consumption and business activities
4. Valuation Regression
   : Current PE ratio is42.44x; need to wait for fundamental improvement to support valuation[0]

It is recommended to pay attention to the progress of the company’s channel inventory digestion and the performance in the 2026 consumption peak season; mid-term布局 can be done on dips.

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[0] Jinling AI - Pien Tze Huang (600436.SS) Financial Data Analysis (December28,2025)

[1] NetEase Finance - “Pien Tze Huang’s foreign revenue once accounted for up to 45%” (2025)
(https://www.163.com/dy/article/KHS18QKN0552R1XU.html)