Analysis of Reasons for Revenue Decline of Sunflower (300111.SZ) in the First Three Quarters of 2025

According to public information, the 2025 Q3 report of Sunflower (300111.SZ) shows that in the first three quarters, the company achieved operating revenue of

, and net profit attributable to shareholders of the parent company of [1][2]. Net profit attributable to shareholders of the parent company after deducting non-recurring gains and losses was a loss of RMB 90,000, a year-on-year decrease of 105.0%; net operating cash flow was RMB 10.98 million, a year-on-year decrease of 79.4%[1].

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From January to September 2025, national above-scale pharmaceutical manufacturing enterprises achieved operating revenue of RMB 1.82114 trillion,

[3]. Affected by the phased impacts of policies related to volume-based procurement, national medical insurance negotiations, and anti-corruption in the pharmaceutical sector, the overall growth rate of the pharmaceutical industry has slowed down.

The API sector achieved operating revenue of RMB 78.21 billion in the first three quarters of 2025,

[3]. By quarter:

• Q1: Revenue of RMB 26.46 billion (+2.0%)
• Q2: Revenue of RMB 26.42 billion (-2.1%)
• Q3: Revenue of RMB 25.33 billion (-4.4%)

Showing a quarter-by-quarter downward trend[3].

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Sunflower’s main business focuses on the pharmaceutical sector, with main products covering

, etc., and its main operating revenue consists of [1][2]. This business structure makes it highly sensitive to changes in industry policies.

From the industry perspective, pharmaceutical enterprises are facing multiple pressures:

• Volume-based procurement pressure
  : Sales of unwinning varieties have declined significantly, while prices of winning varieties have dropped sharply[4]
• Rising costs
  : Demand for some products has declined, and industry competition has intensified[4]
• Medical insurance cost control
  : Sales revenue of core products has continued to decline due to factors such as not being included in the medical insurance catalog and stricter medical insurance cost control[4]

With the full advancement of the normalization of volume-based procurement, the prices of generic drugs have dropped significantly, leading to narrowed profit margins for API and preparation enterprises[3].

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On January 14, 2025, Sunflower received the “Filing Notice” from the China Securities Regulatory Commission (CSRC) and was filed for investigation on suspicion of illegal and irregular information disclosure[1][2]. On the same day, the company announced the termination of the transaction involving the issuance of shares and cash payment to purchase assets and raise supporting funds, as well as connected transactions.

The company originally planned to acquire 100% equity of Zhangzhou Xipu Materials Technology Co., Ltd. and 40% equity of Zhejiang Beide Pharmaceutical Co., Ltd. by issuing shares and paying cash to enter the semiconductor sector[2]. However, the restructuring targets were suspected of misleading statements, and the Shenzhen Stock Exchange (SZSE) issued a letter of concern on December 26, 2025, requesting verification, which ultimately led to the termination of the restructuring[1][2].

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The revenue decline of Sunflower in the first three quarters of 2025 is the result of

:

Factor Type	Specific Performance
Industry Factors	Overall growth slowdown of the pharmaceutical manufacturing industry (-2%), revenue decline in the API sector (-1.5%)
Policy Factors	Normalization of volume-based procurement, increased downward pressure on drug prices
Business Factors	Single main product structure, weak risk resistance capability
Event Factors	Regulatory filing investigation, restructuring failure, market confidence hit

From the industry trend perspective, as the impact of anti-corruption gradually fades and the normalization of volume-based procurement progresses, the year-on-year growth rate of the pharmaceutical manufacturing industry is expected to improve. However, for Sunflower, how to stabilize its performance against the background of pressure on its main business and restructuring failure remains a major challenge for the management.

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[1] China News Service - Sunflower’s Stock Plunged by Limit After Being Filed for Investigation by CSRC, Attracting Market Attention (https://news.china.com/socialgd/10000169/20260115/49166539.html)

[2] Securities Times - Limit Down at Opening! Sunflower Filed for Investigation, Asset Restructuring Terminated (https://www.stcn.com/article/detail/3594332.html)

[3] Southwest Securities - Summary of 2025 Q3 Report for the API Sector (https://pdf.dfcfw.com/pdf/H3_AP202511271789391063_1.pdf)

[4] Phirda - 2025 H1 Pharmaceutical Enterprise Performance Review: WuXi AppTec, Tonghua Dongbao, etc. (https://www.phirda.com/artilce_39700.html)