Dashenlin Pharm Grp Co Ltd

JPMorgan strategists led by Eduardo Lecubarri warned that the climb in 30-year government bond yields poses a risk to small- and mid-cap stocks, arguing the move reflects government debt levels more than the path of short-term interest rates. They said that for the first time in history, about 60% of global GDP sits with governments running debt above 100% of GDP and a deficit, a 3-sigma event investors seem to be ignoring. The U.S. term premium has doubled, with the gap between the 30-year yield and the Fed funds rate widening to 1.42% from 0.73%, a level seen before only after the Fed funds rate fell more than 70%, which the strategists said is unlikely now. For SMid investors, the share of U.S. small- and mid-cap stocks with a dividend yield above the 30-year Treasury yield has dropped to 9% from 19% since the start of 2024, a 24-year low, with similar declines in the U.K. and continental Europe. JPMorgan added Dashenlin Pharmaceutical Group, a $3 billion Chinese company, and Befesa, a €1.4 billion German-listed company, both rated Overweight, to its model portfolio.

Dashenlin held an online briefing on its 2026 interim results on September 30, addressing investor questions about negative investing and financing cash flows, convertible bond conversion, and logistics and distribution. The company said the negative investing cash flow mainly stemmed from capital expenditure on new store openings, digitalisation and logistics system construction, as well as consideration paid for pharmacy acquisitions, while the negative financing cash flow was mainly due to continued cash dividends. Operating cash flow remained a net inflow. The 1.405 billion yuan convertible bonds issued by the company will mature on October 21, 2026, and have not yet been converted. The company said its cash reserves are sufficient, and it will assist holders willing to convert, while repaying principal and interest in full and on time to holders who hold to maturity, with controllable redemption risk. On logistics, the company has built a three-tier warehouse network of group warehouses, regional warehouses and district warehouses. As of the end of the reporting period, it had 35 warehouses nationwide, including in Inner Mongolia and Xinjiang, with total warehousing area of 420,000 square metres. Self-operated delivery accounted for more than 85% of total delivery volume, warehouse shipment fulfilment rate reached 99%, and shipment error rate was below 0.008%. The interim report showed revenue of 13.99 billion yuan, up 3.46% year on year; net profit attributable to the parent of 927 million yuan, up 16.10%; non-GAAP net profit attributable to the parent of 931 million yuan, up 18.05%; net operating cash flow of 1.289 billion yuan, down 55.70%; and a proposed cash dividend of 0.41 yuan per share before tax.

Dashenlin announced plans to distribute a cash dividend of 0.41 yuan per share, including tax, to all shareholders, with an estimated total payout of 464 million yuan. In the first half of 2026, Dashenlin achieved revenue of 13.991 billion yuan and net profit attributable to the parent company of 927 million yuan.

Dashenlin, through its wholly-owned subsidiary Jiangxi Dashenlin Pharmaceutical Co., Ltd., jointly holds shares with Jiangxi Jinbaihe Pharmacy Chain Co., Ltd., to establish a new Dashenlin Pharmaceutical Co., Ltd. in Yichun City. The legal representative of the new company is Hu Xiajin, and its business scope covers drug retail, Class III medical device operations, alcohol sales, food sales, as well as online drug information services and online medical device information services.