Policy Boost Fades as Profit Slump and Drug Setback Weigh
TCM policy tailwind The State Council approved the 15th Five-Year Plan for Traditional Chinese Medicine, a sector-wide boost that sent Longshen Rongfa up 20% on July 13 and again on July 20. This policy support improves the outlook for TCM companies, but the initial price spike may already reflect much of the news.
This is the main positive force behind the stock's early-period surge.
Interim profit drops 40.67% Longshen Rongfa's 2026 interim net profit fell 40.67% year on year to 13.71 million yuan, with revenue down 30.96%. This weak financial performance is a major negative for the stock, as it shows the company's core business is struggling despite policy support.
This is the most important company-specific negative news that directly impacts valuation.
Macao registration for key product Longshen Rongfa's flagship Yuanhu Zhitong Dripping Pills received a Macao registration certificate, allowing sales in Macao and expanding overseas business. While the company says it won't significantly impact near-term performance, it enhances brand and market competitiveness, a modest positive.
This is a new positive development that could support long-term growth.
Drug application not approved Longshen Rongfa's controlling subsidiary's marketing application for brexpiprazole oral dissolving film was not approved. This regulatory setback removes a potential new revenue source and adds uncertainty to the company's product pipeline, weighing on sentiment.
This is a new negative event that directly affects the company's future prospects.