Shan Dong Dong-E E-Jiao Co Ltd

Dong-E-E-Jiao released its 2026 interim report, with net profit attributable to the parent company of 860 million yuan, an increase of 46.07 million yuan compared with the same period last year, up 5.66% year-on-year, achieving five consecutive years of growth. The company's total operating revenue was 3.155 billion yuan, up 3.39% year-on-year, also achieving five consecutive years of growth. The latest gross margin was 74.82%, an increase of 1.70 percentage points from the same period last year; the latest ROE was 8.47%, an increase of 0.54 percentage points from the same period last year. The company's diluted earnings per share was 1.34 yuan, up 5.97% year-on-year.

Dong-E E-Jiao disclosed that first-half net profit rose 5.66% year on year, and it plans to distribute a cash dividend of 13.44 yuan for every 10 shares to all shareholders, with total payout expected to reach 860 million yuan. On the same day, Tuojing Technology, Huachang Chemical, Three Gorges Water Conservancy, Yongmaotai, Sanfu Shares, China Jushi, CITIC Securities, Xiamen Tungsten, and Hunan Gold also released first-half results. Among them, Tuojing Technology's net profit surged 1,324% year on year, Huachang Chemical rose 1,026.9%, and Three Gorges Water Conservancy increased 688.61%. China Telecom's first-half net profit fell 14.9% year on year, while Xinhua Department Store announced plans to buy back shares worth 200 million to 400 million yuan.

Dong-E-E-Jiao disclosed on the 30th anniversary of its listing that its revenue grew from 157 million yuan in 1996 to 6.7 billion yuan in 2025, net profit rose from 23 million yuan to 1.739 billion yuan, and its latest market capitalization stands firmly at 35 billion yuan. Since listing, it has paid cash dividends 29 times, with the total dividend payout exceeding 11 billion yuan, and the annual dividend payout ratio has been close to 100 percent for three consecutive years since 2022. The company also set out its strategic direction for the 15th Five-Year Plan period, building a dual-engine model of pharmaceuticals plus health consumer products, laying out three growth curves around its core ejiao products, men's nourishment, and beauty and anti-aging, and establishing Hong Kong as its international bridgehead.

The State Council has approved in principle the Traditional Chinese Medicine Revitalization and Development 15th Five-Year Plan, igniting the TCM sector. On July 13, Longshen Rongfa hit the 20 percent daily limit up, Shanghai Kaibao and Biotech Valley surged over 10 percent, Tianmu Pharmaceutical hit the daily limit up, and many other stocks rose in sympathy. CITIC Securities believes that the cliff-like drop in upstream precious medicinal material prices has shed the cost burden, the midstream destocking cycle is nearing its end, and cost savings will flow through to the income statement. The current moment is the optimal window for contrarian positioning in the profit recovery inflection point of the TCM OTC sector. China Post Securities noted that branded TCM companies have stable cash flows, and high-dividend TCM firms are trading at historically reasonable or low valuations, offering allocation appeal in a low-interest-rate environment. It suggests paying attention to names such as Dong-E-E-Jiao, Jumpcan Pharmaceutical, and China Resources Jiangzhong.