HEALTHYWAY INC (02587) expects a mid-term profit of no less than 6 million yuan.

HEALTHYWAY INC (02587) announced that the group is expected to achieve a profit of not less than RMB 6 million for the six months ending on June 30, 2025, while a loss of approximately RMB 57.28 million was incurred for the six months ending on June 30, 2024. The loss was mainly due to the redemption liability value change resulting from the termination of the priority rights of the company's convertible redeemable preferred shares upon the listing of the company's shares; and listing expenses incurred during the listing preparation period. Despite the above-mentioned growth, the group expects a decrease of approximately 15% to 18% in revenue for the six months ending on June 30, 2025 compared to the same period in 2024, and a decrease of approximately 8% to 12% in gross profit compared to the RMB 184 million gross profit achieved for the six months ending on June 30, 2024. The board of directors believes that the expected decrease in revenue and gross profit is mainly due to (i) a decrease in content services revenue, mainly because some clients have shifted to direct marketing in order to comply with their revised market promotion strategies, reducing their reliance on the company's Real World Studies (RWS) support services; furthermore, increasing competition in the generic pharmaceutical industry has led to a shift of resources towards commercialization, causing some clients to cut their financial budgets for RWS services; (ii) a decrease in value-added medical services revenue, mainly due to several sales agent agreements for the company's pharmaceutical wholesale business expiring in 2025, while the company is negotiating new sales agent agreements, and due to a decrease in revenue from the company's Health and Medical comprehensive service package due to the company's proactive adjustment of service structure and classification; (iii) a decrease in digital marketing services revenue, mainly due to economic downturn, leading to some clients choosing to reduce advertising and marketing expenses.