Dong'e Ejiao's Big Dividend Payout: Joys and Concerns

Interface News Reporter | Li Kewen

Interface News Editor | Xie Xin

On the evening of March 19, Dong’e Ejiao announced its performance for 2025. In 2025, Dong’e Ejiao achieved revenue of 6.7 billion yuan, a year-on-year increase of 13.17%; net profit was 1.739 billion yuan, a year-on-year increase of 11.67%.

In addition, Dong’e Ejiao simultaneously disclosed its dividend plan, distributing 14.31 yuan in cash (tax included) for every 10 shares, with a total cash dividend of approximately 922 million yuan.

As a result of this performance news, on March 20, Dong’e Ejiao’s stock rose by 6.14%, closing at 56.02 yuan per share.

Behind this significant increase, the market may value Dong’e Ejiao’s high dividend yield, stable growth, and strong cash flow logic. In terms of dividend level, if the interim dividend and annual plan are combined, Dong’e Ejiao is effectively distributing nearly all of its net profit for 2025 as dividends.

The annual profit distribution plan for Dong’e Ejiao in 2025 is to distribute 14.31 yuan (tax included) for every 10 shares, corresponding to a cash dividend of approximately 922 million yuan; in the first half of 2025, a distribution of 12.69 yuan (tax included) for every 10 shares has already been implemented, corresponding to a cash dividend of approximately 817 million yuan.

Based on the closing price of 52.78 yuan per share on the evening of March 19, the dividend yield for Dong’e Ejiao is approximately 5.12%. This is quite attractive in the current interest rate environment, providing certain allocation value for conservative funds.

High dividends require cash flow support. Dong’e Ejiao achieved a net profit of 1.739 billion yuan in 2025, with a net cash flow from operating activities of 2.289 billion yuan. This means that operating cash flow exceeds net profit. Based on this calculation, the cash content of net profit is about 1.32 times.

In terms of cash collection, in 2025, Dong’e Ejiao’s “cash received from sales of goods and services” was 7.096 billion yuan, while operating revenue was 6.7 billion yuan during the same period. The scale of cash collection from sales is not less than the recognized revenue. This is because if a company accumulates a large amount of inventory, relaxes payment terms, and boosts revenue quickly without collecting the cash, it usually results in rapidly increasing revenue while cash collection lags behind.

In fact, Dong’e Ejiao now resembles a consumer goods company driven by brand and marketing for revenue growth. After experiencing performance shocks from the aftereffects of price increases, Dong’e Ejiao has returned to a positive trajectory through product structure optimization, brand investment, and channel repair.

However, Dong’e Ejiao still primarily relies on its core Ejiao single product and Ejiao series products. The secondary growth curve of men’s tonics, bird’s nest, and others that are still being cultivated has not completely taken over; although growth is rapid, the base is very small.

In 2025, revenue from Ejiao and its series products reached 6.198 billion yuan, accounting for 92.50% of total revenue. Dong’e Ejiao’s fundamental performance still relies on Ejiao pieces, compound Ejiao syrup, and Taohua Ji, among others. Revenue from other medicines and health products was 386 million yuan, accounting for only 5.76%.

The most critical point remains the improvement in the profitability quality of Ejiao series products and that expenses have not spiraled out of control.

In 2025, revenue from Ejiao and its series products increased by 11.80% year-on-year, while operating costs only increased by 6.57%, driving the gross profit margin of this business up by 1.23 percentage points to 74.84%. This indicates that the growth is not just a recovery of revenue scale, but that the cost digestion capability and profitability quality of Ejiao and its series products are also improving concurrently.

In 2025, Dong’e Ejiao’s selling expenses were 2.144 billion yuan, an increase of 8.68% year-on-year; management expenses were 483 million yuan, an increase of 8.23%; and research and development expenses were 272 million yuan, an increase of 56.80%. For a consumer goods company, this means that profit improvement is not achieved through cost-cutting, but that operational quality itself is improving.

Dong’e Ejiao’s sales performance has also improved compared to last year. In 2025, the sales volume of the “Pharmaceutical Industry” project increased by 14.88% year-on-year, while inventory decreased by 5.67% year-on-year. This indicates that Dong’e Ejiao is not simply pushing products into the channel. Because relying solely on channel pressure often results in continued inventory increases, or mismatches between sales growth and cash collection.

This can also be corroborated by receivable items. In 2025, Dong’e Ejiao’s accounts receivable, notes receivable, and receivables financing totaled 453 million yuan, significantly down from 739 million yuan at the beginning of the period. While revenue increased, Dong’e Ejiao did not rely on significantly relaxing payment terms or increasing credit sales to boost revenue.

Additionally, by the end of 2025, Dong’e Ejiao’s inventory was 836 million yuan, lower than the 926 million yuan at the beginning of the period. Revenue growth, profit growth, and a decline in inventory indicate that Dong’e Ejiao is currently not in a state of unsold goods and inventory piling up in warehouses.

Looking at the liability side, accounts payable at the end of the period were 338 million yuan, lower than the 359 million yuan at the beginning of the period, with no obvious signs of extending payment periods. This indicates that the improvement in Dong’e Ejiao’s operating cash flow is not achieved by delaying payments to upstream suppliers.

However, Dong’e Ejiao still faces a significant risk that cannot be ignored, which is the high concentration of channels and customers.

Dong’e Ejiao’s top five customers accounted for a total sales of 4.056 billion yuan, accounting for 60.53% of annual total sales. Among them, the largest customer had sales of 2.281 billion yuan, accounting for 34.05%. At the same time, the notes specify that accounts receivable from the top five customers account for 81.19% of total accounts receivable.

This indicates that Dong’e Ejiao is relatively reliant on top channel distributors, commercial circulation platforms, or system customers. The advantage is that channel distribution efficiency is high and volume increases quickly, but the downside is that once the purchasing rhythm of top customers changes, both Dong’e Ejiao’s revenue rhythm and market expectations will be affected.