The pharmaceutical firm has gained traction with its first new drug and is seeking funds for further innovation, but its mainstay generics business is under pressure

Key Takeaways:

• Jingxin Pharmaceutical has refiled for a Hong Kong listing, citing plans to invest in R&D and potential acquisitions to boost its pipeline of novel drugs
• Revenue growth has stalled in recent years, and turnover slipped in the first half of 2026, although sales of the firm’s insomnia drug jumped nearly 177%

By Lee Shih Ta

An insomnia drug launched just over two years ago has become the best hope for reviving sluggish profits at Zhejiang Jingxin Pharmaceutical Co. Ltd. (002020.SZ).

The oral medication, dimdazenil, is the first commercial fruit of the company’s efforts to shift away from generic drugs towards innovative therapies.

Seeking funds to accelerate the transition, Jingxin filed a renewed application this month for a Hong Kong listing, hoping that investors will regard its sleep-inducing capsules as just the start of a lucrative new pipeline.

Jingxin’s operations span generic drugs, traditional Chinese medicine, biologics, active pharmaceutical ingredients and medical equipment, as well as the new line in innovative drugs.

Revenue from dimdazenil nearly tripled in the first half but overall income based mostly on legacy products was stuck in reverse gear, after showing little growth over the past few years.

Annual revenue rose from about 4 billion yuan in 2023 to 4.16 billion yuan ($620 million) in 2024, before falling back to 4.07 billion yuan in 2025, representing a compound annual growth rate of just 0.9% over the two years. Net profit rose from 623 million yuan to 772 million yuan over the same period, for a CAGR of about 11.3%, outpacing revenue growth.

Cost controls helped to lift profits last year, as sales and marketing expenses fell by more than 90 million yuan while R&D spending declined to 368 million yuan and tax expenses also decreased.

In the first six months of 2026, Jingxin’s revenue fell 1.5% to 1.99 billion yuan from the year-earlier period, while net profit dropped 10% to 358 million yuan. Revenue fell across all its segments, except for innovative drugs and medical equipment. The company still relies on generic drugs for about 40% of revenue and is keen to inject fresh momentum through new products.

According to the Hong Kong filing, the proceeds from the listing will be used to develop innovative drugs, expand the firm’s marketing network and acquire or license external pipeline assets.

New earnings engine

The insomnia drug, Jingxin’s first approved innovation, is the clearest growth driver. In its first year on the market, the drug brought in 23.42 million yuan. In 2025, after the drug was granted state medical coverage, the figure rose to 195 million yuan. Sales jumped nearly 177% to 153 million yuan in the first half of this year, taking the overall revenue contribution to 7.7% from 2.7%. By the end of June, dimdazenil had gained access to more than 3,000 hospitals, generating cumulative sales of about 371 million yuan since its launch. The capacity utilization rate for producing the drug rose to 90% in the first half.

However, the rapid growth was from a low base. According to industry research cited in the listing application, dimdazenil ranked seventh in China’s market for sleep-onset drugs in 2025, with a share of about 5.4%. It competes with established products such as midazolam and zopiclone, as well as newer therapies such as lemborexant and daridorexant. What matters from this point is whether sales can keep growing at pace after the boost from entering the drug reimbursement list.

Jingxin’s traditional business is not short of market standing. The company ranked first in China’s generics market for the anti-convulsant levetiracetam and the dopamine agonist pramipexole dihydrochloride, and came second for sertraline hydrochloride, used to treat depression, according to research in the filing. However, nearly half the firm’s revenue came from its 10 highest-grossing products, several of which are subject to the price pressure of volume-based procurement. Jingxin cited intensified competition and lower average selling prices for certain drugs and APIs as factors in its revenue drop last year.

Founder Lyu Gang, along with his associates, set up a predecessor company in the 1990s with registered capital of 3.63 million yuan. Lyu led the company to the Shenzhen Stock Exchange in 2004 and currently controls about 36.44% of Jingxin shares with his wife, Zhang Liling.

The company is now pursuing the challenging task of transforming from an established drugmaker into an innovator, but dimdazenil remains its only breakthrough so far, and other discoveries are at an early stage. Of six candidates identified by Jingxin, only two - JX2201 and JX6001 - have entered clinical trials. JX2201, which is designed to lower cholesterol, has completed a first round of tests and has entered a Phase Two trial in China.

Jingxin’s R&D costs fell from 401 million yuan in 2023 to 368 million yuan in 2025, before declining 10.9% in the first half of this year. Its R&D expense ratio also fell to 8.3% from 10%. Proceeds from the Hong Kong listing have been earmarked for R&D and pipeline development through acquisitions or technology licenses. Jingxin said it had identified about 50 potential partnerships but had not selected any specific targets.

Jingxin’s mainland shares have weakened over the past month, from 14.02 yuan on Aug. 17 to about 11.4 yuan now, a drop of nearly 19%. The stock trades at about 13 times earnings, suggesting investors continue to view Jingxin as a mature drugmaker and have yet to confer an innovation premium.

Dimdazenil serves as proof of capability, but the revenue does not suffice to reverse the overall earnings decline. Until it achieves commercial scale with another innovative drug, Jingxin could well struggle to shed its generic label.

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Just 14 months after its market debut, the drug developer is under investigation over regulatory concerns that its IPO demand was artificially inflated

Key Takeaways:

• Cloudbreak’s IPO drew strong retail demand but weak institutional interest, and the shares have since dropped sharply below their issue price
• A clause in an earlier capital-raising gave shareholders the right to retrieve their investment with interest if the company did not go on to deliver an IPO

By Molly Wen

Hong Kong’s securities regulator has halted trading in eye-drug developer Cloudbreak Pharma Inc. (2592.HK), citing what it described as serious concerns over suspected IPO rigging.

Just over a year after the biotech made its market debut, the Securities and Futures Commission (SFC) announced on Sept. 10 it had launched a probe into whether the offering was manipulated to give an inflated impression of share demand.

In its brief statement, the regulator said it acted to protect the investing public and would not provide further information while the investigation was ongoing. Cloudbreak has not publicly responded to the share suspension and the concerns about the IPO.

The clinical-stage biotech, which focuses on developing ophthalmic drugs, listed under Chapter 18A of the Hong Kong Stock Exchange rules in July last year, with CCB International and Huatai International as joint sponsors. With its shares priced at HK$10.10, the company raised about HK$525 million in net proceeds from the global offering.

The response to the IPO was split along retail and institutional lines. The Hong Kong portion aimed at retail investors was 78.78 times subscribed, while the international offering targeting mainly institutional and professional investors fell short of full take-up at just 0.89 times. Cloudbreak later redirected some shares that had been earmarked for the international segment, raising the Hong Kong proportion from 10% to 20% of the offering, without triggering a standard clawback mechanism for reallocation.

The move itself was consistent with listing arrangements, but it did not tally with standard market logic. Institutional investors typically have access to more comprehensive due diligence and tend to deploy larger amounts of capital. The subscription results in this case showed a clear divergence of views about the merits of investing in the company.

Cloudbreak’s shares performed poorly from the outset. The stock closed nearly 39% below the offer price at HK$6.20 on the first day of trading. Although the stock rebounded at one point, it never managed to match the IPO price. By Sept. 9, before trading was halted, the stock had fallen to just HK$1.19, 88% below the issue price, shrinking the firm’s market value to about HK$1.1 billion.

As a loss-making company with treatments still at the clinical stage, Cloudbreak relies on continued external funding. The drug developer logged no revenue for the first half of 2026, while R&D expenses reached about $31.85 million, leaving the firm with a loss of $47.95 million. A profit of $5.19 million for the same period of 2025 was mainly due to fair-value changes in convertible preferred shares.

Its most advanced drug candidate is an eye-drop solution to treat pterygium, a growth on the eyeball. This treatment, CBT-001, is currently undergoing global Phase Three trials. The company was also seeking permission for a Phase Three Chinese trial of a drug for myopia, CBT-009, but withdrew the application this year.

Pressure to list

Cloudbreak made repeated attempts to secure a listing before achieving its goal last year. Four applications were filed with the Hong Kong exchange between November 2023 and June 2025, with the first three submissions lapsing.

The eagerness was not just driven by financing needs. A redemption clause in an earlier capital-raising likely acted as an added impetus.

Under the terms of a Series C financing round, holders of preferred shares had the right to redeem their investment with 10% annual interest if the company failed to deliver a listing by Dec. 31, 2022. The agreement stipulated that the rights would be suspended once a listing application was filed but would be reinstated if the IPO process was not successfully completed. In other words, persistence in seeking an IPO had the practical benefit of easing potential redemption pressure, as well as offering a route to fresh funding.

After the IPO, Cloudbreak used its listed status to seek new capital. It entered into an agreement in June with the financial services firm ARC Group under which it can issue up to $15 million, or about HK$117 million, in new share tranches for subscription by ARC. Cloudbreak said the proceeds would mainly be used for drug R&D, repayment of bank loans and working capital. However, as of Aug. 31, when half-year results were announced, this financing channel had yet to be tapped.

By end-June Cloudbreak had about $32.75 million in cash and cash equivalents, falling from $40.15 million in the middle of 2025. Over the same period, bank borrowings rose from about $440,000 to $6 million. Sustained losses are not unusual for a company taking the Chapter 18A route to a listing for pre-profit biotechs. The real question is whether its existing cash can support R&D through the next milestone, and whether the company can keep raising funds from the capital markets.

If the regulatory scrutiny constrains the scope for further financing, Cloudbreak could face bigger challenges than a falling share price.

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The producer of cardiovascular drugs is accelerating its shift towards innovative pharmaceuticals, under pressure from price cuts and expiring patents

Key Takeaways:

• Salubris built its early success on generics, but China’s volume-based buying has squeezed its traditional business
• With ample cash flow, the company is likely aiming to access international capital and drug partnerships by pursuing a Hong Kong listing  

By Molly Wen

A Chinese pharmaceutical company specializing in cardiovascular drugs is heading down a well-trodden path to a dual listing, as it transitions from generics to innovative therapies.

After 17 years on the mainland stock market, Shenzhen Salubris Pharmaceuticals Co. Ltd. (002294.SZ) is making a renewed attempt to list on the Hong Kong Stock Exchange to lift its profile and tap international capital.

It hopes to join major players including Fosun Pharma, Baiyunshan Pharmaceutical and Hengrui Pharma in establishing a double equity presence as China’s drug industry, under price pressure at home, looks to expand its reach in global markets.

The application was filed in early September with Goldman Sachs, Citigroup and CITIC Securities as joint sponsors.

Salubris focuses on the CKM segment spanning cardiovascular, kidney and metabolic drugs. It has gradually shifted toward innovative drugs while expanding its portfolio around CKM conditions, with its business now straddling generics, biosimilars and medical devices. In 2025, Salubris ranked second in the Chinese market for in-hospital sales of cardiovascular drugs with an 11.3% share.

The company’s annual revenue rose to 4.35 billion yuan ($649 million) last year, from 4.01 billion yuan in 2024 and 3.37 billion yuan in 2023, translating into a compound annual growth rate of about 13.7%. Net profit rose over the three years from 581 million yuan to 605 million yuan and 653 million yuan. In the first half of 2026, revenue grew 16.3% to 2.48 billion yuan from the year-earlier period, while net profit was about 390 million yuan.

Behind this steady growth, the revenue mix is shifting dramatically. The company built its early business on generics, with its core product TaiJia becoming China’s first-to-market generic version of clopidogrel, an anti-clotting drug. At its peak, TaiJia generated more than 3 billion yuan in annual sales and helped Salubris reach 4.65 billion yuan in revenue in 2018. But since China introduced mass-procurement policies for the state medical system, generic drug prices have been under pressure. TaiJia’s retail price fell from 14.5 yuan to 22.26 yuan per pack in 2023 and to 6.99 yuan in the first half of 2026. From 2023 to 2025, generics declined from 48.8% to 30% of the company’s total pharmaceutical sales.

Innovative drugs have become the new growth engine for Salubris. The company has six such drugs on the market, all focused on CKM. From 2023 to 2025, innovative drugs increased from 30.1% to 52.1% of the firm’s total pharmaceuticals revenue, rising further to 54.8% in the first half of this year, while its gross profit margin went from 68.3% to 74.6% over the same period. However, spending to launch new products has also shot up, with selling and distribution expenses reaching 1.76 billion yuan last year, equivalent to more than 40% of revenue.

Patent expires

The key driver of innovative drug revenue is currently the hypertension drug XinLiTan. In 2013 XinLiTan became China’s first domestically developed angiotensin II receptor blocker (ARB), a class of drug used to treat high blood pressure and heart failure. By 2025 sales had reached 1.48 billion yuan, accounting for nearly 40% of total pharmaceuticals revenue, giving Salubris the top ranking in China’s ARB market.

However, the patent covering its active ingredient expired in July this year. Although patents relating to the drug’s formulation and preparation processes remain valid until 2028, the expiry of the compound patent means other drugmakers can legally develop generics using the same active ingredient. Salubris acknowledges in its listing application that its market share could slip in coming years as lower-priced generics enter the market.

Salubris has accelerated new product launches over the past two years to open additional revenue streams. From 2024 to 2025, FuLiTan, XinLiTing, XinChaoTuo and FuLiAn were approved in quick succession. Among them, XinChaoTuo is the second-in-class globally for ARNi hypertension drugs and is China’s first home-produced novel drug in this category. Meanwhile, the company has broadened the use of EnNaLuo, a treatment for renal anemia. Salubris has now expanded beyond hypertension into CKM areas including heart failure, kidney disease, diabetes and the high-cholesterol condition dyslipidemia. It has a pipeline of 79 innovative drugs across R&D platforms covering small molecules, antibodies, siRNA, cyclic peptides and gene editing.

Unlike many biotech companies that have yet to turn a profit, Salubris enjoys ample cash flow. Annual net cash inflow from operating activities reached 839 million yuan, 1.19 billion yuan and 1.05 billion yuan from 2023 to 2025. Since its Shenzhen listing in 2009, the company has distributed more than 7.8 billion yuan in dividends, more than twice the amount it has raised from the market. The Hong Kong listing may therefore be aimed more at gaining access to international capital, advancing overseas clinical trials and pursuing international collaborations for innovative drugs.

As the revenue mix has shifted, pressures have also been rising. Volume-based procurement in China is squeezing its generics business, its flagship product has lost one of its patent protections, and uncertainties surround the ramp-up of new products.

A Hong Kong listing could open new channels for financing and international expansion, but innovative drugs will need to keep picking up the baton in the race for growth.

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The provider of outsourced pharmaceutical services has delivered unexpectedly strong half-year earnings and has launched its first overseas production hub

Key Takeaways:

• WuXi XDC began operations in August at a site in Singapore, boosting its biologics manufacturing capacity beyond China
• After the earnings stoked a share price rally, another company in the WuXi group sold part of its stake in WuXi XDC, unsettling investors

By Molly Wen

China’s pharmaceutical outsourcing sector has boomed and buckled over the past few years, but signs of a sustained rebound have now emerged.

Industry leaders including WuXi AppTec (603259.SH; 2359.HK) and Asymchem (002821.SZ; 6821.HK) have generally returned to steady revenue growth, although the picture is patchy across other parts of the industry.

Mature businesses such as service providers for small-molecule drugs are still under pressure to cut excess capacity, while the broader market for biocoupled drugs is facing a surge in orders and profits, led by antibody-drug conjugates (ADCs), a class of dual-action therapies designed to target cancer cells.

WuXi XDC Cayman Inc. (2268.HK), a global leader in developing and manufacturing ADCs on a contract basis, logged an unexpectedly strong rise in earnings for the first six months, citing buoyant orders from some of the world’s biggest pharmaceutical companies.

The ADC specialist, which is part of the wider WuXi pharmaceutical group, reported that its revenue jumped 41.5% to 3.70 billion yuan ($550 million) in the first half from the year-earlier period, excluding the impact of currency fluctuations. Adjusted net profit rose 37.4% to a record high of nearly 1.03 billion yuan, while adjusted net profit margin held steady at 27.8%. The upside earnings surprise sent WuXi XDC shares surging nearly 15% on Aug. 25, when the stock touched an intraday peak of HK$80.5, its highest level in nearly a year.

The momentum came from a growing customer base, which reached 814 by the end of June, including 15 of the world’s top 20 pharmaceutical companies as major partners. The service orders placed by clients but not yet shipped, known as the backlog, jumped 50.4% to just under $2 billion, while another backlog measure including potential milestone payments reached about $2.17 billion, up 62.2% from the same period a year earlier.

Order backlog is considered a core metric in the drug services industry as it dictates the pace at which revenue will be captured over the next two to three years. Data released by WuXi XDC indicated that the quality and value of the order book were also increasing, as more projects advance from early-stage R&D into late-stage trials and commercial manufacturing. As of June 30, the company had 21 projects at the process performance qualification (PPQ) stage in the transition from development to manufacturing, and two commercial-stage projects were also underway. The company expects cumulative deliveries of more than 30 PPQ components by the end of this year, and aims to submit four to six applications for biologics licenses. It projects PPQ deliveries to exceed 45 in 2027, with seven to 10 license bids.

Singapore site comes on stream

WuXi XDC has already delivered strong results from commercial manufacturing in China, but the key to future growth and resilience lies in expanded capacity overseas. In August the company officially launched its first biomanufacturing base outside of China, when its facility in Singapore was formally cleared to start production. The site in Singapore’s Tuas Biomedical Park will offer overseas customers greater flexibility to meet localized manufacturing needs.

The site covers about 25,000 square meters, with integrated manufacturing capabilities for monoclonal antibody intermediates and bioconjugate drug substances at up to 2,000 liters per batch, as well as annual production capacity for 8 million vials of bioconjugate drugs. Few other ADC providers can match that scale, giving WuXi XDC the chance to grab an early lead in commercial output of the drugs overseas. WuXi XDC has already expanded its domestic capacity by completing the purchase of a controlling stake in Chinese biologics supplier BioDlink in March. The company’s delivery network now links Singapore, Wuxi and Suzhou, with greater scope to take on big orders from multinational pharmaceutical companies.

However, rising industry competition and international tensions pose clear risks. With global ADC development in full swing, dozens of drug candidates aimed at key targets such as TROP2 and HER2 cell proteins are already in mid- to late-stage trials. Major providers of development and manufacturing services including Switzerland’s Lonza (LONN.SW) and South Korea’s Samsung Biologics (207940.KS) have recently invested heavily to expand their manufacturing capacity for bioconjugates. As new overseas capacity comes online in the next two to three years, price competition in the ADC outsourcing market could intensify.

Meanwhile, some drug companies may review their supply chain resilience when placing orders for early-stage pipelines, considering the risk posed by U.S. biosecurity restrictions and the potential for other disruptive policies. The fallout from rivalries between economic powers could make it harder for WuXi XDC to win some new overseas orders.

The company currently trades at a price-to-earnings ratio of about 50 times, well above the roughly 34 times for its controlling shareholder, WuXi Biologics (2269.HK). However, just as the strong results drove up WuXi XDC’s share price, another stakeholder, WuXi AppTec, sold around 53.52 million shares on Aug. 26 for about HK$3.92 billion ($500 million), equivalent to around 4.23% of WuXi XDC’s total share capital. The sale has inevitably made investors wonder whether WuXi XDC’s lofty valuation may be too high. As the industry cycle turns, time will tell whether the company can continue to justify the expectations for high growth. 

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The firm made more money from precision oncology treatments than from licensing deals in the first half, after gaining insurance coverage for its core drugs in China

Key Takeaways:

• The company’s flagship drug has also delivered encouraging results for patient survival in a global trial led by multinational partner Merck
• Kelun-Biotech has scaled up its commercial team across China to drive rising sales of its antibody-drug conjugates

By Molly Wen

Innovative drugmakers mark a major milestone on the path towards commercial maturity when they start to sell actual products at scale, rather than just the rights to their most promising discoveries.

The latest financial results from a Chinese developer of novel cancer treatments has just delivered evidence of that crucial transition, with drug sales doubling and exceeding revenue from out-licensing deals.

On Aug. 17 Sichuan Kelun-Biotech Biopharmaceutical Co. Ltd. (6990.HK), specializing in targeted therapies known as antibody-drug conjugates (ADCs), reported a modest 2.93% rise in first-half revenue to 978.3 million yuan ($146 million) and swung to a net profit of 388 million yuan from a year-earlier loss.

The outcome may look unspectacular, but the significance lies in the earnings breakdown, which shows the firm has begun to generate growth from sales of its own products. Revenue from licensing and collaboration agreements fell nearly 50% to 315 million yuan, while sales of pharmaceutical products generated 657 million yuan in the first half, already surpassing the 543 million yuan for the whole of 2025.

The surge came after the company’s core drug, sacituzumab tirumotecan (sac-TMT), was added to China’s medications catalogue from the start of the year to treat breast and lung cancers that resisted initial therapy. Two other cancer drugs, tagitanlimab and cetuximab N01, also made it onto the list, giving Kelun-Biotech a trio of products in China’s medical insurance scheme across multiple indications, boosting sales.

The company also nearly doubled the size of its commercialization team in the year to June 30, to more than 800 people, according to the earnings statement. Its expanded network covers more than 2,000 core hospitals across 30 provinces and more than 300 prefecture-level cities, with more than 1,000 hospitals generating sales. Accordingly, sales and distribution expenses more than doubled, climbing to 391 million yuan from 179 million yuan in the year-earlier period. Front-loaded spending of this kind is hard to avoid when a new drug is launched and distributed in the market, as sales are ramped up. The company was upbeat about the earnings outlook, reiterating its target of 100% growth in full-year revenue from pharmaceutical sales.

At the bottom line, the 388 million yuan profit far exceeded market expectations, but the jump was mainly driven by 703 million yuan in income from an agreement to settle an ADC patent dispute with Suzhou MediLink Therapeutics. The deal required MediLink to share a portion of its out-licensing income and future profits with Kelun-Biotech. Excluding this income, the company logged an adjusted net profit of 47.9 million yuan, still marking a turnaround from the loss a year earlier and signaling an improvement in underlying operations.

Overseas pipeline progress

After commercial advances in China, a key factor for future growth will be the pace at which the core cancer drug sac-TMT can be clinically developed globally, through a partnership with multinational pharmaceutical firm Merck.

The drug is designed to target the TROP2 protein on tumors, carrying a payload that then blocks and kills the cancer cells. A global Phase Three trial covering 776 patients with advanced endometrial cancer tested the effectiveness of the drug as a monotherapy against a control group receiving only chemotherapy.

Interim trial data released in May indicated that sac-TMT showed statistically significant benefits in overall survival and progression-free survival, the first such ADC to achieve improvements by both measures in this patient population.

Merck is currently conducting 17 Phase Three trials of the drug, covering seven major cancer types including lung, breast, gynecological, gastrointestinal and genitourinary cancers. Meanwhile, Kelun-Biotech is advancing five Phase Three studies in China of the drug as a first treatment following diagnosis, mainly targeting non-small cell lung cancer and breast cancer.

If these studies deliver positive readouts, the drug could evolve from a later-stage therapy into a blockbuster product spanning multiple tumor types and treatments, creating a market opportunity far beyond its currently approved indications.

However, even as Kelun-Biotech delivers encouraging financial and clinical results, the risks should not be overlooked. More than 10 TROP2 ADC candidates are being developed, with drugmakers including Innovent Biologics, Hengrui Pharma and Daiichi Sankyo accelerating their programs, potentially leading to multiple competing products over the next two to three years. Whether the company’s first-mover advantage can translate into sustainable market share is unclear.

Kelun-Biotech currently trades at a price-to-earnings ratio of 718 times, far above the roughly 66 times for BeiGene (688235.SH; 6160.HK; BGNE.US), which already has a blockbuster drug in its portfolio. Investors appear to have already priced in an optimistic outlook for Kelun-Biotech, although it remains to be seen whether the company can keep delivering on those expectations.

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The biotech is suing its former CEO over an ill-fated $20 million investment as it pursues a short-term pivot from skin cancer drugs to body-contouring therapies 

Key Takeaways:

• After the investment woes, loss-making Sirnaomics faces a financial squeeze that, according to its auditor, puts a question mark over its long-term survival
• The company is seeking to boost its finances by redirecting research towards fat-reduction therapies, but the commercial prospects remain highly uncertain

By Molly Wen

In a fall from grace that took less than five years, the founder of Sirnaomics Ltd. (2257.HK) lost control of the biotech and is now being sued by the company.

On Aug. 14, Sirnaomics filed suit against its onetime leader and biggest shareholder Lu Yang, along with other two other former executives, over a $20 million investment in an offshore fund that went sour.

The former boss and his ex-colleagues Xiaochang Dai and Yip Wing Kei are accused of breaching their fiduciary duties in deciding to buy shares worth $15 million in TradArt Flagship Investment SPC in 2022 and committing another $5 million the following year. With only $23.88 million in cash and cash equivalents at the end of 2023, the biopharmaceutical firm had invested the equivalent of about 80% of its reserves.

But when the company tried to redeem its shares in April 2024, it found the fund’s net asset value had plummeted. Three months later, the company warned that an issuer of debts in the fund was at risk of default. By that point, Sirnaomics had clawed back only $200,000 of its cash. An independent investigation found that the required due diligence and risk analysis had not been carried out beforehand, with only a background check conducted on the investment manager. It also established that alternative investment options had not been considered, nor had information about the fund and its holdings been disclosed to the board.

After the investment went awry, Sirnaomics did not immediately pursue the executives responsible for the decision but instead carried out sweeping management changes. Dai resigned as chief strategy officer in May, while Yip stepped down as chief financial officer. Lu relinquished his role as CEO in November that year. Meanwhile, individual investor Poon Hung Fai took over as CEO and invested HK$58.9 million ($7.5 million) in the company.

Lu resigned from all his positions at the company in 2025. In September that year, medical aesthetics powerhouse Bloomage Biotech (688363.SH) invested HK$138 million in Sirnaomics to become its second-largest shareholder. Poon was then promoted to chairman, putting him in overall control of the firm. It was not until August this year that Sirnaomics filed a writ with Hong Kong’s High Court alleging breaches of duty, authorization and due process by its former executives, seeking damages, interest and other relief.

Shift into aesthetics  

Specializing in RNA therapies targeting faulty genes, Sirnaomics was hailed as the first listed developer of nucleic-acid drugs when it made its Hong Kong market debut in 2021. But the stock has dropped more than 95% from its 2022 peak of HK$101, closing at HK$4.20 on Aug. 17 to value the company at about HK$470 million.

Sirnaomics reported no revenue in 2025 while posting a net loss of $14.61 million. At year end, the company could draw on just $13.52 million in cash and cash equivalents, while its net current liabilities and net liabilities stood at about $22.78 million and $24.49 million, pointing to severe liquidity pressure. Its auditor was unable to obtain enough evidence to verify the value of the assets related to the troubled investment. As a result, it issued a qualified opinion in the 2025 annual report, warning of a “material uncertainty regarding the company’s ability to continue as a going concern”.

The company is now rapidly shifting toward medical aesthetics and fat reduction as a way of generating much-needed cash. Its candidate drug STP705, originally developed to treat a type of skin cancer, is being repurposed as a therapy for targeted fat loss. A Phase Two trial of the drug for aesthetic use was launched at the end of July, when the first patient was enrolled. While oncology remains a long-term focus, medical-aesthetics products could reach the market sooner, improving cash flow, Poon said.

But commercial launch could still be far off for STP705, as the Phase Two trial gets fully underway, results are analyzed and regulatory approval secured. Its prospects therefore remain highly uncertain. Globally, very few drug candidates are being developed to reduce fat through local injections of nucleic acid, and no comparable product has yet been approved.

With slim cash holdings and annual net losses of more than $10 million, existing funds may not be enough to carry the company through to commercialization. If the results of clinical trials disappoint, or regulatory setbacks crop up, investors may need to weigh up whether the company can remain viable.

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The Chinese drug firm has chosen to partner with an AI specialist rather than Big Pharma on a dual-target cancer therapy, netting an upfront payment of $125 million

Key Takeaways:

• Alphamab retains Chinese rights to the candidate drug while Pathos AI is responsible for developing the product in the rest of the world
• The deal promises to ease the financial strain for Alphamab after its R&D spending jumped last year, pushing the company into the red

By Molly Wen

Licensing deals have become commonplace in China’s biopharmaceutical industry, as rights to future sales of promising drugs are exchanged for much-needed cash. But the latest partnership does not follow the typical pattern.

Alphamab Oncology (9966.HK), a clinical-stage biotech specializing in targeted cancer treatments, announced on Aug. 4 it had struck a global licensing agreement with U.S.-based Pathos AI, a developer of oncology drugs, worth up to $2.22 billion. Alphamab’s shares shot higher, peaking with an intra-session gain of nearly 13%, as investors took a fresh look at the potential for dual-target therapies known as bispecific antibody-drug conjugates (ADCs).

The deal centers on a candidate drug - JSKN016 - that binds to two tumor-associated antigens, TROP2 and HER3, to deliver its payload. Alphamab will retain all rights to the asset in Greater China, while Pathos AI gains exclusive rights in the rest of the world and will bear all costs related to developing and launching the drug overseas.

The agreement grants Alphamab an upfront payment of $125 million, along with milestone payments of up to $2.09 billion and percentage-based royalties on annual net sales ranging from the high single digits to low double digits. Pathos AI has also given Alphamab an option to subscribe for $62.5 million of its preferred stock, enabling the Chinese company to participate in its partner’s future growth.

Most licensing deals are struck with major multinational drugmakers such as Merck and GSK, but the most distinctive feature of this deal is the buyer’s use of AI to reshape oncology therapies, although it currently lacks late-stage clinical experience. Pathos AI completed a $365 million Series D financing round in May that valued the company at about $1.6 billion. It uses AI to analyze huge volumes of clinical data, identify promising but undervalued assets, design trials and assign patients. JSKN016 is the fourth key asset selected using this system.

The appeal of the candidate drug JSKN016 lies in its potential to address resistance associated with current single-target ADCs. Its bispecific structure allows it to bind simultaneously to TROP2 and HER3, blocking cancer-promoting pathways and making drug delivery more efficient. A Phase Three study of JSKN016 is underway for an invasive form of breast cancer that does not respond to existing treatments, while multiple studies for the drug as a sole or combined therapy have been launched against lung and breast cancers. Meanwhile, versions designed to be delivered through subcutaneous injections are undergoing Phase One B trials in China and Phase One trials in Australia, covering a range of solid-tumor conditions.

Financial fillip

The money from Pathos AI offers a useful financial cushion, as Alphamab’s main revenue source comes under pressure.

Revenues fell 11.54% to 566 million yuan ($84 million) last year, sending the company to a net loss of 114 million yuan from a profit of 166 million yuan a year earlier, as its immunotherapy drug envafolimab faced a growing number of competing products. Meanwhile, Alphamab’s R&D expenses rose 41.57% to 572 million yuan in 2025 as it worked on advancing six bispecific ADC candidates.

The reliance on envafolimab is unlikely to ease in the near term. Alphamab scored China’s first marketing approval for an HER2 bispecific antibody, anbenitamab, in May, followed by nationwide shipments in June. However, rights to the drug in mainland China had already been licensed to JMT-Bio, a subsidiary of the CSPC Group, leaving Alphamab with a limited revenue stream of just milestone payments and a share of sales.

The business development deal with Pathos AI could deliver meaningful support for Alphamab’s finances. The non-refundable upfront payment of $125 million is equivalent to nearly 1.6 times the firm’s full-year R&D spending of 572 million yuan in 2025. Once received, it could lift cash reserves from 1.35 billion yuan at the end of 2025 to about 2.25 billion yuan, enough to fund roughly another 1.5 to two years of R&D at the current pace.

Before this overseas licensing deal, Alphamab had endured a prolonged series of setbacks. KN046, its closely watched PD-L1/CTLA-4 bispecific antibody, delivered disappointing results in pivotal Phase Three trials between 2023 and 2024, sending the company’s shares down more than 90% from their all-time peak at one point. A revised pipeline strategy helped Alphamab shares to recover somewhat, giving the firm a market capitalization of about HK$8.3 billion ($1.06 billion), compared with roughly HK$10.7 billion for Mabwell (2493.HK), which is also developing ADCs.

The potential for a further re-rating will largely depend on whether JSKN016 can realize the deal’s potential value of $2.22 billion. That rests in turn on the clinical abilities of Pathos AI, the competitive landscape for the drug, and Alphamab’s own commercial expertise.

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Despite swallowing lower prices under a government procurement program, the leading ‘invisible’ dental braces maker posted strong profit and revenue gains in the first half of 2026

Key Takeaways:

• Angelalign’s revenue rose over 40% in the first half of this year, while its profit jumped more than 69%
• The “invisible” dental braces maker’s global sales volume exceeded its domestic sales just three years after going abroad

By Edith Terry

Feng Dai, the Harvard-educated chairman of Angelalign Technology Inc. (6699.HK), likes to tell the story of his first encounter with his company when he walked into a “small, stuffy office with old cubicles and stained carpets” in 2012. As head of Asia healthtech at private equity giant Warburg Pincus, he liked what he saw at China’s largest maker of clear, or “invisible,” dental aligners, which help to straighten teeth.

Three years later he bought the company.

In the latest sign that Feng made the right decision, Angelalign issued a glowing profit forecast last week, saying its revenue jumped 41.9% to 43.1% year-on-year in the first half of 2026 to between $229 million and $231 million. Its profit rose by an even stronger 69% to 78.9% to between $24 million and $25.4 million.

It attributed the big increases to growing quality awareness among consumers and dental professionals, as well as its own heavy investments in professional branding, direct sales and customer service infrastructure. Investors were all smiles over the results as well, sending Angelalign’s shares up nearly 21% in the first two trading days after the announcement.

There were other reasons to smile as well, as Angelalign emerges from legal issues and adjusts to the bruising impact of China’s policy that has squeezed medical suppliers for rock-bottom prices through a national procurement program.

We’ll return to those issues shortly, but first the strong revenue and profit growth that reflects Angelalign’s success both in China and abroad. Its sales volume in China rose by 36.8% for the six-month period to 148,600 cases, the unit it uses for its mainstay product. International sales increased by 43.3% to 168,000 cases – as global sales overtook domestic ones only three years after Angelalign started selling outside its home market.

That trajectory could soon put the company on track to challenge the much larger Align Technology (ALGN.US), owner of the rival Invisalign product, for global leadership in clear aligners.

Global expansion

Angelalign acquired Aditek, a leading Brazilian orthodontic brand, in 2022, and set up subsidiaries the same year in the U.S., Europe and Australia. In 2023, it generated 145.3 million yuan ($21.5 million) in overseas sales, or about a tenth of its 1.48 billion yuan in total revenue that year.

The international market has been growing rapidly ever since, with annual sales volume up 82.1% to 256,200 cases last year, compared to 26.3% growth for domestic sales to 276,200 cases. The company’s revenue for 2026 rose 37.8% to $370.3 million, thanks to a doubling of global revenue to $163 million. And as we’ve already noted, international sales volume passed domestic sales in the first half of this year.

Angelalign was set up in 2003 by dental professionals, including former CEO Li Huamin, who co-developed the first clear aligner treatment approach in China. Li stepped down in 2023, and was replaced by Hu Jiezhang, formerly a managing director with Feng Dai’s CareCapital Group, a private equity and venture capital firm focused on the dental industry.

Angelalign went public in 2021, and saw its shares more than double on their first trading day. By that time, it controlled 41% of the domestic market, just behind Invisalign’s 41.4%. China became the world’s second largest market for clear aligners in 2019, with sales of $1.5 billion in 2020 out of global sales of $12.2 billion, according to Angelalign’s prospectus at the time of its IPO.

That brings us back to the present, where Angelalign scored a victory on the legal front in May, when the Düsseldorf branch of the European Patent Court rejected a patent infringement claim by Align Technology and Invisalign. In July, the Zhengzhou Intermediate People’s Court in China rejected the same charges.

Meanwhile, the impact of China’s national procurement program on the oral health services industry has been devastating, much like a similar policy on pharmaceuticals that began in 2018, cutting generic and mature drug prices by an average of 50%. The extension of the program to the dental sector in 2023 had a similar effect on companies like Angelalign.

Getting included in the program is a trade-off of price for volume. Three of Angelalign’s product lines were selected in China’s first volume-based central procurement program, which is on a three-year cycle whose second round is just beginning.

Price pressure

“Invisible” orthodontic prices took an initial hit of 23.3% to 55% from the program. Lower prices paid by public hospitals and clinics also had a knock-on effect of depressing private-sector prices, tending to favor brands with sufficient scale to benefit from higher volumes. Chinese manufacturers more reliant on the domestic market were hit harder than foreign brands. And some dental services providers like private chain Meilike Orthodontics had to close down.

Angelalign faced price pressure as well, but came out a clear winner against Invisalign. Align Technology submitted seven of its Invisalign products for consideration in the procurement program but none were selected. As a result, its market share dropped from just over 40% to 25% based on volume after the first round of national procurement, while Angelign’s market share rose to over 41%.

Before the pandemic and national procurement program for oral healthcare products, the pair were roughly tied in the domestic market, while the smaller Zhengya Dental was third.

China’s estimated average growth rate of 23.1% between 2020 and 2030 for dental care products reflects a growing awareness of the importance of oral health and dental aesthetics among China’s growing middle class.

So, what’s next for Angelalign? At that fateful meeting in 2012, Angelalign’s chief orthodontist told Feng Dai: “Other aligners are tech focused. It’s always exciting for them to talk about shiny new stuff. But our founders demand clinically predictable outcomes and stability, while being easy to use. That makes life much harder for us and kind of boring for our investors.”

The company’s latest earnings announcement, with its strong double-digit profit and revenue growth, seems to vindicate that approach. “After trying different brands, dental professionals and patients realized that even though all aligners look similar, the treatment results are significantly different,” it said. But it also acknowledged its approach requires heavy investment in professional branding, direct sales and local service infrastructure, adding it “remains committed” to serving dental professionals directly.

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The developer of anti-inflammatory treatments will need to persuade investors to look past its balance sheet problems and its narrow pipeline of products

Key Takeaways:

• The company is making a second attempt at a Hong Kong IPO after withdrawing a previous plan to list in Beijing
• With its cash flow under strain, the company has already sold key rights to treatments under development for skin and nasal inflammations

By Molly Wen

When market conditions and finances are tight, loss-making biopharma companies that have failed to secure a mainland listing often turn their attention to Hong Kong, where the path to an IPO is relatively easier.

A biotech developing treatments for inflammatory conditions has decided to take this well-travelled equity path in the hope of meeting a pressing need for cash.

On July 24, PrimeGenX Therapeutics Co. Ltd. applied for a second time to place its shares on the Hong Kong Stock Exchange, after pulling a plan for a Beijing listing and withdrawing from the National Equities Exchange and Quotations in 2025.

Founded in 2016, PrimeGenX focuses on developing ointments and sprays for autoimmune inflammations but has yet to launch a medicine on the market. Its main product, PG-011 (Pumecitinib), is a targeted treatment that blocks Janus Kinase (JAK) proteins to calm the immune reaction in skin and nasal conditions. The gel version, which is the company’s most advanced candidate, targets mild-to-moderate atopic dermatitis, while the nasal spray is being developed for moderate-to-severe allergic rhinitis. China’s regulators granted a new drug application for the Pumecitinib gel to treat atopic dermatitis in adults and adolescents in February this year. The firm’s three other proprietary drug candidates remain in Phase One or earlier stages and are unlikely to generate revenue in the near term.

Atopic dermatitis is a recurring and chronic skin inflammation that requires long-term management. According to the listing document, more than 74 million people in China suffer from the condition, with mild-to-moderate cases accounting for more than 90% of the total. Citing third-party research, it said China’s market for atopic dermatitis drugs was worth 13.2 billion yuan ($1.95 billion) in 2025 and was projected to reach 48.4 billion yuan by 2033. JAK inhibitors suppress chemical signals along the STAT pathway that instruct cells to become aggravated or grow rapidly, thereby preventing inflammatory genes from being activated.

Three oral JAK1 inhibitors have been approved in China for moderate-to-severe atopic dermatitis, but repeated use can pose serious safety risks, including infections and thrombosis. As a result, treatments applied directly to affected areas have emerged as a way to reduce those side effects. The first two domestic products seeking regulatory clearance were the Ivarmacitinib ointment from Hengrui Pharma (1276.HK; 600276.SH) and Tofacitinib etocomil from Minghui Pharmaceutical. Hengrui voluntarily withdrew its application in June 2026 to refine its submission, while Minghui’s product has not yet been approved.

PrimeGenX’s product is China’s first gel-based version to seek permission for commercial development. The water-rich base is described as less greasy than ointments, with a lower systemic drug exposure that allows for long-term use on sensitive areas such as the face and neck. These characteristics would give it a clear advantage for sustained treatment.

Already licensed out

With no commercial products yet, PrimeGenX derives its income from other sources including government grants. Money defined as other net income totaled 11.22 million yuan in 2024, 36.30 million yuan in 2025 and 6 million yuan in the first four months of 2026. R&D spending, meanwhile, was 146 million yuan, 128 million yuan and 54.49 million yuan over the same timeframe. The share devoted to Pumecitinib rose from 60.7% in 2024 to 70.6% in the first four months of 2026, leaving the company’s pipeline heavily concentrated in a single asset.

PrimeGenX remains deeply in the red, with losses of 178 million yuan in 2024, 141 million yuan in 2025 and 77.53 million yuan in the first four months of 2026. The inability to generate cash also weighed on its financial position. Net assets fell from 154 million yuan at the end of 2024 to 37.33 million yuan at the end of 2025, before turning into net liabilities of 7.19 million yuan at the end of April this year. At that point, cash and cash equivalents had dropped sharply to 128 million yuan from 191 million yuan at the end of 2025.

As it burned through cash, PrimeGenX opted to proactively license out key rights to its core product. In January Jumpcan Pharmaceutical Group secured exclusive commercialization rights for the nasal spray in Greater China with upfront and milestone payments of up to 100 million yuan. PrimeGenX has already received 40 million yuan in upfront cash. Then in June the company signed a deal giving Jiangsu Simcere Pharmaceutical exclusive promotion rights for all dermatological uses of Pumecitinib gel in the Chinese mainland, Hong Kong and Macao.

Beyond its funding challenges, PrimeGenX faces intensifying competition, heavy reliance on a narrow pipeline and tighter regulatory scrutiny of topical JAK formulations. Market regulators are also taking a closer look at the earnings potential for loss-making biotechs seeking to list under Hong Kong’s Chapter 18A rules. PrimeGenX will need to convince investors of the long-term value of its drug discoveries. Whether it can advance its Hong Kong listing and ease its cash flow pressure remains to be seen.

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The company has filed for a Hong Kong IPO, thriving on China’s growing silver economy and a steady stream of government policies supporting traditional Chinese medicine

Key Takeaways:

• Yuyantang has filed to list in Hong Kong, reporting its revenue and net profit both grew by more than 40% in the first five months of this year
• The company is the fifth-largest private China-based provider of medical services based on traditional Chinese medicine

By Bai Xin Rui

China’s aging population is boosting demand for traditional Chinese medicine (TCM) services preferred by many people from an older generation forming the backbone of China’s “silver economy.” That’s providing big business for Harbin Yuyantang Traditional Chinese Medicine Outpatient Group Co. Ltd., the leading private TCM medical services provider in Northern China, which is seizing on the occasion to file for a Hong Kong IPO.

Yuyantang was founded in 2015 by Guo Yang, who previously invested in a Harbin-based TCM developer of herbal ointments and drugs. Yuyantang has carried on that tradition from its base in Harbin, capital of Northeast China’s Heilongjiang province, providing treatment for chronic diseases such as chest heart disease, stroke, hypertension, insomnia, and diabetes, as well as engaging in broader preventive care and long-term health management.

Participants in China’s TCM medical services market include hospitals, outpatient centers, clinics, and other related service providers. Yuyantang primarily operates TCM outpatient centers and clinics, using herbal medicines and non-pharmacological therapies like acupuncture, cupping and therapeutic massage to provide diagnosis and treatment services. It also offers TCM-related pharmaceutical services, such as precise dispensing of herbal medicines and preparation of medicinal decoctions.

The company ranked fifth among all private TCM medical service providers in China last year with 2.3% of the market, according to third-party research in its listing document. It was the leader in the North China region, commanding 7% of the market. It had 59 offline physical institutions by the end of May, including facilities outside its Northeastern China base after moving into East China’s affluent Jiangsu province.

Unlike some companies that use a franchise model, Yuyantang builds and operates all of its centers to ensure uniformity across its clinical protocols, service quality and overall brand standards. Its outpatient centers and clinics typically range from 400 to 800 square meters and are located in high-density communities, allowing for shorter investment payback periods and quicker expansion of its network.

The company’s big money spinner is prescription preparations, which accounted for 92.4% of its revenue in the first five months of 2026. That part of the business generated 169 million yuan ($25 million) during the five-month period, up by a healthy 40% year-over-year.

Prescription preparations include personalized TCM preparations, as well as in-hospital preparations. Personalized TCM preparations cover a highly personalized treatment philosophy of “one prescription per patient,” with the specific combinations of herbs adjusted for each patient's illness and physical constitution. Consequently, core medicinal ingredients vary in each personalized prescription.

By comparison, in-hospital preparations are standardized pharmaceutical formulations manufactured or prepared in strict accordance with fixed, pre-set formulas explicitly approved by the hospital. That allows them to be repeatedly prescribed to the same patient or applied to other patients suffering from similar medical conditions.

For the five-month period through May, Yuyantang's average revenue per patient stood at 443 yuan, up 1.1% from 438 yuan at the end of 2025. Over the same period, its gross margin dropped 1 percentage point to 61.6% from 62.6% in 2025. The company’s overall revenue grew 43.1% year-over-year to 183 million yuan during the period, offsetting the slight margin decline, to boost its profit by 41.3% to 24.22 million yuan in the first five months of 2026.

M&A potential

The company and its peers are getting a policy boost from Beijing’s backing for the development of private TCM medical institutions and the broader TCM industry. The central government has rolled out a number of policies involving the area, including a “15th Five-Year Plan for Traditional Chinese Medicine Development,” the “Major Project Implementation Plan for the Revitalization and Development of Traditional Chinese Medicine,” and the “‘Health China 2030’ Plan Outline.”

Supported by such policies, combined with China’s rapidly aging population, the domestic market for TCM prescription preparations hit 63.4 billion yuan in 2025, according to market data in the listing document. The market is forecast to keep growing rapidly as more people seek TCM services for chronic diseases and other conditions, reaching 105.8 billion yuan by 2030.

As one of China's top five players, Yuyantang is poised to directly benefit from this macroeconomic momentum. However, investors should also note that demand for TCM medical services tends to be cyclical, with visits typically down during the Lunar New Year that falls in January or February. As a result, first-quarter revenues for TCM service providers tend to be slightly lower during that time.

Overall, China’s top five private TCM medical service chains control a combined market share of just 21%, with the leader accounting for 7.9% of that. That reflects the industry’s fragmented landscape, suggesting room for consolidation by major players like Yuyantang by acquiring smaller industry peers.

In terms of peer comparisons, Hong Kong-listed PuraPharm (1498.HK) reported revenue of HK$336 million ($42.8 million) in 2025, but lost HK$35.22 million during the year. By comparison, Yuyantang's revenue last year reached 400 million yuan, and its profit surged 163% to 67.3 million yuan.

Using PuraPharm's market capitalization of 150 million yuan as a reference, Yuyantang’s relative pedigree suggests it should be valued more highly by institutional and retail investors alike, likely to attain a valuation of HK$200 million or more.

In summary, Yuyantang looks like a highly competitive company, with a solid financial growth profile and strong base through its chain of self-operated medical facilities offering highly “sticky” chronic disease diagnostic and long-term treatment services. Supported by China’s strategic push to revitalize TCM and the demographics of a rapidly aging population, the company’s decision to pursue a Hong Kong listing looks well timed.

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China’s biggest supplier of temperature-controlled services for the drug sector has renewed a Hong Kong listing plan, raising questions with hefty pre-IPO payouts

Key Takeaways:

• Turnover has grown steadily, driven by demand from drug developers, but payments to shareholders and executives have made the bottom line bumpy
• The company’s controlling shareholders benefited from large dividends signed off shortly before the IPO filing

By Molly Wen

As China’s innovative drug sector heats up, the investor spotlight has fallen on the cold-chain systems that underpin the pharmaceutical supply chain.

Insulated packaging, refrigerated trucks and special depots help to ensure that temperature-sensitive medicines, vaccines and samples for clinical trials are delivered or stored safely.

The cold-chain business has been growing in tandem with the rising volume of research into new drugs, and now a Chinese leader in the sector is seeking a Hong Kong listing, following in the footsteps of some of the companies it serves.

Shanghai Shengsheng Pharmaceutical Cold Chain Technology Co. Ltd. filed on July 22 for a main board listing, with plans to invest the proceeds in expanding its facilities in China and overseas. The application, sponsored by CICC and Sinolink Securities, marked a second Hong Kong flotation attempt after the company withdrew an earlier plan for a mainland IPO.

With roots reaching back to 2009, Shanghai Shengsheng specializes in temperature-controlled services for clinical trials, while also providing cold-chain logistics for medical products and producing related equipment and materials.

According to industry data in its IPO paperwork, the firm was China’s largest provider of cold-chain services for the pharmaceutical and life science industries by revenue in 2025. It was the only Chinese company to rank among the world’s top 10 suppliers of such services specifically for clinical trials. Over the three years covered by the IPO application, it served more than 7,000 customers, including biopharmaceutical companies, laboratories and firms conducting research, development or manufacturing in the drug sector.

The required standards of temperature control and tracking for high-value biologics, vaccines and cell or gene therapies are much more stringent than for other businesses using cold-chain logistics. At the pre-clinical and clinical stages, the focus is on delivering small and frequent batches of time-sensitive materials. Once products are launched on the market, providers need to step up with nationwide networks, cost control and compliant distribution at scale.

In recent years, wider adoption of emerging therapies such as antibody-drug conjugates (ADCs) and bispecific antibodies has driven steady growth in demand for temperature-controlled supply chains. Research data in the IPO document projected the global market would grow from $31.3 billion in 2025 to $45.1 billion by 2030. In China, the market increased from 18.8 billion yuan ($2.78 billion) in 2020 to 28 billion yuan in 2025, representing a compound annual growth rate of 8.3%. It was further forecast to grow 8.9% to 43.4 billion yuan from 2026 to 2030.

This has translated into steadily rising turnover at Shanghai Shengsheng, with revenue of 614.2 million yuan in 2023, rising to 654.5 million yuan a year later and 727.6 million yuan in 2025. The upward trend continued into 2026, with revenue increasing 8.3% to 256.4 million yuan in the first four months, from 236.8 million yuan in the same period a year earlier. Its gross profit margin also improved from 32.9% in 2023 to 37.9% in the first four months of 2026.

Nevertheless, the bottom line has been highly volatile. A net profit of 92.03 million yuan was logged in 2023, but the figure plunged by more than 70% to 26.4 million yuan in 2024. Net profit rebounded to 139 million yuan in 2025. But in the first four months of 2026, Shanghai Shengsheng’s net profit fell around 9% to 45.24 million yuan.

Big payoff

The primary cause was a series of share-based payments, apparently to compensate or retain leading executives after the failed attempt at a Shanghai IPO. Around 72.12 million yuan was paid out in 2024 compared with just 1.6 million yuan in 2023. Shanghai Shengsheng applied for a Shanghai main board listing in 2023 but voluntarily withdrew its application the following year after a first round of inquiries. In 2024, the firm’s five highest-paid executives received 55.93 million yuan in share-based payments, equal to about 77% of the total. Company founder Ju Jibing, who is also on the management team, was a major beneficiary.

Aside from that windfall, Ju and his wife also benefited from repeated cash dividends, with a combined pre-IPO stake in the company of 42.62%. Shanghai Shengsheng paid out dividends of 20.1 million yuan in 2024 and 20 million yuan the following year. On June 12, shortly before its second filing with the Hong Kong Stock Exchange, the company approved a further dividend of 30.6 million yuan.

Shanghai Shengsheng also faces financial pressure from rising receivables and weaker liquidity. Its trade receivables increased from 157.9 million yuan in 2023 to 226.1 million yuan in 2025, while turnover days on money owed to the company lengthened from 98 days to 106 days. As collections slowed, cash and cash equivalents fell sharply to 207.1 million yuan as of April 30 this year, from 625.4 million yuan at the end of 2025.

In addition to liquidity challenges, the company has faced governance questions over low-priced share transfers and the big dividends paid before its IPO bid. As Hong Kong IPO candidates come under greater scrutiny, it remains to be seen whether the company can allay any concerns about its financial practices or earnings outlook to move forward with its listing plan.

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Iza-bren was approved for recurrent or metastatic esophageal squamous cell carcinoma, after receiving earlier approval to treat nasopharyngeal carcinoma

Key Takeaways:

• New approvals for Biokin’s Iza-bren highlight the rise of China’s role in developing bispecific ADCs, and their effectiveness in treating a growing range of solid tumors
• The company aims to become a multinational corporation using major-indication “super blockbuster” products, as it prepares to launch Iza-bren overseas by 2029

By Molly Wen

As a sector-wide correction for innovative drug stocks bottoms out, major breakthroughs and commercial rollouts have become the most potent catalysts for reviving investor confidence in individual companies. Since late June, Sichuan Biokin Pharmaceutical Co. Ltd.’s (688506.SH), listed on Shanghai’s STAR market, has voluntarily announced that its investigational drug Izalontamab brengitecan (Iza-bren) has completed first patient dosing in two Phase Three clinical trials for biliary tract cancer and breast cancer.

Over the past month, China’s National Medical Products Administration (NMPA) has also approved two marketing applications for indications of the company’s internally developed EGFR×HER3 bispecific antibody-drug conjugate (ADC), for the treatment of advanced nasopharyngeal carcinoma and recurrent or metastatic esophageal squamous cell carcinoma (ESCC). The latest approval marks the world’s first bispecific ADC for ESCC and carries the potential to redefine the standard of care.

The positive news sparked a major rally for Biokin’s Shanghai-listed stock, which surged by 40% in a month since it made the first announcement. While the stock is listed on China’s domestic A-share market, it is also available to foreign investors through the Shanghai-Hong Kong Stock Connect program.

ADCs, often dubbed “biological missiles,” precisely target cancer via an antibody–linker–payload design and have become a core focus of global drug development. With 2,334 ADCs in pipelines — 75% of those conventional — the crowded single-target space is driving bispecific ADCs as the next-generation approach.

As a first-in-class EGFRxHER3 bispecific ADC, Iza-bren locks onto the epidermal growth factor receptor (EGFR) on one end and the human epidermal growth factor receptor 3 (HER3) on the other. Both receptors drive tumor growth and resistance in cancers such as lung and nasopharyngeal.

The dual EGFR/HER3 blockade using Iza-bren overcomes resistance, exhibits a low rate of discontinuation in only 2.6% in patients, and enables dosing just once every three weeks, relieving the burden on patients.

In the bispecific ADC arena, Biokin boasts a generational lead. Iza-bren is the first bispecific ADC to conclude a Phase Three registrational clinical study and achieve approval, with the closest candidates behind it at just the Phase Two clinical stage. The time gap has given Biokin a clear first-mover advantage.

Iza-bren’s first approved indication is for adults with recurrent or metastatic nasopharyngeal carcinoma (NPC) after failure of at least two chemotherapy lines and PD-1/PD-L1 therapy, addressing a major unmet need in South China and Southeast Asia. It shows better efficacy and survival versus standard chemotherapy and is the preferred regimen in both the “NCCN Guidelines for Nasopharyngeal Cancer: Chinese Edition (2026)” and the “2026 CSCO Guidelines for the Diagnosis and Treatment of Nasopharyngeal Carcinoma.”

Broader commercialization potential

As a first-in-class EGFR×HER3 bispecific ADC developed in China, Iza-bren gained approval to treat ESCC within a month of filing, a notable milestone. The approval expands its use into major solid tumors, launching a multi-tumor strategy and advancing bispecific ADC therapy.

“This approval marks a key step in expanding Iza-bren into major solid tumors and signals the rise of bispecific ADC therapy in high-incidence cancers, advancing China’s position at the forefront of global biopharma innovation,” said Biokin Chairman Zhu Yi.

With broader clinical adoption, Iza-bren is expected to be rapidly incorporated into standard treatment guidelines in China and globally, potentially becoming the new standard second-line therapy for recurrent or metastatic ESCC, offering improved survival prospects for patients with advanced solid tumors.

Iza-bren also shows global commercialization potential for treating a variety of other solid tumors. By June 2026, the drug had kicked off more than 40 pan-tumor clinical trials in the two core markets of China and the U.S., receiving a total of eight breakthrough therapy designations.

Globally, Biokin has launched three pivotal registrational trials. Bristol Myers Squibb (BMY.US), its key co-developer outside China, is positioning Iza-bren as a key oncology asset with a broad development roadmap.

On global commercialization, Biokin Chairman Zhu said the company’s R&D, clinical, and supply-chain strengths are well-established. But commercialization is still developing, with overseas markets largely led by Bristol Myers Squibb under their $8.4 billion Iza-bren partnership. Amid geopolitical cost pressures, Zhu said profitability hinges on “super blockbuster” drugs, scale via multi-product synergies, and in-licensing to build a global pipeline and offset overseas commercialization costs.

Regarding overseas regulatory expectations, Zhu pointed out in an interview with Bamboo Works that top-tier clinical data generated in China can also win endorsement from the U.S. FDA under mutual data recognition principles of the International Council for Harmonisation of Technical Requirements for Pharmaceuticals for Human Use (ICH). As for regulatory mandates involving racial disparities, the company just needs to conduct bridging studies to supplement population data and establish the absence of significant clinical divergence, he said. Previously, the company's second ADC drug, BL-M07D1, leveraged vast amounts of domestic PD-1 combination data to pave the way for a bridging trial in the U.S., validating the viability of such a path.

Biopharma revaluations often hinge on a lead asset moving from the development to commercialization stage. For Biokin, China’s approval of Iza-bren validates such a path and marks the start of its shift toward a multinational model. Investors will now focus on whether its domestic and global commercialization can scale into sustained sales and profits.

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The medical robot maker expects to report a profit of 28 million yuan to 40 million yuan for the first half of 2026, reversing years of losses

Key Takeaways:

• MicroPort MedBot recorded its maiden profit in the first half of this year, as its revenue surged 200% to 230% and its gross margin rose more than 15 percentage points
• The company’s Toumai laparoscopic surgical robots have become its star product, surging since last year to account for more than three-quarters of its overall orders to date

By Doug Young

Shanghai MicroPort MedBot (Group) Co. Ltd. (2252.HK) is cranking out milestones these days, as its laparoscopic robots rapidly gain traction after years of development. After achieving its first positive cash flow in the second half of last year, the company announced on Wednesday it will report its first-ever profit in the first half of 2026.

But rather than greet the news with enthusiasm, investors responded by dumping MedBot’s shares to the tune of a 3.4% decline on Thursday, the day after the announcement. The cold reception looks related to MedBot’s valuation, which is still quite high, even as the stock has lost about half of its value since its 2021 IPO.

We’ll return to that question shortly, and when and if the company’s financials might finally grow to catch up with its valuation metrics that are well ahead of global peers like Medtronic (MDT.US) and Stryker (SYK.US), which also focus on laparoscopic surgical devices. Such products perform surgery through insertion into tiny incisions using specialized cameras to guide surgeons.

Such methods are increasingly preferred because they are less invasive and painful for patients. And in a growing trend, the use of such robots allows surgery to be increasingly performed by doctors working remotely using high-speed telecoms connections.

Valuation multiples aside, MedBot’s story really does look quite remarkable – the result of years of R&D and marketing of its older SkyWalker line of orthopedic surgical robots, and its newer Toumai laparoscopic surgical robot that’s rapidly becoming its major breadwinner.

In one slight cause for concern, the company sharply curtailed its R&D spending by 30% last year, as the figure fell to 39% of revenue from more than 100% in 2024. That was part of a broader cost control campaign that paved the way for the company’s maiden profit in the first half of this year. But R&D is also the life blood of any company in such a high-tech and highly competitive space, and such a sharp slowdown, while fiscally positive, also suggests the company may be letting down its guard after years of hard work to get where it is.

That said, we’ll return to this week’s announcement, which saw MedBot announce it expects to report a net profit of between 28 million yuan ($4.14 million) and 40 million yuan for the first half of this year, reversing a 115 million yuan net loss a year earlier. The primary catalyst behind the move to the black was a huge jump in revenue, which rose between 200% and 230% in the six-month period from the 176 million MedBot reported in the first half of 2025.

That translates to first-half revenue of 519 million yuan to 579 million yuan. The growth rate marked a sharp acceleration from last year, when the company’s full-year revenue more than doubled to 551 million yuan from 257 million in 2024.

Soaring gross margin

Besides the revenue growth, the other notable factor behind the move to the black was MedBot’s improving efficiency with its increasing scale. That helped it improve its gross margin by more than 15 percentage points in the latest six-month period from the 47% margin it reported in the first half of 2025. That figure was already up sharply from its 41% gross margin in the first half of 2024, showing it is rapidly gaining economies of scale.

And again, we should also reiterate the move to the black was assisted by the sharp slowdown in R&D spending.

The company’s Toumai laparoscopic robots have emerged as its star product, which it highlighted in another announcement last month. Among other things, it noted the product has received more than 300 commercial orders worldwide, accounting for more than three-quarters of the company’s nearly 400 units of its various products ordered to date. By comparison, MedBot’s second most popular product, the SkyWalker orthopedic robot, had logged just 65 units ordered as of March this year.

MedBot pointed out that Toumai’s first 100 orders took nearly 1,000 days to achieve, while the latest 100 took just 120 days. It said the product has achieved commercial installations in 60 markets globally, including 10 added this year, such as Saudi Arabia and South Korea.

Exports zoomed last year to easily overtake the company’s domestic sales. MedBot’s sales in China last year actually fell slightly to 151 million yuan from 154 million in 2024. But as a percentage of total sales, the figure plummeted to just 27% of sales from 60% in 2024. Exports moved the other way, quadrupling last year to 400 million yuan from 104 million yuan in 2024, accounting for 73% of sales last year.

All this shows that MedBot really is hitting its stride, which bodes well for the company if it can keep logging triple-digit revenue growth.

But from an investor perspective, the company’s stock still looks quite pricey even after a 13% decline this year, which includes the latest drop on Thursday. MedBot currently trades at a price-to-sales (P/S) multiple of 35, though that would drop by about half to 17 if it can maintain the 200% revenue growth through the rest of the year. Still, Medtronic and Stryker, which are both profitable, trade at far lower multiples of 2.9 and 4.8, respectively. Other less cutting-edge medical device makers like Venus Medtech (2500.HK) and Cofoe Medical (1187.HK) trade even lower at 1.5 and 1.8, respectively.

MedBot would need to keep up its current triple-digit revenue growth for the next few years to bring its P/S ratio down to levels similar to the global giants, which looks possible given its recent momentum, but certainly isn’t guaranteed.

The company points out it has strong policy support from the Chinese government, which is strongly promoting development of cutting-edge medical devices, including exports. But that could also come back to haunt the company if governments in key foreign markets decide that MedBot is receiving unfair state support, which is rapidly becoming a hot issue confronting China’s high-tech exports across a growing range of products.

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Projected earnings at the drug research company have been inflated by the soaring value of research monkeys, but the on-paper gains may not be sustainable

Key Takeaways:

• Joinn Laboratories uses its macaques for in-house testing purposes and does not sell many on the open market, so the fair-value gains are largely unrealized
• Its principal business as a contract research organization has been hit by a price war, squeezing operating margins

By Molly Wen

China’s dash to develop novel drugs for cancer and other diseases has caused a curious side effect: a speculative rally centered on the supply of monkeys for medical research.

The frenzy on Chinese equity markets began with drug research firm Joinn Laboratories (China) Co. Ltd. (603127.SH; 6127.HK), which holds a valuable stock of research primates for use in medical testing. The investor exuberance even spread to banana seller Great-Sun Foods (603336.SH) and a travel company associated with a mountain habitat for wild monkeys, Emei Shan Tourism (000888.SZ).

Joinn, the company at the center of the rally, saw the sharpest price swings. Its Hong Kong shares rose for five straight sessions from July 9 to July 15, including gains of 11.46% on July 10 and 23.78% on July 14. The stock touched HK$29.98 in intraday trading on July 16, its highest level in three and a half years. Other contract research organizations also rallied, including InnoStar Bio-tech (688710.SH), Shanghai Medicilon Inc. (688202.SH) and Pharmaron Beijing (300759.SZ; 3759.HK).

On the evening of July 16, Joinn made a statement warning of extremely high risks of irrational speculation, saying that its shares were liable to fall at any time. Its Shanghai-listed shares plunged by their daily limit when the market opened the following day. The firm’s Hong Kong shares had already begun retreating, losing 13.54% over two trading sessions through July 17.

The trigger for the market upheaval was a seemingly spectacular profit forecast released by Joinn on July 14. First-half revenue was projected to be flat or modestly higher than the same period a year earlier, but the bottom line was forecast to make a staggering leap of around 885% to 1,377%, with net profit ranging from 600 million yuan to 900 million yuan ($89 million to $133 million). Minus non-recurring gains and losses the figure was projected to rise by an even more striking 2,334% to 3,551%, reaching between 561 million yuan and 842 million yuan.

But first-half revenue was estimated at between 669 million yuan, the same level as the previous year, and 739 million yuan, an increase of 10.5%.

What could account for such a big disconnect? The critical factor was the value of the biological assets on Joinn’s books, projected to soar to between 703 million yuan and 777 million yuan, compared with just 87.85 million yuan a year earlier, after supply shortages drove up the prices for research monkeys.

Research monkeys serve as stand-ins for humans in preclinical safety tests for new drugs. The price of a cynomolgus monkey, a type of macaque, has surged from 92,000 yuan in May 2025 to 178,000 yuan in June this year, recently peaking at 200,000 yuan. Supply is lagging demand after years of depressed prices discouraged breeding and resulted in ageing populations. Meanwhile, the Chinese innovative drug industry has been stepping up projects involving large-molecule drugs and antibody-drug conjugates, unleashing pent-up demand for preclinical testing. Founder Securities estimates that China will face an annual shortage of around 10,000 research monkeys from 2025 to 2027, with the gap continuing to widen. As a leading preclinical research organization with a stock of about 30,000 research monkeys, Joinn was naturally a beneficiary of the price surge.

Barely breaking even

However, excluding the paper gains from soaring monkey prices, the projected half-year net profit from its core laboratory services and other businesses ranges from a loss of 141.62 million yuan to a profit of 64.97 million yuan. Lingering effects of cutthroat competition meant revenue rose only slightly, while gross margins have yet to recover.

Over the past few years, a funding shortage in China’s innovative drug sector forced many drug developers to scale back programs and cancel preclinical and early-stage clinical projects, triggering fierce price wars among research providers. When Joinn listed in Shanghai in 2017, its gross margin stood at 56.27%. By 2025, the margin had fallen to 20.71%, while core revenue from non-clinical studies services declined by 17.75% and income from clinical trial and related services dropped by 27.12%. Joinn’s annual report attributed the pressure on gross margins to lower project prices and the lingering effects of fierce competition.

Major CRO companies typically maintain their own stocks of research monkeys to ensure they can fulfil customer orders. Joinn operates its own breeding facilities and acquired two suppliers of research primates in 2022. The firm told an earnings briefing in April that the animals were mainly used in its own work, with only a very small number sold externally. Therefore, the eye-popping gains in the accounts remain largely unrealized.

Over the longer term, a widening shortfall should give Joinn, with its sizeable stock of research monkeys, an advantage in securing more orders. But Joinn currently trades at about 32 times earnings, compared with just 20 times for industry leader WuXi AppTec (603259.SH; 2359.HK), which also has substantial research-monkey resources and boasts a gross margin of about 47%. That suggests a generous monkey premium has already been factored into Joinn’s valuation. If prices go into reverse due to changes in import policy or other uncertainties, investors may need to monitor whether the company can sustain itself on the core business alone.

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The developer of the world’s first end-to-end AI drug has projected a big leap in half-year earnings, driven by lucrative collaborations with multinationals

Key Takeaways:

• Insilico expects to power into the black after cashing in on drug partnerships this year with Eli Lilly, Takeda and SK Biopharmaceuticals
• Its flagship drug, which was discovered and developed using AI, has entered Phase Three trials but substantive results are not expected before late 2027

By Molly Wen

For years, artificial intelligence has promised to speed up drug discovery, but the research has rapidly burned through cash while struggling to get clinical or commercial traction.

That could be starting to change. A Chinese biotech that uses AI to discover and design new drugs for cancer and chronic diseases has just flagged up an impending surge in earnings, backed by a raft of deals with pharmaceutical giants.

The profit alert from Insilico Medicine (3696.HK) comes just six months after it turned heads with Hong Kong’s biggest IPO of 2025, riding on investor hopes for AI-assisted medical breakthroughs.

Insilico projected a swing into profit for the first half of this year, with six-month revenue nearly double the firm’s whole turnover for 2025.

The company forecast revenue of between $102.5 million and $106.5 million, a surge of more than 270% from the same period a year earlier, turning a loss of $19.2 million in the first half of 2025 into a projected net profit this time ranging from $33.5 million to $39.5 million. Adjusted non-IFRS net profit was estimated to be between $45.5 million and $51.5 million.

The main driver was a host of licensing and collaboration agreements with leading names in the global drug industry, focusing on finding new treatments for cancer, lung disease and autoimmune conditions. According to the DXY Insight database, which tracks global pharmaceutical markets, Insilico has sealed 14 deals so far in 2026 with a total potential value exceeding $7 billion. These include an agreement worth up to $888 million in January with French drug firm Servier, a $2.75 billion global R&D collaboration with Eli Lilly in March, a $2.5 billion pact with SK Biopharmaceuticals in June and a $600 million global strategic collaboration with Takeda in early July.

It is worth noting that the headline figures include milestone payments and royalties on potential sales, with no certainty that the money will be received in full. Moreover, earnings generated by these business development deals are inherently volatile. The agreements can deliver a quick earnings boost, but subsequent revenue streams depend on clinical progress and commercial viability.

The bumpy pattern is already visible in Insilico’s earnings. Last year revenue fell to $56.24 million from $85.83 million in 2024, in the absence of any big licensing deals, while its annual net loss swelled to $352 million from just under $17.10 million.

End-to-end AI drug

The AI drug discovery industry generates revenue in three main ways: selling software platforms, providing outsourced R&D services and licensing internally developed drug candidates. But Insilico is not content with being a mere provider of AI technology. The company is also using its flagship AI platform to develop its own drugs that could be independently launched on the market.

By the middle of this year, Insilico had identified 31 preclinical candidates across high-barrier, high-potential therapeutic areas including oncology and immunology, as well as disorders of the metabolism and central nervous system. Of these, 13 had received regulatory clearance for testing as investigational new drugs. Of 10 programs in clinical development, four are being advanced independently and six are progressing through collaborative clinical studies with pharmaceutical partners.

Insilico’s most advanced candidate has just entered late-stage trials, billed as the world’s first drug in which the biological target and the therapeutic compound were discovered and designed using generative AI. Rentosertib (ISM001-055) began Phase Three trials on July 8 as a treatment for idiopathic pulmonary fibrosis, a chronic lung disease. U.S. regulators have designated it an “orphan drug”, entitled to financial incentives as a potential treatment for a rare condition, while China has included the drug in its breakthrough therapy program. But despite the excitement, there are underlying concerns. Part of its Phase Two testing enrolled only 71 patients, while the U.S. Food and Drug Administration previously put a temporary hold on a trial of the drug. While the testing later resumed, the episode showed that regulators apply extremely rigorous safety protocols to molecules identified and designed using AI.

Assuming a 52-week course of treatment, Rentosertib’s Phase Three trial is expected to wrap up at the end of June next year. Allowing extra time to process the data, the key results are unlikely to emerge before the end of 2027. That means the project, initiated in 2019, could take a decade to proceed through testing to regulatory approval and commercial launch. If AI accelerates the early stages of drug discovery but fails to improve success rates during the far more expensive and failure-prone clinical phase, its value to the pharmaceutical industry could be substantially diminished.

Insilico commands a market value of about HK$26.5 billion ($3.38 billion), compared with approximately HK$31 billion for fellow AI drug leader XtalPi Holdings (2228.HK), whose revenue is less dependent on licensing deals. Insilico has committed heavily to its internally developed pipeline. The future of its share price depends on whether the flagship drug proves effective in clinical tests, and whether the firm can forge new partnerships to keep generating cash.

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The healthcare company has announced five acquisitions in the past two weeks to shore up growth and fend off competition in the traditional Chinese medicine market

Key Takeaways:

• Gushengtang is buying two more hospitals in Beijing’s Changping district, weeks after closing deals on facilities in Singapore and Tianjin
• The expansionist moves came as rival provider Tong Ren Tang Healthcare made its Hong Kong equity market debut

By Lee Shih Ta

Traditional Chinese medicine is being transformed from a local service into a major commercial enterprise, with the growth of digital platforms, chains of clinics and listed brands.

In this shifting marketplace, companies with more practitioners, licenses and patient volumes are better positioned to turn dispersed TCM demand into repeatable revenue.

And so Gushengtang Holdings Ltd. (2273.HK) is on a buying spree, announcing on July 5 that it was in the process of acquiring two hospitals offering TCM services in a northern district of Beijing. The company said its health management subsidiary had agreed to buy controlling interests in Shahe Hospital and Hongyang Hospital in the capital’s Changping district. Upon completion of the deals, both hospitals will be consolidated as subsidiaries into Gushengtang’saccounts.

It marks a second acquisition statement in as many weeks. On June 23, the company announced the purchase of 100% stakes in Singapore’s Sante Clinics and Sante TCM, as well as a 90% interest in Tianjin Bainian Renyitang, with all three firms also being folded into its accounts. From Singapore to Tianjin and Beijing, Gushengtanghas been rapidly expanding its reach by gobbling up established medical resources.

The company said the newest additions will help to increase its Beijing market share, offering synergies with its existing medical facilities and online healthcare platforms. It did not reveal the amount to be paid, but the outlay appears to be modest, as the size of the deals - whether singly or combined - falls below the threshold required for detailed financial disclosure. The statement did not reveal earnings information for the acquisition targets, nor the number of their beds or doctors.

The deals may be limited in scale, but their location is worth noting, with a focus on northern Beijing, where Gushengtang already owns the Changping Bohua JingKang TCM hospital acquired in 2025. TCM services have a clear service radius, as patients value convenience for follow-up visits, prescription pick-ups and chronic disease management. Consolidating a corporate presence in a single area could boost efficiencies and brand exposure.

Acquisition-led expansion has long been Gushengtang’s main growth engine, with the number of its offline medical institutions rising to 101 last year from 79. Increased consultations, the bigger set of clinics and an expanded medical team have driven turnover, but the momentum looks to be flagging, judging from the latest annual results.

Gushengtang’s revenue rose 7.5% to 3.25 billion yuan ($478 million) in 2025, while adjusted net profit edged up just 0.55% to 403 million yuan. By comparison, the top line grew 30.1% in 2024, while adjusted net profit jumped 31.4%, lifted by the expansion of offline facilities that achieved a 34.5% revenue leap that year. By 2025, growth in offline revenue had slowed to 8.8%.

The quality of the growth has also changed. Customer visits increased to 6.01 million from 5.41 million, but average spending per visit fell to 541 yuan from 559 yuan, while the customer return rate slipped to 66.1% from 67.1%. At the same time, the cost of sales rose 5.9% to 2.24 billion yuan, driven by a 5.6% increase in physician and material costs and a 6.8% rise in recurring expenses linked to physician demand and the expanded network, which diluted the contribution of new revenue to profitability.

For now, Gushengtang is one of the few TCM providers with a Hong Kong stock listing, but its scarcity value is slipping. Tong Ren Tang Healthcare (2667.HK), which listed in Hong Kong this week, lags Gushengtang in scale and profitability, with revenues edging down 0.3% to 1.17 billion yuan last year and net profit falling about 25% to 27.48 million yuan. But it has the benefit of the powerful Tong Ren Tang brand and counts Beijing as an important home market.

Battle for Beijing

In this context, Gushengtang’s latest acquisitions in northern Beijing look to be a tactical move to boost competitiveness after the Tong Ren Tang debut, as it aims to secure local licenses, practitioners and service entry points in the capital.

The M&A flurry has lent some share price support. Gushengtang’s shares had fallen as low as HK$24.32 in late June but jumped more than 20% in the five trading days after the Singapore acquisition was announced. On the day after the news about the Beijing deals, the stock rose another 1.05% in a broadly positive response to the expanding network.

However, sustained gains will depend on whether the newly added facilities can translate into higher profits. Gushengtang still has a first-mover advantage in building a chain-based TCM business, but its ability to integrate resources will be key going forward.

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The company’s two core hepatitis drugs were dropped from China’s state insurance scheme on July 1, effectively wiping out the remains of its legacy drug sales

Key Takeaways:

• The company has exited antivirals and is now wagering its future on weight-loss drugs that are just entering overseas trials
• But a late start and intensifying competition leave Ascletis facing steep challenges

By Molly Wen

The first company to take advantage of Hong Kong’s revised listing rules for biotechs eight years ago has had a difficult journey since its debut, switching from one drug type to another in search of commercial success.

Now Ascletis Pharma Inc. (1672.HK) has suffered a further blow, as its two core hepatitis drugs have been dropped from China’s medical insurance coverage, virtually eliminating its product sales.

For most Hong Kong-listed innovative drugmakers, sustained sales are a key test of a company’s technological prowess and prospects for stable revenue. By that measure, Ascletis looks to be falling short. The drugs that were the centerpiece of its listing have faltered, and a big investment in developing weight-loss drugs has yet to pay off.

The company’s two therapies for hepatitis C, Ganovo and Asclevir, failed to secure reimbursement renewals, meaning the cost of their use will no longer be covered from July 1. While the products remain on the market, their sales are set to plummet, shrinking the company’s drug revenue to pretty much zero.

The two Ascletis products were among eight drugs that failed to hold on to their place in the reimbursement list this time.

The Ascletis earnings report for last year records 127 million yuan ($19 million) in revenue, but almost all of it came from bank interest, government grants and fair-value gains on its equity investment in Nasdaq-listed Sagimet Biosciences.

The two main Ascletis businesses — R&D services and drug sales — contributed only 2.03 million yuan, with token product sales of just 382,000 yuan.

When Ascletis listed in Hong Kong in 2018 as the first Chapter 18A biotech stock, it had the two hepatitis drugs in hand and its turnover more than tripled that year to 166 million yuan, apparently putting the business on the path to profit. But the Chinese drugs have lost out to rival products from multinational drugmakers.

Ganovo needed to be used in combination with long-acting interferon, requiring injections and carrying greater risks of side effect risks, while alternative drugs from Gilead Sciences and Merck & Co. could be taken in tablet form without any additional booster, and became the global standard.

In 2019 reimbursement talks, a price cut of more than 85% was agreed for the imported drugs, while the discount on Ganovo fell short. The Ascletis drug, then the only domestically developed hepatitis C treatment to make it into the talks, failed to get on the list. The misstep sent Ganovo sales plunging nearly 80% in 2020, before falling further to 1.1 million yuan in 2022. Although the second hepatitis C drug, Asclevir, was approved in 2020 and was accepted for reimbursement the following year, along with Ganovo, the firm had already lost its first-mover advantage.

Ascletis was also badly hit by setbacks in other parts of its drug business. As the sales agent in China for Roche’s long-acting interferon drug Pegasys, it enjoyed related revenue of 70.91 million yuan in 2021, accounting for as much as 90% of the total. But as better alternatives emerged, Roche withdrew the product from the Chinese market in 2022, depriving Ascletis of a key earnings pillar. The Chinese company later launched antiviral ritonavir, the booster in Pfizer’s Paxlovid, which generated 49.4 million yuan in 2023. But as the pandemic faded, that revenue also plunged by more than 90% in 2024.

Full pivot to weight loss

With its antiviral business beyond saving, Ascletis opted for sweeping reforms. In 2024, the company terminated several programs, including candidates for chronic hepatitis B, HIV and RSV, while seeking out-licensing opportunities for ASC40, a treatment for fatty liver disease. As a result, antiviral R&D spending was slashed from 33.7% of the total to just 0.4%.

In September 2024, Ascletis announced a full R&D shift to metabolic and weight-loss treatments, spanning small-molecule GLP-1 drugs, amylin and thyroid hormone receptor agonists. Its key bet, the oral GLP-1R/GIPR dual-target small molecule ASC30, is designed with both oral and injectable formulations. In a Phase One U.S. study over four weeks, it achieved a placebo-adjusted mean weight loss of up to 6.5%, while the oral formulation is expected to begin global Phase Three trials by the end of the third quarter of 2026. On July 6 the company said it had submitted two obesity-related clinical trial applications to the FDA.

Lifted by weight-loss hopes, Ascletis shares rocketed from a low of HK$0.76 in August 2024 to HK$18.75 in August 2025. But competition among obesity drugs is even more intense than in the hepatitis market. Giants Eli Lilly and Novo Nordisk kicked off a price war in China this year, as the tirzepatide price was cut by more than 80% after entering medical insurance coverage. Innovent Biologics (1801.HK) launched mazdutide in June 2025 as the first domestically developed dual-target weight-loss drug, while multiple dual-target weight-loss programs from Hengrui Pharmaceuticals (600276.SH; 1276.HK), BrightGene Bio-Medical Technology (688166.SH) and Hansoh Pharma (3692.HK) have been submitted for marketing approval in quick succession. Ascletis, whose programs remain in the clinical stage, is already lagging.

Ascletis currently has a market value of about HK$12.5 billion, while Laekna Inc. (2105.HK), which is also pivoting to weight-loss drugs, is valued at only about HK$3.3 billion. That gap reflects higher market expectations for Ascletis, which has a cushion of more than 1.9 billion yuan in cash reserves that could fund operations through 2029. Survival is not an immediate concern, but the true test will be whether the company can prove its worth with solid clinical data in an increasingly crowded market.

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The company will use a majority of the $68 million it raised from its Hong Kong listing to expand its network of traditional Chinese medicine hospitals and clinics

Key Takeaways:

• Tong Ren Tang Healthcare made its Hong Kong IPO at a lower price, backed by its status as China’s most famous healthcare brand.
• Ranked as China’s biggest private traditional Chinese medicine operator, the company hopes to become a consolidator in the fragmented market

By Doug Young

Is there still room for anything other than AI concept stocks in Hong Kong’s hottest IPO market in years, including companies that have made astronomical debuts despite short track records, little revenue and massive losses?

Beijing Tong Ren Tang Healthcare Investment Co. Ltd. (2667.HK) is finding out with its trading debut on July 7 – its second attempt after a last-minute postponement of its original plan to debut in March amid market uncertainty.

The revised offering raised HK$532 million ($68 million), after the company calibrated a more conservative pricing strategy compared with its initial plans, signaling a more pragmatic valuation approach in the current market. It sold 108 million shares for HK$5.50 apiece.

50% cornerstone commitment 

Tong Ren Tang Healthcare secured cornerstone backing from Airport Port Technology Capital, Aurora SF and CICCFT, which together bought HK$296.1 million of the IPO shares, representing about 50% of the total on offer if the over-allotment option is not exercised. That underscores investor confidence in its traditional Chinese medicine (TCM) healthcare services business.

To cushion the share price around the listing, Tong Ren Tang Healthcare has deployed a team of stabilization dealers who can buy in the market if the price falls below the offer level in early trading. The mix of adjusted pricing, strong cornerstone backing and post-listing support are expected to deliver a smoother debut and protect investor value in a cautious Hong Kong IPO environment.

The firm now ranks as China’s largest private traditional Chinese medicine operator by patient visits, with annual visits growing 39.4% each year on average as it expands its network of hospitals, outpatient centers and clinics.

It operates 13 self-owned hospitals, outpatient healthcare centers and clinics, provides management services for another 13, and runs an internet hospital that pools TCM experts from across the country. It also cooperates with more than 500 external pharmacies, enabling it to send electronic prescriptions to partner pharmacies near customers.

A 357-year TCM brand

Tong Ren Tang Healthcare has a 357-year pedigree to pitch to investors, as arguably the world’s oldest TCM brand. It’s worth noting the company’s promotion expenses were just 0.2% of revenue in 2025, a figure it links to the Tong Ren Tang brand moat and synergies across its integrated TCM business, spanning herbal sourcing, manufacturing, clinics and retail, which drives patient traffic and sales without heavy advertising.

Demographic aging and consumption upgrades are fueling strong demand for TCM, driven by rising needs for chronic disease management and preventive care, alongside broader adoption across age groups. At the same time, supportive policies under China’s 14th Five-Year Plan and expanded insurance coverage are providing long-term tailwinds, and a fragmented market with private institutions holding 54.9% share offers consolidation opportunities for leading players like Tong Ren Tang Healthcare.

According to research in the prospectus, the highly fragmented TCM market is expected to grow 9.5% annually between 2025 and 2030 to reach 1.7 trillion yuan ($251 million) by the end of that period. That offers Tong Ren Tang Healthcare the opportunity to act as a consolidator of the many local providers that operate at a small scale. The company plans to keep adding self-owned and managed facilities, while leveraging its online hospital and supply chain to standardize services and capture share from smaller competitors.

Reflecting its potential to emerge as a consolidator, three of the company’s self-owned facilities were acquired since 2022, including two in 2024. All three are in the affluent Yangtze River Delta region, including two in Shanghai, indicating the company intends to focus on regions with the greatest consumption power where it can fully leverage its well-known brand.

Tong Ren Tang Healthcare’s financials look respectable with its revenue remaining stable last year at 1.17 billion yuan, almost unchanged from 1.18 billion yuan the previous year.

Healthcare services, delivered by more than 2,700 physicians across its network, accounted for about 85% of revenue, rising slightly to 995 million yuan last year from 988 million yuan in 2024. Product sales, the second-largest category at around 13% of revenue, fell to 150 million yuan from 167 million yuan, as the company adjusted one of its recently acquired facilities to avoid competing with Tong Ren Tang Group.

Management services, while still small at 16.1 million yuan in revenue last year, show significant potential, as many independent TCM hospitals and clinics seek specialist operators to raise standards and quality. In a recent example, Tong Ren Tang Healthcare signed a collaboration agreement in April with Guizhou Maotai Hospital, partnering with another prominent name in the region known for China’s best-known liquor, Moutai.

The company reported a gross margin of 18.9% last year and its profit fell to 33.8 million yuan from 46.2 million yuan in 2024. It cautioned that the 2024 figure included a 17.1-million-yuan one-time gain from an asset sale that did not recur in 2025.

In its IPO prospectus, the company said it expects to use about 64% of its listing proceeds to expand its network and enhance its service capacity, including plans to acquire three to five medical institutions by the end of 2030. It also plans to open three medical institutions on its own or through joint ventures with partners using an asset-light model.

The less aggressive listing valuation looks likely to help Tong Ren Tang Healthcare cross the finish line this time, though it still faces the challenge of standing out in a crowded field. A sizable 16 firms made their trading debuts in the last week of June alone, and another 15, including Tong Ren Tang Healthcare, are set to start trading this week.

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The drug developer stood out from the IPO crowd of unprofitable biotechs due to its existing revenue stream and a focus on novel remedies for renal disease

Key Takeaways:

• Alebund plans to prioritize getting Chinese approval next year for its core product and is aiming for a U.S. launch in 2029
• The IPO drew 11 cornerstone backers including prominent names in global finance and biopharma investment  

By Molly Wen

A host of pre-profit biotechs have listed in Hong Kong this year, taking advantage of relaxed rules for budding pharmaceutical pioneers, but the latest entrant has made a particularly big splash.

Alebund Pharmaceuticals (Jiangsu) Ltd. (9637.HK), which is developing a range of drugs to treat kidney disease, doubled its share price on the first day of trade, outperforming the seven previous biotech listings so far this year.

According to LiveReport Big Data, those earlier Chapter 18A newcomers achieved an average first-day gain of 72.72%. On its June 29 debut, Alebund opened 85.84% higher and stormed to a HK$46 finish, a rise of 103.54%.

The IPO was priced at HK$22.60 per share, with a lot size of 100 shares and a minimum investment of nearly HK$2,283. Around 56.76 million shares were on offer, representing 16.70% of the firm’s overall share capital, for projected gross proceeds of about HK$1.28 billion ($164 million). Enthusiastic investors piled in from the outset, with the offering oversubscribed by around 963 times and a one-lot success rate of just 6%.

Alebund is described in the prospectus as aspecialist developerof drugs for renal diseases whose discoveries are approaching the commercial stages. Founded in 2018, the biotech is developing seven pipeline programs, including a core product that aims to treat high phosphate levels in the blood resulting from renal disease.

The company was due to submit a new drug application in China for AP301, its oral phosphate binder, in June. The product is also undergoing Phase Three multi-regional trials in the United States and China. Alebund has pledged to prioritize bringing AP301 to the commercial market, predicting Chinese approval in 2027 and envisaging a U.S. launch in 2029.

The market for innovative renal remedies is potentially huge. Chronic kidney disease, or CKD, is the world’s third-largest chronic condition, affecting 802 million people globally and 124 million in China in 2025. Hyperphosphatemia, one of the most common complications, affects about 95% of dialysis patients. The standard treatments require heavy dosage and often cause gastrointestinal side effects, while up to 76% of dialysis patients in China still have uncontrolled serum phosphate levels, according to data in the listing application.

The company said that AP301 would offer several benefits over currently available treatments, making it more effective and easier for patients to take. The pills can bind with more phosphate, do not have to be chewed before swallowing, expand at a low rate in digestive fluids and cause limited leakage into the bloodstream, according to the IPO paperwork.

Alebund is also developing another treatment for hyperphosphatemia in the form of an oral pan-phosphate transporter inhibitor. Phase Two B global trials of the drug, AP306, were launched in the United States and China in May and are due to complete in the second quarter of 2027. Alebund entered a partnership with U.S.-based R1 Therapeutics last year to develop the treatment overseas, in a deal combining licensing rights and equity.

Big backers but far from profit

With several drug candidates still in clinical development, Alebund remains deeply in the red, with losses of 335 million yuan ($49 million) in 2024 and 752 million yuan in 2025, mainly due to heavy R&D spending, which reached 235 million yuan and 373 million yuan for those two years.

But unlike many biotechs, Alebund has secured an income stream through a 2023 deal to license a drug from Roche for sale in mainland China. The drug, marketed under the name Mircera, is a long-acting therapy for anemia associated with chronic kidney disease. After it was folded into China’s health insurance coverage in 2023, Alebund’s income from the drug jumped 368% in 2025 to about 30.6 million yuan. That money has supplemented working capital, easing cash-flow pressure in a business otherwise reliant on external financing. The income has also enabled the company to build a commercial sales team and gain experience in Chinese healthcare policies, laying the groundwork for future drug launches.

Aside from the distinctive drug portfolio, investors have also been drawn to Alebund’s in-house expertise and its array of big-name backers. Co-founders Jin Tian and Gavin Xia together bring deep experience in clinical development and the pharmaceutical business. Before its IPO, Alebund raised around 2 billion yuan in multiple financing rounds, with stakeholders including well-known institutions such as Tencent Holdings, Lilly Asia Ventures and Loyal Valley Capital.

It secured strong backing for the IPO, bringing in 11 cornerstone investors that subscribed for about $81.5 million in shares, representing 49.78% of the global offering. The investors included global sovereign wealth funds, specialist biopharma funds and major Chinese public fund managers, including GIC, Loomis Sayles, RTW funds, Tencent, GF Fund Management and China Universal Asset Management.

Overall, Alebund has captured investor attention with its positioning in renal diseases, its clinical progress and initial commercial returns. The company currently commands a market value of about HK$15.6 billion. By comparison, Everest Medicines (1952.HK), which has already launched a new renal drug and enjoys an annual turnover exceeding 700 million yuan, has a market value of just HK$8.5 billion. Whether Alebund can sustain its premium will depend on the approval timeline for its core drug and its ability to clinch new global deals.

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Shares of the over-the-counter traditional Chinese medicine company tumbled after it reported sequential revenue and profit declines in the second half of its fiscal year

Key Takeaways:

• JBM Healthcare’s profit edged up 1.9% in its latest fiscal year through March
• The over-the-counter traditional Chinese medicine company’s full-year dividend payout ratio reached a generous 70%.

By Lau Chi Hang

It’s safe to say that most ordinary consumers have never heard of JBM (Healthcare) Ltd. (2161.HK). But the brands from its proprietary cabinet of over-the-counter (OTC) traditional Chinese medicines (TCM), like Po Chai Pills, Ho Chai Kung, Flying Eagle Woodlok Medicated Oil, and Tong Tai Chung Woodlok Oil, are household names in Hong Kong, as well as adjacent Guangdong province. 

JBM Healthcare was spun off from Jacobson Pharma (2633.HK) in February 2021 and separately listed in Hong Kong. But even before that, Jacobson Pharma was stocking up its cabinet of well-known TCM brands. Jacobson acquired Li Chung Shing Tong, the century-old enterprise behind the Po Chai Pills dynasty, in 2008 by taking advantage of a succession dispute within the Li family. It later purchased the familiar Tong Tai Chung Woodlok Oil brand. And in 2016, Jacobson splashed out HK$560 million ($72 million) to buy out Ho Chai Kung, a legacy Chinese cold remedy.

By 2017, Jacobson had also snapped up indigestion drug Saplingtan, Shiling Oil, which is used to treat minor aches and pains, and cold and flu remedy Col-gan from Ling Chi Medicine Co., rounding out its stable of traditional Chinese medicine brands. Jacobson repackaged and integrated those brands into JBM Healthcare before taking the company public as its flagship vehicle for OTC Chinese medicines.

Lackluster performance

But JMB Healthcare seems to have come down with its own financial malaise lately, in the form of anemic growth disclosed in a new financial report last week for its latest fiscal year through March. The company reported revenue of HK$835 million for the 12-month period, up 6.7% year-over-year, and a profit of HK$201 million, up 1.9%. In keeping with its tradition of generous payouts, the company announced a final dividend that lifted its dividend for the year to HK$0.171 per share, up 0.6% from fiscal 2025.

Despite the stable – if not remarkable – revenue and profit growth and continuation of strong dividend payouts, the company's shares took a massive dive the day after the earnings release. The stock tumbled out of the gate, and ultimately fell below the HK$2 mark to close down 14% for the day at HK$1.96.

A more in-depth dissection of the numbers reveals that JBM Healthcare's performance showed significant signs of weakening in the second half of its fiscal year. Calculations using data from the company’s midyear report for the first half of the fiscal year show its revenue and profit came in at HK$405 million and HK$86 million in the second half of its fiscal year, respectively, representing a sequential declines of about 6% and 25% from the first half.

JBM Healthcare's two main product categories both suffered declines in the latest six-month period. Second-half sales from its branded medicines totaled around HK$130 million, down more than 15% from the first half. At the same time, sales of its proprietary Chinese medicines slipped about 2% to HK$230 million over the same period. Only sales of the company’s health and wellness products – a smaller category – managed a modest sequential uptick of 4.5% to HK$44.08 million.

Despite that weakness, the company’s expenses still rose notably over the past fiscal year. Its selling and distribution expenses increased by 7.5% year-over-year to HK$132 million, while administrative and other operating expenses jumped 27% to HK$80.26 million. Financing costs during the period, while relatively small, also skyrocketed by 162% from HK$4.46 million in fiscal 2025 to HK$11.69 million in the latest fiscal year.

Final dividend tumbles 

While the company kept its high-dividend policy intact for the full year — a major draw for investors — the final dividend amounted to just HK$0.0735. That figure was down by a hefty 36% from last year’s final dividend, and was also 24.6% lower than the dividend announced for first-half of the company’s fiscal year. Put differently, the company’s dividends for all of its latest fiscal year only held steady due to the relatively generous payout in the first half of that year.

The sharp share selloff reflects a clear disconnect between the company's results and market expectations. Many were probably expecting much better, especially given the surge in Mainland Chinese tourists coming to Hong Kong over the past year after Beijing relaxed travel restrictions. A mild economic recovery in Hong Kong also probably led investors to believe that local residents would be consuming more of the company’s products. Yet, the second-half sequential profit decline, when many may have been hoping for an increase, and the slashing of the company’s final dividend, left investors understandably disappointed.

The reality is the company's financial health isn’t as robust as it once was. Its cash continued to shrink over the past fiscal year, dropping from HK$205 million in fiscal 2025 to HK$120 million by the end of March this year — a 41% decline. Its trade and other receivables, meantime, swelled by nearly 76% to HK$288 million by the end of the latest fiscal year.

On the debt front, the company’s short-term bank loans showed signs of improvement, falling by 23% to HK$115 million. But its long-term bank loans moved in the other direction, swinging from zero in fiscal 2025 to HK$250 million in the most recent fiscal year.

Wait-and-see approach

Despite the apparent disappointment over the latest results, the company appears to be on relatively sound footing overall. Its gearing ratio sits below 22%, and its cash is sufficient to cover all of its bank loans due within a year. While the second half of its fiscal year wasn’t the greatest, it does just represent one six-month window and might merely be a transitional blip, with the potential for a near-term pickup if recent economic trends continue.

Moreover, JBM Healthcare is cultivating a second growth curve, setting its sights on TCM clinic operations to complement its current stable of TCM products. Last June, it bought Kenford Medical Group for HK$38 million, giving it Kenford’s chain of TCM clinics. And late last year, JBM paid another HK$36 million for King Pui Chinese Medical Group and Siulun Medheart Co., which both operate TCM clinics and offer medical services such as orthopedics and chiropractic care.

For now, at least, JBM Healthcare continues to look like a relatively solid enterprise. Its projected price-to-earnings (P/E) ratio is roughly 7.6 times, closely mirroring the 7.4 times for rival TCM company Baiyunshan (0874.HK). Investors might want to stay on the sidelines temporarily and scrutinize the company's next report for the six months through September when it comes out later this year. Consideration of its ability to sustain its dividend payouts may also be warranted before pulling the trigger on any new investment.

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The producer of food additives and pharmaceutical ingredients is aiming to raise fresh capital to support its drive to become a developer of innovative drugs

Key takeaways:

• R&D costs have been soaring since the firm bought a controlling stake in drug developer Megalith Biopharmaceutical, reaching nearly 50% of revenue in 2025
• Meanwhile, profit pressures at the CSPC parent have capped the amount available to support drug research at group companies

By Molly Wen

As China reins in health insurance costs and drives a hard bargain on medical procurement, companies that once relied on generic drugs or active ingredients for their income are having to rethink their business model.

One such shapeshifter is a company in the CSPC Pharmaceutical Group (1093.HK)  that has moved from making dietary additives into developing cancer-targeting smart drugs. Underlining the change, Shenzhen-listed CSPC Innovation Pharmaceutical Co. Ltd. (300765.SZ) changed its short stock name from “Xin Nuo Wei” to “CSPC Innovation” on June 17. The following day the firm refiled an application to list on the main board of the Hong Kong Stock Exchange, just a week after an earlier submission had lapsed, with CITIC Securities as sole sponsor.

CSPC Innovation’s core business has long been the production of chemically synthesized caffeine, which is used in energy drinks, dietary supplements and pain relief tablets. The company has ranked as the world’s biggest producer of the additive for six consecutive years and held a 50.7% market share in China in 2025, according to research cited in the prospectus.

But this mainstay business is becoming less profitable. Data in the listing paperwork shows that the average selling price of the product fell from 93 yuan ($14) per kilogram in 2023 to 64.8 yuan per kilogram in 2025, sending operating profit from caffeine products tumbling from 622 million yuan to 269 million yuan. As a result, the functional ingredients and nutritional products segment, which includes caffeine products, saw its gross margin fall from 45.6% in 2023 to 38.2% in 2025.

Earnings have had a rough ride in recent years. From 2023 to 2025, annual revenue came in at 2.54 billion yuan, 1.98 billion yuan and 2.16 billion yuan. The bottom line swung from the black to the red, with a profit of 126 million yuan in 2023, followed by losses of 304 million yuan and 634 million yuan amid mounting research spending. CSPC Innovation’s R&D expenses ballooned from 671 million yuan to 842 million yuan and 1.06 billion yuan over the three years, reaching 49.2% of total revenue in 2025.

The jump in R&D spending was closely linked to the company’s 2024 acquisition of a controlling stake in Megalith Biopharmaceutical, the CSPC group’s platform for three types of frontier therapies: antibody drugs, antibody-drug conjugates (ADCs), which combine immuno- and chemotherapy, and mRNA vaccines.

CSPC Innovation shifted from being primarily a provider of active pharmaceutical ingredients (APIs) to a dual business combining established and innovative drug operations. The company currently has more than 15 drug candidates in clinical or later stages of development, including nine ADC products and one mRNA vaccine.

In January 2026, Megalith Biopharmaceutical, CSPC Group and related companies sealed a strategic collaboration deal with multinational drugmaker AstraZeneca. They granted AstraZeneca the rights to develop and commercialize a portfolio of once-monthly injectable drugs for weight management outside Greater China and agreed to collaborate on four new programs.

The deal gives the Chinese group up to $1.2 billion in upfront fees and as much as $17.3 billion in milestone payments. The $420 million upfront payment to Megalith Biopharmaceutical, received in May 2026, served as a vote of confidence in CSPC Innovation’s portfolio of novel drugs.

But the heavy investment in R&D via Megalith are also rapidly consuming CSPC Innovation’s cash flow. Cash and cash equivalents plunged from 3.77 billion yuan at the end of 2023 to 718 million yuan at the end of April 2026. Excluding the big upfront payment from AstraZeneca, its current cash reserves would only be enough to support operations for the next 17 months.

Meanwhile, earnings at parent company CSPC Group are also under pressure. As the Chinese authorities double down on bulk procurement and tighten cost controls on medical insurance, drug makers are grappling with price competition. The group's revenue fell 10.4% in 2025 and net profit declined for a third straight year to 3.88 billion yuan. Revenue from its core finished-drug segment dropped 13.3%, while income from its oncology business nearly halved. The downturn is also limiting the parent company's capacity to fund the group's work on innovative drugs, making it increasingly important for CSPC Innovation to gain direct access to capital markets.

CSPC Innovation said it plans to allocate approximately 60% of the listing proceeds to the clinical development of its core pipeline, with a particular focus on Phase Three trials for ADC candidates such as SYS6010, which targets advanced solid tumors. About 20% will be used to expand its commercialization team to around 180 employees, covering around 200 key hospitals across China. Another 15% will be earmarked to acquire complementary assets or technology platforms, targeting areas such as dual-target ADCs, dual-payload ADCs and mRNA delivery systems.

Aside from raising capital, the company may also want investors to re-rate its business as belonging to a higher value sector. In the mainland Chinese market, it has long been viewed primarily as a producer of APIs and health supplements, trading at a price-to-book ratio of about 13 times. By comparison, RemeGen (9995.HK), which also focuses on ADCs, trades at a price-to-book ratio of around 50 times in Hong Kong. Helped by Hong Kong's easier access for pre-profit biotechs, as well as strong investor appetite for ADC developers, CSPC Innovation could potentially secure a higher premium.

However, the company remains highly dependent on volatile licensing income, while its ADC products face intensifying competition from similar products. Ultimately, its value will be determined by progress in developing and launching drugs in its core pipeline.

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Shares of Here Group, Zepp Health, Burning Rock Biotech and So-Young International all posted meteoric gains last year, but have given most of that back in 2026

Key Takeaways:

• A group of small- and midcap U.S.-traded Chinese companies that briefly notched sharp rallies over the last year have given back most or all of the gains
• Investors may have been lured to the shares on belief they were undervalued, though their rise and fall also comes as the U.S. cracks down on suspected stock manipulation

By Doug Young

What do collectible toys, wearable health devices, cancer tests and cosmetic surgery have in common?

Certainly not much, in terms of their business. But companies from all four of these areas were among a group we previously called “Chinese Easter Eggs,” after their stocks suddenly soared last year, often rising many-fold in just months. Fast forward to the present, when the Easter Egg party is definitely over, and most of these stocks have given back nearly all their gains.

At the time of their meteoric rise, we said a newfound appreciation by investors might be behind the huge gains for collectible toy maker Here Group Ltd. (HERE.US), wearable device maker Zepp Health Corp. (ZEPP.US), cancer testing company Burning Rock Biotech Ltd. (BNR.US) and cosmetic surgery company So-Young International Inc. (SY.US). But based on the return to earth for all of their stocks, the rise-and-fall looks suspiciously like the type of manipulative speculation that has caused many U.S. investors to increasingly shun this group of smaller Chinese companies.

That’s not to say these companies don’t have interesting business models that are producing healthy growth. But the people buying their stocks appear less interested in the companies’ stories, and more interested in making some quick money, similar to the GameStop (GME.US) meme stock phenomenon of early 2021. While the GameStop story has long since faded from headlines, it appears to be living on in these smaller Chinese stocks.

The U.S. securities regulator and the Nasdaq, where most of these stocks are traded, are quite aware of this phenomenon and have taken steps to stamp it out. Most notably, the Nasdaq is implementing new rules that require all new Chinese listings to raise at least $25 million, and is aggressively delisting companies if the value of their listed securities falls below $5 million.

None of the four companies we mentioned looks to be in imminent danger of delisting under the new regime, though the rule changes have sent a chill over new listings by Chinese companies on Wall Street. No major new Chinese companies have listed in New York in more than a year, and new listings by smaller companies have also come to a near halt since the Nasdaq announced its new rules.

Here today, gone tomorrow

All that said, we’ll take a closer look at the four China Easter Eggs we mentioned, including their recently released earnings for the first quarter.

All four are in a stage of transition, which is relatively common in the business world as companies constantly look for the next new growth engine. That story is most relevant for Here Group, which jettisoned its original adult education business and jumped into the pop toy business about a year ago, just as the global Labubu sensation was peaking.

That radical move was probably what excited investors. Here Group’s stock soared nearly sevenfold from around $2 at the end of 2024 to as high as $13.50 a year ago, before returning to its previous levels at its latest close of $2.05.

The company’s latest results show its pop toy pivot isn’t going anywhere fast, with revenue down 7% to 165 million yuan ($24.4 million) in the three months to March from 177 million yuan in the previous quarter. That weakness prompted Here Group to lower its revenue guidance for its fiscal year to June to about 600 million yuan from a previous range of 750 million yuan to 800 million yuan. All of those figures are quite low compared with the company’s pre-pivot annual revenue of 3.8 billion yuan in 2024.

Next there’s Zepp, which has been transforming from a maker of wearables for other brands, most notably China’s Xiaomi, to developing its own brands, led by its Amazfit product line. Zepp’s story was a little more compelling than Here Group’s, since the company already had plenty of experience in wearables, even if it was new to brand development.

Zepp was the biggest riser of all the China Easter Eggs, with its shares soaring from about $2.30 a year ago to as high as $61 last October, before falling back to their current level of around $5. The company is doing relatively well in its shift to branded products, though its latest report shows it expects its revenue growth to slow sharply to between just 6% and 14% in the second quarter after a much stronger 34% rise to $51.5 million in the first quarter.

Despite the slowdown, there’s no question the branded business offers much better margins. The company’s first-quarter gross margin came in at 37.7%, compared with figures in the 20% to 25% range before its business shift.

Falling revenue at Burning Rock

Then there’s Burning Rock, which is shifting its focus from at-home cancer testing services to in-hospital testing following a government crackdown that affected the former segment. The company’s stock was also a stellar performer in the Easter Egg rally, rising from just $3 a year ago to as much as $41 this January. It now trades at around $9, making it one of the best performers post-Easter Egg rally.

The company’s latest results show its overall revenue fell 18.9% year-on-year in the first quarter to 108 million yuan, led by a 15.3% drop for its at-home testing services that use a central lab to process test results. Its in-hospital testing revenue, which now accounts for more than half of the total, also fell 8.5% for the quarter, though the company points out the figure would have risen 2% excluding a one-time issue involving two hospitals.

Lastly there’s So-Young, which is transforming from a referral company for cosmetic surgery services to an operator of its own chain of surgery centers. Such a model provides better quality control in this sensitive sector, though its new business comes with much lower margins than simple referral services. So-Young’s shares rose from about $1 a year ago to a high of about $6 last July, before falling back to their current price of about $2.

The company’s latest report shows that business from its chain of clinics continues to grow rapidly, up 186% in the first quarter year-on-year to 282 million yuan. That more than offset a 34% decline for its information services, which fell to just 80 million yuan. But gross margin for the clinic operation business was just 27.1% in the latest quarter, compared with a much higher 92.0% for information services.

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The drug services provider has been battling to shore up its share price and suffered a sharp sell-off after being added to a U.S. list of firms with suspected military links

Key Takeaways:

• Pharmaceutical firms hit by weakening Hong Kong valuations have been increasingly launching buyback programs to bolster investor confidence
• WuXi AppTec is particularly exposed to any tightening of restrictions in the U.S. market, which is its biggest source of revenue

By Molly Wen

Shares in China’s pharmaceutical sector have been hit by growing concerns about U.S. regulatory curbs and the impact of domestic price controls, although access to capital has improved and orders are reported to be flowing in.

With valuations subdued, a trend has emerged for companies to buy back their shares to bolster confidence. Industry leader WuXi AppTec Co. Ltd. (2359.HK; 603259.SH) went on a buyback spree for 10 straight days from May 26 in a campaign costing around HK$1.26 billion ($160 million), exchange data shows.

But WuXi AppTec’s share price kept falling, compounded by news on June 8 that U.S. authorities were turning up the heat on the Chinese provider of pharmaceutical services by designating it a military-linked company.

On June 8, WuXi AppTec repurchased 912,600 shares at prices ranging from HK$119.20 to HK$123.80 per share, spending HK$110 million in a single day. Its buyback tally for the 10-day campaign reached 9.94 million shares.

The company has said the shares will be channeled into treasury stock for use in its incentive scheme for senior and technical staff. That leaves the number of outstanding shares unaffected and will not enhance per-share earnings. The primary objective appears to be to establish a pool of shares for equity incentives to retain talent and signal long-term confidence in the business.

WuXi AppTec is far from alone in its repurchase strategy. As shares in the healthcare sector have fallen to multi-year lows, about 80 pharmaceutical and biotech companies have carried out share buybacks since the start of the year, the most active of all industries. Other firms in the WuXi group have joined in. In late May, WuXi Biologics announced a buyback program of up to $400 million, while WuXi XDC disclosed a $100 million repurchase plan, all funded by cash on hand. Other industry leaders including Tigermed (300347.SZ) and Hengrui Pharmaceuticals (600276.SH; 1276.HK) have also unveiled sizeable buyback plans in recent months.

The buyback wave follows a prolonged period of share-price pressure. Valuations have slipped as capital rotated out of healthcare into rising sectors such as AI and semiconductors, while tighter Chinese policies on medical procurement and insurance crimped the profit outlook for innovative drug companies.

More recently, market confidence has been rocked by talk that regulators could tighten oversight of outbound licensing and business development deals. Meanwhile, companies in the global pharmaceutical supply chain now face a geopolitical-risk discount, with proposed U.S. legislation that would hinder contracts with federally funded medical providers.

Policy risks on the rise

Even as WuXi AppTec was scooping up its own shares, geopolitics reared its head again. On June 8, the U.S. Department of Defense added WuXi AppTec to an updated list of what it called Chinese military companies, drawing a swift and robust rebuttal from the company, which vowed to challenge the move. But shares in the Chinese drug services giant fell more than 5% that day.

WuXi AppTec insisted that it neither owned, controlled nor was affiliated with any Chinese military or government entity. The company did not provide services to the Chinese military and was not linked to the defense industrial base or military-civil programs, the statement said.

The damage to WuXi AppTec is not likely to come from sanctions or export restrictions, as the company is not involved in US defense procurement.
A greater risk lies in the compliance reviews that could be triggered within the supply chains of its major clients. For example, if a multinational is conducting drug research funded by U.S. federal agencies such as the National Institutes of Health (NIH), its legal and compliance teams may be more cautious when awarding new contracts or could even redirect projects to suppliers that are not on the list.

Any increase in U.S. policy risk has the potential to undermine investor confidence in WuXi Apptec’s profit outlook. Its revenue from U.S. customers rose 34.3% in 2025 to 31.25 billion yuan ($4.61 billion), accounting for nearly 70% of its total turnover of 45.46 billion yuan.

At present, WuXi AppTec trades at a price-to-earnings ratio of about 15 times, below the roughly 23 times for its sister company WuXi Biologics, suggesting that investors have already priced in a significant level of policy uncertainty. Yet the company’s performance appears solid. Its order backlog at the end of the first quarter exceeded 59.7 billion yuan, a year-on-year rise of 23.6%. With the share price appearing to diverge from fundamentals, some investors may want to consider at this point whether too much downside risk is being factored in.

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The developer of medical devices is aiming to open up a commanding lead in the niche market for puncture and ablation robots, with the help of IPO proceeds

Key Takeaways:

• The company’s revenue stream amounts to a mere trickle for now, as its specialized instruments are only starting to be commercialized at scale
• True Health is highly dependent on a single customer that has consistently contributed nearly 90% of revenue

By Lee Shih Ta

The surgical robot changed how operations are carried out. Now a Chinese medical technology company wants to revolutionize the way needles are inserted to conduct biopsies or excise tumor tissue.

Guangdong True Health Medical Technology Development Co. Ltd. recently filed for a Hong Kong listing, seeking to raise money to develop and promote its range of robotic puncture tools.

While companies such as MicroPort MedBot (2252.HK) and Cornerstone Robotics focus on laparoscopic surgery, True Health has chosen a less-traveled path, using robotic systems to assist with micro incisions that require pinpoint accuracy. While the market is far smaller than for surgical systems, it could expand into a significant niche within China’s medical robotics industry.

True Health was founded in 2018 by an entrepreneur with experience in medical imaging and precision treatment. Zhang Haoren chose to specialize in the emerging field of percutaneous puncture, primarily used to diagnose and treat lung, liver, and kidney cancers, to help physicians avoid errors in accessing hard-to-reach lesions.

In 2023 the company moved its headquarters from Beijing to Hengqin, Guangdong, where it is closely aligned with the province’s plans to develop its healthcare industry. True Health’s TH-X MW microwave ablation robot subsequently became the first innovative medical device to be approved in Hengqin in the tightest regulatory category, Class Three, for instruments used in high-risk procedures.

According to the IPO application, True Health’s core products include that system, described as the world’s first image-guided microwave ablation robot, and China’s first domestically developed system for percutaneous puncture navigation.

Third-party data cited in the application found China’s market for percutaneous puncture robots was only worth about 40.3 million yuan ($5.9 million) in 2024 but was projected to reach 2.33 billion yuan by 2032, representing a compound annual growth rate of 66%.

According to China Insights Consultancy, True Health ranked first in China’s market for puncture and ablation robots by revenue from 2022 to 2024, with the sector’s biggest number of approved precision devices. Yet with such a small overall market, even the leading player still operates on a modest commercial scale.

The maker of incision equipment has only a trickle of income, with a revenue base smaller than many local clinics, but it needs to invest in R&D to expand its business. It generated revenue of 2.3 million yuan in 2023, falling to 1.79 million yuan in 2024. Over the same period, its net loss narrowed slightly from 95.54 million yuan to 92.16 million yuan. But turnover in the first half of 2025 totaled just 173,000 yuan, while losses came in at 56.73 million yuan. As its products are still being brought to market, incomings are erratic, as revenue recognition remains highly project based.

Concentrated clientele

The revenue pattern reflects a market in its early stages. It takes years for medical robots to gain regulatory approval, be procured by hospitals and then adopted by physicians. Large-scale commercialization has yet to truly begin in this case.

The company is also exceptionally reliant on a concentrated customer base. Its top five customers accounted for 100% of revenue in 2023, 2024 and the first half of 2025, while its largest client contributed nearly 90% of revenue.

The company said its products had been deployed across more than 20 provinces and nearly 100 medical institutions by the middle of last year, supporting more than 5,000 clinical procedures. For a puncture robotics market that is still in its infancy, this growing body of clinical data could become a competitive advantage over time.

More than 20 years ago, the company that developed the pioneering da Vinci system for minimally invasive surgery, Intuitive Surgical (ISRG.US), was also unprofitable when it went public. It went on to become the global leader in medical robotics through its installed systems, instruments and consumables, with a market value now exceeding $150 billion. But Intuitive Surgical was already pumping out many more millions of dollars in revenue at the time of its IPO than True Health is today.

The market for puncture robots is still much smaller than that for laparoscopic tools. China’s volume-based procurement system and controls on healthcare costs also pose a bigger operating challenge. True Health’s revenue base remains extremely small, its business model is unproven, and it has a long way to go before generating sustainable cash flow.

For investors searching for the next big opportunity in medical robotics, True Health may appeal as a potential early leader in puncture technology, if it can build out from its tiny revenue base.

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The Chinese biotech has added a major Pfizer collaboration to its growing roster of global deals, this time with a tighter commercial and profit-sharing partnership  

Key Takeaways:

• Co-commercialization deals like this are becoming a new pathway for Chinese drugmakers to realize their global ambitions
• Innovent is already riding a wave of earnings momentum, with revenues from existing products jumping more than 50% in the first quarter

By Molly Wen

Deal by deal, Innovent Biologics Inc. (1801.HK) is helping to write a new playbook for relationships between Chinese biotechs and Big Pharma, just as the trend for teaming up on new drugs is coming under closer scrutiny.

China’s drug sector has been buffeted in recent months by the risk of tighter restrictions on its international partnerships, after U.S. lawmakers voiced concerns about China’s increasing role in pharmaceutical supply chains and new drug pipelines.

Nevertheless, Innovent came out this month with another blockbuster contract to develop next-generation cancer drugs, adding to its web of cooperation arrangements with some of the top names in the global pharmaceutical business.

The Chinese biotech announced on May 29 it had agreed a global strategic collaboration with Pfizer Inc. (PFE.US) worth up to $10.5 billion. The news sent Innovent’s shares surging 11.36% on the day of the release and helped to lift the broader novel drug sector out of a months-long torpor.

The agreement covers 12 early-stage and new oncology research programs, including eight early-stage assets originated by Innovent and four discovery programs proposed by Pfizer. Leveraging its expertise in drug discovery and early testing, Innovent will advance all 12 programs through Phase One studies, after which Pfizer will take global responsibility for developing the drugs.

Pfizer agreed to pay Innovent $650 million upfront, with up to $9.85 billion more in milestone payments linked to progress in developing the drugs and getting them cleared for sale, for a total maximum value of $10.5 billion. In addition, Innovent stands to gain double-digit percentages of royalties on sales of each licensed product that gains approval.

The hybrid nature of the deal, with a more deeply integrated model of collaboratively developing and commercializing the assets, sets it apart from conventional licensing-out transactions.

Four key programs in the set will follow a co-commercialization (Co-Co) model, with the companies working together to make the drugs available for sale after clinical trials. The assets will be co-developed, sharing the costs, and then taken forward commercially on a joint basis in the United States and Europe, splitting the profits. Innovent will retain rights in Greater China. Another four programs grant Pfizer exclusive rights outside Greater China, while the remaining four provide Pfizer with exclusive global rights.

The tiered structure suggests that the partnership goes beyond a simple deal to monetize assets. Aside from the cash-flow boost from the upfront portion, Innovent will share profits in key overseas markets that could translate into substantial long-term income streams.

The Chinese company can also leverage Pfizer’s R&D and business infrastructure to accelerate the progress of its early-stage pipeline. Notably, the Pfizer deal marks Innovent’s second Co-Co agreement within a year, after it partnered with Japan’s Takeda Pharmaceutical (4502.T) last October over a cancer immunotherapy drug. The two parties agreed to jointly develop the bispecific antibody IBI363 globally and co-commercialize it in the U.S. market while sharing profits.

The biopharma industry has been innovating in its business structures as well as its drug design. Aside from license deals, it has come up with NewCo structures that spin off specific drugs into separate corporate entities to fast-track development. Now the Co-Co model, which enables biotechs to retain a bigger share of long-term value, is emerging as a new pathway for leading Chinese drugmakers to seek global expansion. Hengrui Pharmaceuticals (1276.HK; 600276.SH) has also joined Bristol Myers Squibb (BMY.US) in a strategic collaboration with a potential value of up to US$15.2 billion that incorporates a Co-Co framework. Under the agreement, the two companies will jointly advance 13 early-stage programs spanning oncology, hematology and immunology. Hengrui not only retains co-development rights for selected projects but may also work alongside its partner to commercialize products in the future.

Inflection point

Even as it has struck a series of major deals, Innovent has also delivered strong sales from its own products. That suggests its frequent overseas partnerships are not a forced sale of early-stage assets under funding pressure, but rather a strategic choice made from a position of strength. In 2025, Innovent posted its first full-year profit under International Financial Reporting Standards (IFRS), with net profit of 814 million yuan ($120 million). Total revenue rose 38.4% year on year to 13.04 billion yuan, while product revenue grew 44.6% to 11.90 billion yuan, marking a new stage of self-generated growth.

The earnings momentum has carried into 2026. In the first quarter, product revenue rose more than 50% to 3.8 billion yuan from the same period a year earlier, driven by the twin engines of cancer drugs and obesity treatments. Oncology sales were lifted by the rapid uptake of five therapies based on tyrosine kinase inhibitors that were included in China’s medical coverage program. Its broader portfolio, including Xinermei (mazdutide) and two drugs to lower cholesterol, also made solid contributions.

In recent years, Innovent has continued to expand its global footprint through multiple outbound licensing deals. The total potential value of its deals has exceeded $30 billion over the past year, while its core pipeline is moving more quickly into global multi-center clinical trials. Investors clearly have high hopes for Innovent’s future growth. The company currently trades at about 158 times earnings, more than double the 67 times for BeiGene Ltd. (6160.HK; 688235.SH), another leading Chinese drugmaker with global ambitions.

The $10.5 billion deal marks a key step in Innovent’s overseas expansion. But to maintain its elevated valuation, the company may need to go on to deliver commercial success and healthy profits in U.S. and European markets.

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The biotech enjoyed a standout Hong Kong share debut after hailing its novel anti-bacterial drug, now undergoing late-stage clinical tests, as a potential gamechanger

Key Takeaways:

• The TenNor Therapeutics IPO was oversubscribed more than 9,000 times and surged 179% in its first trading session
• The company remains firmly in the red, with cumulative losses exceeding 490 million yuan over the past three years

By Molly Wen

A Chinese biotech specializing in anti-bacterial drugs has pulled off a stellar market debut, as investors bet on the firm’s potentially powerful new therapy to combat stomach ulcers and gastric cancers.

The Hang Seng Healthcare Index fell more than 2% last week, but investors nevertheless flocked to newly listed shares in TenNor Therapeutics (Suzhou) Ltd.(6872.HK), which achieved the strongest first-day performance of any firm that has listed so far under Hong Kong’s special rules for pre-profit biotechs.

The company’s stock opened more than 98% higher and finished with a gain of 179% in the May 22 debut after an IPO marked by strong investor demand.

The offering of nearly 8.86 million shares was priced at HK$75.70 per share, with a lot size of 50, implying an entry threshold of about HK$3,823. The Hong Kong portion was oversubscribed by around 9,000 times, while the international placement achieved a subscription rate of 9.24 times. After expenses, the IPO is projected to raise net proceeds of about HK$598 million ($76 million), with CITIC Securities and ABCI Capital as joint sponsors.

Founded in 2013, TenNor Therapeutics is a clinical-stage biotech that is coming close to launching commercial products. While much of China’s innovative drug sector has crowded into oncology, TenNor has focused on anti-infective therapies through its multi-target conjugate technology. Its most keenly watched product is rifasutenizol (TNP-2198), a treatment for the infections that can lead to stomach ulcers and gastric cancers. The drug is the world’s only novel molecular candidate targeting the infectious agent, known as helicobacter pylori, to be developed since the bacterium was identified, the company said.

The bacterium is closely associated with multiple upper gastrointestinal diseases and is considered a leading cause of gastric cancer. According to a study cited in the prospectus, around 621 million people in China and 4.08 billion people globally were infected with the bacterium in 2024. The standard treatment is a four-part therapy including two types of antibiotics, a proton pump inhibitor to reduce stomach acid and a bismuth-based drug to inhibit the infection. Broad-spectrum antibiotics such as clarithromycin and metronidazole are widely used but rising resistance to those drugs is leading to treatment failures and relapses.

The company’s candidate drug, rifasutenizol, is designed to create a bonded mechanism combining rifamycin and nitroimidazole pharmacophores. The anti-bacterial drug would replace bismuth and clarithromycin to form a new triple therapy. Clinical studies have indicated it succeeds in clearing the infection at lower dosage rates than the conventional treatment, and with less risk of resistance. According to the prospectus, the product is expected to gain approval by the end of 2026 and carries significant market potential. Beyond the flagship product, TenNor is also working on investigational drugs targeting acute bacterial skin infections and infections associated with joint replacements.

Big bets on drug potential

TenNor Therapeutics has yet to commercialize any products and listed under Hong Kong’s Chapter 18A rules for companies lacking a revenue stream. The drug developer recorded annual net losses of 192 million yuan ($28 million), 146 million yuan and 153 million yuan from 2023 through 2025, driven by high R&D outlays amounting to 108 million yuan, 69.84 million yuan and 71.87 million yuan. By the end of last year, TenNor held cash and cash equivalents of 184 million yuan.

TenNor’s market appeal stems from its scientific credentials and strong capital backing, as well as from its promising pipeline. Its technological roots trace back to Cumbre, an infectious diseases biotech that was co-founded by award-winning biochemist Steven McKnight and celebrated Harvard microbiologist Rich Losick. TenNor founder Ma Zhenkun previously served as R&D head at Cumbre. TenNor brought the two prominent scientists on board as scientific advisors and secured a solid R&D basis during its Series A financing by allowing Cumbre to exchange core patented technologies and commercial agreements for preferred shares.

Before its IPO, TenNor raised more than 700 million yuan in seven funding rounds. Its investor roster includes prominent healthcare-focused funders such as Northern Light Venture Capital, GSR Ventures, New Horizon Capital and Suzhou GTJA. Pharmaceutical giant WuXi AppTec also participated through its affiliated funds. Wang Xiaodong, co-founder of BeiGene and a member of China’s National Academy of Sciences, serves as a scientific advisor and holds a personal 0.19% stake in TenNor.

TenNor’s IPO was also backed by prominent institutional investors. Five cornerstone investors, including AMR Action Fund, Hua Yuan International and Orient Asset Management (Hong Kong) collectively subscribed for around $29.8 million worth of shares. TenNor currently commands a market capitalization of about HK$10.3 billion, compared with HK$1.7 billion for Dawnrays Pharmaceutical (2348.HK), a profitable company focused on cephalosporin antibiotics. The gap suggests investors are assigning a hefty premium to the pioneer status of TenNor’s flagship drug. The longer term valuation will depend on the approval timeline for rifasutenizol, and how quicky the drug can penetrate the market and deliver on its promise.

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The company’s Sonrotoclax is the first newly approved BCL-2 inhibitor in the U.S. in nearly a decade, giving BeOne a potential new hit beyond its Zanubrutinib blood cancer therapy

Key Takeaways:

• BeOne Medicines’ newly approved Sonrotoclax could leverage the company’s large patient base for its Zanubrutinib blood cancer treatment
• The company recently raised its full-year revenue guidance to between 43.6 billion yuan and 45.2 billion yuan, while forecasting a gross margin in the high-80% range

By Molly Wen

For innovative drugmakers with relatively limited portfolios, the success of a single blockbuster therapy is often a key driver toward profitability. But when one product dominates for too long, investors may also begin to question the long-term stability of the company’s business, worried about overdependence on a single revenue source.

BeOne Medicines Ltd. (688235.SH; 6160.HK; ONC.US), formerly known as BeiGene, got a nice diversification shot in the arm in that regard last week, with the announcement that its internally developed next-generation highly selective BCL-2 inhibitor, Sonrotoclax, received accelerated approval in the U.S. The decision by the U.S. Food and Drug Administration (FDA) marks an important step in helping the company build a more comprehensive hematologic oncology portfolio.

According to BeOne’s announcement, the U.S. approved Sonrotoclax to treat adults with relapsed or refractory (R/R) mantle cell lymphoma (MCL) who have previously received at least two lines of systemic therapy, including a Bruton’s tyrosine kinase (BTK) inhibitor. The approval is the first for a new BCL-2 inhibitor in the U.S. in nearly a decade, the company said.

Sonrotoclax was previously approved in China this January for the treatment of R/R MCL, as well as for adults with chronic lymphocytic leukemia (CLL)/small lymphocytic lymphoma (SLL) who have previously received at least one systemic therapy, including a BTK inhibitor. The approvals mean BeOne has completed its BCL-2 rollout across the Chinese and U.S. markets within just six months.

Equally important, BCL-2 complements BeOne’s flagship BTK inhibitor, Zanubrutinib, in that both are used to treat hematologic malignancies. Patients treated with BTK inhibitors over the long term often eventually develop drug resistance. The BCL-2 pathway lies downstream of BTK resistance mechanisms, making Sonrotoclax potentially complementary to Zanubrutinib. That means Sonrotoclax could leverage BeOne’s large patient base for Zanubrutinib, boosting its physician and patient stickiness for the company’s therapies.

Despite those positive implications, market response to the latest U.S. approval was hardly a booster for BeOne’s stock. Between May 14 and May 18, the company’s Hong Kong-listed shares fell by a cumulative 6.8%, largely driven by weakness for innovative drug stocks and the broader market as well. The Hang Seng Index also moved lower, while the Hang Seng Innovative Drug Index fell 6.5% over that time, reflecting weak overall sector sentiment.

What’s more, Sonrotoclax’s positive clinical data and the likelihood for FDA approval were already widely anticipated and probably priced into the stock. In line with the old adage, many investors apparently decided to “sell on the-news.”

Another profitable quarter

Short-term share volatility aside, BeOne’s financials are currently at their strongest point in the company’s history. The company’s revenue rose 31% year-on-year to 10.54 billion yuan ($1.55 billion) in the first quarter, while it swung to a net profit of 1.61 billion yuan from a loss a year earlier, according to its latest financials released this month. The results extended the company’s positive momentum after it achieved its first full-year profitability in 2025.

The latest results showed that product revenue accounted for 98% of BeOne’s total in the first quarter, rising 29.3% year-on-year to 10.3 billion yuan. Within that, Zanubrutinib sales made up about three-quarters of the total, rising 33.5% to 7.6 billion yuan. From a geographic perspective, the U.S. remained Zanubrutinib’s primary growth engine, with first-quarter sales in the market rising 30.8% to 5.28 billion yuan, accounting for nearly 70% of the drug’s global total. The drug’s European sales posted even stronger growth, up 51.4% to 1.27 billion yuan. Meanwhile, the company’s other products also maintained solid momentum. Global sales of its PD-1 antibody Tislelizumab reached 1.43 billion yuan in the quarter, up 14.8%, while sales of products from licensed from U.S. peer Amgen (AMGN.US) totaled 989 million yuan.

The strong first-quarter performance led BeOne to raise its 2026 financial guidance. The company now expects its revenue this year to range between 43.6 billion yuan and 45.2 billion yuan, while its gross margin is expected to remain in the high-80% range. Its adjusted operating profit for the year is expected to reach between 10 billion yuan and 10.6 billion yuan.

Beyond its internally developed pipeline, BeOne is also expanding its portfolio through licensing agreements with outside partners. In one of the latest of those, the company signed an exclusive agreement with Huahui Health last month giving it global rights to HH160 (BON-110), a novel trispecific antibody targeting PD-1, VEGF-A and CTLA-4. The deal suggests that, taking advantage of its strong cash flow, BeOne is using this type of licensing deal to rapidly expand into next-generation immunotherapy targets.

BeOne currently trades at a price-to-earnings (P/E) ratio of about 66 times, significantly higher than the 46 times for domestic peer Hengrui Pharmaceuticals (600276.SH; 1276.HK). That seems to reflect stronger investor expectations for the company’s global platform capabilities and the long-term growth potential of its hematologic oncology portfolio centered around Zanubrutinib and Sonrotoclax. Whether such a lofty valuation is sustainable over the longer term will largely depend on whether Zanubrutinib can keep up its current momentum, or even exceed strong expectations for the therapy, and whether Sonrotoclax can quickly ramp up its sales following the recent approvals in China and the U.S.

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"To out-license drugs is a very handy and clever way for a win-win… but in terms of acquiring the businesses, that's going to be really tough." – Bradley Burgess

Key Takeaways:

• Chinese biopharma companies are transitioning from licensing Western medicines to out-licensing their own cutting-edge drugs
• Homegrown sportswear brands are cautiously expanding into Southeast Asia and beyond, though they face stiff competition and geopolitical hurdles

By Doug Young & Bradley Burgess

We're currently witnessing a fascinating shift in how Chinese enterprises interact with global markets. On one hand, foreign appetite is rapidly growing for cutting-edge medicines developed by Chinese life sciences startups — a stark reversal from the historical trend of Chinese firms solely licensing treatments from the West. At the same time, homegrown Chinese sportswear makers are taking baby steps onto the international stage, aiming to challenge entrenched global athletic giants.

While biopharma and athletic footwear might seem like entirely disconnected industries, they share a common thread: Chinese companies are no longer content to just serve their domestic market, and they're aggressively testing their ability to compete and do business globally.

We'll start with a look at the growing demand for advanced medicines developed in China by large foreign drugmakers. This process, known as out-licensing, represents the exact opposite of the older practice where Chinese companies would license drugs from foreign enterprises to sell at home.

In recent headlines, 3SBio (1530.HK) reported that its revenue nearly doubled last year. Most of those gains came from out-licensing payments related to a colorectal cancer treatment being developed with Pfizer (PFE.US). In another similar case, an entity established by Keymed Biosciences (2162.HK) to fast-track an immunotherapy drug was acquired by the U.S. giant Gilead Sciences (GILD.US) in March.

We believe Chinese companies are suddenly capable of producing their own cutting-edge drugs due to a confluence of three major factors. First is industrial policy. Beijing's approach toward the life sciences is heavily supportive, epitomized by the "Healthy China 2030" initiative. The U.S. could take a page from this playbook to strengthen its own pharmaceutical industrial policy. Second is the rapid pace of innovation. With a streamlined approval process and faster clinical trials, the creation of these drugs happens much quicker in China than in the U.S. Finally, there's the brain trust of returning experts. These individuals acquired significant industry knowledge working at top multinationals in the U.S. and have now returned home with the dream of making it big in their native country.

However, these out-licensing deals can be a double-edged sword. Much of the money earned comes in the form of one-time, non-recurring payments. A company might post huge income in one quarter, only to see it drop back to zero the next, largely because they're surrendering the rights to sell these drugs outside of China. Some might wonder why these startups don't commercialize the drugs overseas themselves. At present, they lack the commercial infrastructure, capital, and global network required. By out-licensing, they can focus entirely on innovating while tapping into the vastly superior business networks of multinationals.

While out-licensing remains a handy and smart win-win, outright acquisitions by foreign multinationals — like the Gilead purchase — will likely be heavily constrained by geopolitics. Covid was a wake-up call for the U.S. government, triggering "Operation Warp Speed" to develop a vaccine, with the sudden realization regarding domestic manufacturing vulnerabilities. Intellectual property and anything cutting-edge or proprietary consistently set off alarm bells these days. Politics will undoubtedly get in the way of sweeping foreign acquisitions, even if the market logic makes perfect sense.

Racing into Southeast Asia

Moving from the laboratory to the running track, we're seeing similar global ambitions from Chinese consumer brands. Xtep (1368.HK) is one of several homegrown sportswear makers expanding abroad to challenge industry behemoths like Nike (NKE.US), Adidas (ADSGn.DE) and Reebok. Xtep recently announced its entry into Malaysia, a top Southeast Asian market, with the opening of six stores. The company aims to boost its overseas revenue by 50% or more in each of the next three years.

Why are so many Chinese consumer companies targeting Southeast Asia first? We think it boils down to three simple points. First is the diaspora — culturally, Chinese companies feel most at home in the region. Second is geographic proximity. Third is market opportunity, as many claim the current stage of Southeast Asia mirrors China 10 years ago. Exposure to Chinese brands and thinking is simply much higher in that part of the world than in the West.

Yet, familiarity can also breed contempt. Consumers in Southeast Asian markets can occasionally be very anti-China due to political flare-ups, as seen in countries like Vietnam and the Philippines. Trust is also a major hurdle. Global legacy brands have built immense trust over decades and sponsor universally known athletes.

To win over agnostic and price-sensitive consumers, Chinese brands must demonstrate consistent quality and value. There are some cases where local companies are successfully leveraging Western names to build this trust. For example, Xtep owns the licensing rights in China to the popular Saucony running shoe brand. The Saucony stores opening in Shanghai are incredibly well-done, sometimes visually surpassing their U.S. counterparts, which effectively proves their quality on the ground. Similarly, Anta (2020.HK) owns Fila in China and has acquired Amer Sports (AS.US), which owns the premium Arc'teryx as well as the Wilson tennis brand.

Conversely, companies like Li Ning (2331.HK) might struggle globally because their brand is too heavily linked to China. While a hyper-nationalistic strategy plays well with domestic consumers, it doesn't translate outside of the country. For a company to truly go global, it needs to decouple from that hyper-nationalism. Ultimately, while geopolitical friction remains, both the biotech and athletic sectors show that China's ambitious shift to the global stage is well underway.

The biotech scored a strong debut on the Hong Kong stock market after launching a targeted “synthetic lethality” drug that can kill off mutated cancer cells

Key Takeaways:

• The company’s PARP inhibitor drug for advanced cancers was approved in China last year and is being covered by the public health insurance program
• With a big R&D budget, Impact Therapeutics remains deeply in the red and needed IPO cash to pump into its drug pipeline

By Molly Wen

As the battle against cancer enters an era of precision medicine, investors are starting to bet on a new type of drug that can exploit genetic weaknesses in tumor cells.

These “synthetic lethality” therapies are designed to work on mutated cells that have already lost one of the two protein pathways they use to keep growing. By inhibiting the second route, the drugs can wipe out cancer cells, leaving healthy tissue unharmed.

The Hong Kong stock market welcomed its first maker of these specialized anti-cancer drugs on May 13, when Impact Therapeutics Inc. (7630.HK) pulled off a stunning debut. Its shares doubled on the first day of trade, closing at HK$41.86, after a public offering that was oversubscribed by more than 2000 times.

Impact Therapeutics sold about 41.98 million shares at HK$20.1, pricing the offer at the top end of the indicative range, to deliver gross proceeds of about HK$844 million ($108 million) and net returns of about HK$759 million in an IPO jointly sponsored by Goldman Sachs and CICC.

Founded in 2009, the innovative drug company specializes in synthetic lethality techniques, targeting cancer cells that have already lost one of two ways to repair their DNA. When the drug blocks the back-up path, the tumor cell accumulates damage and eventually dies in a process known as PARP inhibition. Drugs designed as PARP inhibitors are now widely used to treat ovarian, breast and other cancers associated with mutations of the BRCA gene.

The company’s core product is senaparib, a self-developed PARP1/2 inhibitor approved for use in China in January 2025, according to the prospectus. The drug, which prevents enzymes from repairing cellular DNA, is the company’s first commercial product, aimed at patients with advanced ovarian cancer after a round of chemotherapy. Clinical data indicated senaparib reduced the risk of disease progression or death by 57% and could deliver benefits more widely for cancer patients whether they have the BRCA mutation or not.

The drug was added to China’s list of reimbursable drugs last December, opening the way for its wider adoption. Through a partnership with Huadong Medicine, senaparib has already reached more than 900 medical institutions across China. Beyond senaparib, the company’s pipeline includes 11 candidate drugs, including next-generation PARP1 selective inhibitors and ATR inhibitors, which also block DNA repair, that are in clinical development.

Star-studded stakeholders

As a biotech company that is only just starting to bring its drugs to market, Impact Therapeutics remains deeply in the red. According to the prospectus, the company generated revenue of 33.55 million yuan in 2024, mainly from a major out-licensing deal, and 38.25 million yuan in 2025, including 20.2 million yuan in sales after the senaparib launch.

The company posted annual losses of 255 million yuan and 296 million yuan over the same period, largely due to R&D spending amounting to 379 million yuan over the two years. Cash and cash equivalents stood at 259 million yuan by the end of 2025, enough to fund about a year of activities at the current burn rate and making an IPO increasingly urgent. About 51% of the IPO proceeds will go towards further developing and commercializing senaparib, while 31% are set to be invested in other key pipeline products. As capital is pumped into drug development, profitability remains a long way off.

The synthetic lethality market offers significant growth potential, according to a report cited in the prospectus. The study predicted the global market for the precision drugs would expand from $4.3 billion in 2024 to $8.7 billion by 2029, but competition within the arena is fierce. In the PARP inhibitor space, AstraZeneca’s olaparib and Hengrui Pharma’s fluzoparib already enjoy first-mover advantages. While senaparib differentiates itself with broader patient coverage, it still faces a stiff challenge to catch up in an increasingly crowded market.

Before going public, Impact Therapeutics completed multiple funding rounds backed by high-profile investors including Lilly Asia Ventures, Tencent, Junshi Biosciences and WuXi AppTec. The IPO also attracted six cornerstone investors with combined subscriptions of about $35.87 million. On top of support from existing shareholders such as Tencent and Lilly Asia Ventures, the move attracted public funds and state-backed investors including Ruiyuan Fund and Jiangbei New Area state-owned capital.

Based on the IPO pricing, Impact Therapeutics commands a market value of about HK$6.01 billion. Using 2025 revenue as a benchmark, the company is trading at a price-to-sales ratio of roughly 145 times — high even among Hong Kong’s listed biotechs. As senaparib sales ramp up this year through China’s reimbursement program, the company’s exceptionally high 95.9% gross margin will likely come under pressure from state-driven price cuts.

Against that backdrop, investors will be watching to see if Impact Therapeutics can deliver breakout revenue growth to justify its elevated valuation.

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Wecare Probiotics ranked third globally and first in Asia by probiotic raw powder production volume in 2025, even as large amounts of its capacity lay idle last year

Key Takeaways:

• Wecare Probiotics has filed to list in Hong Kong, reporting its overseas sales have grown steadily to contribute 40.2% of revenue last year
• The company has attracted a diverse group of investors, including industrial capital, state-backed funds and market-oriented investment institutions

By Molly Wen

Growing health consciousness among global consumers is providing a boost for probiotics, with China emerging as one of the world’s largest markets. Behind such familiar products as yogurt and supplements are a platoon of upstream manufacturers focused on things like strain research and production, providing the industry with the latest raw materials.

Now, a member of that upstream mix is aiming to give investors a taste of its business as Wecare Probiotics Co. Ltd., based in the East China city of Suzhou, filed last week for a Hong Kong IPO. Second-tier underwriter Haitong International is acting as the listing’s sole sponsor, indicating it’s likely to be mid-sized, probably raising less than $100 million.

Founded in 2013, Wecare develops and sells probiotic strains, which are naturally occurring microorganisms like bacteria and yeast that assist in digestion and fighting some diseases. Probiotics are often created in the fermenting process, and are found in foods like yogurt, sauerkraut and aged cheeses.

Wecare ranked third globally and first in Asia by probiotic raw powder production volume in 2025, according to third-party research in its listing document. Its products are mainly used in functional foods, dietary supplements, dairy products, agriculture and other sectors. The company generates most of its revenue from the sale of probiotic powder and also for processing such powder into probiotic formulations based on customer requirements.

Wecare’s core strength lies in its integrated capabilities combining product development and manufacturing. Leveraging its proprietary strain bank and supporting production capabilities, the company has been able to achieve mass production of probiotic powder with high viability and stability. According to the prospectus, the company has established production bases with intelligent manufacturing systems in its hometown of Suzhou, as well as in the city of Luohe in Central China’s Henan province. It has achieved viable cell counts exceeding 1 trillion CFU/g for multiple strains, while its core strains have viable cell retention rates of over 60% after 24 months of storage in ambient conditions.

Steady growth

Wecare has been growing steadily over the last three years, with its revenue rising from 496 million yuan ($72.5 million) in 2023 to 701 million yuan last year. Its “human health” segment is its main money spinner, with its share of total revenue continuing to increase. In 2025, probiotic powder and formulations under the segment generated approximately 647 million yuan, or 92.2% of the total. Revenue from the company’s traditional dairy division, its second largest segment, grew that year as well, but its contribution stood at just 2.5% of total revenue.

Geographically, China remains Wecare’s core market, although its revenue contribution has been gradually declining. Revenue from Greater China, which includes Mainland China, Hong Kong, Macao and Taiwan, rose from 335 million yuan in 2023 to 420 million yuan last year, though its share of total revenue fell from 67.6% to 59.8% over that time. Overseas sales have been growing rapidly, rising from 161 million yuan in 2023 to 282 million yuan in 2025, accounting for 40.2% of revenue last year.

Margin pressure

Despite its strong growth, Wecare’s financial report card also includes some potential red flags. Its profit declined to 65.21 million yuan last year from 79.61 million yuan in 2024, while its gross margin has also been trending downward, falling from 49.7% in 2023 to 47.5% in 2025. The company attributed the declines primarily to its newly built Suzhou production base being in a ramp-up phase, with capacity not yet fully utilized, resulting in higher fixed costs per unit.

The company plans to use its IPO proceeds to expand its capacity at the Suzhou plant over the next three years, and to strengthen its R&D capabilities and expand its strain bank. It expects that upon completion of the expansion, its annual production capacity for probiotic raw powder will increase by an additional 600 tons.

Such a big expansion might leave some scratching their heads, since Wecare already has an annual production capacity of 700 tons of probiotic raw powder, and only used 65.6% of that last year – meaning one-third of the capacity remained idle. Underutilization is even more apparent in its probiotic formula operation, with only 1,158 tons produced last year despite 5,484 tons of capacity, translating to a utilization rate of just 21.1%.

While the company’s expansion plan is ambitious, it also carries significant risks. If growth in the downstream dairy and dietary supplement markets falls short of expectations, or if its overseas expansion stalls, the addition of so much new capacity could be difficult to absorb.

Highly valued

Wecare has completed multiple funding rounds since its founding, attracting a diverse group of investors including industrial capital, state-backed funds and more market-oriented institutions. Its most recent round was in February this year, with Boyu Capital investing 110 million yuan at 37 yuan per share. Based on the company’s total share capital of about 106 million shares, the latest fundraising would value it at nearly 4 billion yuan, or just under $600 million.

No comparable probiotic raw material companies are currently listed in Hong Kong, though Shenzhen-listed Scitop Bio-tech (300858.SZ) has a relatively similar business model and trades at around 53 times earnings. Wecare’s valuation after its latest financing and its 2025 profit give it an implied price-to-earnings (P/E) ratio of about 61 times, significantly higher than Scitop’s.

While the probiotic industry is currently in a high-growth phase, fueled by rising interest in gut health and immune regulation, Wecare’s current valuation already seems to price in high growth expectations. Investors considering the stock should carefully assess whether the company’s aggressive buildup of new capacity, commercialization efficiency, and future profitability can support and justify such a lofty valuation.

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The leading Chinese chain of private eye hospitals is aiming to boost its brand visibility and widen its funding options, but will it be able to justify a juicy premium?

Key Takeaways:

• Stiff competition and price pressure in China have curbed revenue growth, prompting the company to target international eyecare markets
• Income from its overseas eye clinics rose around 16% last year, more than double the overall rate of revenue growth

By Molly Wen

After rapid growth, Chinese private hospital chains have been falling out of favor on equity markets as they compete for customers by cutting prices.

But the country’s leading private network of specialized eye hospitals is looking to reframe that narrative, with a move to raise its international profile and boost its overseas presence.

The board of Aier Eye Hospital Group Co. Ltd. (300015.SZ) voted on April 23 to pursue a listing on the main board of the Hong Kong Stock Exchange, subject to shareholder approval, a month after overseas media reported the Shenzhen-listed company was considering a secondary float.

The firm’s shares rose 5.57% the day after the boardroom vote, pushing the group’s market value back above 100 billion yuan ($14 billion).

In explaining its equity ambitions, the hospital chain said it was looking to broaden its access to international capital and support ongoing global expansion plans. But the company enjoys relatively strong cash flow and had previously played down the prospects for a Hong Kong listing.

At a shareholder meeting last May, Chairman Chen Bang said Aier Eye had no plans to launch H-shares, citing solid financing capacity and a lack of suitable overseas acquisition targets in the near term. The decision to press ahead with a Hong Kong listing appears to be less about meeting funding needs and more about changing market perceptions.

Aier Eye has grown into China’s leading private provider of ophthalmology services over the past decade, building a tiered network with the help of M&A. By the end of 2025, it operated 391 hospitals and 272 outpatient clinics in China, along with 179 overseas ophthalmology centers and clinics. Annual outpatient visits rose 11.52% to 18.89 million from the prior year, while the number of surgical cases handled by the group rose 5.77% to 1.68 million.

The group developed rapidly into an industry giant, with annual net profit rocketing from about 92 million yuan in 2009 to 743 million yuan in 2017, implying a compound annual growth rate of around 30%. Its share price soared to a peak of 42.49 yuan in July 2021, when the group’s market value approached 400 billion yuan and its price-to-earnings ratio exceeded 100 times.

In recent years, however, the pace has flagged. Revenues rose just 6.53% to 22.35 billion yuan in 2025, while net profit fell 8.88% to 3.24 billion yuan, weighed down by one-off items such as goodwill impairment. Excluding these factors, adjusted net profit edged up 1.36% to 3.14 billion yuan, pointing to stable underlying earnings. The new fiscal year has brought signs of recovery, as revenues rose 6.15% to nearly 6.40 billion yuan in the first quarter of 2026 from the year-earlier period, while net profit increased 12.46% to 1.18 billion yuan.

Overseas opportunity

While its core business is still growing, profits have been squeezed by intensifying competition, pricing pressure and rising costs. Domestic gross margin fell 1.22 percentage points to 47.26% in 2025, but the firm’s overseas gross margin enjoyed upward momentum, rising 0.58 percentage points to 46.17%.

The company’s overseas network of ophthalmology centers and clinics spans Hong Kong, Europe, the United States and Southeast Asia. Overseas revenue reached 3.06 billion yuan in 2025, up 16.47% year on year, with its share of total turnover rising to 13.68% from 12.51% in 2024. But healthcare services are not standardized consumer products. Aside from capital, success in scaling up the overseas business is subject to various factors, including the available medical workforce, local regulatory frameworks and health insurance coverage.

Aier Eye’s Shenzhen-traded stock has fallen around 70% from its peak, hit by a broader contraction in mainland shares, the firm’s slowing growth and negative headlines around medical services. A Hong Kong launch at this point could prove a double-edged sword. On the plus side, a Hong Kong presence could enhance the group’s ability to fund its overseas expansion and help facilitate cross-border M&A. The visibility could boost the brand and help forge partnerships with physicians. But on the debit side, healthcare service providers in Hong Kong typically trade at lower valuations than their peers on mainland markets. If the Hong Kong issuance is priced at a meaningful discount, investors may reassess the premium attached to the mainland shares.

C-MER Medical (3309.HK) serves as a comparison. The Hong Kong-listed ophthalmology chain trades at around 15 times earnings, compared with about 30 times for Aier Eye, whose revenue and profit are more than 10 times that of C-MER Medical. Even so, Aier Eye would need to prove that its overseas expansion will accelerate revenue growth and contribute consistently to the bottom line to justify a significantly bigger premium.

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The provider of healthcare data and tools is poised to pass the breakeven point, helped by rising AI uptake, but the outlook for sustained profits remains uncertain

Key Takeaways:

• The company says it expects to post a net profit ranging from around $6 million to $8 million for its financial year to the end of March
• Yidu Tech’s AI tools are being adopted into medical workflows, with some client hospitals reported to use them nearly 1,000 times a day

By Lee Shih Ta

For years, medical AI has generated plenty of excitement but has struggled to show it can make money. That situation may be starting to change, as one Chinese provider of healthcare technology prepares to mark an earnings milestone.

Yidu Tech Inc. (2158.HK) announced on April 20 it expects to post the first annual profit in its 11-year history, potentially marking an inflection point for the broader AI-powered healthcare sector.

The supplier of big data and tech solutions for the medical sector projected a net profit of between 41 million yuan and 56 million yuan ($6 million and $8.2 million) for its financial year to the end of March, rebounding from a loss of around 118 million yuan in the previous year.

In explaining the turnaround, the company cited a surge in new orders as it integrates AI into its products, driving higher gross margins, as well as better operating efficiency and economies of scale.

It was clear from Yidu Tech’s half-year earnings that the firm was heading towards breakeven. Revenues for the six months to end-September rose 8.7% to 358 million yuan, reversing a contraction in the year-earlier period. Gross margin rose to 37.4%.  from 35.6% while operating losses narrowed by 71% to 15.71 million yuan and net losses shrank 72% to 15.76 million yuan.

Those interim results showed that growth was increasingly being driven by application-based solutions for hospitals and payment systems, rather than pharmaceutical services.

Half-year revenue from the company’s big data platform and solutions grew 14.6% year on year, while income from the health management segment jumped 30.3%. In contrast, life sciences solutions for pharmaceutical companies slipped 4.4%. In terms of the revenue mix, the big data platform business remains the largest contributor to the top line.

As the AI momentum shifts from large models to real-world deployment, investors are increasingly focused on whether the technology can be embedded into workflows to generate returns. In healthcare, that would mean integrating artificial intelligence into clinical care, research or payment systems.

Few Chinese AI healthcare companies have so far crossed the profit threshold. For example, iFlytek Healthcare (2506.HK) focuses on primary care and voice interaction scenarios. It has expanded rapidly through standardized tools yet still reported a loss of 64.79 million yuan in 2025. Airdoc Technology (2251.HK) concentrates on single-point applications such as retinal image recognition with a relatively clear but limited business model, leaving it with a loss of 24.97 million yuan last year.

Yidu Tech has taken a different path. In its early stages, the company developed medical platforms and disease-specific databases, building a large pool of structured data and a wide base of hospital clients. More recently it has shifted from simply providing information to participating in healthcare decisions through products such as a clinical Copilot and an evidence-based AI agent.

These tools appear to be finding their way into clinical workflows, according to usage data contained in the half-year earnings report, with some hospitals reported to be accessing them nearly 1,000 times a day. Such high-frequency uptake could be the key to generating stable returns from the business of AI-powered healthcare.

Meanwhile, the company has demonstrated scalability in serving more than 10,000 medical institutions and partnering with over 100 top-tier hospitals. However, a correlation between wide take-up and monetary returns has yet to be clearly established.

Uncertain outlook

Revenue growth remains in the single digits, with no clear sign of acceleration. Based on the outline figures for full year, it is hard to determine how sustainable the profits will be. Moreover, the adoption of healthcare AI is highly dependent on hospital procurement cycles and supportive government policies, affecting the pace and scope of expansion.

The company could still be in a transitional stage in which its business model is taking shape but remains unproven. Yidu Tech’s earnings breakthrough shows that AI healthcare can be monetized in specific scenarios, but it may not be sustainable or replicated across the whole sector.

Still, the profit projection lifted the company’s shares. After the announcement, the stock rose 3.8% to close at HK$6.3, for a year-to-date gain of 18.4%. Yidu Tech is trading at a price-to-sales ratio of about 7.5 times, broadly in line with iFlytek Healthcare at around 8 times and Airdoc Technology at about 6 times. This suggests investors are still basing their valuation on revenue scale and growth potential, rather than profitability.

If Yidu Tech can stay in the black over the next few quarters and accelerate its revenue growth, the stock may have room to rise. But if profits falter, the valuation may have already peaked out.

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A company set up to develop Hengrui Pharma’s weight-loss drugs has made a strong debut on the U.S. equity market, building confidence in the “NewCo” business model

Key Takeaways:

• Hengrui’s diluted stake in the hived-off company, Kailera Therapeutics, has reached a value of about $300 million after the stock’s debut
• The Kailera IPO comes a month after another NewCo success story - the lucrative sale of a firm hived off from drug developer Keymed

By Molly Wen

When Chinese drugmakers began spinning off promising pipelines into standalone companies, they faced market concern and skepticism. The strategy was considered an unproven and potentially risky way to monetize their clinical assets.

But the attitude towards these so-called NewCos - corporate vehicles housing specific drugs under development - has brightened this year after one of the Chinese spin-offs was bought out by a multinational, delivering a big payoff for the original developer.

And now another leading Chinese pharmaceutical firm, Jiangsu Hengrui Pharmaceuticals Co. Ltd. (1276.HK; 600276.SH), has provided further evidence to validate the NewCo model. A company with rights to a portfolio of weight-loss drugs incubated by Hengrui, Kailera Therapeutics (KLRA.US), has just made a strong trading debut on the Nasdaq.

The newly listed firm was set up as a corporate wrapper for Hengrui Pharma’s GLP-1 assets, with shareholders including Bain Capital Life Sciences, Atlas Venture, RTW Investments and Lyra Capital, along with other specialized investment institutions. The Kailera share price surged about 63% on its first U.S. trading day, offering a windfall opportunity for its stakeholders and backers.

It was the second NewCo success story in a matter of months, after a company set up by Keymed Biosciences (2162.HK) to fast-track an immunotherapy drug was acquired by Gilead Sciences (GILD.US) in March, delivering a healthy investment return.

Hengrui’s NewCo experiment began in 2024, when Kailera - originally named Hercules - was founded and acquired global rights outside Greater China for three Hengrui GLP-1 drug candidates. Those assets include ribupatide (HRS953), a GLP-1/GIP dual agonist, the oral small-molecule GLP-1 receptor agonist HRS-7535, and the triple agonist HRS-4729. Hengrui received an upfront payment and technology transfer fees totaling $110 million, as well as a stake of around 19.9% in the new entity, along with potential milestone income of up to $6 billion.

Through the deal, Hengrui Pharma enjoyed a swift injection of cash while retaining a link to the drugs’ ongoing prospects through its Kailera stake. Even though Hengrui’s shareholding was diluted to about 9.8%, the value of its stake has climbed to around $300 million based on Kailera’s first-day closing price.

Backed by prominent names in venture capital, the newly formed Kailera moved swiftly into fund-raising mode, completing a $400 million Series A round in October 2024. In July 2025, Hengrui and Kailera jointly announced positive results from a Phase Three Chinese trial for the ribupatide anti-obesity injection. In October of the same year, Kailera completed another $600 million Series B financing. The company then went public in April, raising $625 million in a Nasdaq IPO — the largest listing to date by a Chinese pharmaceutical company using the NewCo model.

Kailera has achieved a relatively high valuation on the back of its weight-loss assets. Its core product, ribupatide, has entered Phase Three overseas trials for obesity, while two of its oral GLP-1 drugs are also due to enter global testing this year. Proceeds from the IPO will be used to advance those pipelines, positioning the company as a direct rival to global giants such as Eli Lilly and Novo Nordisk.

After Kailera’s IPO, Morgan Stanley maintained an “overweight” rating on Hengrui Pharma, citing the potential to monetize the GLP-1 portfolio through rising equity value, milestone payments and royalties, generating reliable cash flow.

Steady income stream

Hengrui has deployed the NewCo structure more than once. A similar model was used in September 2025 for overseas rights to a medication to treat a heart muscle condition. The cardiac myosin inhibitor HRS-1893 was licensed to Braveheart Bio, a company backed by venture capital firms Forbion and OrbiMed. The deal included an upfront payment and equity consideration totaling $65 million, with a potential total value of up to $1.09 billion.

Hengrui struck five overseas licensing deals last year worth 3.39 billion yuan ($500 million), a year-on-year rise of nearly 26%, establishing a new growth engine as it shifts from supplying generic drugs to pioneering new treatments. The company’s revenues rose 13% in 2025 to 31.63 billion yuan, while net profit increased almost 22% to a post-listing high of 7.71 billion yuan. Revenue from innovative drugs jumped 26% to 16.34 billion yuan, accounting for around 58% of total pharmaceutical sales and surpassing income from generics.

However, the NewCo model takes Hengrui only part of the way to international status and commercial success. While such tactics have helped to unlock pipeline value ahead of product delivery, the portfolio still lacks drugs with blockbuster sales, capping Hengrui’s equity market value.

The firm trades at a price-to-earnings ratio of around 53 times, while fellow drug developer BeiGene (6160.HK; 688235.SH; ONC.US) commands an elevated multiple of 132 times, despite only pulling out of the red last year with a profit just one fifth the size of Hengrui’s bottom line.

For now, investors are granting a bigger premium to BeiGene’s business potential. Converting its strong R&D pipeline into commercially successful and globally competitive products will be a key challenge for Hengrui going forward.

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The supplier of services for primary healthcare providers has applied for a Hong Kong IPO, reporting strong profit growth last year on non-operational factors

Key Takeaways:

• Good Doctor Cloud Healthcare has applied to list in Hong Kong, reporting solid revenue growth but declining gross margins over the last three years
• The provider of services to hospitals, clinics and pharmacies saw its profit surge 43% last year, primarily due to non-operational changes in the value of financial instruments

By Bai Xin Rui

China has gone from a growing to an aging society in the space of just a few decades, opening a door to big demand for companies that can provide medical care and medicines for adults and the elderly. Good Doctor Cloud Healthcare & Technology Group Co. Ltd. sees an opportunity in that space, and is seizing on Hong Kong’s current hot IPO market to woo investors with its listing application filed this month. While the prospectus shows the company’s top line continues to grow, that growth is coming at the cost of shrinking profitability in an industry famous for its thin margins.

Good Doctor Cloud Healthcare started out in 2016 with a founding mission of addressing the pain point of inadequate clinical testing capabilities within primary healthcare institutions. It later gradually expanded into other businesses, addressing issues such as a lack of digitalization in the primary healthcare industry, weak diagnostic and treatment capabilities, and inefficient pharmaceutical supply chains. These three areas eventually evolved into the company's core business segments.

The company’s largest shareholder is currently Sichuan Jianengda Investment, holding 32.79% of its equity. Sichuan Jianengda is, in turn, owned 60% by Geng Funeng and 40% by his younger brother, Geng Fuchang. The elder Geng founded the Good Doctor brand and possesses 40 years of experience in China's primary healthcare market. His experience includes extensive expertise in pharmaceutical R&D, pharmaceutical industry operations, pharmaceutical commerce and team management.

Benefiting from aging population

The aging of China’s population, combined with a concurrent rise in chronic diseases, has made primary healthcare increasingly important within China's medical system. Primary healthcare in China typically takes place at healthcare institutions, as well as in pharmacies. Such institutions run a wide range in China, often based on local wealth levels, covering outpatient departments at hospitals, as well as community and township healthcare centers, village health stations and clinics. Pharmacies are classified by business model and scale, chiefly encompassing large chains, typically with 500 or more outlets, small and medium-sized chains with fewer than 500 outlets, and independent stores. Primary healthcare institutions account for 95.2% of the total medical institutions in China.

Good Doctor Cloud Healthcare is playing into a market with big potential. Within China’s total healthcare market, direct pharmaceutical sales to primary healthcare outlets – one of the company’s main businesses – expanded from 7 billion yuan ($1 billion) in 2018 to 20.6 billion yuan in 2024, representing 19.8% annual growth, according to third-party market data in the company’s prospectus. As the population ages and demand for healthcare and medicine rises, the market is expected to reach 63.8 billion yuan by 2030, equating to an accelerated 20.7% annual growth rate over the next four years.

A significant barrier to entry for the companies in the pharmaceutical supply chain is strict requirements for temperature control, which often requires strict cold chain capabilities. That limitation has led to a relatively concentrated landscape in China’s direct pharmaceutical supply market. The top five players hold a combined market share of 53.1%. Good Doctor Cloud Healthcare is one of those with 11.3% of the market in 2024, making it the second-largest player, trailing the leader by just 3.1 percentage points.

The company’s revenue reached 3.82 billion yuan last year, up 17.1% year-on-year, benefiting from growth in its direct pharmaceutical supply and distribution services. But its gross profit rose by a far slower 1.6% to 870 million yuan. Its profit for the year jumped 43% year-on-year to 54.1 million yuan. But that was mostly due to a substantial decrease in fair value change losses on equity share redemption liabilities in 2025, which fell 72.5% to 11.07 million yuan last year from to 40.22 million yuan in 2024. In other words, the improvement was mostly due to non-cash factors unrelated to the company’s operations.

Revenue rises, gross profit falls for second-largest business

It’s worth noting that Good Doctor Cloud Healthcare's gross margins have been ailing lately, showing a steady decline over the past three years from 29.9% in 2023 to 22.9% last year. The drop owes mostly to a slide in margins for its pharmaceutical direct supply and distribution services.

Its integrated diagnosis and treatment solutions segment was also problematic, even though Good Doctor Cloud Healthcare is the market leader by revenue in that area. Its revenue for the segment rose 8.7% year-on-year to 730 million yuan last year. But its gross margin plummeted by 14.1 percentage points to 31.9%. That collapse caused the segment’s gross profit to decrease by 24.6% to 231 million yuan. The company attributed the steep decline to the impact of launching solution portfolios with relatively lower gross margins to specific customers after taking over customer relationships from one of its top customers. That customer, Sichuan Medical Trade, is a related company that counts Geng Yuefei, the son of founder Geng Funeng, as one of its minority investors.

Good Doctor Cloud Healthcare's revenue is also subject to seasonal fluctuations. A case in point is respiratory system medications, whose demand rises notably each year during cold and flu season. Other seasonal diseases give rise to similar fluctuating demand. Additionally, some customers arrange to purchase more goods in advance due to the potential for poor road conditions in many parts of rural China during extreme winter weather.

Comparable companies primarily focused on the retail pharmaceutical sector, such as Sinopharm (1099.HK) and China Resources Pharmaceutical (3320.HK), currently trade at relatively low price-to-earnings (P/E) ratios of 7.3 times and 8.3 times their forecast profits for 2026, respectively. That shows valuations for this group aren’t particularly high, largely because the business is relatively low margin with little room for differentiation among major players.

By comparison, investors tend to prefer more highly differentiated biotech pharmaceutical companies and AI stocks involved in drug research and development. That lack of appeal, underscored by its lack of big-name investors, means Good Doctor Cloud Healthcare is likely to command a similarly low valuation, and will almost certainly need to price its stock at a forecast P/E ratio below 10 times to attract investors.

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Ammunition Life-tech has commercially launched five diagnostic tests for various types of cancer but could struggle to win over investors at an elevated valuation

Key Takeaways:

• The company’s combined losses over the past two years were nearly four times its revenues, as R&D and admin costs outpaced income
• The company’s valuation after its last funding round in January, implying a price-to-sales ratio of 147 times, could be hard to reach in current conditions

By Molly Wen

Screening for early signs of cancer has long been regarded as a potentially large and lucrative business. But companies in the sector face high barriers to entry, heavy costs and long development cycles before they can turn that promise into hard cash.

The rewards for success could be substantial - the global market for molecular testing for cancer has been projected to reach 405 billion yuan ($59 billion) by 2033. But for now, some Chinese companies are having a hard time in the equity markets as they struggle to close the gap between ambition and achievement.

Against this backdrop, a company specializing in detecting some of the most lethal forms of cancer is making a second attempt to list on the Hong Kong Stock Exchange, filing a revised application on April 7.

Although its net losses widened by more than a fifth last year, Wuhan Ammunition Life-tech Co. Ltd. resubmitted its paperwork just days after its initial IPO filing lapsed, moving swiftly as the Hong Kong stock market faced a downward correction. CCB International and BOCOM International were named as joint IPO sponsors.

Founded in 2015, the company focuses on methylation technologies to detect cancer biomarkers in tissue or blood samples. It has brought five products to the market, including two core tests to detect cancers of the liver and urethra.

The first of those, IHepcomf, is the world’s first such test using a real-time quantitative polymerase chain reaction, the company said. The other core product, IUrisure, tests for cancer using urine samples.

The other three approved products screen for colorectal cancer and esophageal cancer. Ammunition Life-tech has another four candidate tests in developmenttargeting lung, gastric and endometrial cancers.

According to the prospectus, its revenues more than doubled to 15.42 million yuan in 2025, driven by newly approved products, while its gross margin surged to about 78% from 56.9% in the previous year.

The new tests for liver cancer and esophageal cancer were both approved for sale in January 2025, contributing a combined 44.1% of total revenue. IColohunter, a blood test to detect early-stage colorectal cancer that was approved in September 2024, contributed another 18.4%. However, revenue from IColocomf, a stool test for colorectal cancer, fell 12.4% to 4.58 million yuan.

Despite the overall revenue surge, Ammunition Life-tech’s net losses widened by 26.8% in 2025 to 48.98 million yuan. Combined losses for 2024 and 2025 reached nearly 88 million yuan, almost four times the revenue of 22.66 million yuan over the same period, as the company burned through cash to expedite growth. R&D expenses rose nearly 42% in 2025 to just under 21.30 million yuan, while general and administrative expenses surged 247% to 20.05 million yuan.

These included 8.5 million yuan in IPO-related fees and 6.4 million yuan in share-based compensation. The company also warned in its prospectus that high R&D expenses and other costs will keep it stuck in the red in 2026.

Cooling sentiment

As Ammunition Life-tech makes its bid for investor funding, the sector in which it operates has had a troubled relationship with the capital markets over the last two years. New Horizon Health (6606.HK), formerly an industry benchmark with a market value of HK$41 billion ($5 billion) at its peak, has been suspended from trading since March 2024 over allegations of financial misconduct and now faces the risk of delisting. Meanwhile, Genetron Health accumulated losses exceeding 5.5 billion yuan from 2018 to 2022 and was taken private and delisted in 2024. Burning Rock Biotech (BNR.US) was slapped with a Nasdaq delisting warning after its share price stayed below $1 for an extended period. The firm cut about 18% of its workforce in 2024 to control costs and carried out a 1-for-10 reverse stock split, nudging its share price above $1 to narrowly maintain its listing.

In this context, Ammunition Life-tech is set to face a stiff test of investor confidence, with annual revenue of just 15.42 million yuan.

The risk of a concentrated customer base has also been rising year by year, with much of the firm’s business coming from related parties. Income from its top five customers rose from 69.3% to 76.6% of total revenue between 2023 and 2025. Its biggest client in 2024 was Wuhan Ainuo Medical Laboratory, a company owned by Ammunition Life-tech’s founder Zhang Lianglu. Ainuo contributed around 52% of the company’s revenue that year, or 3.77 million yuan.

Although Ainuo’s contribution dropped to 17.2% in 2025, the largest customer that year, KingMed Diagnostics, is linked through one of its major stakeholders, Liang Yaoming, who also controls Suzhou Jinhe, a shareholder in Ammunition Life-tech. This suggests that a substantial portion of the company’s revenue still depends on related parties or customers with equity ties.

Ammunition Life-tech was valued at around 2.2 billion yuan in its last funding round in January 2026, implying a price-to-sales ratio of 147 times based on its 2025 revenue of 15.42 million yuan. By comparison, New Horizon Health’s peak market value before its trading suspension translated into a price-to-sales ratio of about 20 times. An elevated multiple for Ammunition Life-tech would be a hard sell during a broader downturn in the cancer detection sector. It remains to be seen whether a company with no clear profit timeline can find favor with investors under these conditions.

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The Chinese drugmaker delivered sharply higher earnings, thanks to a bumper deal with Pfizer to develop a new cancer drug, but its older products came under pressure

Key Takeaways:

• 3SBio’s revenues jumped 94% to $2.58 billion in 2025, boosted by more than $1 billion in early payments from Pfizer
• However, income from core sales and services slipped 9.3%, leaving investors torn between bullish and bearish reactions

By Molly Wen

For many Hong Kong-listed drugmakers, upfront payments from international licensing deals can deliver a financial shot in the arm, boosting earnings.

But the gains from these high-profile partnerships can sometimes be short-lived. A truer test of a company’s financial health may lie in the underlying growth of its products, as illustrated by the latest annual results from 3SBio Inc. (1530.HK).

Beneath the impressive headline figures, which were lifted by a blockbuster rights deal with pharmaceutical giant Pfizer (PFE.US), the Chinese drugmaker’s baseline sales slipped back, leaving investors in two minds about how to react.

3SBio’s revenues surged 94.3% to 17.69 billion yuan ($2.58 billion) in 2025 from the prior year, while net profit quadrupled to 8.48 billion yuan, driven by about 9.43 billion yuan in fees related to Pfizer’s purchase of international rights to a cancer drug under development. With up to $4.8 billion in additional milestone payments yet to be realized from that deal, the outlook seems bright. But for now, if the licensing windfall is excluded from 2025 earnings, income from products and services fell 9.3% to about 8.27 billion yuan.

Behind that core figure is a growing competitive challenge for 3SBio’s established products, including a therapy to offset the effects of chemotherapy, and an erosion of market share.

The key revenue pillar, an injection to treat low platelet counts in patients with thrombocytopenia, is under pressure from oral alternatives that have been included in China’s centralized drug procurement, triggering deep price cuts. The market share in mainland China for TPIAO, 3SBio’s injectable drug, fell 6.2 percentage points last year to 60.4%.

Meanwhile, 3SBio’s subsidiary focused on developing novel drugs, Sunshine Guojian, has also seen sales of its proprietary products drop. Annual revenues fell to 912 million yuan, making up just 21.71% of total revenue.

More specifically, its flagship product used to treat autoimmune disorders is also slipping. The drug, Yisaipu, has fallen to 23.35% of the TNF inhibitor market, trailing behind anti-inflammatory drugs based on adalimumab that command a 48.83% share. Sales of the breast cancer drug Cipterbin, an HER2 monoclonal antibody, also fell in 2025, mainly due to the rise of HER2 antibody-drug conjugates (ADCs). Meanwhile, the company partnered with Duality Biotherapeutics (9606.HK) in January 2025 to develop an HER2 ADC, suggesting it regards Cipterbin as a legacy drug that is on its way out.

Investor attitudes toward 3SBio have swung between up- and downbeat, driving share-price volatility. Ahead of the results, optimism prevailed, sending the stock 10.41% higher on March 27. After the earnings came out on March 30, the price fell 6.75% in the next session. The swings continued, with an 11.84% rebound on April 1. The company’s market value currently stands at around HK$64.4 billion, reflecting bullish and bearish views on its medium- to long-term outlook.

Cash buffer

The partnership with Pfizer has beefed up 3SBio’s finances. The company held cash reserves of 12.18 billion yuan at the end of last year, with an interest-bearing debt ratio of just 9.8%. At that point, the drugmaker had more than 20 drug pipelines on the go, with annual R&D spending reaching 1.52 billion yuan, a year-on-year rise of 14.6%. Three new therapeutic agents - envafolimab, eltrombopag and roxadustat - were approved for market launch last year, aimed at platelet disorders, cancer and anemia. In addition, new drug applications have been filed for candidate treatments for gout, atopic dermatitis and macular disorders, which could over time supplement the company’s earnings.

Meanwhile, the collaboration with Pfizer is gradually translating into more predictable milestone income. In January, Pfizer initiated global Phase Three trials of the PD-1/VEGF bispecific antibody as a treatment for colorectal cancer and enrolled the first patient. Within the year, it also plans to launch global Phase Three trials across multiple indications, including non-small cell lung cancer, endometrial cancer and urothelial carcinoma. The total potential milestone payments for 3SBio, which originated the drug, could reach $4.8 billion.

Meanwhile, two other segments have become important revenue streams for 3SBio beyond its core business.

A subsidiary specializing in hair-loss and obesity treatments, Mandi International, brought in 743 million yuan in the first half of 2025, supported by its 71% market share for the alopecia treatment minoxidil. The unit, which is in the process of a spin-off listing, continues to generate stable cash flow.

In addition, contract drug development and manufacturing services delivered 263 million yuan of revenues last year, up 46.3%.

3SBio is trading at a price-to-earnings ratio of about 7 times, compared with around 26 times for CSPC Pharmaceutical Group (1093.HK), another established drugmaker pivoting toward innovative medicines. Investors may not yet have fully factored in the potential benefits of the Pfizer partnership, with the late-stage trials and associated payment milestones. Any upside in 3SBio’s valuation will depend on a recovery in core product sales and the progress of its candidate therapies, as well as the clinical trials for its drug collaboration with Pfizer.

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The Chinese biotech set up a separate “NewCo” company for its autoimmune drug, beating the likely proceeds from a conventional out-licensing deal

Key Takeaways:

• International drug rights were transferred to the new U.S.-based entity for an upfront fee and equity stake back in 2024
• The independent firm is now being sold on to Gilead Sciences, delivering a windfall profit for Keymed on top of rising product revenues

By Molly Wen

Less than two years ago, a Chinese biotech hived off an experimental immunotherapy drug into a standalone company to fast-track the product’s progress. That decision is now set to deliver a substantial payoff.

Keymed Biosciences Inc. (2162.HK) scored its success through a so-called NewCo, a firm set up overseas for the express purpose of monetizing a clinical asset. This approach has become a key but controversial route for globalizing China’s promising drug pipelines, forming one strand of a wave of outbound deals that exceeded $60 billion in the first quarter of this year alone.

The drug at the center of this latest transaction is designed to reset the immune system to stop the body attacking healthy cells. Keymed had transferred rights to the asset into a separate entity, Ouro Medicines, in November 2024, retaining a 15% stake. In late March, pharmaceutical multinational Gilead Sciences (GILD.US) agreed to buy the U.S.-incorporated company, marking the first complete NewCo cycle from set-up to exit by a Chinese drugmaker.

Keymed said in a statement that Ouro Medicines would change hands for up to $2.175 billion, including an upfront payment of $1.675 billion and potential milestone payments of up to $500 million.

Based on its stake, the Chinese biotech is in line for about $250 million upfront and as much as $70 million in milestone payments, for maximum proceeds of roughly $320 million. Under the deal, Keymed will relinquish its equity interest in Ouro Medicines but will retain rights to royalties on sales of the candidate drug, CM336/OM336.

When Ouro Medicines was set up, Keymed granted the company exclusive rights to develop, produce and sell its immunotherapy drug outside Greater China, for $16 million upfront and additional near-term payments. From start to finish, Ouro Medicines will have existed for only about 16 months.

The NewCo method differs from standard licensing models in that overseas rights to drug pipelines are granted to a new company led by international capital and operating teams. The original developer of the assets gets an equity stake in return. The new vehicle can then concentrate its entire resources on developing a target drug, avoiding dilution of effort.

The originators rarely get big upfront sums, but they keep a stake in their discovery and can participate to some extent in decision-making. In the case of Ouro Medicines, Keymed got a cash payment from the initial transaction and ultimately exceeded the likely returns from a standard licensing deal after the Gilead acquisition boosted its equity value.

The core asset of Ouro Medicines is a bispecific T-cell engager (TCE) targeting BCMA and CD3 antigens that Keymed developed independently. It works by recruiting T cells to selectively kill diseased cells and is currently undergoing Phase One and Two clinical trials as a treatment for primary light-chain amyloidosis, a bone marrow disorder, and multiple myeloma. The U.S. Food and Drug Administration (FDA) has granted the therapy Fast Track and Orphan Drug status. Meanwhile, Gilead’s Chief Medical Officer Dietmar Berger described the therapy as a differentiated approach with the potential to offer long-lasting control of autoimmune diseases.

Market inroads

Keymed marked its 10^th anniversary in 2025 and made a leap forward commercially. Annual results issued on March 26 show that revenues rose 67% in 2025 to around 720 million yuan ($105 million), including about 315 million yuan in product sales and 402 million yuan from external licensing and collaboration arrangements.

Stapokibart, the company’s monoclonal antibody to treat inflammatory conditions, hit the market in 2025 and has been fully included from this year in China’s medical coverage scheme for sufferers of moderate-to-severe atopic dermatitis, chronic rhinosinusitis and seasonal allergic rhinitis. The product is China’s first such drug to have been domestically developed and is now set for a sales push, having earned 315 million yuan even before it was accepted into the national drug reimbursement list.

Still, Keymed’s net loss edged up 1% to 523 million yuan in 2025, mainly due to increased sales costs, while R&D expenses fell 2% to approximately 720 million yuan. The company has more than 50 drug projects underway, with a fifth of those already in clinical stages, including five bispecific antibodies and two antibody-drug conjugates (ADCs).

The company held cash reserves of around 1.96 billion yuan by the end of last year, and proceeds from various licensing deals are now expected to swell its coffers. Aside from the Ouro proceeds, a Keymed ADC pipeline licensed to AstraZeneca earned a $45 million milestone payment in February this year after entering a Phase Three trial for use against gastric cancer.

Keymed’s Hong Kong share price rose for four straight sessions after the earnings and acquisition news, achieving a cumulative rise of 20% that boosted its market value to HK$18 billion ($2.3 billion), even as the wider market was sliding on worries about the impact of Middle East tensions.

Keymed is currently trading at a price-to-sales ratio of about 22 times, above the 15 times for RemeGen (9995.HK), another drugmaker focused on autoimmune diseases. The premium suggests investors have greater confidence in the long-term prospects for Keymed’s drug portfolio.

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The innovative drugmaker’s newfound profitability marks its transition into a new stage characterized by stability and virtuous development cycles

Key Takeaways:

• InnoCare posted an annual profit of 644 million yuan, driven by licensing and product sales, achieving profitability two years ahead of plan
• The company has made significant strides in global expansion, including out-licensing agreements with Zenas and Prolium Bioscience

By Molly Wen

A confluence of factors, including market liquidity, investor composition, and cross-border capital controls, have led to significant valuation gaps between companies listed in Hong Kong and their concurrent listings on China’s A-share markets in Shanghai and Shenzhen. InnoCare Pharma Ltd. (9969.HK; 688428.SH) offers one such case, as its Hong Kong shares consistently trade at roughly half the valuation of its Shanghai listing. That could present potential upside for the Hong Kong shares, particularly as the company continues to evolve into a more stable business with diverse revenue streams and consistent profits.

InnoCare’s 2025 annual report, released on March 25, included its first full-year profit, coinciding with the company’s 10th anniversary — a milestone signaling its evolution from biotech startup to a mature, independent biopharma player.

Despite attracting strong market attention for its big business development deals, the company remains relatively undervalued. InnoCare now stands at a “triple inflection point,” with profitability achieved, globalization enhanced, and core pipelines progressed, marking a new stage in its development.

Self-sustaining growth

Its latest report shows InnoCare's revenue last year rose 135% to 2.38 billion yuan ($344 million). More importantly, it recorded an annual profit of about 644 million yuan, representing a swing of more than 1 billion yuan from its loss of 453 million yuan in 2024. The inflection point was notable as it was achieved two years ahead of the company's original forecast, demonstrating its transition into a self-sustaining entity no longer reliant on external financing.

InnoCare also differs from some of its peers that achieved early profitability by relying on one-time upfront payments from partnerships. By comparison, InnoCare's march to profitability has been jointly propelled by a dual engine of licensing deals and direct product sales. On the commercial front, the company’s drug sales reached 1.44 billion yuan last year, up 43.4%.

InnoCare's profit breakthrough owes to two main factors: continued revenue growth driven by expanding indications for its main revenue engine Orelabrutinib, and significant cash inflows from licensing agreements with partners such as Zenas BioPharma (ZBIO.US). This not only improves the company's revenue and profitability but also reflects the establishment of a fully integrated value chain encompassing R&D, clinical trials, commercialization, and licensing.

Orelabrutinib continued its strong momentum, now included on China’s National Reimbursement Drug List for all four of its indications. Its approval as a first-line treatment for chronic lymphocytic leukemia/small lymphocytic lymphoma (CLL/SLL) earlier this year further expanded its addressable patient base and revenue potential.

The company’s other commercialized drug, Tafasitamab, was approved in May 2025 and launched in September, and is the first CD19 monoclonal antibody in China for treatment of relapsed-refractory diffuse large B cell lymphoma (R/R DLBCL). Both Tafasitamab and Orelabrutinib are targeted therapies for hematological malignancies, strengthening InnoCare’s overall competitiveness in B-cell lymphoma treatment.

Beyond those two approved products, InnoCare is also developing Mesutoclax, a novel BCL2 inhibitor, as a key follow-on asset within its hemato-oncology portfolio. As the first BCL2 inhibitor to receive breakthrough therapy designation in China, Mesutoclax has been advancing rapidly through multiple registrational clinical studies in China and globally.

A Phase Three trial evaluating the combination of Mesutoclax with Orelabrutinib for first-line treatment of CLL/SLL has completed patient enrollment. The fixed-dose combination regimen is designed to deliver improved responses in treatment-naïve patients and holds significant potential to overcoming treatment-resistant mutations. Mesutoclax also has big potential in the field of acute myeloid leukemia (AML) and myelodysplastic syndromes (MDS).

The company is also leveraging its two internally developed TYK2 inhibitors to expand into the dermatology therapeutic area, which covers large patient populations including atopic dermatitis, psoriasis, and vitiligo.

InnoCare’s R&D pipeline has now entered a new phase, with clearly emerging “second growth curves” from new products moving closer to commercialization that will help to sustain the company’s newfound profitability.

Accelerating global expansion

InnoCare's globalization strategy made significant progress in 2025. On Oct. 8, the company entered into a collaboration with U.S.-based Zenas BioPharma, with a potential total deal value of more than $2 billion. This transaction set a new record for out-licensing deals from China within the small molecule autoimmune segment. Following announcement of the partnership, Zenas’ shares nearly doubled within just over two months, reflecting confidence in the big potential of Orelabrutinib.

The partnership comes as therapeutic applications for Orelabrutinib expand beyond hematological malignancies into autoimmune diseases, which represents an even larger market opportunity. InnoCare’s advanced clinical development programs in this market segment currently target three indications: multiple sclerosis (MS), primary immune thrombocytopenia (ITP), and systemic lupus erythematosus (SLE).

In particular, the global market for MS treatments is vast and represents a major potential growth opportunity for multinational pharmaceutical companies. The market is currently dominated by biologics, exemplified by CD20 monoclonal antibodies, with annual sales reaching into the tens of billions of dollars and growing rapidly. As a BTK inhibitor with differentiated properties, Orelabrutinib could have strong potential as a new MS treatment, pending regulatory approval.

In other collaborations, InnoCare entered into an out-licensing agreement with Prolium Bioscience in January 2025 for the CD20xCD3 bispecific antibody ICP-B02. In the latest development of this collaboration, Prolium initiated a single ascending dose study for the drug candidate in early March this year and plans to commence a global multi-center Phase I/II clinical study for systemic sclerosis in the second quarter.

A number of investment banks, including Goldman Sachs, Citic Securities, and Ping An Securities, have assigned InnoCare "buy" ratings. They generally believe the company's long-term growth is being driven by three main factors: continued commercialization and expansion of Orelabrutinib; major overseas potential for its autoimmune disease pipeline; and the gradual realization of the value of its R&D pipeline. Meanwhile, collaborations with companies such as Zenas have boosted the company's finances and further validated the global competitiveness of its drug development capabilities.

For InnoCare, achieving annual profitability marks not only a pivotal financial breakthrough but also shows the company's operations have entered a virtuous cycle characterized by sustained expansion fueled by revenue-generating products and a pipeline of new drug candidates. From an investor perspective, the company now looks like a mature biopharma entity that combines profitability with strong growth potential.

The company possesses core assets like Orelabrutinib, whose sales are rapidly expanding as it enters new global markets and expands into additional indications. It has also established sustainable growth pathways through major collaborative deals. In addition, it possesses a comprehensive R&D pipeline spanning both oncology and autoimmune disease areas, with products at all stages of development.

That said, the stock still looks relatively undervalued for such a high-growth company that has just achieved profitability. The Hong Kong-listed shares currently trade at a modest price-to-sales (P/S) ratio of approximately 14. That implies potential upside for the shares – if it can continue to operate profitably and continue delivering strong revenue growth through new collaborations.

The Bamboo Works offers a wide-ranging mix of coverage on U.S.- and Hong Kong-listed Chinese companies, including some sponsored content. For additional queries, including questions on individual articles, please contact us by clicking here

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The company has pared its annual losses but faces high costs and competitive challenges to deliver its voluntary vaccine into a tight market

Key Takeaways:

• The biotech slashed its R&D costs by nearly 29% last year and shrank its annual loss by around 10% ahead of the planned vaccine launch
• But bank borrowings surged, pushing the gearing ratio up from 18.7% to 36.5%

By Molly Wen

China’s vaccine industry has been battling through a tough year, as dwindling demand and price wars have pushed some leading suppliers into the red. Beijing Luzhu Biotechnology Co. Ltd. (2480.HK) is now preparing to launch its core product, a shingles vaccine, into this troubled market.

How best to navigate the competitive environment for new vaccines is a key question for the company. Its latest earnings report released in mid-March suggests the strategy for now is to sharply rein in R&D costs and other expenses to limit its losses.

The results did not offer much of a booster shot as Luzhu Biotech prepares for the expected launch this year of its recombinant herpes zoster vaccine against shingles, a painful condition triggered by the chickenpox virus.

The firm announced a loss of 150 million yuan ($22 million) for 2025, 10.6% smaller than the deficit it reported a year earlier. Research and development spending fell nearly 29% to 96.48 million yuan, benefiting from lower clinical expenses after Phase Three trials for the flagship shingles vaccine were largely completed. The company also slashed administrative expenses by 20% to 51.79 million yuan.

However, the cost controls could not contain the blow from shrinking government grants and bank interest. The amount logged as other income nearly halved from the previous year, falling 48.4% to 11.03 million yuan. Meanwhile, the balance of other gains and losses turned from a net positive of 11.82 million yuan in 2024 to a loss of 4.22 million yuan in 2025, hit by a drop in fair value prices for financial assets and rising impairment losses on property, plant and equipment.

On the plus side, Luzhu Biotech said it expected its main vaccine candidate, targeting the virus that causes shingles, to gain Chinese regulatory approval and land on the market in the second half of this year.

The earnings report disclosed that China’s National Medical Products Administration had already checked the clinical trials and inspected manufacturing facilities for the product, LZ901, which has shown promise as a competitor to the current market-leading shingles vaccine. Luzhu Biotech completed a head-to-head comparative study last year against GSK’s benchmark vaccine, Shingrix, which found the Chinese product delivered a superior immune response and safety profile for patients aged 50 or above, the Chinese company said.

In the run-up to the expected launch, Luzhu Biotech brought a newly built R&D facility in Yizhuang, Beijing, into operation last August, and plans to start trial runs at its Beijing production facility as early as the second half of 2026. The marketing groundwork is also being laid, as the financial report recorded sales and distribution expenses of approximately 758,000 yuan for the first time, along with the addition of 11 commercialization staff.

Voluntary vaccines under pressure

However, the vaccine is about to enter a crowded and challenging market for inoculations that must be funded by the recipients themselves. Several prominent producers have reported losses or sharply reduced earnings for 2025, including Zhifei Biological (300122.SZ), Wantai Biological (603392.SH), BCHT Biotech (688276.SH) and Kangtai Biological (300601.SZ).

Demand for optional vaccines such as HPV or flu shots that fall outside the state immunization program has fallen sharply, and a glut of similar products has intensified price wars, with the cost of a trivalent flu shot falling as low as 5.5 yuan per dose.

The shingles vaccine is facing similar challenges, with two products already available in China. GSK’s Shingrix is a recombinant vaccine distributed by Zhifei Biological, while a rival product, Ganwei, is a live attenuated vaccine developed by Baike Biotech.

Although GSK’s Shingrix is a blockbuster in the global market, with sales exceeding 3.56 billion pounds ($4.77 billion) in 2025, the Chinese pricing strategy has been aggressive. From the second quarter of 2025, Shingrix was offered on a “buy one, get one free” promotion, effectively cutting the cost of a standard two-dose regimen from over 3,200 yuan to around 1,650 yuan.

Baike Biotech quickly followed suit, slashing the price of its vaccine to between 30% and 80% of the original cost. Even so, sales continued to struggle. Its confirmed sales volume for the first nine months of 2025 came in at minus 65,400 doses, meaning large stocks of sold but unused vaccines nearing expiry were returned.

Luzhu Biotech’s LZ901 will face intense price pressure and weak demand, while also requiring hefty investment to develop and promote sales. The company held around 96.9 million yuan in bank balances and about 324 million yuan in financial assets at the end of last year, bringing total available resources to roughly 420 million yuan. However, this cushion is largely supported by debt. Total bank borrowings surged from 54.91 million yuan at the end of 2024 to 260 million yuan, while the gearing ratio increased from 18.7% to 36.5%.

Although Luzhu Biotech still commands a market value of around HK$4.9 billion ($630 million), its daily turnover has dwindled to as little as tens of thousands of Hong Kong dollars. This reflects market caution about the near-term outlook. Investors will keep a close eye on the shingles vaccine launch, to judge whether the product can get differentiating traction and sustain profit margins in a fiercely competitive marketplace.

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One of China’s oldest medical names has applied to list its Tong Ren Tang Healthcare Investment unit, which is building an integrated healthcare system

Key Takeaways:

• Top-rated non-public traditional Chinese healthcare service provider Beijing Tong Ren Tang Healthcare has kicked off its IPO, aiming to raise up to HK$897.7 million
• The company plans to acquire and build 10 medical institutions by 2029 to drive growth of its healthcare network

By Li Shih Ta

China’s aging population is boosting demand for services like chronic disease and long-term health management, as well as rehabilitation therapies, providing a big business opportunity for traditional Chinese medicine (TCM) practitioners. As one of China’s oldest medical names with over 350 years of history, Tong Ren Tang looks well positioned to cater to such demand from consumers drawn to its brand by not only nostalgia, but its deep knowledge of TCM.

Beijing Tong Ren Tang Healthcare Investment Co. Ltd. (2667.HK) is banking on demand from that and other groups to attract investors to its Hong Kong listing plan. The company launched the IPO on March 20, aiming to sell 108 million shares for between HK$7.30 and HK$8.30 each, raising net proceeds of HK$844 million ($108 million) at the middle of that range. The stock is set to make its trading debut on March 30. In its transition from “time-honored brand” to “integrated healthcare services provider,” the company is targeting the entire Chinese population, and finding big business in long-term repeat patients, who often include the elderly and people with chronic conditions.

Unlike other companies from the Tong Ren Tang family, Tong Ren Tang Healthcare’s strategy centers on providing a full range of TCM healthcare services, including health management and also product sales. The company provides such services from a network of 12 self-operated medical institutions, 12 managed medical institutions and one internet hospital.

The company says it improves treatment efficiency and better retains patients by integrating diagnosis, treatment, rehabilitation, referrals, and health management into a single system. In 2024, it recorded nearly 3 million online and offline out-patient and in-patient visits, ranking first in China's non-public TCM hospital healthcare services with about 1.7% of the market. At the end of last September, the company had about 770,000 patients in its membership program, reflecting the relatively large size of its medical network.

Specialized talent development

Founded during the Qing Dynasty dating back to 1644, Tong Ren Tang's longstanding brand recognition in TCM brings inherent trust advantages to its various affiliates in the eyes of many Chinese. The brand’s strength assists the company in attracting both patients and physician resources more easily than other emerging medical institutions trying to establish similar TCM healthcare networks.

The core competitiveness of TCM healthcare service providers lies in their physician resources. Tong Ren Tang Healthcare has enhanced its capabilities in that regard by recruiting senior TCM experts, developing specialty departments, and through equipment upgrades. Over 2,700 physicians practice at the company, forming the foundation for its healthcare service system. That’s an important draw for long-term patients, who often look for treatment plans from a single doctor and don’t just come for single consultations.

AI and digital transformation

Despite its historical reputation, Tong Ren Tang is embracing modernity with its deployment of AI and digital tools across both its production and user-facing segments. In manufacturing, the company is advancing intelligent TCM production in a collaboration with software firm Yonyou, which owns a BIP AIoT platform, aiming to improve its production efficiency, quality control, and supply chain coordination capabilities.

On the consumer side, the company has partnered with smart products maker Xiaomi to launch its “Tong Ren Tang Wellness Hall” an AI-enabled TCM health services intelligent agent. The system delivers personalized wellness recommendations through natural language interaction and integrates online pharmaceutical purchasing services, extending TCM knowledge into daily life scenarios.

Healthcare network expansion

Tong Ren Tang Healthcare has also been rapidly expanding its network of facilities and other resources in recent years through acquisitions. Notable examples include its acquisition of Sanxitang, another time-honored TCM brand based in Zhejiang province that operates clinics and also makes TCM products; and Zhonghetang, an outpatient healthcare center operator in Shanghai. Such purchases are allowing the company to quickly establish and expand its healthcare services in regions like the affluent Yangtze River Delta while simultaneously expanding its patient base.

Financially, the company’s business has been growing steadily over the last three years, rising from 911 million yuan ($132 million) in 2022 to 1.18 billion yuan in 2024. It recorded revenue of about 858 million yuan in the first nine months of last year, up from 833 million yuan a year earlier. Its gross margin rose 1.1 percentage points year-on-year to 18.2% in the first nine months of last year.

TCM healthcare services are the company's primary revenue source. Revenue from that segment totaled 723 million yuan in the first nine months of 2025, accounting for about 84% of the total. Such services consist mostly of outpatient diagnosis, treatment and related services, with management services and health product sales providing supplementary revenue.

Healthcare network expansion requires sustained investment, which may be a factor behind the decision to list in Hong Kong.

Tong Ren Tang Healthcare has shown stabilizing growth rates lately, as the pace of its revenue increases decelerated from 26% in 2023 to about 3% in the first nine months of last year. The company’s profit fell nearly 10% year-on-year to about 24 million yuan in the first nine months of last year, though that was mostly related to one-time gains from asset disposals that set a high base in the year-ago period.

The company is seeking new expansion initiatives to revive its momentum. It said it plans to acquire five medical institutions by the end of 2029, and to build an additional five new facilities, potentially in partnership with other companies, by that time to further expand its footprint.

From a broader perspective, demand for TCM healthcare services remains generally positive. Third-party data in the prospectus indicates that market was worth about 300 billion yuan in 2023 and is projected to expand to around 500 billion yuan by 2030, equating to about 7% annual growth over that time. Given the rapid expansion of China’s older population and growing awareness of chronic diseases and how to manage them, demand for TCM diagnosis and treatment and health management services is expected to continue expanding.

Tong Ren Tang Healthcare should be well placed to tap into that demand, especially as it integrates acquired assets during its expansion phase and enhances its operational efficiency through efforts like greater use of AI. And, of course, there’s always its name, which is a household word in China and is hugely influential. That asset alone, combined with its expansion and other initiatives, could be draws for investors looking for traditional industry alternatives in Hong Kong’s current hot IPO market.

The Bamboo Works offers a wide-ranging mix of coverage on U.S.- and Hong Kong-listed Chinese companies, including some sponsored content. For additional queries, including questions on individual articles, please contact us by clicking here

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The Chinese firm is pocketing an upfront payment for a gene-focused drug under development and anticipates rising sales of an approved treatment for lung cancer

Key Takeaways:

• Early clinical data for the company’s pan-KRAS inhibitor indicate the targeted cancer drug is safe and effective
• Revenue tumbled in 2025 but Jacobio is projecting a profit for this year and a surging cash balance

By Molly Wen

Investors in Chinese drug developers have tended to focus on product pipelines and collaboration deals. But now they are paying more attention to the clinical data for emerging drugs and the prospects for global sales in the future.

Jacobio Pharmaceuticals Group Co. Ltd. (1167.HK) released its 2025 annual results on March 10 and disclosed early clinical data for a candidate drug targeting gene mutations associated with a range of cancers.

Jacobio’s product in progress, the pan-KRAS inhibitor JAB-23E73, was the subject of a development deal with AstraZeneca late last year. With the $100 million upfront payment from that collaboration about to flow into earnings, the company has predicted it will land in the black in 2026.

Last year already marked a commercial milestone for Jacobio, when another of its drugs was approved for sale in China as a treatment for a type of lung cancer. The internally developed drug, Glecirasib, was cleared for patients carrying KRAS G12C mutations who had already received at least one round of cancer therapy.

Jacobio had already teamed up with Allist Pharmaceuticals (688578.SH) in 2024 to accelerate the drug’s market launch, with the partner taking responsibility for China sales. The medication was added to China’s National Reimbursement Drug List in December 2025, clearing the way for Jacobio to receive a milestone payment of 53.5 million yuan ($8 million) along with a share of product revenue.

Aside from the progress with Glecirasib, a clinical update on the pan-KRAS inhibitor JAB-23E73 was the most striking feature of the earnings report.

RAS mutations - primarily KRAS, NRAS and HRAS - are among the most common triggers in human cancers. About 20% to 30% of solid tumors carry RAS mutations, with KRAS accounting for the biggest share. Yet for decades, this target had been considered out of reach for drug treatment. Pan-KRAS inhibitors have become a major focus for pharmaceutical companies as a way to suppress multiple mutations and may be even more effective when combined with other targeted therapies, while also helping to overcome drug resistance.

Early results indicate the drug is effective and safe, the company said. Of the 41 people who received JAB-23E73 in a Phase One trial, only 11.9% experienced severe side effects, compared with 22% for the comparable drug RMC-6236 made by Revolution Medicines, a U.S. precision oncology company. Moreover, the Jacobio drug showed promise as a treatment for pancreatic cancer. Among 13 pancreatic cancer patients receiving doses of at least 160 mg per day, the objective response rate (ORR) reached 38.5% while the disease control rate (DCR) was 84.6%.

As for the annual earnings, Jacobio’s revenue fell sharply to 53.5 million yuan in 2025 from 156 million yuan a year earlier, mainly on the back of reduced income from licensing collaborations and clinical trial services. However, administrative expenses fell 20.2% and full-year R&D spending sank 42.9% to 189 million yuan.

The tie-up with Allist eased the cost burden, as Jacobio conducted no major clinical tests on its own behalf during the reporting period. Key trials for Glecirasib and another investigational oncology drug, the SHP2 inhibitor sitneprotafib (JAB-3312), were managed and fully funded by Allist. As a result, Jacobio’s net loss narrowed to 146 million yuan.

Strong cash position

Based on encouraging early data for JAB-23E73, Jacobio signed a licensing agreement with AstraZeneca in December 2025 with a potential value approaching $2.02 billion, setting an out-licensing record for a clinical-stage small-molecule cancer drug developed in China.

The two parties agreed to jointly develop and commercialize JAB-23E73 in China, while AstraZeneca will hold exclusive rights in other markets. Jacobio gets $100 million upfront and is eligible for up to $1.92 billion in payments linked to development and commercial milestones, as well as royalties from sales outside China.

By the end of last year, Jacobio held around 974 million yuan in cash and bank balances. The company predicted that its cash balance would rise above 2 billion yuan once AstraZeneca’s $100 million payment is banked in the first quarter of 2026.

The ample cash reserves should help to fund at least five more years of work across its drug pipeline. Aside from the AstraZeneca money, revenue-sharing income from Glecirasib is also expected to jump in 2026 after the drug made it into the drug catalogue covered by Chinese medical insurance, Jacobio Chairman and CEO Wang Yinxiang said. Meanwhile, several other collaboration projects may also generate milestone payments if they progress as planned. The company expects these factors to help it achieve profitability in 2026.

In addition to its deep focus on KRAS-related therapies, Jacobio is also developing a platform for next-generation antibody-drug conjugates (ADCs). Its pipeline includes JAB-BX600, an ADC aimed at the EGFR cell protein and carrying a KRAS G12D inhibitor payload. Another drug in development, JAB-BX467, targets a protein associated with breast cancer, HER2, and carries a STING agonist payload designed to help the body destroy tumor cells. The company is expected to apply for investigational new drug (IND) status for both therapies in the second half of 2026.

Jacobio currently commands a market value of about HK$5.5 billion ($700 million), compared with HK$10.4 billion for fellow KRAS-focused drug developer GenFleet Therapeutics (2595.HK). The valuation gap suggests the market may not have fully factored in Jacobio’s pan-KRAS assets or an approaching breakeven point, creating a potential opportunity for investors.

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The Chinese healthcare platform enjoys a thriving online pharmacy business and is investing heavily in AI tools, but powerful rivals are entering the same arena

Key Takeaways:

• Competitors such as Alibaba Health are piling into AI-assisted healthcare, while Meituan has muscled into the market for on-demand drug deliveries
• JD Health’s latest annual results show earnings are on the rise, but online pharmacy sales accounted for nearly 83% of revenue

By Molly Wen

Welcome to the age of diagnostic chatbots and digital doctors. China’s online healthcare sector has bounced back after a post-pandemic slowdown and is now rapidly rolling out AI tools to upgrade the business.

One of the biggest names in Chinese digital healthcare, JD Health International Inc. (6618.HK), ramped up online pharmacy sales last year and has been an early adopter of applied artificial intelligence, launching a suite of AI assistants. Judging from the latest annual results, the corporate vital signs are strong for now, although the firm faces growing pressure from powerful rivals.

In early March, JD Health reported robust earnings growth for 2025, lifting its net profit margin to 8.9%, the highest level since the business was founded.

Revenue rose 23% to 73.4 billion yuan ($10 billion) in 2025 from the prior year, marking the fourth straight quarter of expansion above 20%. On a non-IFRS basis, net profit climbed 36% to 6.5 billion yuan, while active platform users reached 218 million by the end of last year.

By far the biggest revenue chunk came from online sales of pharmaceuticals and health products, which jumped nearly 25% to 60.9 billion yuan, accounting for almost 83% of total turnover. A rise in active platform users and increased sales to existing customers drove the growth, as well as a wider range of medicines and healthcare products on offer.

The traffic attracted a growing number of advertisers to the platform, helping to boost services revenue by 34% to 2.56 billion yuan.

To fend off fierce e-commerce competition, JD Health has been forging closer strategic ties with drugmakers to become the go-to platform for new product launches. More than 100 new drugs made their online debut on JD Health in 2025, a sharp jump from just over 30 in 2024, including an insomnia treatment from pharmaceuticals firm Eisai China and domestically developed anti-flu medicines.

These drug launches generate useful incremental income while boosting the company’s brand image and user loyalty.

However, JD Health faces strong competition in the fast-growing business of on-demand pharmaceuticals, especially from delivery giant Meituan (3690.HK).  Leveraging its huge local traffic and fast delivery network, Meituan’s service has captured more than 70% of the market.

For customers with urgent requests, the promise of getting their pills within 30 minutes can be more compelling than the appeal of using an established platform. In response, JD Health has been strengthening its offline infrastructure. By the end of 2025, the company had opened more than 300 self-operated pharmacies, integrating online and offline inventory through its JD Pharmacy Express Delivery service.

The company has also stepped up spending to compete for users. Selling and marketing expenses rose faster than product sales in 2025, increasing 26% to 3.8 billion yuan.

AI brings new rivals

An AI-driven transformation is also gathering pace in China’s online healthcare sector, as companies move beyond the basic model of pharmaceutical e-commerce to build intelligent, comprehensive healthcare platforms.

Last year JD Health launched its “AI Jingyi” system for health consumers with more than 10 types of intelligent agents including AI doctors, AI pharmacists and AI nutritionists, incorporating clinical data from specialists at more than 1,000 leading hospitals. The company’s AI agent “Dr. Da Wei” draws on clinical guidelines and databases of medical literature to provide round-the-clock health consultations. The company said the digital doctor had completed hundreds of millions of interactions by the end of last year, with a high user satisfaction rate.

Meanwhile, JD Health has deployed its “Joy Doc” AI solution to institutions including a hospital affiliated with Wenzhou Medical University, serving more than five million patients. In early 2026, the company further launched an evidence-based AI medical tool called “Zhiyi” designed for use by physicians. The tool integrates reams of authoritative medical papers from around the world to support clinical decision-making and analysis of medical research.

As AI penetrates more deeply into various industries, the healthcare sector is seeing a new wave of tech-savvy entrants. The fintech Ant Group has leveraged its widely used payment ecosystem to launch a healthcare app, “Ant Afu”, with an AI chatbot that answers health queries and connects users to medical providers.

Internet healthcare company Medlinker offers a “Future Doctor” platform with AI support and links to medical professionals. All these moves signal that telehealth competition is shifting from simple doctor-patient connections toward broader ecosystems offering a range of AI-enhanced services.

As for valuations, JD Health currently trades at a price-to-earnings ratio of about 26.5 times, while another industry giant, Alibaba Health (0241.HK), commands a much higher multiple of around 39.5 times. The gap suggests investors see stronger growth potential for the Alibaba unit as AI healthcare takes off.

Over the longer term, investors will be watching to see whether JD Health can keep benefiting from its supply-chain advantages and multi-channel strategy as the rivalry in AI-assisted healthcare heats up.

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Key Takeaways:

• China’s coffee market faces consolidation pressure as premium players try to capture a niche demographic seeking a slower, more prestigious experience
• Private medical providers must innovate and articulate clear long-term narratives to survive amid economic headwinds and overwhelming state hospital dominance

By Doug Young & Bradley Burgess

The Chinese consumer landscape is currently presenting a tale of stark contrasts, perhaps best exemplified by the shifting dynamics within two vastly different sectors: the highly saturated premium beverage market and the increasingly challenging private healthcare industry. Both arenas were once heralded as prime beneficiaries of China’s expanding middle class, yet they are now navigating profound structural and economic changes.

We recently observed the $400 million acquisition of the upscale coffee chain Blue Bottle by Centurium Capital, the Chinese private equity firm that is also the controlling stakeholder of Luckin (LKNCY.US). This purchase price was notably below the $700 million its previous owner, the Swiss food giant Nestle (NESN.SW), was reportedly seeking. The transaction brings two radically different players under the same ownership. Blue Bottle operates a mere 100 high-end locations across the U.S., Canada, Japan, South Korea, and China, selling cups for roughly $7. By comparison, Luckin operates a vast network of more than 30,000 stores, predominantly in China, prioritizing convenience with $2 offerings.

We believe this acquisition highlights a deliberate strategy to segment the market. Last year, Centurium and Luckin reportedly explored acquiring the more affordable Costa Coffee chain from Coca-Cola (KO.US), which operates 4,000 stores globally. The failure of those talks and the subsequent pivot to Blue Bottle suggests a desire to capture a distinct, elite demographic. Our new guest today, Bradley Burgess, witnessed the opening of the Blue Bottle location at the Jing'an Kerry Centre in Shanghai, where the minimalist decor initially gave him the impression of a Japanese brand. More importantly, the space was filled with a younger, stylish, white-collar demographic seeking a premium social experience — heavily driven by social media visibility and prestige.

This dynamic is reminiscent of high-end fragrance boutiques in Shanghai’s trendy Xintiandi area, where crowds gather for photographs but few make actual purchases. To succeed, premium coffee brands must rely on white-collar professionals utilizing the space for meetings and work, effectively rejecting the ultra-fast convenience model popularized by Luckin and increasingly adopted by Starbucks (SBUX.US). However, we anticipate significant industry consolidation ahead. The market is vastly oversaturated; independent proprietors and boutique cafes are highly vulnerable to price sensitivities and will likely suffer as stronger, better capitalized players dominate the landscape.

Extracting value in a challenging healthcare market

A similarly complex correction is unfolding in the private medical sector. Huge Dental, a manufacturer of dental materials used in dentures and replacement teeth, recently applied for a Hong Kong listing after failing to list on China’s domestic exchanges in Shanghai or Shenzhen. Historically, private healthcare providers were expected to thrive as consumers willingly paid premiums for discretionary medical services. Yet, Huge Dental's growth stalled last year, hindered by a slowing economy, intensifying competition, and margin-compressing bulk procurement by China's national health plan.

It is markedly easier for medical technology firms to list in Hong Kong due to less stringent profitability requirements. However, investor reception remains exceptionally chilly. While sectors like semiconductors and autonomous driving command inflated IPO valuations, dental companies are trading at depressed P/E ratios, with the three firms listed since 2022 experiencing significant stock declines.

We think these challenges are symptomatic of a broader malaise within private healthcare, including private hospitals. The core issue lies in competing against pervasive, heavily supported state-owned hospitals.

Bradley recently navigated a major health issue for a family member at a highly regarded state hospital in China. The physical infrastructure and surgical expertise were exceptional, but the administrative management and patient experience were profoundly deficient — so much so that he curtailed the treatment and opted to pay out-of-pocket for completion in the United States.

Although the broader Chinese public may possess a higher tolerance for poor customer service, there remains an undeniable, willingness to pay for superior care among some. It is a smaller segment, to be sure, but savvy private operators have found a highly effective way to serve it. Rather than competing directly with the ubiquitous public system, they are finding proven success through collaborative, hybrid models that successfully bridge premium private service with state infrastructure. Ultimately, it is no longer sufficient for medical companies to merely secure a public ticker; they must clearly articulate a differentiated, best-in-class product and a compelling strategic vision for the next decade.

The conglomerate warned that impairment provisions tied to its real estate investments, along with other charges, caused its net loss to balloon last year

Key Takeaways:

• Fosun lost up to 23.5 billion yuan last year, as it took major impairment provisions on its real estate holdings and intangible assets related to some non-core businesses
• The warning reveals that despite years of downsizing, Fosun remains vulnerable to China’s prolonged property downturn

By Warren Yang

Fosun International Ltd. (0656.HK) has been busy downsizing these last three years, shedding non-core businesses after an aggressive overseas expansion push plunged it into a high-profile liquidity crisis in 2022 and 2023. Unfortunately for Fosun, the assets it retained still include sizable Chinese real estate holdings, and it’s paying a hefty price for remaining exposed to one of the most vulnerable spots in the country’s economy right now.

Last Friday, billionaire Guo Guangchang’s conglomerate warned that it expects to report a staggering net loss of as much as 23.5 billion yuan ($3.3 billion) for 2025, far larger than its 4.35 billion yuan loss for 2024. It attributed the massive loss to asset impairments.

For starters, it wrote down its properties and booked related impairment charges as China’s never-ending real estate downturn continues to take its toll on home and commercial building values.

“During the 2025 financial year, the real estate industry has continued in a downward cycle with overall weak market demand, exerting pressure on the group’s real estate business segment,” Fosun said. “In accordance with the principle of prudence, the company has made substantial asset impairment provisions for certain real estate projects with impairment indicators.”

Fosun subsidiary Shanghai Yuyuan Tourist Mart (Group) Co. Ltd. (600655.SH) — whose vast operations span more than 10 segments, including jewelry, fashion and real estate — accounts for about 55% of Fosun's provisions, according to a Bloomberg report citing unnamed people familiar with the situation. Last month, Yuyuan flagged a net loss of 4.8 billion yuan for 2025 in its own profit warning. That led Citi to slash its target price for Fosun’s stock by 16% to HK$5.60, still well above the company’s Tuesday close of HK$3.84.

Fosun also wrote down goodwill and intangible assets related to some non-core businesses. Basically, that means the company conceded that those assets may never generate expected returns that can justify premiums it paid when it acquired them during its buying binge in the 2010s.

Fosun didn’t provide the exact size of all its provision charges. But the magnitude of its annual loss means they must be massive enough to not only wipe out the 661 million yuan net profit it made in the first half of last year, but then push it more than 20 billion yuan into the red. Put differently, the company’s projected loss for 2025 amounts to more than a quarter of its total revenue for the first six months of the year.

Property exposure

Fosun’s real estate exposure that was a major factor behind its 2025 loss includes residential and commercial properties, which are both grappling with falling sales and values.

A contracting population and weak economy in an uncertain employment environment are suppressing housing demand, keeping inventory at high levels. Fitch Ratings expects new residential property sales in China to decline another 7% to 8% in 2026, while S&P Global is even more bearish, forecasting a 10% to 14% drop.

Things are equally dire for commercial real estate. Supply far exceeds demand after a long construction boom, resulting in high vacancy rates for office and retail spaces. Making matters worse, companies are consolidating offices in their drive to cut costs. Retail property owners are grappling with a shift to online shopping that is reducing foot traffic and in-store purchasing.

Yuyuan is vulnerable to all of these changes as its portfolio is comprised of retail, office and mixed-use properties across China. The fact that Fosun recorded huge impairment charges for properties tied to Yuyuan and other subsidiaries suggests that their values have fallen sharply over several years, prompting the company to write them down.

But property exposure isn’t Fosun’s only problem. The company remained profitable in the first half of last year, but its net profit shrank by about 9% year-on-year as its revenue dropped more than 10%. During the six months, the company’s "happiness" segment, its biggest revenue generator that includes Yuyuan's jewelry business, along with Club Med and other consumer assets, swung to a loss from a profit a year earlier.

Fosun’s intelligent manufacturing segment, which produces steel and new materials, and provides factory automation services, saw a revenue decline of more than a quarter in the first half of last year, partly due to sales of some businesses in the aftermath of its debt crisis. Fosun lost 974.8 million yuan from asset management services during the six-month period, although the figure is smaller than the unit’s loss in the first half of 2024.

The company’s health segment, which encompasses drug and medical device makers, as well as healthcare service providers, was the only notable bright spot in an otherwise downbeat report, delivering a 48.3% net profit increase, even though its revenue slipped.

Not surprisingly, investors initially dumped Fosun shares the next trading day after its profit warning. But a pre-market announcement that same day of a pledge by controlling shareholders and senior executives to purchase stock worth up to HK$500 million ($72.6 million), on top of a previously unveiled HK$1 billion share buyback program, triggered a rebound. Even after the dust settled, Fosun stock still trades at a measly price-to-sales (P/S) ratio of 0.15, well below the unimpressive 0.79 for CK Hutchison Holdings (0001.HK), another conglomerate whose portfolio also includes large real estate holdings.

The question now is whether Fosun’s grand asset write-down represents simply some short-term pain that it needs to face just this once as part of its post-crisis rebuilding. But the problem with many diversified conglomerates is that they contain many different parts across a range of sectors, and a particularly weak performance by just a few of those can sometimes drag down a company’s bottom line like what happened to Fosun in the first half of last year.

While its pharmaceutical assets look promising, tourism, which Fosun is exposed to through Club Med, is susceptible to global economic cycles. Yuyuan’s jewelry and retail operations are exposed to weak consumption in China. And while the latest property write-downs have probably brought those assets down to current market values, it’s quite likely that more write-downs will be needed in the future until the sector finally stabilizes.

Fosun has certainly done some needed streamlining following its debt crisis, improving its balance sheet. But its slimmed-down version still contains many pieces that could create problems for the company in a weak Chinese economy.

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The company has defied a broader slowdown in the vaccine industry with its latest earnings report, after its flagship drug was cleared for use in a wider age group

Key Takeaways:

• CanSino gets most of its revenue from meningitis shots and its earnings could come under pressure as rivals launch comparable drugs
• With increased competition at home, the vaccine maker is targeting markets in Southeast Asia and beyond

By Molly Wen

China’s vaccine industry has struggled to shake off persistent ailments over the past year. A falling birth rate has shrunk the market for childhood inoculations while price wars have broken out for flu shots and other common vaccines.

Makers of the protective serums have been left with stunted earnings, and even heavy losses, but CanSino Biologics Inc. (688185.SH; 6185.HK) stood out at the end of February when it issued a more positive report card.

The company, which stepped into the spotlight a few years ago with a Covid vaccine, reported steady revenue growth in 2025 and a return to the black, albeit with the help of state subsidies, in a preliminary earnings summary.

CanSino said its annual revenue rose 26% to nearly 1.07 billion yuan ($154 million) in 2025, while the firm’s bottom line swung from a net loss of 379 million yuan in 2024 to a profit of 27.87 million yuan.

However, the picture was less rosy at the core level, as the return to profit was driven by non-recurring gains such as government subsidies. After deducting those items, the company managed to narrow its losses from a yawning deficit of 441 million yuan but was still 92.50 million yuan in the red.

Rising sales of the meningitis vaccine MCV4, sold under the brand name Menhycia, were the engine behind CanSino’s improved results. Launched in 2021, the flagship product is China’s only approved quadrivalent meningococcal conjugate to have reached the market, promising better protection against the virus for infants as young as three months old.

The potential market for the vaccine expanded last month when China’s drug regulators approved plans to lift the upper age limit for the vaccine from three years to six years.

The move on Feb. 24 boosted CanSino’s Shanghai share price after the Lunar New Year holiday, when the stock climbed 12.6% over four straight sessions. The reaction from Hong Kong investors was more muted, with the company’s shares advancing 4.7% over the same timeframe.

One cause for caution is CanSino’s heavy reliance on meningitis shots. In the first half of 2025, revenue growth almost entirely derived from Menhycia and another meningococcal vaccine, Meinaixi (MCV2), which generated 364 million yuan or 97% of total turnover.

Other income streams barely amounted to a trickle. The company’s Covid vaccine brought in just 10.41 million yuan in the first half, about 2.7% of overall revenue. Meanwhile, a development deal signed with AstraZeneca in 2023 for work on mRNA vaccines no longer contributed any revenue in the first half of 2025.

This concentrated model is risky, leaving CanSino’s earnings base vulnerable to competitive challenges. Menhycia’s monopoly looks set to be broken as similar vaccines start to land on the market.In May last year Zhifei Biological (300122.SZ) secured approval to register its quadrivalent meningococcal conjugate vaccine, while Phase Three trials of a comparable product from Walvax Biotechnology (300142.SZ) are well underway.

Once it faces rival products, CanSino may struggle to sustain its 79.3% gross margin. Any market fluctuation or profit erosion affecting its core product will have an amplified impact on overall earnings and could reverse the profit turnaround.

Fewer births, smaller market

Demographic warning signs are also flashing. The number of newborns in China fell to just 7.92 million last year, 1.62 million fewer than in 2024, squeezing demand for pediatric vaccines. At the same time, fierce price wars are waging for established products such as HPV vaccines and influenza shots, pushing the industry broadly into the red. Zhifei Biological is predicting a loss for 2025 ranging from around 10.70 billion yuan to 13.73 billion yuan, while Wantai BioPharm and Baike Biotechnology have projected net losses of up to 410 million yuan and 272 million yuan respectively.

When domestic markets are problematic, Chinese companies tend to look overseas for buyers. CanSino has already targeted Southeast Asia and has plans to penetrate the Middle East, South America and North Africa.

The company started to ship Menhycia to Indonesia in September 2025, marking another overseas launch of a novel drug after its Covid vaccine. It has also begun a Phase One trial in Indonesia for its inhaled tuberculosis vaccine and is collaborating with Malaysian partners to develop an mRNA multivalent flu vaccine.

Another growth engine could be powering up with the launch of a new CanSino vaccine. Prevnarxin (PCV13i), a vaccine against bacterial infections such as pneumonia, officially went on sale in China last September. The 13-valent pneumococcal conjugate vaccine adopts a dual-carrier model using CRM197 and tetanus toxoid to teach the immune system to withstand infection.

Currently, the company’s price-to-book ratio stands at around 1.53 times, against 1.36 times for industry leader Zhifei Biological, indicating that a higher growth premium is being assigned to CanSino’s product pipeline.

In the short term, investors should pay close attention to sales of meningitis vaccines and the rollout of Prevnarxin, along with cost controls, to determine whether the company can achieve a definitive net profit without any extra uplift.

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The dental materials provider’s new Hong Kong listing application shows its revenue flatlined last year, as its profit tumbled 38%

Key Takeaways:

• Huge Dental has renewed its application for a Hong Kong IPO, but could face difficulty attracting attention in a flood of listings by flashier tech companies
• China’s dental materials market where the company operates is expected to grow by double digits through 2029, but is also becoming crowded with new local entrants

By Doug Young

It was once seen as a greenfield for huge potential growth in China, feeding off the rise of a new middle class eager to improve their smiles and oral health. But these days, the nation’s dental sector is rapidly losing that polish, hampered by a slowing economy, as well as pressures from Beijing’s efforts to control costs through central procurement programs.

Into that wash, dental materials supplier Huge Dental Ltd. is making a new attempt to attract investors with its latest filing for a Hong Kong IPO last week. Huge Dental is no stranger to capital markets, having previously listed on Beijing’s thinly traded National Equities Exchange and Quotations (NEEQ) market and making several attempts to list on the larger A-share markets in Shenzhen and Shanghai. It filed to list in Hong Kong last year, but never completed that plan and is now trying again.

It’s hard to see how Huge Dental will stand out in a Hong Kong IPO market that has been extremely hot lately but also quite crowded. Most attention has gone to high-tech companies in emerging sectors like robotics, AI and microchips. Dental products and services look much more mundane, even though they once excited investors for their big growth potential.

Making matters worse, Huge Dental’s growth ground to a halt last year amid growing competition, and as Chinese reined in their spending and the company’s overseas business hit a tariff roadblock in the U.S. The company does have one potentially more positive story to tell in its global expansion plan, which would focus on the more promising Southeast Asian, Indian and European markets using an offshore production base it’s developing in Indonesia.

Hong Kong has become quite the hot spot for dental offerings these last few years, as many companies listed on the exchange when the outlook for their industry was brighter. Recent arrivals include Meihao Medical (1947.HK) and Arrail (6639.HK), both listed in 2022, and Dazhong Dental (2651.HK), which listed last year.

But none of those has done very well since their listings, with Dazhong and Meihao both now down about 60% from their listing prices. Arrail was down by an even bigger 87% before its shares were suspended last November after a dispute with its auditor.

Despite that gloom, Huge Dental’s listing boasts a relatively strong cast of underwriters in CICC, DBS and Daiwa, indicating the IPO could raise some substantial funds despite the company’s relatively small size. Most of its peers currently trade at relatively modest price-to-earnings (P/E) ratios of about 10, which would only value Huge Dental at around $100 million, based on its profits from the last couple of years.

The company is a relatively strong player in China’s dental materials market, which includes materials to make things like dentures, crowns and synthetic teeth. That market was worth 30 billion yuan ($4.4 billion) in 2024, and is expected to grow 15% annually over the five years from then to reach 66.1 billion by 2029, according to third-party market data in the prospectus. Huge Dental controlled about 1.3% of the market in 2024.

Flatlining growth

While China’s dental materials market may be growing by double-digits, the same can’t be said for Huge Dental’s own business. The company reported revenue of 400 million yuan for 2025, basically unchanged from the 399 million yuan the previous year, according to its listing document. That marked a slowdown from the 12% revenue growth the company reported in 2024, and reflects growing competition as more local players enter a sector traditionally dominated by foreign names.

Huge Dental currently gets about two-thirds of its revenue from China, and that figure also flatlined at about 271 million yuan in both 2024 and 2025.

Many drug and medical device and material makers have been taking a hit lately as China uses its clout to bargain for lower prices through bulk procurement. Huge Dental said a couple of its products have been subject to such pricing pressure, though they currently account for a relatively small part of its business. Still, that element could remain a future vulnerability if China, where most people get their medical services through state health plans, extends its bulk procurement to some of the company’s other products.

Europe is Huge Dental’s largest global market, accounting for about 14% of its sales last year. The U.S. was the second largest, but the company saw revenue from that market tumble 42% last year to 16.5 million yuan due to tariff fallout and also the loss of a major customer.

The company said that one of its plans to jumpstart growth is through accelerating its global expansion, which will be centered on a facility it’s building in Indonesia. It said the first phase of that plan will involve expansion in Europe, Southeast Asia and India. In particular, the company plans to set up a subsidiary in Europe as soon as this year to sell more of its products directly, which would boost its margins from its current near-exclusive reliance on third-party distributors in that market.

It conceded that the U.S. won’t be part of its near-term expansion until the tariff situation becomes clearer, and added the Middle East could be another market for future expansion.

Like many of its peers, Huge Dental grew up during headier times when China’s economy was posting high single-digit and even double-digit growth, feeding off demand from the nation’s new middle class. It was founded in 2006 in Eastern China’s Shandong province, making it one of the earlier Chinese companies to enter the dental materials field.

Apart from its flatlining revenue, the company’s other major worry is its falling profit. Its gross margin looks relatively solid, holding steady at around 58% over the last three years. But rising marketing and administrative costs, due to competition at home and its overseas expansion, caused its profit to drop 38% last year to 47.7 million yuan from 76.6 million yuan in 2024.

All that said, the big picture for Huge Dental is decidedly mixed. Its China business is facing quite a few headwinds from competition and a slowing economy, though its overseas expansion could help it return to growth on both its top and bottom lines. But perhaps the biggest immediate challenge for the company will be attracting investor attention to its IPO in a market where flashier tech offerings are drawing most of the spotlight.

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The developer of new treatments for ocular disorders is in a race against time to secure a Hong Kong listing before its cash reserves run out

Key Takeaways:

• Two VivaVision drugs have reached Phase Three clinical trials, with one of them on a regulatory fast track as a breakthrough therapy for eye inflammation
• The company’s filing follows a rebound in Hong Kong’s biotech IPO market

By Molly Wen

You could say this company has an eye for an opportunity.

After biotech stocks staged a rebound last year, a cash-strapped developer of eye drugs has joined the queue of IPO hopefuls looking to stabilize their finances by listing on the Hong Kong equity market.

And VivaVision Biotech (Zhejiang) Co. Ltd. is under particularly strong pressure to succeed in its quest before its funds run out.

The ophthalmology biotech submitted its application to the Hong Kong Stock Exchange in mid-February, seeking a main board listing with CICC as sole sponsor.

Founded in 2016, VivaVision aims to develop innovative therapies for diseases affecting both the surface and the back of the eye, targeting disorders that lack existing treatments. The discoveries remain at the clinical testing stage, and, without any product income, the company’s finances are under mounting strain.

At the end of last September, the company held just 35.77 million yuan ($5.2 million) in cash, while net losses for the first three quarters of 2025 reached 131 million yuan, averaging roughly 43.33 million yuan per quarter. At the current burn rate, the cash balance is getting ever tighter.

To ease the pressure, VivaVision completed a D+ financing in November 2025, securing about 175 million yuan in emergency funds. But with an IPO typically taking around six months from filing to completion, the company has only a narrow window of opportunity to replenish its coffers before the money runs out.

VivaVision has a tiny revenue stream largely derived from government subsidies, but that trickle of income is dwarfed by outgoings. The company posted 8.57 million yuan in other income and gains in 2024, according to data in its application, alongside a loss of 202 million yuan. For the first nine months of 2025, other income and gains totaled 3.44 million yuan, while losses reached 131 million yuan.

R&D and finance costs were the biggest debits during the first nine months of 2025, at 65.18 million yuan and 59.31 million yuan.

Despite the financial challenges, VivaVision has reached Phase Three trials with two core products - a treatment for eye inflammation that has been granted a fast-track route through the Chinese regulatory process, and a therapy for dry eye issues. 

The first asset, VVN461(HD), is a novel selective dual inhibitor of Janus kinase 1 (JAK1) and tyrosine kinase 2 (TYK2) targeting an inflammatory condition known as non-infectious anterior uveitis (NIAU). Designated a breakthrough therapy by drug regulators, the product could become the first treatment of its kind to launch in China, if it reaches the commercial stage. According to data cited in the prospectus, China’s NIAU drug market expanded from $122.9 million in 2020 to $177.6 million in 2024, representing a CAGR of 9.6%, and is projected to reach $362 million by 2029.

The other core asset, VVN001, is a second-generation lymphocyte function-associated antigen-1 (LFA-1) antagonist for dry eye disease. Phase Three trials in China began in June 2024 and are expected to wrap up at the end of this year. Competition in this space is far more intense, however, with five innovative drugs already approved for dry eye disease in China and another 10 candidates at the Phase Two stage or beyond.

Repeated funding rounds

VivaVision was founded by an industry veteran, Shen Wang, with more than three decades of experience in drug development. His career included scientific and executive roles at global pharmaceutical names such as Abbott Laboratories (ABT.US), Sunesis (SNSS.US) and Amgen (AMGN.US), focusing on oncology, immunology, metabolic disorders and antiviral treatments.

Under his leadership, VivaVision has completed seven funding rounds from the angel stage to D2+, raising about 735 million yuan. As the company developed, its valuation climbed from roughly 17 million yuan to nearly 1.83 billion yuan after the latest injection of funds. Investors including Sequoia China and Longpan Healthcare have bought into the company, optimistic about the long-term potential of innovative eye care.

The VivaVision IPO filing follows a resurgence in Hong Kong biotech IPOs over the past year. Figures from the financial data provider Wind show that 28 healthcare companies listed in Hong Kong during 2025, 17 more than in 2024. The newcomers included eight businesses in the medical devices and services sector. Sixteen loss-making drug developers took the Chapter 18A route to a listing in 2025, which offers relaxed financial criteria for biotechs, compared with just four a year earlier.

That recovery, however, remains highly polarized. Loss-making biotechs that lack marquee partners or compelling clinical data have faced strong selling pressure since their IPOs. A fellow developer of eye drugs, Cloudbreak Pharma (2592.HK), is a prime example and cautionary tale for investors. It raised about HK$612 million at HK$10.10 per share, only to see the stock plunge nearly 39% in its trading debut and languish around HK$2 since then.

Overall, VivaVision faces a dual test. In the short term, it must bag its IPO before the cash runs dry. Over the longer term it will need to turn clinical breakthroughs into commercial returns in a competitive market.

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The company’s valuation plunged 40% in its latest funding round from four years earlier, as it seeks a Hong Kong listing

Key Takeaways:

• Sinder Technology’s profit declined in 2024, but then more than doubled in the first nine months of last year
• Shares of comparable Mainland-listed companies have undergone similar significant corrections in recent years from earlier peak levels

By Cheng Shui Tong

China’s rising living standards have heightened awareness of food safety and livestock health, driving growth in related industries. Shandong Sinder Technology Co. Ltd. rode that wave to prominence, thriving on rising demand for its animal health products. Now, the company is hoping to bring its animal health story to investors with its filing this month for a Hong Kong IPO, adding its name to a long list of hundreds of companies seeking similar listings.

The company is feeding off a Chinese animal health market that expanded from 50.9 billion yuan ($7.37 billion) in sales in 2019 to 68 billion yuan in 2024, averaging 6% annual growth, according to third-party market data in its listing document. That growth is expected to accelerate slightly from last year to reach 141 billion yuan by 2034, increasing at an average annual rate of 7.6%.

Sinder has its own pedigree in founder Li Zhaoyang, 57, who graduated with a veterinary degree from Qingdao Agricultural University in 1991 and established Sinder Technology eight years later. Li currently serves as vice president of the China Veterinary Drug Association, and leads a management team made up mostly of other veterinary professionals.

Veterinary biological products generated around 70% of Sinder’s revenue in the first nine months of 2025, with vaccines accounting for 53.8% of total sales. Classified by animal type, poultry products contributed 77.3% of the company’s revenue and livestock products made up 13.7%, while pet products accounted for just 1.3%.

Investors indifference

Animal health is a relatively novel concept for investors, putting it at a disadvantage to hotter areas like AI and robotics, which often make their trading debuts with large gains. That discrepancy showed up in the Hong Kong IPO earlier this month by Muyuan Foods (2714.HK), China’s leading pig farmer and pork producer. The local portion of Muyan’s IPO was just five times oversubscribed, in sharp contrast with tech listings that are sometimes oversubscribed by thousands of times. The stock’s debut was also underwhelming, rising just 4% on its first day.

More critically, the animal health sector's heyday appears to be in the past. Sinder has completed three funding rounds to date: a Series A in December 2015 that raised 168 million yuan ($24.3 million), valuing the company at a 671 million yuan; and a Series B in June 2021 that raised 200 million yuan, valuing it at 2.88 billion yuan – more than four times its earlier figure. But the company got a rude awakening with its Series C funding last October, when its valuation fell by nearly 40% to 1.8 billion yuan.

Other companies listed on China’s domestic A-share market have experienced similar valuation downsizing as the industry’s heyday fades into the rear-view mirror. Industry leader China Animal Husbandry Industry (600195.SH) recently forecast its core profit last year, excluding non-recurring gains, plunged between 62.6% and 72.8% year-on-year, marking a third consecutive annual decline. The company’s shares have gained about 18% over the past year, but still trade at less than half their peak levels from 2020 and 2021.

Deep valuation cuts

Pulike Biological Engineering (603566.SH), ranked eighth in the animal health market with a focus on veterinary biologics, offers another grim story from the sector. Its shares have tumbled from a 2023 peak above 30 yuan to recent levels around 13.8 yuan. Such plunging valuations point to intensifying competition, which is pressuring company margins and ultimately filtering down to their bottom lines with falling profits.

Sinder’s own results were similarly lackluster until last year. Its revenue dipped slightly in 2024 from 2023 levels, while its gross margin edged down from 46.3% to 46% over that time, resulting in a 19% profit decline to 28.12 million yuan. But things looked up in the first nine months of 2025, when its revenue jumped 25.2% to 877 million yuan and its gross margin rose to 49.7%. As a result, its profit more than doubled to 55.67 million yuan during the nine-month period. The company credited the rebound to strong sales for its higher-margin veterinary biological products, primarily vaccines and transfer factors.

Raw material cost exposure

Sinder's profitability is highly dependent on its raw material costs, which accounted for 63.4% of its total cost of goods sold during the first nine months of last year. A price swing in material costs of just 5% in either direction would alter its profit by about 14 million yuan, meaning an uptick of that magnitude would have slashed the company’s profit for the period by around a quarter.

China's animal health sector also remains fiercely competitive. The top 10 players command a collective share of just 23%, with the leader holding only 4%, according to Sinder’s prospectus. Sinder ranks ninth nationally with a 1.4% slice, though it holds third place in China's poultry veterinary biologics market.

Despite current strong sentiment for new listings, Sinder's core proposition falls well outside the latest investor flavors of the day. The company’s big valuation reset last year, while undermining its current shareholders, could offer a more reasonable value proposition for new investors if the listing makes it to market. That could present a potential opening for investors trying to steer clear of the inflated valuations from more popular sectors.

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After months of rumors drove up its share price, the Chinese drug company has unveiled a record licensing deal with AstraZeneca, only to see its stock tumble

Key Takeaways:

• Going into the deal, CSPC’s earnings have been under pressure after its core drug business was hit by China’s centralized procurement policies
• The company is accelerating its push into novel drugs for the global market under the new leadership of Cai Lei, who served in the U.S. research division and is the son of the firm’s founder

By Molly Wen

Chinese companies in the drug discovery business have been haunted by a strange phenomenon for the past few months. After announcing large and lucrative licensing deals, their share prices have repeatedly plunged.

The counterintuitive reaction has been so pronounced since the second half of last year that it has been dubbed a curse on business development partnerships in China’s innovative pharma sector.

And now CSPC Pharmaceutical Group Ltd. (1093.HK) has suffered the same setback. The Chinese biopharma revealed a much-anticipated deal with the multinational drugmaker AstraZeneca (AZN.L) at the end of January, carrying an eye-popping value of up to $18.5 billion, only to be hit with a sharp stock selloff.

To some extent, this may be a straightforward case of “buy the rumor, sell the fact”, in which the market prices in an anticipated event ahead of time. But digging a bit deeper, there could be other factors at play.

The cooperation pact gives AstraZeneca rights to CSPC’s portfolio of anti-obesity drugs under development, as competition heats up in the global race for new and more convenient weight-loss treatments.

The two sides will jointly develop long-acting peptide drugs based on CSPC’s technology for sustained drug release and its AI-driven discovery platform. AstraZeneca gets exclusive global rights outside Greater China to CSPC’s injectable weight-management drugs, including one long-acting GLP-1R/GIPR agonist, with the serial number SYH2082, which is advancing into Phase One trials, as well as three preclinical programs.

The partners will also collaborate on four additional new programs, with CSPC retaining rights to these products in mainland China, Hong Kong, Macao and Taiwan.

GLP-1 weight-loss drugs have entered a new phase of development, with the emphasis now on multi-target agonists and oral formulations, stoking intensifying rivalry among pharmaceutical brands.

But SYH2082, the core asset in the CSPC-AstraZeneca collaboration, is already off the pace. Going forward, the developers must show that the product is effective while also speeding its progress through research and clinical trials. The partnership allows CSPC to tap into AstraZeneca’s global R&D and commercialization network to manage those risks and boost the chances of success.

Under the deal, CSPC gets an upfront sum of $1.2 billion, second only to the downpayment secured by 3SBio (1530.HK) for a licensing deal between an overseas partner and a Chinese drugmaker. CSPC could also receive up to $3.5 billion in development milestones and up to $13.8 billion linked to sales targets, along with royalties on product sales that could reach double-digit percentages.

The deal’s potential value of $18.5 billion sets a record for overseas licensing transactions by China’s drug developers. But investors were seemingly disappointed when the news broke, despite the scale. CSPC shares plunged at the open, at one point falling more than 12%, before closing with a loss of 10.20% at HK$9.60. The group’s drug platform subsidiary, CSPC Innovation (300765.SZ), also took a beating, sliding nearly 18% intraday and ending the session 15.72% lower.

Why did this record-setting deal fail to excite? High expectations have been priced in since last December when rumors of a major partnership between CSPC and AstraZeneca began swirling, driving the stock up about 38%. Therefore, much of the upside had already been absorbed. When the expectation was finally realized, short-term investors ran for the exits, triggering a pullback.

But deeper market concerns may also stem from CSPC’s track record in corporate governance after an insider trading case involving executive director Pan Weidong and other prominent figures. In November 2025, Pan was fined the maximum 5 million yuan ($720,000) by China’s securities regulator for share dealings in 2023 using privileged information about a planned group restructuring.

After learning about plans for CSPC Innovation to acquire CSPC Baike, Pan bought 2.74 million shares in CSPC Innovation for nearly 100 million yuan through a securities account held by NBPR, a wholly owned group subsidiary. The case also implicated three other former CSPC-affiliated executives, all of whom were penalized for related trades.

The involvement of multiple figures posed serious questions about the company’s internal controls and governance standards.

Executive changes

CSPC’s blockbuster licensing deal comes at a critical juncture, as revenue from its core finished-drug business has been severely squeezed by China’s centralized procurement process for medicines, which is capping prices.

In the first three quarters of 2025, CSPC revenue fell 12.32% to 19.89 billion yuan from the same period a year earlier, while net profit slipped 7.1% to 3.51 billion yuan. The downturn followed a weak performance in 2024, when full-year turnover slipped 7.8% and net profit plunged 26.31%.

In response, the company shuffled its leadership last December to promote a sharper focus on innovative drugs, led by the son of the company’s founder. Cai Lei, 45, joined CSPC in 2014 and previously served on the leadership team of the firm’s U.S. R&D division, overseeing research, drug development and sales. He has now taken on the roles of vice chairman and chief executive officer at the firm founded by his father, Cai Dongchen.

The appointment signals a desire to accelerate the push into novel drugs and expand the firm’s global reach. In recent years, the group has forged multiple licensing partnerships, with the total contract value of its outbound deals already exceeding $16.6 billion by the end of 2025. CSPC has secured more than 30 overseas clinical approvals worldwide, and 16 products have received fast-track or orphan-drug designations from U.S. regulators.

CSPC currently trades at about 25 times earnings, compared with a multiple of 56 for Hengrui Pharma (1276.HK; 600276.SH), which is also shifting from legacy medicines to innovative drugs. The $18.5 billion business deal marks a major milestone on CSPC’s drug-discovery journey, but investor confidence will ultimately hinge on the company’s ability to deliver those novel products and execute its international strategy.

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The healthcare services arm of the Tong Ren Tang group enjoys a high-profile TCM brand, but its profit margins lag far behind industry peers

Key Takeaways:

• Tong Ren Tang Healthcare ranks as China’s biggest private-sector hospital network focused on traditional Chinese medicine, with 1.7% of the market
• Making its fourth listing bid, the company needs funds to acquire more medical institutions in an ambitious expansion plan

By Molly Wen

When it comes to traditional Chinese medicine, Tong Ren Tang remains one of the country’s most trusted brands, backed by 350 years of history.

Founded by an imperial court physician, the company supplied herbal medicines to the Qing dynasty. However, the group’s newer healthcare services business has taken a distinctly modern approach, pursuing an aggressive expansion strategy through multiple acquisitions.

The company, Beijing Tong Ren Tang Healthcare Investment Co. Ltd., has now launched a fourth attempt at a Hong Kong listing, seeking an injection of funds to continue along its ambitious growth path. Its application, submitted at the end of January, has CICC acting as sole sponsor.

The firm was established in 2015 to serve as Tong Ren Tang’s primary provider of healthcare services using traditional Chinese medicine (TCM). If it finally achieves its IPO goal, the services company will become the group’s fourth listed entity. The already floated businesses - Tong Ren Tang (600085.SH), Tong Ren Tang Technologies (1666.HK) and Tong Ren Tang Chinese Medicine (3613.HK) - focus on manufacturing and sales of TCM products.

Meanwhile, the group’s as-yet unlisted healthcare services operator has built a business model in which it runs clinics, provides management services for medical partners and delivers digital healthcare consultations. The network includes 12 self-owned medical institutions, 12 managed institutions and one internet hospital. The company logged around 2.98 million outpatient visits across its online and offline business in 2024, making it the largest TCM-focused hospital group in China, outside of the public sector, with a market share of 1.7%.

But despite its market position, Tong Ren Tang Healthcare suffers from obvious weaknesses in its earnings profile. The company reported annual revenue of 1.15 billion yuan ($170 million) in 2023 and nearly 1.18 billion yuan a year later, followed by turnover of 858 million yuan in the first nine months of 2025. Net profit came in at 42.63 million yuan, 46.20 million yuan and just under 24 million yuan over the same time frames. Notably, net profit for the first three quarters of 2025 fell 9.76% from the year-earlier period, while gross margin slipped 0.7 percentage points from 18.9% in 2024 to 18.2%. On this metric it lags other listed members of the Tong Ren Tang family and trails far behind industry peer Gushengtang (2273.HK) with a gross margin of more than 30%.

The company’s three main revenue sources are healthcare services, management services and sales of TCM products. Healthcare services have consistently been the main driver at more than 84% of total revenue during the reporting periods. Operational and management services are provided to partner medical institutions, while healthcare product sales are conducted through its subsidiary Zhejiang Sanxitang Chinese Medicine. However, product sales within the group are dominated by two of the listed companies, Tong Ren Tang Technologies and Tong Ren Tang Chinese Medicine.

The benefit of a time-honored brand cannot override business risks, as highlighted by the prospectus. The firm’s license to use the Tong Ren Tang trademark is set to expire in April 2026. The agreement allows for a three-year renewal but leaves room for uncertainty. The dependence on inter-group business is also a potential risk exposure. During the first three quarters of 2025, income from management services and product sales to related parties within the Tong Ren Tang group totaled 88.09 million yuan, or 10% of total revenue.

Acquisition-led growth

A review of Tong Ren Tang Healthcare’s growth trajectory highlights the critical role of acquisitions. Two institutions - Beijing Tong Ren Tang TCM Hospital and Zhejiang Sanxitang TCM Healthcare Hospital - have consistently generated more than half of total revenue over the period covered by the prospectus, illuminating the risks of a highly concentrated income base.

The purchase of Sanxitang’s hospitals and pharmacies in 2022 was a turning point. After consolidation, Sanxitang generated roughly 30% of total revenue while contributing more than 40% of gross profit, directly driving a 22.1% year-on-year surge in revenue from TCM healthcare services in 2023. However, the earnings boost has proven difficult to sustain. In search of new momentum, the company bought TCM healthcare centers Shanghai Chengzhitang and Shanghai Zhonghetang in 2024, taking 70% and 60% equity stakes respectively. With those operations folded into earnings, revenue for the first nine months of 2025 marked a 3% year-on-year rise.

However, Sanxitang has begun to show signs of strain as the earnings engine. To avoid internal competition within the group, Sanxitang’s business model shifted from high-margin retail to lower-margin wholesale operations. As China’s consumer confidence and retail demand slipped, Sanxitang’s revenue and gross profit both fell in the first nine months of 2025. Revenue from the Beijing region also declined 16.8% year on year in 2024, hit by the impact of asset transfers and adjustments to medical insurance policies. Meanwhile, continued acquisitions pushed the company’s goodwill balance sharply higher, from 161 million yuan at the end of 2023 to 263 million yuan by the end of September 2025. The total was equivalent to 36% of net assets, well above the widely recognized 30% safety threshold and planting potential impairment risks for the future.

The prospectus lays out an ambitious expansion plan. The company aims to acquire five medical institutions by the end of 2029, while also establishing five new facilities under an asset-light model. Sustained acquisition-driven growth will require substantial capital, yet the company’s cash position is relatively tight, and some of the equity gained in prior deals has already been pledged as loan collateral. This may explain why Tong Ren Tang Healthcare is so eager to proceed with a listing after three abortive attempts. Ultimately, the investor response will hinge on the company’s ability to integrate its assets and convert them into sustainable profits.

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