Tong Ren Tang Healthcare makes trading debut, backed by 39% annual patient growth

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.

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

To subscribe to Bamboo Works free weekly newsletter, click here