In April 2026, Shanghai Huilun Pharmaceutical Co., Ltd. officially submitted its listing application to the Hong Kong Stock Exchange, marking its third attempt to go public, with CITIC Securities acting as the sole sponsor. This move follows the failure of its A-share listing plan and the termination of its acquisition by Xintian Pharmaceutical.
According to the prospectus, the company's revenue plummeted from RMB 985 million in 2023 to RMB 686 million in 2025, while net profit shifted from a gain of RMB 20.659 million to two consecutive years of losses, with the 2025 loss widening to RMB 174 million. The company faces challenges in product structure, performance growth, capital recognition, and R&D conversion, casting uncertainty on its ability to successfully navigate the capital markets.
Financially, Huilun Pharma's performance began to decline in 2023, with revenue falling sharply, profitability worsening, and operating cash flow under prolonged pressure, showing no signs of recovery.
Revenue-wise, the company achieved RMB 985 million in 2023, largely driven by demand for its core product, Xiweina, during the pandemic. However, revenue dropped 30.4% to RMB 686 million in 2024 and saw only a marginal increase of RMB 267,000 in 2025, a growth of just 0.05%, indicating near stagnation.
Profitability deteriorated further, with losses expanding after turning negative. While the company posted a net profit of RMB 20.659 million in 2023, it reported a loss of RMB 124 million in 2024, which widened by 40.3% to RMB 174 million in 2025. Two consecutive years of significant losses pushed the debt-to-asset ratio up sharply, from 72.74% in 2023 to 86.96% in 2025.
The decline in performance stems from a dual squeeze of falling revenue and high costs. On one hand, a sharp drop in core product sales dragged down revenue growth; on the other, persistently high sales and R&D expenses further eroded profits. In 2025, sales and marketing expenses reached RMB 376 million, while R&D costs were RMB 234 million, totaling RMB 610 million and accounting for 89% of annual revenue.
Cash flow remains a concern, with operating cash flow under long-term pressure and liquidity issues becoming prominent. Net operating cash flow was negative in both 2023 and 2024. Although it turned positive in 2025 to RMB 8.544 million, the amount is small, and sustainability remains uncertain.
Business-wise, Huilun Pharma has focused on developing improved new drugs for critical illnesses since its inception, with Xiweina as its core product. As the only domestically produced and globally approved targeted drug for systemic inflammatory response syndrome-related acute lung injury/acute respiratory distress syndrome, Xiweina was once the company's cash cow.
In 2023, sales of this product reached RMB 745 million, accounting for 75.7% of total revenue, nearly supporting the entire business. However, as post-pandemic medical demand normalized, Xiweina's sales declined sharply, falling to RMB 424 million in 2024 and further to RMB 370 million in 2025, down approximately 50% from the 2023 peak.
To reduce reliance on Xiweina, the company has focused on developing products like Zuoyu and Dinuan to create new growth drivers. Zuoyu, the first improved new drug of its type approved in China, saw sales surge 192.4% to RMB 75.635 million in 2025, increasing its revenue share from 2.4% in 2023 to 11.0%. Dinuan, the first commercialized generic version of dienogest in China, saw its revenue share rise from 7.2% to 13.4%. However, neither product has exceeded RMB 100 million in sales, far below Xiweina's peak of RMB 745 million, making it difficult to fill the growth gap left by the core product's decline.
Moreover, competition for these products is intensifying. The oncology adjuvant drug market for Zuoyu already has multiple similar products approved, while Dinuan experienced a sharp drop in production and sales after failing to win a bid in the 2025 centralized procurement program, leading to inventory impairment provisions of tens of millions of RMB. Future growth prospects for these products are severely limited.
Other products, such as the generic drugs Kangmairui and Lierban, serve as key cash flow pillars but face significant price pressure after being included in national centralized procurement. The prospectus shows that Lierban (10mg) saw price cuts of 97–99% in the fifth round of procurement, while Kangmairui (90mg) saw reductions of 55–92%.
In terms of R&D pipeline, most of Huilun Pharma's products are in early clinical stages, with long commercialization timelines and high risks. Among its four Class I innovative drugs, HL-1186, the first Nav1.8 inhibitor to enter clinical research in China, is in Phase II trials; YD0293, the only DPP1 inhibitor globally in clinical development for chronic sinusitis, is also in Phase II; and H057, the world's first and only inhaled sodium selonsert candidate in clinical stages, has not yet advanced to late-phase trials.
Externally, capital enthusiasm has cooled. Since its Series A funding in 2013, Huilun Pharma has undergone 10 rounds of financing, with post-money valuation rising from RMB 225 million to RMB 3.431 billion. However, capital recognition has noticeably declined in recent years, with valuation growth slowing and external investor participation waning.
Between 2013 and 2021, the company experienced a valuation boom, driven by R&D progress and commercialization of Xiweina. Post-money valuation surged 129.9% year-on-year in Series B funding and 58.82% in Series E, making it a market favorite. From 2022 onward, valuation growth slowed significantly, with Series F and G post-money valuation increases falling to 25.55% and 21.79%, respectively. In the 2024–2025 Series H and I rounds, growth narrowed further to 5.33% and 8.53%. The post-money valuation in the 2025 Series I round was RMB 3.431 billion, up only 14.3% from the RMB 3.002 billion in the 2022 Series G round, indicating near stagnation.
Accompanying the slowdown in valuation growth is a deterioration in financing structure. Before 2022, funding was primarily from external institutions, including market-oriented financial investors like Hainan Zhongtai and Jiaxing Huayu, as well as local industrial capital from Guizhou and Jiangsu, resulting in a diverse and healthy financing mix. Since 2022, however, external investor interest has dropped sharply following the failed A-share listing plan and declining performance. Financing has increasingly relied on companies controlled by the majority shareholder. In August 2025, Xintian Pharmaceutical, controlled by Chairman Dong Dalun, invested RMB 40 million in Huilun Pharma through a combination of capital increase and share transfer, becoming the core participant. Only two other institutions, Yantai Tianzihuilai and Beijing Jinhufeng, participated, contributing RMB 37 million and RMB 15 million, respectively, reflecting significantly reduced external capital involvement.
The decline in external investor enthusiasm is closely linked to the company's repeated setbacks in capital markets. Huilun Pharma's path to capitalization has been rocky. In 2022, it initiated listing preparations for the STAR Market, but the process stalled due to tightened IPO policies for biopharmaceutical firms. In 2024, Xintian Pharmaceutical planned to acquire an 85.12% stake in Huilun Pharma at a valuation of RMB 2.9 billion, but the acquisition was ultimately terminated. With both A-share listing and acquisition by a listed company failing, an Hong Kong IPO remains the only option.
In terms of shareholding structure, the majority shareholder and related parties hold over 57% of the company. Huilun Pharma also maintains close related-party transactions and business ties with Xintian Pharmaceutical, controlled by the same shareholder. Following the August 2025 capital increase and share transfer, Xintian Pharmaceutical holds a 15.4567% stake, making it the second-largest shareholder. Additionally, Xintian Pharmaceutical's director, deputy general manager, and board secretary, Mr. Wang Guangping, served as a director at Huilun Pharma within the past 12 months, indicating cross-board membership. While the company claims that related-party transactions follow market pricing principles that are objective, fair, and voluntary, the absolute control by the majority shareholder raises questions about pricing fairness.
Comments