Just ten months after its Hong Kong listing, CF Pharmtech (02652.HK) announced on August 6, 2026, the completion of a rapid placement, issuing 21.7477 million new H-shares at HKD 13.82 per share, netting approximately HKD 295 million. The funds are allocated as follows: about 70% (roughly HKD 206 million) for the clinical and preclinical development of innovative drug candidates; about 15% (approximately HKD 44.22 million) for the global development of complex inhalation products; and the remaining 15% (around HKD 44.22 million) for working capital and general corporate purposes. The placement price represents an 11.97% discount to the closing price of HKD 15.70 before the announcement, and the new shares account for about 5.03% of the company's enlarged total issued shares.
This starkly contrasts with the frenzy on its debut day, October 8, 2025, when shares opened at HKD 47 and surged over 220% intraday. As of August 12, the stock closed at HKD 16.11, a drop of roughly 65.7% from the opening price on its first trading day, with an even larger decline from its peak. Moving from an IPO raising HKD 525 million to a secondary placement within less than a year, CF Pharmtech's capital-raising pace underscores the real pressures faced by an innovative drugmaker caught between Volume-Based Procurement (VBP) impacts and heavy R&D spending.
Initial public offering and market expectations
In October 2025, CF Pharmtech listed on the Hong Kong Stock Exchange at an issue price of HKD 14.75 per share, offering 41.198 million H-shares globally and netting about HKD 525 million. The company focuses on the R&D, production, and commercialization of inhalation formulations. Market enthusiasm was high, with massive oversubscription during the public offering phase. The stock opened at HKD 47 on its first day, surging 218.6% from the issue price. However, the anticipated "high-growth narrative" faced a severe test when the company released its first annual report.
Financial performance and stock price collapse
For the full year of 2025, CF Pharmtech reported revenue of approximately RMB 433 million, a 29.0% decrease year-on-year. Profit attributable to owners of the parent was a meager RMB 2.485 million, plunging 88.2% from RMB 21.088 million in 2024. Adjusted profit for the year was RMB 31.751 million, also down 38.8% year-on-year. The core reason for this profit collapse was a sharp decline in the average selling price of its key product, CF017 (budesonide inhalation suspension), following an updated national VBP program. Sales revenue from CF017 dropped to RMB 345 million in 2025 from RMB 574 million in 2024. Additionally, a decline in the prevalence of respiratory infections, sales network restructuring, and increased one-time expenses for R&D and listing collectively dragged down short-term performance.
This "high open, low walk" performance trajectory is directly reflected in the stock price. From an opening of HKD 47 to HKD 16, the market took just ten months to reprice this innovative drugmaker under VBP pressure. The two financing rounds—an IPO raising HKD 525 million and a placement netting HKD 295 million—total roughly HKD 820 million within a span of less than a year. While this pace is not unusual in itself, it signals three key issues for investors.
First, has the erosion of profitability from VBP hit bottom? The decline in CF017's average selling price after the 2025 VBP update was the primary driver of the profit slump. If subsequent VBP renewal prices continue to fall or more products are included in the VBP program, the timeline for profitability recovery could be further extended. Second, can CF018 become a new growth engine? CF018 (azelastine fluticasone nasal spray) generated sales revenue of about RMB 79 million in 2025, representing the company's most promising second growth curve. However, whether this single product can offset the decline of CF017 remains to be seen. Third, the placement leads to equity dilution and impacts market confidence. The new shares, accounting for about 5.03% of the enlarged share capital, dilute the holdings of existing shareholders. With the stock price already down over 60% from its first-day high, the supply pressure from additional shares on the secondary market cannot be ignored. When the valuation logic for innovative drugmakers shifts from "expectation-driven" to "performance-verified," each financing round becomes a repricing of market trust. This time, the placement price of HKD 13.82 is already 6.3% lower than the IPO price.
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