Shares of BAO PHARMA-B (HKEX: 2659), which had just completed six months of listing on the Hong Kong Stock Exchange, fell another 4.21% today (16th), closing at HK$18.41 to set a new historical closing low. Year-to-date, BAO PHARMA-B has now plunged by 76.26%. At today's close, the stock is also down 31.24% from its issue price of HK$26.38 per share, and has plummeted over 91% from its all-time high of HK$206, suffering what could be described as a 'foot-ankle chop'.
Looking back at the stock price fluctuations of BAO PHARMA-B over the more than six months since its listing, the trajectory has been truly astonishing. The initial brilliance has been matched by a subsequent tragic and severe decline. On December 10th last year, BAO PHARMA-B officially debuted on the Hong Kong Stock Exchange, soaring 138.82% on its first trading day. Early market speculation around its synthetic biology and assisted reproductive pipeline concepts drove its share price higher and higher. On February 25th this year, the stock hit an intraday high of HK$206, a surge of over 6.8 times its issue price of HK$26.38, with its peak market capitalization reaching HK$67.1 billion. BAO PHARMA-B briefly enjoyed unparalleled limelight, becoming the 'fair-haired child' of Hong Kong's biopharmaceutical sector.
However, the good times did not last. Since then, BAO PHARMA-B has entered a pattern of decline, experiencing multiple flash crashes during the entire right-side downtrend. For instance, on March 6th, the stock plummeted 36.63% in a single day. Notably, BAO PHARMA-B was officially included in the Stock Connect scheme on March 9th. The most dramatic event occurred on April 30th, when the stock suddenly crashed in the afternoon, plunging 65% in a freefall, causing significant losses for investors who had chased the rally earlier. After this episode, BAO PHARMA-B's share price became deeply mired, struggling to show any signs of recovery.
Public information shows that BAO PHARMA-B was founded in 2019 and is a biotechnology company with one approved product and a diversified clinical pipeline. It utilizes synthetic biology technology to develop and provide recombinant biologics in China, focusing on target diseases with limited treatment options and complex drug manufacturing processes. However, according to public information, the company has only commercialized one assisted reproductive drug, SJ02, since its inception. Its two core products, KJ017 and KJ103, are currently in the stages of having just received marketing approval and having their marketing authorization applications just accepted, respectively.
From a fundamental perspective, BAO PHARMA-B's operating performance is notably weak: commercialization efforts are yielding little, and it has been unable to reverse its long-term losses. Financial data shows that from 2023 to 2025, BAO PHARMA-B's operating revenues were RMB 6.93 million, RMB 6.16 million, and RMB 49.16 million, respectively, with a three-year cumulative revenue of only about RMB 62.25 million. The 2025 revenue was primarily derived from a one-time upfront license payment, with 95.3% coming from a single customer. During the same period, the company's net profits were -RMB 160 million, -RMB 364 million, and -RMB 395 million, respectively, resulting in a cumulative loss of approximately RMB 919 million over three years, with the loss widening each year.
The dramatic rise and fall of BAO PHARMA-B since its listing reflects capital speculating on new listings, subsequently taking profits and exiting, ultimately leaving a mess behind. Analysis indicates that the stock's weakness is not driven by a single factor but is the result of multiple factors converging: the bursting of a valuation bubble, fundamental pressures, negative event shocks, concentrated capital outflows, and a weakening industry environment.
Initial Drivers of the Downturn
First, after its listing, BAO PHARMA-B was subject to extreme speculative fervor, with its share price at one point surging nearly 7 times its issue price. Against a backdrop of no sustained commercial revenue, no stable profitability, and a core pipeline still in clinical stages, it was pushed to a market cap of tens of billions of Hong Kong dollars. Its valuation was completely detached from industry norms and fundamentals, representing a classic bubble driven by sentiment and share positioning. Coupled with the overall downward shift in the valuation center for unprofitable biotech stocks in Hong Kong, market risk appetite for purely thematic, cash-flow-negative innovative pharmaceutical companies has continued to decline. The premium bubble from earlier stages has been continuously digested, leading the stock price into a prolonged valuation correction phase.
Underlying Business Weakness
Second, the company's business is inherently weak. Its revenue scale in recent years has been extremely small, and it has sustained large net losses annually. High R&D expenditures have long eroded cash flow, and it relies on listing proceeds to maintain operations. It is unlikely to achieve breakeven in the short to medium term (2-3 years), and its growth story lacks performance validation. Furthermore, revenue is highly dependent on one-time licensing income, with contributions from self-developed products being minimal. Persistent large losses mean a profit inflection point is far off. Combined with negative events like patent litigation, the promised story fails to materialize, and value cannot support the high stock price.
Pipeline and Competitive Challenges
Several of the company's core pipeline drugs are still in the clinical application stage, with a long cycle remaining before they can contribute revenue. Meanwhile, competing products from established pharmaceutical companies in the same field are progressing more rapidly, continuously eroding potential market share. Core technology patents are not yet fully secured, raising questions about long-term competitive barriers.
Liquidity and Share Unlock Pressure
Additionally, as the institutional and short-term capital that entered earlier for speculation exited in batches from high levels, the trading volume for BAO PHARMA-B has continued to shrink, with daily average turnover remaining low. With the arrival of the share unlock window—the six-month post-listing lock-up period for cornerstone investors has expired—7.6 million shares have been released into the float, continuously exerting downward pressure on the stock price.
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