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With liabilities exceeding ten billion yuan, Zhifei Biological is facing a difficult winter.
How quickly can a company's performance decline? In 2021, Chongqing Zhifei Biological Products Co.,Ltd. (300122.SZ), holding two flagship products—its own COVID-19 vaccine and the代理权 for Merck's HPV 9-valent vaccine—saw its net profit break through the ten-billion-yuan mark, reaching a high of 10.209 billion yuan. Yet, four years later, the company's performance has reversed dramatically, not only recording its first annual loss since listing 15 years ago but also incurring a loss amounting to billions.
An announcement released by Zhifei Biological on the evening of January 12 shows the company expects its 2025 net profit attributable to shareholders to incur a loss between 10.698 billion yuan and 13.726 billion yuan, a precipitous year-on-year decline of 630% to 780%.
Regarding the reasons for the loss, the company explained: on one hand, sales of its main products fell short of expectations, putting performance under pressure compared to the previous year; on the other hand, it made impairment provisions for inventory whose net realizable value fell below its book value due to changes in market demand and items nearing or reaching their expiration date; it also assessed expected credit losses on accounts receivable and made credit impairment losses provisions based on their aging.
As of January 13, Zhifei Biological's share price closed at 20.19 yuan per share, with a total market capitalization of 48.3 billion yuan.
The "Vaccine Distribution King's" Performance Collapse Short-term Borrowings Soar to Ten Billion Yuan The loss at Zhifei Biological was not entirely without warning; in fact, signals of this storm were evident earlier. In the first half of 2025, the company had already reported a loss of 597 million yuan, a stark contrast to the profit of 2.234 billion yuan recorded in the same period last year.
In the first half of last year, the company's inventory reached 21.01 billion yuan, and its inventory turnover days skyrocketed to 1,103.84 days from 165.58 days in the same period the previous year.
Chairman Jiang Rensheng candidly stated during the performance meeting in May last year: "The company is indeed facing operational difficulties currently." He admitted there were deviations in internal forecasts and issues with the judgment regarding changes in the macroeconomic situation, industry adjustments, and the progress of new business development.
However, the company's situation did not improve after recognizing these problems. For the first three quarters of 2025, Zhifei Biological achieved revenue of 7.63 billion yuan, a sharp decrease of 66% year-on-year; the net profit attributable to shareholders was a loss of 1.2 billion yuan, also marking the first loss reported in a semi-annual period. Simultaneously, as of the end of the third quarter, Zhifei Biological had 20.2 billion yuan in inventory piled up on its books, along with 12.814 billion yuan in accounts receivable.
Beyond the performance slump, Zhifei Biological is also facing enormous debt pressure. As of the first three quarters of 2025, the company's short-term borrowings amounted to a hefty 10.318 billion yuan, while its monetary funds on the books were only 2.498 billion yuan.
On the flip side of the billion-yuan debt, Zhifei Biological's interest expenses surged, reaching 244 million yuan in the first three quarters of last year alone.
Facing such a massive funding gap, Zhifei Biological passed a plan in July 2025 to issue corporate bonds not exceeding 6 billion yuan. This marks the company's first large-scale debt financing since its listing 15 years ago, aimed at addressing increasingly severe operational challenges.
But even if this entire 6 billion yuan is used for debt repayment, the company's funding gap would still not be completely filled.
Hidden Dangers Sown by Over-Reliance Zhifei Biological's rise was closely tied to Merck's nine-valent HPV vaccine. After becoming Merck's exclusive agent in China in 2017, the company's revenue soared from 446 million yuan in 2016 to 52.918 billion yuan in 2023.
This partnership created a business legend. In 2018, Zhifei Biological adjusted its procurement value for Merck's HPV vaccine to 18 billion yuan, nearly quadrupling the 2017 figure. In 2023, the international market sales of Merck's HPV vaccine reached $6.8 billion, with most of the growth contributed by the Chinese market.
However, this successful model also sowed the seeds of risk. In 2023, revenue from代理 products accounted for 98.05% of Zhifei Biological's total revenue. By the first half of 2025, the proportion of revenue from代理 products still remained high at 89%.
In early 2023, Zhifei Biological also renewed its agreement with Merck, committing to complete procurement of HPV vaccines totaling over 98 billion yuan before the end of 2026, with over 32.6 billion yuan required for payment in 2024 alone.
But in June 2025, Wantai Biological's Cecolin® 9 was approved for market launch. Reportedly, this is China's first domestically produced nine-valent HPV vaccine and the world's second nine-valent HPV vaccine, breaking Merck's market monopoly that lasted over a decade.
In its announcement, Zhifei Biological stated that to address current challenges, the company has optimized its operational strategy and controlled related risks through multiple measures: negotiating with partners to adjust procurement plans, alleviating pressure from upstream supply; optimizing product promotion strategies based on market demand to enhance inventory turnover efficiency; accelerating the launch pace of self-developed products and intensifying R&D efforts to further optimize the revenue structure; adjusting the debt structure and promoting the completion of existing debt replacement.
Zhifei Biological expressed deep regret for the performance loss and stated that in 2026, the company will go all out to drive operational improvements, strive to achieve more launches of proprietary products, further optimize commercial cooperation and product promotion strategies, and promote the company's sustainable development.
Yuan Shuai, Co-founder and Initiator of the New Intellectual Faction New Quality Productivity Salon, believes that at the financial structure level, this combination of "high leverage + low liquidity" is particularly dangerous in the biopharmaceutical industry. This industry is characterized by long R&D cycles, large capital requirements, and strict policy regulation; companies typically need to maintain high cash reserves to cope with risks like clinical trial failures or approval delays. Zhifei Biological's current financial strategy clearly deviates from industry norms. The excessively high proportion of short-term borrowings not only increases financial expenses but also squeezes out R&D investment space, forming a negative cycle of "performance decline — financing constraints — R&D lag — competitiveness decline." If the capital structure cannot be quickly improved through asset disposals, equity financing, or debt restructuring, the company might face the extreme risk of being forced into bankruptcy liquidation by creditors.
The "Richest Person in Chongqing" Controls 2 Listed Companies The Second Generation Faces Dual Challenges in Succession In April 2021, Zhifei Biological's market capitalization approached 370 billion yuan. Founder Jiang Rensheng's net worth that year was 140 billion yuan, ranking him 21st nationally in terms of wealth, thereby securing his position as the "Richest Person in Chongqing."
In 2025, Jiang Rensheng still holds the title of "Richest Person in Chongqing," but his net worth has shrunk significantly. The Hurun Rich List shows that the Jiang Rensheng family's wealth in 2025 was 42 billion yuan, ranking 420th nationally.
Jiang Rensheng was born in 1953 in a place called Xiushui Village in Guanyang County, Guangxi Province. At age 17, he worked as a民办教师 (minban teacher), and later worked in the Guangxi epidemic prevention system for nearly 20 years. He formerly served as Deputy Head of the Guanyang County Health and Epidemic Prevention Station, and Deputy Section Chief and Section Chief of the Planning Immunization and Biological Products Sections at the Guangxi Health and Epidemic Prevention Station. At age 46, Jiang Rensheng abandoned his "iron rice bowl" job and became a vaccine salesperson. During this career phase, he recognized the development prospects of domestic vaccines.
In 2002, Jiang Rensheng acquired a vaccine enterprise called Chongqing Jinxin Biological Products, later renamed Chongqing Zhifei Biological Technology Co., Ltd.
In 2005, a Group C meningococcal meningitis epidemic broke out in China. At that time, only the Lanzhou Institute of Biological Products possessed the vaccine for this disease, and this vaccine happened to be Jiang Rensheng's exclusive代理 product.
That year, Jiang Rensheng's son, Jiang Lingfeng, who was working in legal affairs, resigned to join his father in entrepreneurship. Currently, Jiang Rensheng holds a 48.44% stake, and Jiang Lingfeng holds a 5.41% stake, making them the top two shareholders of Zhifei Biological.
Jiang Lingfeng was born in 1980. He graduated from the Law Department of Guangxi University in 2003, later pursued a Master's in Business Administration at Guangxi University, and obtained an Executive Master of Business Administration from the Guanghua School of Management at Peking University. In recent years, he has held positions at Zhifei Longkema and Zhifei Lüzhu, and currently serves as Vice Chairman and President of Zhifei Biological.
In 2008, Jiang Rensheng successively restructured three companies with R&D capabilities: Lüzhu Pharmaceutical, Chongqing Zhiren, and Anhui Longkema, after which the company began selling self-developed products.
After completing four restructurings, Zhifei Biological listed on the Shenzhen Stock Exchange in 2010.
Besides Zhifei Biological, Jiang Rensheng is also building his pharmaceutical portfolio. In June 2023, Zhixiang Jintai (688443.SH), controlled by Jiang Rensheng, listed on the STAR Market. Zhixiang Jintai primarily focuses on R&D of innovative antibody drugs for autoimmune diseases. Its legal representative and chairman, Shan Jikuan, is one of the founding shareholders of Junshi Biosciences, holding a 5.29% stake. Additionally, several members of Zhixiang Jintai's management team also hold positions at Zhifei Biological.
However, the R&D and commercialization of innovative drugs pose significant challenges. Since its listing, for the years 2023, 2024, and the first three quarters of 2025, Zhixiang Jintai's net profit attributable to shareholders was -801 million yuan, -797 million yuan, and -333 million yuan respectively, accumulating losses of nearly 2 billion yuan over more than two years.
As of January 13, Zhixiang Jintai's share price closed at 31.43 yuan per share, with a total market capitalization of 11.5 billion yuan.
Currently, Zhifei Biological is undergoing a power transition. In September 2024, the company held the first meeting of its sixth board of directors, appointing Jiang Lingfeng as the company's President.
Evaluating his son, Jiang Rensheng used phrases like "steadfast and steady" and "very reassured." Jiang Lingfeng's own response was: "The task is arduous and the road is long" and "I will make unremitting efforts and live up to expectations."
Under the governance of the father and son, Zhifei Biological is seeking transformation. In March 2025, the company announced a cash investment of 593 million yuan to increase its capital in Chongqing Chen'an Biopharmaceutical Co., Ltd., acquiring a 51% stake in the latter. Through this transaction, Zhifei Biological expanded its business from vaccines into the metabolic disease领域, gaining products nearing the commercialization stage, including semaglutide injection (for blood sugar control and weight loss). This marks the first time since its listing that Zhifei Biological has achieved control of another company through capital operations.
The company is also actively promoting its self-developed products. In 2025, Zhifei Biological's quadrivalent influenza virus split vaccine obtained its drug registration certificate. The 15-valent pneumococcal conjugate vaccine has already received the Phase III clinical trial summary report; if approved for market launch, it is expected to create synergies with the company's already marketed 23-valent pneumococcal polysaccharide vaccine.
For Zhifei Biological, the real challenge might just be beginning. It must summon greater determination than it took to build its distribution empire to undergo a thorough self-reinvention, transforming from a successful "vaccine搬运工" into a genuine biotech enterprise with core competitiveness. On this path, the ten-billion-yuan loss is a painful lesson, but it might also be the only force compelling a rebirth.
What are your thoughts on Zhifei Biological's projected ten-billion-yuan loss? Have you received any vaccines from Zhifei Biological? Let's chat in the comments section.
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