When people hear "Kexing," many first think of Sinovac Biotech (SVA.O), the global star pharmaceutical company that made a fortune with its COVID-19 vaccine. However, in the capital markets, there is another "Kexing"—Kexing Biopharm Co.,Ltd. (688136.SH).
Though both companies trace their origins to Shenzhen Kexing Bioproducts Co., Ltd. (Shenzhen Kexing Bioproducts), their business focuses are entirely different. Kexing Biopharm specializes in the R&D and production of biopharmaceuticals, with deep expertise in recombinant protein drugs and microecological preparations—a stark contrast to Sinovac Biotech's COVID-19 vaccine business.
Recently, Kexing Biopharm formally submitted its IPO prospectus to the Hong Kong Stock Exchange, aiming for a dual listing on the A+H markets. However, with slowing sales growth of its core products and increasing market competition, the company faces a dilemma of rising profits without revenue growth. It now seeks new growth opportunities through capital operations.
Meanwhile, Sinovac Biotech, embroiled in a nearly decade-long battle for control, faces delisting risks. On November 12, it received a delisting notice from Nasdaq due to overdue annual report filings.
01 From Construction to Pharma: A Major Shift
Kexing Biopharm is one of China's earliest biopharmaceutical companies. In 1989, Shenzhen Kexing Bioproducts became the country's first industrial base for the production of the biological agent "Interferon α1b," led by Hou Yunde, director of the Chinese Academy of Preventive Medical Sciences' Institute of Virology.
However, due to the pharmaceutical industry's long R&D cycles, high failure risks, and substantial investment requirements, Shenzhen Kexing Bioproducts burned through cash from the start. By 1994, with only a few thousand yuan left in its accounts and mounting debts, Peking University's Unim Group stepped in.
At the time, Unim Group had just been established with only 400,000 yuan in startup funding from Peking University. It partnered with Hambrecht & Quist and Sinogen, an investment platform under the H&Q Asia Pacific Fund led by Chinese-American entrepreneur Ta-Lin Hsu, to invest in Shenzhen Kexing Bioproducts. In 1997, Interferon α1b injections were launched, quickly dominating China's interferon market under the brand name "Sai Ruo Jin," a transliteration of Sinogen.
Under Unim Group's restructuring, Shenzhen Kexing Bioproducts was dissolved in November 1998, replaced by Shenzhen Kexing Bioengineering Co., Ltd. (Shenzhen Kexing Engineering), founded by Unim Group in 1993.
In 1999, Unim Group and Sinogen invested in Shandong Yongming Weiwo Biopharmaceutical Co., Ltd., the predecessor of Kexing Biopharm, which underwent several name changes before settling on Shandong Kexing.
As Unim Group and Sinogen expanded their influence in biopharma, they sought further opportunities. In 2001, they jointly established Beijing Sinovac Biotech Co., Ltd. (Beijing Sinovac), with Unim Group holding 51%, Sinogen 25%, and Yian Biotech (founded by Yin Weidong) contributing technology for a 24% stake. Beijing Sinovac is now Sinovac Biotech's main entity in China.
However, Shandong Kexing's development took a downturn due to Unim Group's mismanagement, leading to real estate developer Deng Xueqin gradually acquiring full control of Kexing Biopharm.
In 2004, Unim Group's 21.15% stake in Shenzhen Kexing Engineering was auctioned off to Beijing Holdings and other institutions. In 2007, due to bond disputes with Hunan TV & Broadcast Intermediary, Unim Group's 42.41% stake in Shandong Kexing was sold to Shenzhen Zhengzhong Group, marking its entry into pharma.
Later, Zhengzhong Group negotiated with other shareholders of Shenzhen Kexing Engineering, acquiring an additional 33.71% stake. Deng Xueqin then restructured Shenzhen Kexing Engineering and Shandong Kexing into the current Kexing Biopharm and took it public.
By September 2025, Deng Xueqin held 55.38% of Kexing Biopharm's shares—0.88% directly and 54.5% through Shenzhen Keyi, backed by his real estate firm Shenzhen Zhengzhong Group. Deng, a former deputy director of Shenzhen's Bao'an District Construction Bureau, transitioned from construction to pharmaceuticals.
However, on November 20, Keyi Pharma sold 10.06 million shares via block trades, cashing out approximately 300 million yuan. Post-sale, its stake dropped to 49.50%, with Deng and Keyi's combined holdings falling to 50.38%.
Notably, since June, Shenzhen Keyi has executed a large-scale divestment plan for Kexing Biopharm. Over three months, it sold about 22.09 million shares via various methods, cashing out 754 million yuan and reducing its stake from 66.01% to 54.5%.
The sell-off at peak prices triggered a market reaction, causing Kexing Biopharm's stock to plummet by about 50% from its June high of 63.99 yuan per share. As of November 21, it closed at 32.38 yuan per share, with a market cap of 6.517 billion yuan.
02 Seeking New Growth: H1 Net Profit Surges 700%
For its Hong Kong IPO, Kexing Biopharm plans to use the proceeds for innovative drug pipeline R&D, high-value drug acquisitions, and overseas sales team expansion.
The company's revenue primarily comes from four self-developed products—SINOGEN (Interferon α1b), EPOSINO (Erythropoietin), WHITE-C (Granulocyte Colony-Stimulating Factor), and CLOBICO (Clostridium Butyricum)—and two licensed products: Apexelsin (Paclitaxel) and Reminton (Infliximab).
From 2022 to H1 2025, Kexing Biopharm reported revenues of 1.316 billion yuan, 1.259 billion yuan, 1.407 billion yuan, and 700 million yuan, respectively, mainly from pharmaceutical sales.
However, revenue from its four core products stagnated between 1.2–1.3 billion yuan, while licensed products showed strong growth. Reminton's sales rose from 13.9 million yuan in 2022 to 59.1 million yuan in H1 2025, contributing 1.1% to 8.7% of total pharma revenue.
Apexelsin, launched in Q3 2024, quickly became a new growth driver, generating 119 million yuan by June 2025. Combined, Apexelsin and Reminton accounted for 20.1% of pharma revenue in H1 2025.
Despite this, new products couldn't offset declining core product sales. In H1 2025, revenue fell 7.82% YoY, with gross margins dropping from 75.4% in 2022 to 63.6%. Net profit swung to a 1.9% margin in 2024, then surged over 700% in H1 2025—driven mainly by non-operating gains, including 15.27 million yuan from subsidiary sales and fair value adjustments.
03 Cost-Cutting Measures Amid Rising Receivables
To boost profits, Kexing Biopharm slashed expenses, with sales costs falling from 62.9% of revenue in 2022 to 42.4% in 2024, while R&D spending fluctuated sharply (193 million yuan in 2022, 345 million yuan in 2023, and 168 million yuan in 2024).
The company currently has two Phase III and three Phase I/II clinical projects, plus ten preclinical programs. However, reduced R&D spending has raised concerns about pipeline progress.
Another worry is liquidity. As Apexelsin and Reminton sales grew, trade receivables hit 564 million yuan by June 2025—80.57% of H1 revenue.
With 80% of revenue tied up in receivables and days sales outstanding rising from 101.2 days in 2022 to 138.5 days in H1 2025, cash flow worsened. Operating cash flow cumulatively netted a 125 million yuan outflow over the period.
Meanwhile, cash reserves dwindled from 784 million yuan in 2022 to 446 million yuan in H1 2025, while short-term bank loans climbed to 643 million yuan. By June 2025, Kexing Biopharm faced a 200 million yuan short-term debt gap.
As of Q3 2025, receivables surged 57.57% YoY to 640 million yuan, far outpacing 10.54% revenue growth, turning operating cash flow from a 53.27 million yuan inflow in 2024 to a 7.26 million yuan outflow.
Listing Intermediaries: - Sole Sponsor: China Securities (International) Finance Limited - Legal Advisors: PwC Legal | Jia Yuan Law Offices - Auditor: Grant Thornton (HK) CPA Ltd. - Industry Consultant: Frost & Sullivan (Beijing) Consulting Co., Ltd. Shanghai Branch - Property Valuer: JLL Valuation & Advisory Services Ltd.
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