Chongqing Zhifei Biological Products Co.,Ltd. (Zhifei) has reported its worst third-quarter performance in the past decade. For the first three quarters of 2025, the company's revenue fell 12.06% year-on-year to RMB 7.627 billion, while net profit plummeted to a loss of RMB 6.653 billion, down 156.1% year-on-year. The dismal results stem from the collapse of its long-relied-upon agency business model and the failure of its self-developed products to fill the gap.
1. **Agency Model in Crisis: The End of HPV Vaccine "Easy Money" Era** As the exclusive distributor of Merck's HPV vaccines in China, Zhifei once saw its revenue skyrocket from RMB 446 million in 2016 to RMB 52.918 billion in 2023. However, with increased HPV vaccine production capacity, market saturation, and the approval of domestic nine-valent HPV vaccines in June 2025, the monopoly of imported vaccines has been broken.
Meanwhile, China's inclusion of HPV vaccines in its immunization program—offering free bivalent vaccines to eligible girls—has further squeezed the market for high-priced, self-paid HPV vaccines. In H1 2025, Zhifei's nine-valent HPV vaccine shipments plunged 76.8% year-on-year, while its four-valent HPV vaccine recorded zero shipments. Additionally, its hepatitis A vaccine agency business exited the Chinese market in Q3. The multi-line contraction exposes the risks of Zhifei's over-reliance on external products.
2. **Weak In-House R&D: Struggling in Price Wars and Market Indifference** Facing the decline of its agency business, Zhifei has attempted to pivot toward innovation, but its self-developed products lack competitiveness. For example, its 23-valent pneumococcal vaccine, launched just two years ago, recorded zero shipments in H1 2025 as competitors undercut prices—offering RMB 25 per dose in government tenders, far below the market price of RMB 200.
Similarly, its newly approved four-valent flu vaccine in March 2025 was quickly dragged into a price war, with Sinopharm leading the charge and driving bid prices to historic lows. Although Zhifei has multiple vaccines under review or in clinical trials, these pipelines offer limited near-term revenue relief.
3. **Challenging Transformation: Uncertain Prospects in M&A and GLP-1 Sector** To accelerate its shift, Zhifei acquired a controlling stake in Chenan Biotech for RMB 593 million in March 2025, entering the GLP-1 drug market. However, this sector in China is already fiercely competitive, with 21 GLP-1 drugs either launched or in late-stage development as of July 2025. As a latecomer, Zhifei lacks first-mover advantages and is unlikely to see quick financial returns.
Moreover, the company's accounts receivable and inventory remain high at RMB 12.814 billion and RMB 20.246 billion, respectively, accounting for over 70% of total assets. If not managed effectively, potential bad debts or inventory write-downs could worsen financial risks.
**Conclusion** From "Agency King" to deep losses, Zhifei's struggles reflect the broader challenges facing Chinese vaccine firms transitioning from distribution-driven to innovation-driven models. The key to recovery lies in commercializing in-house products and optimizing its asset structure as its agency business fades.
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