A pharmaceutical tycoon with a net worth of 15.5 billion yuan is once again eyeing a Hong Kong listing. On December 10, CSPC Innovation Pharmaceutical Co., Ltd., a subsidiary of China's leading pharmaceutical company CSPC Pharmaceutical Group, officially submitted its prospectus to the Hong Kong Stock Exchange for an IPO.
CSPC Innovation, already listed on Shenzhen’s ChiNext board in 2019 under the ticker "Xinnuowei" (300765.SZ), closed at 33.84 yuan per share on December 11, with a market cap of 47.5 billion yuan.
In recent years, Xinnuowei has pivoted from being CSPC’s active pharmaceutical ingredient (API) platform to venturing into innovative drugs through acquisitions, including Jushi Biosciences. According to the prospectus, in November 2025, CSPC Innovation acquired an additional 29% stake in Jushi Biosciences from CSPC NBP Pharmaceutical for 1.1 billion yuan, raising its ownership to 80%.
However, the Hong Kong listing comes amid declining traditional performance and growing pains from its innovation drug transition. Revenue has slumped consecutively, with net profits turning from gains to losses—and widening deficits. Notably, just a month ago, the company drew market attention after several former executives were heavily penalized for insider trading.
**1. Slumping Performance: 226 Million Yuan Loss in First 7 Months of 2025** While CSPC Innovation may not be a household name, its clients—PepsiCo, Coca-Cola, and Red Bull—are global beverage giants. The company supplies caffeine, a key ingredient in functional beverages, alongside health products like vitamin C.
Yet, its shift to innovative drugs has been rocky. Financial reports show revenue dropped from 2.84 billion yuan in 2022 to 1.98 billion yuan in 2024, with net profits plunging from 294 million yuan to a 300 million yuan loss. In the first seven months of 2025, losses expanded to 226 million yuan.
The downturn stems from dual challenges: stagnant growth in its caffeine and health-supply business (contributing over 90% of revenue) and unprofitable biopharma ventures. Despite commercializing two antibody drugs and two mRNA vaccines, biopharma accounted for under 5% of 2024 revenue. Meanwhile, R&D costs surged to 843 million yuan in 2024 (42.5% of revenue), driving losses.
**2. The 15.5 Billion Yuan Tycoon’s Reshuffle** CSPC NBP Pharmaceutical holds a 73.8% stake in CSPC Innovation, controlled by billionaire Cai Dongchen (155 billion yuan net worth, per Hurun 2025). Since 2022, CSPC has funneled assets into Xinnuowei to boost valuation, including the 800 million yuan buyout of CSPC Shengxue (adding acarbose APIs) and the majority stake in Jushi Biosciences for innovative drug development.
In November 2025, CSPC Innovation paid 1.1 billion yuan for another 29% of Jushi Biosciences—a 146.08% premium with no performance guarantees.
**3. Scrapped 7.6 Billion Yuan Deal and Insider Trading Scandal** A planned 7.6 billion yuan acquisition of CSPC Baike collapsed in 2024 after Shenzhen Stock Exchange scrutiny. Later, ex-chairman Pan Weidong and other former executives were fined for insider trading, raising governance concerns.
**4. Conclusion** The Hong Kong IPO aims to ease funding pressures as Xinnuowei bets on innovative drugs. But with legacy businesses still dominant (90% of revenue), its ability to commercialize R&D and establish a second growth curve remains uncertain.
Comments