Chongqing Zhifei Biological Products Co.,Ltd. (300122.SZ), once thriving on its agency business for Merck's HPV vaccines, is now confronting multiple challenges including high inventory levels, difficult cash collections, and transformation difficulties.
Recently, Chongqing Zhifei Biological Products delivered its worst interim performance report since listing in 2010.
Industry experts note that under normalized centralized procurement and intensified homogeneous competition, vaccine companies face long-term declining profitability risks. Centralized procurement has compressed product profit margins, while homogeneous competition makes it difficult for companies to achieve high profits through product differentiation. To address this situation, companies need to strengthen cost control, optimize production processes, reduce manufacturing costs, increase innovation and R&D investment, develop innovative vaccines with unique advantages, and enhance product added value.
**Worst Interim Report Since Listing**
In the first half of 2025, this former "vaccine agency king" recorded revenue of 4.919 billion yuan, down 73.06% year-over-year. Net profit attributable to shareholders posted a loss of 597 million yuan, declining 126.72% year-over-year, representing a dismal performance.
This marks Chongqing Zhifei Biological Products' first half-year loss since listing. Moreover, the company has been in a loss-making state for four consecutive quarters.
Industry analysts point out that Chongqing Zhifei Biological Products' "agency + proprietary" business model has exposed numerous potential risks during this industry volatility. First, agency business is subject to upstream suppliers, and any supplier strategy adjustments, such as raising supply prices or reducing supply volumes, will directly impact company performance. Second, proprietary product R&D requires long cycles and large investments; if R&D fails or progress lags, preventing timely launch of new products, companies face product pipeline gaps.
For domestic vaccine companies, balancing agency introduction and proprietary R&D relationships is crucial. Agency introduction can quickly enrich product lines and gain market share, but should focus on selecting products with market potential and technological advantages. Proprietary R&D is the core of long-term corporate development, requiring increased investment, establishing comprehensive R&D systems, and cultivating professional talent teams.
**Agency Product Batch Releases and Revenue Decline Significantly**
Specifically, in the first half of 2025, Chongqing Zhifei Biological Products' core agency product batch release volumes generally declined, with Merck's HPV vaccines showing the most prominent performance.
Market data shows that due to market demand saturation and Merck's supply strategy adjustments, four-valent HPV vaccine batch releases dropped from 466,000 doses in the first half of 2024 to zero, a 100% year-over-year decrease.
Nine-valent HPV vaccine batch releases fell from 18.272 million doses in the first half of 2024 to 4.239 million doses, down 76.8% year-over-year.
Among other agency products, five-valent rotavirus vaccine had 2.689 million doses in batch releases in the first half, though up 19.3% year-over-year, still significantly below the 6.597 million doses in the first half of 2023. Recombinant zoster vaccine batch releases totaled 575,000 doses, down 64.2% year-over-year, reflecting the product's impact from low-price competition from domestic competitors.
Simultaneously, Chongqing Zhifei Biological Products' agency revenue was cut in half. Data shows agency product revenue fell from 51.89 billion yuan in 2023 to 24.67 billion yuan in 2024, down 52.5% year-over-year; it further declined to 4.37 billion yuan in the first half of 2025, down 75.2% year-over-year, becoming the main cause of revenue decline.
Moreover, the company's agency product gross margin dropped from 28.66% in 2022 to 24.98% in 2024, further declining to 22.61% in the first half of 2025.
Notably, while Chongqing Zhifei Biological Products' cooperation with Merck remains effective, it is relatively passive. Despite the 100-billion-yuan procurement agreement renewed by both parties in 2023 (2024-2026) still being in effect, Merck suspended HPV vaccine supply in February 2025, citing "high channel inventory" as the reason for adjusting delivery rhythm, causing delays in Chongqing Zhifei Biological Products' procurement plans.
**Small Scale of Proprietary Products**
Regarding proprietary products, proprietary product revenue in the first half of 2025 was 500 million yuan, accounting for 10.15% of total revenue. Although the gross margin was as high as 78.50%, it declined 8.06 percentage points year-over-year.
Furthermore, proprietary products including ACYW135 vaccine and Hib vaccine saw batch release volumes decline over 50% year-over-year, unable to offset the decline in agency business.
Specifically, ACYW135 vaccine batch releases grew 59.2% year-over-year in the first half of 2025, mainly due to the low base of only 1.2 million doses in the same period of 2024.
Looking back, this product's full-year 2024 batch releases totaled 2.248 million doses, still down 71.94% from 8.012 million doses in 2023. Market demand weakness and the impact of Cansino's ACYW135 conjugate vaccine approval affected sales of Chongqing Zhifei Biological Products' vaccine product.
For Hib vaccine, batch releases in the first half of 2025 declined 66.46% year-over-year, from 1.74 million doses to 584,000 doses; full-year 2024 declined 26.8%. The underlying reasons may include increased domestic Hib vaccine manufacturers, declining public vaccination willingness, and the company's marketing resources tilting toward agency products.
Although the company's proprietary product gross margin of 78.50% is significantly higher than agency products' 22.61%, revenue scale is only 11.4% of agency products, contributing limitedly to performance.
The underlying reasons may be a thin product pipeline and insufficient R&D investment.
On one hand, proprietary products on sale are mainly traditional vaccines (meningococcal, Hib, etc.), lacking blockbuster innovative varieties. The 23-valent pneumococcal vaccine approved in 2023 had zero batch releases in the first half of 2025, so new product contribution is limited.
On the other hand, the company's R&D expense ratio to revenue has long been below 4%, far lower than peers like Walvax Biotechnology and Watson Biopharmaceutical.
Although the R&D expense ratio reached 8.5% in the first half of this year, this was also due to the significant revenue decline. From R&D investment data, the first half of this year was 635 million yuan, extrapolating to about 1.27 billion yuan for the full year, still below last year's 1.391 billion yuan.
This may be one reason the company's pipeline under development, such as 15-valent pneumococcal vaccine and mRNA vaccines, are progressing slowly and have not yet entered commercialization.
In summary, Chongqing Zhifei Biological Products currently faces severe challenges. The company's traditional agency business continues to contract while proprietary R&D product lines also show weak growth momentum. Under dual pressure, how to break through remains a critical question requiring continued attention.
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