The former "vaccine distribution king" that once boasted a market cap exceeding 350 billion yuan is now experiencing its harshest winter since going public 15 years ago.
On August 18, Chongqing Zhifei Biological Products Co.,Ltd. released dismal half-year results: revenue plummeted 73% to 4.919 billion yuan, with a net loss of 597 million yuan. This marks the company's fourth consecutive quarterly loss and its first-ever half-year loss since listing. The distribution business that once contributed 98% of revenue has now become the catalyst for performance collapse—batch release volumes for the 9-valent HPV vaccine plunged 76.8%, while batch releases for the 4-valent HPV vaccine and inactivated hepatitis A vaccine dropped to zero.
**Distribution Model Backfires: Billion-Yuan Gamble Turns Sour**
The rise and fall of Chongqing Zhifei Biological are both tied to Merck's HPV vaccines. After securing distribution rights for the 9-valent vaccine in 2018, the company's performance soared: revenue jumped from 1.3 billion to 52.9 billion yuan, with net profit growing over 18-fold. At its 2023 peak, the company committed nearly 100 billion yuan to renew procurement agreements, not anticipating the market's sudden shift. As public vaccination willingness declined and competition intensified, the distribution business took a sharp downturn from 2024, with inventory accumulating like a snowball.
**21 Billion Yuan Inventory Shock: Over Half of Assets "Frozen" in Vaccines**
The half-year report revealed an even grimmer reality: inventory reached 21 billion yuan, surging 34% year-over-year and accounting for 45.7% of total assets. Finished goods comprised 98.7% of inventory, with vaccine turnover days exploding from 165 days to 1,104 days. Given vaccines have only a 2-year shelf life, the 20.7 billion yuan inventory faces expiration and disposal risks.
Moreover, the company's liquidity alarms are sounding. With only 2.566 billion yuan in cash on hand but over 14 billion yuan in short-term debt, plus 13.5 billion yuan in accounts receivable, Chongqing Zhifei Biological has urgently launched a 6 billion yuan corporate bond issuance plan to address immediate funding needs.
**Adding Insult to Injury: Domestic 9-Valent Vaccine Enters at Low Prices**
In June this year, Walvax Biotechnology's domestic 9-valent HPV vaccine received approval, priced at less than half of Merck's product. The once-monopolized market structure has been shattered, accelerating the collapse of the distribution model's competitive moat. Although Merck is pivoting toward the male market for growth, it struggles to resolve the near-term saturation of the female market.
Chongqing Zhifei Biological's predicament serves as a warning bell for the pharmaceutical industry: over-reliance on a single distribution model is like walking a tightrope at high altitude. Currently, the 21 billion yuan inventory hangs like the sword of Damocles, while the 6 billion yuan bond issuance provides only temporary relief. Whether this former vaccine leader can carve a path through independent R&D and inventory digestion will determine if it can emerge from its darkest hour.
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