Core Viewpoint - Kangzheng Pharmaceutical (00867.HK) plans to spin off its skin health business, Demy Pharmaceutical, for a "listing by introduction" on the Hong Kong Stock Exchange, marking it as the first "zero fundraising" IPO case in 2025 [2][5][18] Company Overview - Kangzheng Pharmaceutical has faced declining performance, with revenue dropping from 91.5 billion RMB in 2022 to 80.13 billion RMB in 2023, and further down to 74.69 billion RMB in 2024, representing a year-on-year decline of 12.4% and 6.7% respectively [6][7] - The company experienced a significant drop in net profit, from 23.84 billion RMB in 2023 to 16.13 billion RMB in 2024, a decrease of 27.2% [7] - The decline in performance is attributed to the failure of key products to win bids in national procurement, leading to a loss of market share and revenue [7][8] Demy Pharmaceutical Financials - Demy Pharmaceutical's revenue grew from 384 million RMB in 2022 to 618 million RMB in 2024, but it also reported increasing losses, from 55.17 million RMB in 2022 to 105.63 million RMB in 2024 [8][9] - The company's cost structure is heavily skewed towards sales expenses, which consumed 99% of its gross profit in 2024, leading to a net loss of 106 million RMB [10][12] - Demy Pharmaceutical's research and development expenditure remains low compared to its sales expenses, with a research expenditure rate of only 4% [10][12] Strategic Implications - The spin-off is seen as a strategic move to alleviate financial pressure on Kangzheng Pharmaceutical while allowing Demy Pharmaceutical to seek independent funding and partnerships [18] - The choice of "listing by introduction" allows for a quicker and less costly process, avoiding the dilution of shares and the complexities of traditional IPOs [17][18] - However, Demy Pharmaceutical will still face scrutiny regarding its ongoing losses and the sustainability of its business model post-spin-off [13][15] Market Context - The move reflects a broader trend among Chinese pharmaceutical companies seeking to adapt to the pressures of national procurement policies and increasing competition in the industry [17] - Since 2020, over 20 pharmaceutical companies have pursued similar spin-offs to focus on high-growth areas like medical aesthetics and consumer healthcare [17]
康哲药业分拆德镁医药上市：资本腾挪术下的“求生”与“弃子”博弈