Hanfang Pharmaceuticals rushes to list on Hong Kong Stock Exchange: a single product accounts for over 99% of revenue, production capacity utilization declines

Rui Finance Liu Zhiying On February 25, Shandong Hanfang Pharmaceutical Co., Ltd. (hereinafter referred to as Hanfang Pharmaceutical) submitted an application for listing on the Main Board of the Hong Kong Stock Exchange, with Zhongtai International serving as its sole sponsor.

The prospectus shows that Hanfang Pharmaceutical was founded in June 2004. It is a comprehensive pharmaceutical company engaged in the production, sales, and R&D of traditional Chinese medicine products, focusing on the treatment of skin and mucous membrane diseases. The company’s product portfolio is divided into three main categories: prescription external Chinese patent medicines, including its flagship product Fufang Huangbai Liquid Ointment; classic formula Chinese patent medicines, such as Angong Niuhuang Wan and Wujiji Feng Wan; and cosmetics.

Fufang Huangbai Liquid Ointment is currently the only approved prescription ointment in China’s traditional Chinese medicine field. It is a second-class national Chinese medicine protected variety, with production legally restricted to other entities, and the protection period runs from November 2023 to July 2030. According to Frost & Sullivan, based on 2024 sales revenue, Fufang Huangbai Liquid Ointment ranks fourth in China’s external Chinese patent medicine market, accounting for 1.1% of the market share.

The company acquired the marketing rights for Angong Niuhuang Wan and Wujiji Feng Wan in November 2021 and May 2022, respectively. After the acquisitions, the company initiated systematic integration processes, including building dedicated production facilities for these two products and implementing comprehensive quality assurance programs. As of the last practicable date, the company has commercialized Angong Niuhuang Wan and Wujiji Feng Wan.

During the reporting periods of 2023, 2024, and the first nine months of 2025 (hereinafter referred to as the “Reporting Periods”), Hanfang Pharmaceutical’s revenue was RMB 1.053 billion, RMB 992 million, and RMB 803 million, respectively; net profit was RMB 237 million, RMB 199 million, and RMB 145 million; and gross profit margins were 84.3%, 82.5%, and 84.3%.

The decline in Hanfang Pharmaceutical’s revenue in 2024 was due to a decrease in the maximum retail price of Fufang Huangbai Liquid Ointment in hospitals; the revenue growth in the first three quarters of last year was driven by expanding its retail pharmacy network.

By product, during the reporting periods, revenue from Fufang Huangbai Liquid Ointment was RMB 1.05 billion, RMB 990 million, and RMB 800 million, accounting for 99.8%, 99.8%, and 99.7% of the company’s total revenue, with gross profit margins of 84.4%, 82.6%, and 84.4%.

During the reporting periods, sales volume of Fufang Huangbai Liquid Ointment was 27.149 million bottles, 27.141 million bottles, and 21.74 million bottles, with prices ranging from RMB 12.21 to RMB 49.28 per bottle, RMB 15.5 to RMB 47.77 per bottle, and RMB 15.5 to RMB 47.77 per bottle, respectively.

In terms of production, during the reporting periods, the output of Fufang Huangbai Liquid Ointment was 38.9 million bottles, 35.9 million bottles, and 40.5 million bottles, with capacity utilization rates of 84.7%, 78.2%, and 57%. With the completion and operation of the new industrial park, the company’s annual production capacity for Fufang Huangbai Liquid Ointment has reached 70.2 million bottles.