Lepu Medical's Spin-off Wave: Capital Strategies, Succession Challenges, and Pan-Health

Optimize the balance sheet.

《Investor Network》Cai Jun

Lepu Health (300003.SZ, hereinafter referred to as the “Company”) has hit another setback with its spinoff listing.

In March 2026, the plan for RuiJian Medical, an Northern Stock Exchange listing under the Lepu group, was officially announced to be terminated. Actually, the Company’s capital operations have never stopped. On the left hand, since 2020, the Company has gradually acquired Bosimei, Minwei Biotech, and Frontier Technology, corresponding to tracks such as dentistry, innovative drugs, and brain-computer interfaces. On the right hand, the Company is still proceeding with the spinoff and listing of Binqun Medical.

Actually, spinoff listings in the healthcare industry have gone through two major changes. Interestingly, Lepu Health and another pharmaceutical group, Kelun Pharmaceutical, just happened to catch the entire cycle and initiate a new round of internal reshuffle. Standing at the crossroads of industry change, the outcome of the reshuffle will provide the answer in due course.

Left Hand and Right Hand of the Spinoff

It is certain that the termination of RuiJian Medical’s listing is by no means the end of Lepu Health’s spinoff.

At present, the Company’s subsidiary Binqun Medical is in the stage of IPO guidance for the ChiNext board. Actually, the enterprise launched its listing plan back in 2023. As a high-margin asset in the field of surgical devices, the latest guidance report shows that it still needs to achieve independence in terms of operations, business, assets, and personnel.

Put another way, independence is a sword hanging over the top of the Company’s spinoff listing. RuiJian Medical, which failed to get listed, mainly sells blood purification consumables. In terms of performance, it has stable profitability and cash flow; however, in two rounds of regulatory inquiries, regulators focused on issues such as the fairness of related-party transactions and the authenticity of sales. In the final analysis, the related-party layout of the Lepu group is the crux of the problem in capital operations.

Looking back since 2020, the Company has repeatedly launched campaigns to the capital market through spinoffs, showing a pattern of intertwined success and failure. Those whose listings were terminated include Lepu Diagnostics and RuiJian Medical; those that succeeded include Lepu Bio and Xintai Medical. What’s interesting is that the winners all got listed on the Hong Kong Stock Exchange, while the losers all fell on the A-share market.

Therefore, the market is curious about the underlying logic behind the Company’s enthusiasm for spinoff listings, and the path of the entire operation is very clear.

Lepu Bio and Xintai Medical, which both successfully landed on the Hong Kong Stock Exchange, are typical assets characterized by high investment, high growth, and high risk. Both focus on high-barrier tracks such as oncology innovative drugs and heart valves. In the early stage, they required massive clinical investment, resulting in a long profitability cycle and a relatively high rate of R&D failures. By contrast, the failed spinoffs—Lepu Diagnostics and Binqun Medical—are typical assets with high gross margins, steady profitability, and mature cash flow.

Around these two fundamentally different types of assets, the Company demonstrates different core logics. On the left hand, targeting innovative businesses such as Lepu Bio and Xintai Medical, the Company’s appeal is to offload loss pressure and diversify R&D risk. Since these two assets enjoy higher valuations on Hong Kong stocks, when financing is fully realized, it helps ease the Company’s investment pressure.

On the right hand, targeting mature businesses such as Lepu Diagnostics and Binqun Medical, the Company’s appeal is asset securitization and consolidating returns. After these two assets are spinoff and repriced, the Company still retains controlling interests. It also benefits from potential dividend income from subsidiaries, fully capturing value.

But beyond the left-hand and right-hand rotation, there is an even deeper logic: optimizing the balance sheet. In earlier years, through acquisition-driven expansion, the Company “carried” liabilities and goodwill, and its liability ratio exceeded 40%. After multiple rounds of spinoffs, the Company’s liability ratio dropped significantly to around 30%. After lightening its load, the Company has revealed yet another ambition.

A new crossroads

Looking back, spinoff listings in the healthcare industry have gone through two major changes. Interestingly, Lepu Health and another pharmaceutical group, Kelun Pharmaceutical, just happened to catch the entire cycle.

The first stage is the early development period of 2020–2021. At that time, the spinoff listing rules for A-shares were implemented. Coinciding with the high valuations of the healthy living segment, many listed companies launched operations. The Company spun off Lepu Diagnostics, and Kelun Pharmaceutical spun off Chuanling Biotech, both in this stage.

Among them, Kelun Pharmaceutical also had a relatively high level of liabilities. The difference is that Chuanling Biotech, whose main business is antibiotic intermediates, has many production lines. The spinoff from the Kelun group is essentially heavy-asset securitization, aimed at easing the pressure from liabilities. Ultimately, in 2022, Chuanling Biotech listed on the ChiNext board.

In other words, at that time, the A-share market leaned toward spinoffs of heavy-asset businesses rather than high-margin assets.

The second stage is the Hong Kong stock wave of 2022–2023. By then, A-share review had tightened across the board, and the Hong Kong Stock Exchange was more accommodating to unprofitable pharmaceutical companies. During this period, the Company and Kelun Pharmaceutical seized the window and successfully pushed Lepu Bio, Xintai Medical, and Kelun Botaik to listing.

It is very clear that the underlying logic for both the Lepu group and the Kelun group is to reduce liabilities through spinoffs. The difference is that the Kelun group seized two opportunities and achieved “a light boat passes through ten thousand mountains” between the two capital markets. But in any case, the momentum of capital turns quickly and disappears just as fast. What truly tests both companies is the qualitative change in industry advancement.

Since 2020, with the full rollout of centralized procurement (VBP) and the rise of consumer healthcare, innovative products have become the driving force for transformations among listed companies. The focus has centered around innovative drugs, innovative medical devices, medical beauty, health products, and more. In short, the convergence of “broad healthcare” has become a trend.

At the crossroads of the wind, internal proactive change arrived as scheduled.

Shift into higher gear

Lepu Health is accelerating its shift. In 2024, the Company’s former general manager and former deputy general manager resigned, and Pu Fei, the daughter of the actual controller, took over as general manager.

After the handover between the new and old teams, the Company launched a reconstruction of its organizational structure. On the one hand, to adapt to the new strategy, the Company changed its previously decentralized management model—departments such as marketing and the back/middle office were streamlined and integrated, and are directly led by Pu Fei. On the other hand, it optimized its staffing structure, covering R&D and production personnel from Lepu Diagnostics and Lepu Yunzhi, as well as marketing personnel for the pharmaceutical segment, among others.

The essence of the strategic shift is to achieve efficiency synergies around broad healthcare segments such as innovative drugs, high-end devices, and medical beauty. Especially in the medical beauty segment, the Company has built a matrix of three major functional product categories: regenerative filling, wrinkle repair, and facial shaping. The core logic is to develop medical beauty products with a dimensionality-reduction approach based on a professional medical platform.

In the first three quarters of 2025, the Company’s revenue from its medical services and health management business was 320 million yuan, up 28.27% year over year. Among them, the Tongyan injection and the water light injection achieved operating revenue of 86 million yuan. In 2025, the Company expects non-recurring net profit attributable to shareholders of 800 million yuan to 1.2 billion yuan, representing a year-over-year increase of 261.29%–441.93%. The Company states that the traditional business base remains stable; incremental contributions come from innovative drug and dermatology business. The effectiveness of the Company’s earlier personnel optimization and resetting, as well as the reshaping of the organizational structure, has already shown results.

As for Kelun Pharmaceutical, internal succession and its transformation into broad healthcare are also accelerating. In 2025, the enterprise clearly positioned itself to move into the broad healthcare track, with the goal of achieving “therapeutic medicine + preventive medicine” within 3–5 years. Led by the actual controller Liu Gexin and his son Liu Sichuan, the plan is to stabilize the basic business of innovative drugs and APIs as a prerequisite, and then launch the health product Ergothionine sulfide.

From the current perspective, the transformation of the Lepu group has shown early results. In 2025, Lepu Bio achieved profitability in its first year, with attributable net profit of 935 million yuan, and several core drugs expanded their sales. In the same period, Kelun Botaik incurred losses in its first year of commercialization, and its external BD revenue still accounted for the largest portion of revenue.

Ultimately, both the Lepu group’s spinoff listings and its internal leadership reshuffle are accelerating, and can be considered industry samples together with the Kelun group. As for what happens next, on the one hand it depends on the direction of the capital market, and on the other it depends on the efficiency of the reshuffle. (Produced by Thinking Finance)

Comments: “Like + Follow + Share—don’t miss the next in-depth article.”