Ask AI · Why Has the Valuation Logic of Pharmacist Help Shift Amid Large-Scale Capital Withdrawals?

Produced by | Startup Frontline

Author | Zhang Jue

Editor | Egg Boss

Design | Xing Jing

Review | Song Wen

Since its official establishment in 2015, Pharmacist Help, as a digital platform connecting upstream suppliers and end pharmacies, has witnessed a decade of upheaval in China’s pharmaceutical industry. During this period, the National Healthcare Security Administration was founded, volume-based procurement entered normalization, and regulation of pharmaceutical distribution channels became increasingly strict.

From consecutive losses before going public to a significant financial turnaround after listing, Pharmacist Help finally delivered a yearly report in 2025 showing markedly improved profitability. The financial report indicated a net profit of 153 million yuan, up 409.7% year-over-year. Among them, its private label business has become a new profit point.

However, as policies in the pharmaceutical market change rapidly, Pharmacist Help’s initial valuation logic is beginning to collapse.

Before the IPO, Pharmacist Help was highly favored by capital, with a valuation as high as $1.44B and exceeding 40 billion yuan after listing. Now, the company’s market value has shrunk to around 3.5 billion yuan, and it was removed from the Hong Kong Stock Connect in March 2026.

Is Pharmacist Help’s recent profitability merely a fleeting moment at the end of the rough era of pharmaceutical e-commerce? Or can it continue to support the digital future of this trillion-yuan track?

1. Deliver the Best Performance

In 2025, China’s off-campus pharmaceutical retail market was not optimistic. According to Zhongkang Data, the total retail drug sales in the year reached 436.8 billion yuan, a slight decrease of 0.3% year-over-year, marking the first negative growth in five years.

Under multiple pressures such as the reform of individual medical insurance accounts, the implementation of outpatient co-payment policies, and stricter compliance regulation, demand in traditional retail terminals shrank, with OTC drug sales accounting for only 42.3%, and growth continued to be under pressure.

However, in an industry approaching zero growth overall, Pharmacist Help delivered its best performance since inception.

According to the 2025 financial report, Pharmacist Help achieved an annual revenue of 20.9 billion yuan, up 17.1%; net profit of 153 million yuan, up 409.7%; and adjusted net profit of 237 million yuan, up 51.2%.

(Picture / Pharmacist Help 2025 Performance Report)

Pharmacist Help’s growth in 2025 mainly came from further concentration of existing market share.

During the reporting period, the company’s self-operated revenue increased by 18.2% to 20.07 billion yuan, serving as the core engine driving total revenue. Currently, Pharmacist Help’s coverage of individual pharmacies has reached 85%, with procurement share around 30%, corresponding to a market share close to 25%.

At the chain pharmacy level, it has covered 4,000 chain headquarters. This growth essentially reflects the replacement of traditional multi-tier distribution channels by digital supply chains. When terminal pharmacies face operational pressures, Pharmacist Help absorbs shares that previously belonged to traditional small and medium wholesalers through centralized ordering and improved delivery efficiency.

Additionally, the company continues to deepen its presence in broad, sinking markets. The financial report shows that Pharmacist Help now covers 98.9% of counties and 91.2% of towns nationwide.

Profitability improvements mainly stem from adjustments in gross profit structure. In 2025, Pharmacist Help’s overall gross profit margin increased from 10.1% to 11%, with gross profit rising by 27.2%, far outpacing revenue growth.

The core of this change lies in the volume of private label business. In 2025, the transaction scale of Pharmacist Help’s private brands was about 2 billion yuan, up approximately 282%, accounting for 80% of its flagship business.

This business model leverages the market scale of downstream distribution to directly OEM (original equipment manufacturing or contract manufacturing) products to factories with idle capacity.

Private label drugs involve the platform selecting promising varieties, entrusting qualified upstream manufacturers to produce and label them with its own brands, thereby controlling pricing and distribution rights.

This strategic acceleration began in October 2024, when Pharmacist Help invested 1.03B yuan to acquire 100% of the B2B pharmaceutical supply chain service provider “One Block Medical.” Since its founding in 2019, One Block Medical has mainly distributed OEM private label drugs to chain pharmacies via direct supply.

Currently, Pharmacist Help’s private brands are mainly managed by its “LeYaoShi” and “One Block Medical” units, with LeYaoShi focusing on product selection. Its existing private brands include LeYaoShi, YuanDian, HuiTai, etc.

Taking the “LeYaoShi” matrix as an example, it has covered cold medicine scenarios such as Huoxiang Zhengqi oral liquid, painkillers like Ibuprofen and Celecoxib, as well as 15 common disease medications for everyday consumers.

(Picture / LeYaoShi Official Website)

By removing the circulation premium of traditional branded drugs, Pharmacist Help lowers upstream procurement prices while maintaining competitive prices downstream, thus increasing its gross profit margin from 6.2% to 7.7%.

However, the company’s overall net profit margin remains low at 0.7%. This indicates that its business model still relies on a high-turnover, low-margin approach: Pharmacist Help has over 60 days of accounts receivable from upstream suppliers, while its inventory turnover days are only about 30 days, and downstream pharmacies mostly settle in cash.

Meanwhile, the company heavily depends on sales and marketing expenses. In 2025, Pharmacist Help’s sales and marketing costs grew by 19.3% to 1.74B yuan.

2. Market Cap Falls to 3.5 Billion, Removed from Hong Kong Stock Connect

One week after releasing its 2025 financial report, Pharmacist Help’s stock price rebounded by 18.6%, but this did not reverse its long-term sluggish trend.

Currently, the stock price remains around HKD 5, a more than 90% drop from the peak of HKD 64.5 in August 2023. Its market cap has shrunk from over 1.44B yuan to about 3.5 billion yuan.

The large-scale capital withdrawal is the direct cause of the market value collapse. Pharmacist Help listed in June 2023, and on December 13, 2023, the lock-up period expired, during which its stock price plummeted 46% in a single day. Over the following year and a half, core investors reduced holdings consecutively.

DCM chose to fully exit, Fosun Pharma sold multiple times, and Sequoia Capital fully liquidated its remaining shares at HKD 3.1 per share in September 2025. Baidu, which led the Series E round at USD 8.64 per share and held a high position, also completed its exit in November 2024.

These capital backers once valued the IPO at $600k, but now their mass sell-offs reflect market doubts about Pharmacist Help’s long-term valuation logic.

The fundamental reason for capital withdrawal is the disappearance of the premium in its track.

Pharmacist Help’s business model is mainly “platform + self-operated” dual-driven. The platform builds a digital marketplace for sellers and buyers, charging commissions based on sales volume. Its self-operated business involves purchasing drugs and selling to downstream pharmacies and primary healthcare institutions.

Initially, Pharmacist Help was regarded as a dual benchmark for industrial internet and pharmaceutical distribution, aligning with policies like the “Two-Invoice System” and “Prescription Outflow.” In the primary market narrative, it was seen as a company that used digital means to eliminate layers and markups in pharmaceutical circulation, leveraging internet long-tail effects to improve off-campus distribution efficiency.

However, with the normalization of medical insurance centralized procurement and the fading of prescription outflow dividends, the off-campus market has reverted from a capital windfall to a traditional track. The valuation logic has shifted from high-growth “platform internet” to the more traditional “pharmaceutical distribution.”

Especially with its focus on private label drugs, its business model is increasingly aligned with traditional pharmaceutical retail. Referencing the similarly private label-focused LaoBaiXing DaYaoFang, which has a private brand matrix covering Vinojian, YaShengTang, and others, with over 600 varieties, private label sales accounted for 22.8% of its retail sales in the first three quarters of 2025.

This private label operation relies on offline terminals, with higher gross margins but fundamentally a traditional retail logic dependent on supply chains and operations, diverging sharply from Pharmacist Help’s early internet-disruptive, asset-light narrative.

Liquidity issues have also intensified market pessimism. On March 9, 2026, Pharmacist Help was removed from the Hong Kong Stock Connect, and its stock price fell over 15% on that day, closing at HKD 3.92.

Losing southbound funds means trading volume will shrink further, making valuation recovery even more difficult.

Previously, facing the stock price decline, Pharmacist Help conducted several share buybacks from May to November 2025, totaling over 7.4 million shares at prices ranging from HKD 6.98 to 11.21.

(Picture / Pharmacist Help 2025 Performance Report)

The day after releasing its 2025 financial report, management announced a new buyback plan. On March 24, 2026, Pharmacist Help granted a total of 32.55 million share options to Chairman and CEO Zhang Buzhen and Executive Director and CFO Chen Fei, with an exercise price of HKD 4.608 per share.

The unlocking of these options is tied to the company’s total market cap. Zhang Buzhen and Chen Fei’s options are divided into three vesting levels: when Pharmacist Help’s average market cap over 10 consecutive trading days first reaches or exceeds HKD 12 billion, 20 billion, and 30 billion, they will vest 4.11 million, 8.22 million, and 13.71 million options for Zhang Buzhen, and 1.37 million, 2.06 million, and 3.08 million options for Chen Fei, respectively.

These targets are far from the company’s current market cap. Such symbolic confidence signals are unlikely to convince investors in a market lacking industry growth and liquidity support.

3. Difficult Crossroads

Even with its best-ever performance, Pharmacist Help has not escaped a difficult situation.

In July 2025, the mandatory implementation of drug traceability codes by healthcare authorities took effect. From January 2026, all medical institutions (including non-insurance) are required to collect and upload traceability codes in full. The nationwide rollout of traceability codes becomes a tool for pharmaceutical companies to control channels. Through traceability codes, upstream manufacturers can monitor drug flow in real-time and crack down on illegal diversion.

As early as 2019, Pharmacist Help was “blacklisted” by more than ten companies including Yangtze River Pharmaceutical and Harbin Pharmaceutical Group, which issued notices demanding distributors suspend supply to Pharmacist Help’s platform, fearing its low prices would disrupt the market.

Today, technological measures have plugged regulatory loopholes, directly squeezing out the space for unregulated drugs on Pharmacist Help’s open platform, rendering its previous price arbitrage and comparison model unsustainable.

Regulation on pricing itself is also tightening. Starting April 2026, the “Rules for Internet Platform Price Behavior” will prohibit platforms from forcing nationwide price comparisons and price reductions, bringing pharmaceutical e-commerce under stricter regulation.

In the past, Pharmacist Help used its traffic advantage to restrict upstream drug companies and maintain low prices, but such practices are now deemed illegal. As the space for low-price circulation shrinks, the growth foundation of its platform model is crumbling.

To hedge risks, Pharmacist Help is heavily developing its private label brands. But this shifts the company from a neutral intermediary to an active competitor, undermining trust in the platform economy.

Using procurement data from its 600k partner pharmacies, Pharmacist Help identifies high-volume, high-margin products, then finds contract manufacturers to produce private label products, selling them at lower prices to the same customers.

This mode is viewed as aggressive by suppliers, because contributing data essentially feeds competitors.

As private label sales in flagship business reach 80%, Pharmacist Help has transformed from a neutral matchmaker into a market competitor leveraging data advantages, which inevitably strains relationships with mainstream pharmaceutical companies.

Regulatory costs are another major challenge. The 2025 “Pharmaceutical E-commerce Compliance Rules” require “piercing supervision” of drug sales on platforms, strictly prohibiting unlicensed small distributors from operating under compliant pharmaceutical companies’ names.

Early expansion relied heavily on such unlicensed small distributors, with platforms acting as mere matchmakers without quality responsibility. “Piercing supervision” now demands tracing invoices, funds, and actual controllers, and prohibits any shell company operations. With the upcoming revision of the “Internet Drug Trading Management Measures” in 2026, this regulation will be further enforced.

To meet compliance, Pharmacist Help must conduct on-site verification of entrants, review qualifications, and check pharmacists on duty—adding significant compliance costs.

Meanwhile, giants like JD Health and Alibaba Health, which have long cultivated sinking markets, are gradually stepping in.

In 2024, JD Health’s user share in third- and lower-tier cities exceeded 65%, while Alibaba Health is leveraging primary healthcare SaaS services to attract sinking market users in the 2025 fiscal year. These giants not only have stronger cash flows but also natural advantages in supply chain and logistics.

Pharmacist Help’s room for growth in existing markets is now very limited. After its best year in 2025, it faces a tough crossroads. Where will the company go next? “Startup Frontline” will continue to follow.

Note: The cover image and unnamed pictures in the article are from Shetu.com, based on VRF protocol.