Tongrentang Medical and Wellness (02667.HK) has locked in over 46%, as the subscription for the century-old traditional Chinese medicine's first stock enters the final countdown.

The Chinese medicine healthcare service leader, carrying 356 years of brand heritage, is recently conducting an IPO in Hong Kong, backed by “time-honored brands,” completing the last piece of the puzzle for Tongrentang Group’s “pharmaceutical-retail-medical care” health ecosystem. This global offering is for 108 million shares, with approximately 10% for the Hong Kong public offering and about 90% for the international offering. Cornerstone investors have locked in over 46% of the offering size, with the cornerstone ratio close to the maximum limit.

Institutional Real Money Entering the Market: High Cornerstone Ratio, Strong Institutional Participation

Data is the most honest signal.

According to the prospectus, cornerstone investors Airport Technology Capital (Hong Kong) and Aurora SF will subscribe for shares totaling about HKD 389 million at the offering price, accounting for over 46% of the global offering size, a relatively high level among recent Hong Kong IPOs. A high cornerstone lock-up ratio means limited tradable shares after listing, providing stronger price support in the secondary market. Additionally, the cornerstone lock-up period exceeds the traditional 6 months, further enhancing market expectations.

Customer Acquisition Cost Extremely Low: Only One-Sixtieth of Peers

In the healthcare service industry, customer acquisition cost is a key variable determining the profit ceiling.

Tongrentang Healthcare relies on the well-established brand “Tongrentang,” founded in 1669, where the economic value of the brand barrier can be summarized by a number: the promotion expense as a percentage of revenue is only about 0.2% in 2024. However, the number of patient visits skyrocketed from 1.321 million in 2022 to 2.977 million in 2024, with a CAGR of 50.1%. By September 2025, it reached 2.536 million, an increase of 21.5% year-on-year. Membership grew from 436,000 to 767,000 (as of September 2025), showing strong repeat purchase stickiness.

As revenue scales up, every penny spent on marketing by peers can almost be directly converted into profit for Tongrentang Healthcare. This is a moat that no competitor can replicate in the short term.

Profit Turning Point Established: Adjusted Net Profit Growth of 29%

For growth companies in the IPO window, investors are most concerned about: Is the profit trend upward or downward?

The answer is clear—upward, and accelerating.

Financial data shows the company has demonstrated robust profitability. From 2022 to 2024, the company transformed from a loss of HKD 9.23 million to a profit of HKD 46.2 million, with adjusted net profit reaching HKD 61.73 million, a growth of 29%; gross profit increased from HKD 143 million to HKD 222 million, with a compound annual growth rate of 24.8%; the cash conversion rate in 2024 was 87.2%, with interest-bearing debt accounting for only 11.56%, and holding cash of HKD 225 million, significantly improving profit quality.

Tongrentang Healthcare’s current development stage is highly similar to that of Gushengtang at the time of its IPO, where profitability has just entered the release channel, and the fastest growth stage may not have arrived yet.

Copy Growth Phase: Plan to Add 20 Medical Institutions

Chinese medicine healthcare services form the basic performance base, and the company has established a tiered diagnosis and treatment network comprising 25 medical institutions, including 12 owned medical institutions and 12 managed medical institutions, as well as 1 internet hospital providing online diagnosis and treatment services. By 2024, the number of patient visits is expected to reach about 3 million, with a CAGR of 50.12%; by September 2025, approximately 2.536 million, a year-on-year increase of 21.5%; membership is around 740,000, with about 500 cooperative pharmacies.

As the core business opening up growth space for Tongrentang Group, the healthcare service sector still requires stronger support and expansion. According to its fundraising disclosure, the company plans to acquire 5 new medical institutions, establish 5 new medical institutions in a light-asset manner, and additionally provide management services to 5-10 medical institutions. Clearly, its strategy for rapid expansion in the future is clear, with “acquisition + light-asset new construction + management output” working in synergy.

Not “Famous Doctor-Driven”: Relying on Standardized “System-Driven” Approach

For Chinese medicine healthcare service companies, the biggest growth bottleneck lies in whether “famous doctors can be replicated.” Tongrentang Healthcare is answering this question with a systematic methodology.

The company extends upstream and has built its own supply chain system, completing an end-to-end industrial chain closed loop. In addition to pharmaceuticals, the sales of health products have also achieved commercial realization of brand value. The company has been authorized to exclusively sell the popular An Gong Niu Huang Wan series products from Tongrentang in Zhejiang Province, and as of the last feasible date, the company has sold health products and other products to over 4,000 institutional clients.

Furthermore, the company has rooted a cloud digital system in every medical institution within its network, using real-time data analysis and management, replacing “hospital directors” with intelligent systems, and transitioning towards a “human-machine collaborative” new type of chain medical management approach. This allows growth to no longer rely entirely on individual famous doctors’ “human management,” but instead on a replicable operational system, digital middle office, and talent training mechanism to achieve scalable and standardized expansion.

AI + Traditional Chinese Medicine: Deep Pharmaceutical Data Barriers

As the only strategic vehicle for Tongrentang Group in the field of traditional Chinese medicine services, Tongrentang Healthcare stands at a historical turning point where traditional Chinese medicine meets artificial intelligence. Recently, Tongrentang Group has been actively promoting the application of AI technology in the Chinese medicine field, collaborating with Xiaomi to create an “AI Intelligent Traditional Chinese Medicine Health Service Agent,” deeply integrating traditional Chinese wisdom with modern AI technology to form a service closed loop of “consultation—advice—service—purchase medication.”

Looking ahead, the trillion-dollar traditional Chinese medicine healthcare service market is entering a golden window for leading integration. With a multi-driver development model, a solid financial foundation, and a forward-looking layout of AI technology, Tongrentang Healthcare has not only completed the last piece of the “puzzle” of the time-honored brand’s capital map but also opened a new era of deep integration between traditional Chinese medicine services and cutting-edge technology.

With the fundraising from the IPO in place, it is believed that Tongrentang Healthcare is expected to accelerate the comprehensive AI transformation of its core business, continuously consolidating its leading position in the trillion-dollar traditional Chinese medicine healthcare service market and leading the industry into a new era of intelligence.