Tongrentang's revenue and net profit both decline in 2025, as the century-old brand faces multiple challenges

How Do AI · How Do Medical Insurance Restrictions on An Gong Niu Huang Wan Affect Tongrentang’s Core Business?

Reporter Yan Shuo, 21st Century Business Herald

As a century-old traditional Chinese medicine brand, Beijing Tongrentang Co., Ltd. (hereinafter “Tongrentang”) delivered a set of financial results for 2025 showing declines in both revenue and net profit.

During the reporting period, the company achieved operating revenue of 17.256 billion yuan, down 7.21% year-on-year, marking the first decline in nearly five years; net profit attributable to shareholders was 1.189 billion yuan, down 22.07% year-on-year, continuing the decline trend from last year.

By industry segment, revenue for both its two main businesses—pharmaceutical manufacturing and pharmaceutical commerce—declined, and gross margin also fell slightly; in terms of sales model, both retail and wholesale revenue declined. Retail gross margin increased by 1.49 percentage points, while wholesale gross margin decreased by 2.18 percentage points, ultimately reducing the overall gross margin of the main business by 1.08 percentage points to 42.69%.

Worth noting is that at the end of 2025, a dispute over Tongrentang-brand OEM Antarctic krill oil brought Tongrentang’s brand governance to the forefront. Although Tongrentang has no equity relationship with the companies involved, it still drew attention due to trademark issues. During the reporting period, Tongrentang paid 35.5794 million yuan in brand usage fees to its controlling shareholder, China Beijing Tongrentang (Group) Co., Ltd. (hereinafter “Tongrentang Group”), a surge of 296.99% year-on-year, reaching a historical high.

In 2025, Tongrentang’s operating performance reached one major turning point in nearly five years: both revenue and net profit attributable to shareholders declined in parallel, ending the growth channel it had enjoyed previously.

The financial report shows that from 2021 to 2024, Tongrentang’s revenue grew from 14.603 billion yuan to 18.597 billion yuan, but in 2025 it declined by 7.21% year-on-year and fell to 17.256 billion yuan. From 2021 to 2023, the company’s net profit attributable to shareholders increased from 1.227 billion yuan to 1.669 billion yuan, with growth rates all exceeding 15%; after a year-on-year decline of 8.54% in 2024 to 1.526 billion yuan, net profit further fell by 22.07% in 2025 to 1.189 billion yuan, reverting to the level seen five years earlier.

Regarding changes in revenue, Tongrentang stated in its financial report that the main factors included a slowdown in market demand and intensified industry competition, among other comprehensive factors, leading to a reduction in sales revenue during the reporting period.

In March this year, Tongrentang’s core product, An Gong Niu Huang Wan, was delisted from Shanxi’s pharmaceutical and medical device procurement platform and given a two-year ban from entry in the hospital system because there were no records of any in-hospital transactions in the past two years, drawing widespread attention in the market. Market data shows that the product has long ranked first in both category sales volume and sales revenue. Over the past nearly three years, the combined sales revenue of An Gong Niu Huang Wan by Tongrentang and its holding company Tongrentang Technology has exceeded 2 billion yuan.

Behind this are policy impacts. The 2024 edition of the national medical insurance catalog clearly states that An Gong Niu Huang Wan is only reimbursable for emergency patients or inpatients, and for An Gong Niu Huang Wan containing natural musk and natural cow bezoar, the pooled fund will not provide payment.

In recent investor communications, Tongrentang said that An Gong Niu Huang Wan (tissue culture) has already achieved in-hospital channel sales. The versions with dual-natural raw materials have not yet been included in the scope of pooled fund payments. Currently, the company is continuously increasing efforts to promote An Gong Niu Huang Wan through in-hospital channels, to further broaden scenarios for clinical use.

An Gong Niu Huang Wan, which belongs to the cardiovascular product category, is an important revenue pillar for the company. Against this backdrop, in 2025 the sales volume for this category fell by 7.05% year-on-year to 15.3037 million boxes. Even though production volume decreased by 4.79% year-on-year, inventory for this category surged by 57.38%. Revenue also declined accordingly: after dropping sharply by 20.46% year-on-year, it fell to 4.093 billion yuan. Although sales volume of tonic products and gynecological products grew by 61.43% and 7.35% year-on-year respectively, because their revenue share is relatively small, they are unable to offset the revenue decline in the cardiovascular product category.

In addition, regarding net profit attributable to shareholders, there was a downward trend in the fourth quarter of 2025. From Q1 to Q4, figures were 582 million yuan, 363 million yuan, 232 million yuan, and 118 million yuan, respectively; Q4 accounted for only 20% of Q1.

In 2026, Tongrentang will coordinate its own brands, core technologies, and channel resources, deepen marketing reforms, optimize the layout of industrial production capacity, and accelerate the development and implementation of research-driven product varieties. The company will speed up the R&D of new Chinese patent medicines and the secondary development of existing products; continue advancing the R&D layout for innovative drugs, classic famous formulas, and health tonics and medicinal liquor; build a diversified R&D pipeline, strengthen an integrated mechanism across production, sales, and research, and amplify the effectiveness of collaborative implementation.

One data point in the financial report is worth paying attention to: in 2025, as an listed company, Tongrentang paid 35.5794 million yuan in brand usage fees to its controlling shareholder, Tongrentang Group, for use of the “Tongrentang” brand, a significant year-on-year increase of 296.99%, setting a historical record. In prior years, this fee had been stably maintained below the tens of millions of yuan range for many years.

Brand governance has become a topic of intense attention for Tongrentang in recent years. At the end of 2025, a product claimed to be “Beijing Tongrentang 99% high-purity Antarctic krill oil” was exposed for having phospholipid content of 0, raising suspicions of fraud. The product is distributed by Sichuan Healthy Pharmaceutical, a company under Tongrentang Group’s Tongrentang Health, and it falls under an OEM-for-brand model. After the incident, the listed company Tongrentang urgently issued a clarification announcement, stating that it does not directly or indirectly hold equity in Sichuan Healthy Pharmaceutical, and that all its medicines are independently produced, with no third party commissioned for OEM manufacturing. The company quickly cut off the risk, but the incident still exposed issues in Tongrentang’s brand usage practices.

Legal professionals previously told 21st Century Business Herald that Tongrentang’s clarification of having no equity relationship with Sichuan Healthy Pharmaceutical is intended to clarify the responsibility boundaries of the listed company to shareholders, so as to prevent unrelated risks from being transmitted to the listed company level. However, in consumers’ understanding, it is rare for people to deliberately distinguish equity levels among the listed company, the group company, and subsidiaries; instead, they directly link products bearing labels such as “Tongrentang” to the brand’s credibility. For a time-honored brand, equity can be separated, but the impact on brand reputation is integrated. As the core listed platform carrying the brand, the listed company should not stop at “drawing clear lines,” and should further promote coordinated governance at the group level.

In 2026, the listed company Tongrentang will explicitly strengthen the use and management of “Shuanglong” (Double Dragon) trademarks, further highlighting its differentiated characteristics from other market players; at the same time, it will focus on governance and safety control, and reinforce the bottom line for high-quality development.

As the group’s core listed platform, Tongrentang directly holds controlling stakes in two Hong Kong-listed companies: Tongrentang Technology and Tongrentang Sinopharm. Both of them came under simultaneous performance pressure in 2025. Wind data shows that Tongrentang Technology, mainly engaged in the manufacture and sale of Chinese patent medicines, achieved revenue of 6.484 billion yuan in 2025, down 10.69% year-on-year; net profit attributable to shareholders was 396 million yuan, down 24.05% year-on-year. Tongrentang Sinopharm, which focuses on overseas Chinese medicine business, recorded revenue of 1.333 billion yuan in 2025, down 6.10% year-on-year; net profit attributable to shareholders was 350 million yuan, down 20.60% year-on-year.

It is also worth noting that capital operations at the group level have continued to accelerate, with horizontal acquisitions being used to improve the industrial chain layout. In December 2024, Tongrentang Group obtained a 60% stake in Tianjin Tongrentang. In 2025, the listed company Tongrentang and Tianjin Tongrentang have already conducted business synergies, generating small-value related-party transactions. In addition, Tongrentang’s newly appointed director and chief accountant, Pan Baoxia, also became a director of Tianjin Tongrentang in September 2025. The subsequent pace of business synergy between the two sides is expected to accelerate.

In February 2026, Tongrentang Group plans to acquire Jiashitang, making it the acquirer’s controlling party. Jiashitang mainly engages in the wholesale of medical devices, the wholesale of pharmaceuticals, and the retail of pharmaceuticals. On March 27, the acquisition was approved under the State Administration for Market Regulation’s anti-monopoly review of concentration of business operators, and the core policy risks have basically been eliminated. If the transaction is ultimately completed, Jiashitang will become the fourth listed company within the Tongrentang Group system, after Tongrentang, Tongrentang Technology, and Tongrentang Sinopharm.

Previously, Tongrentang’s plan for the Tongrentang Health and Elderly Care segment—expected to become the group’s fourth listed company—ran into setbacks. Originally scheduled for listing on the Hong Kong Stock Exchange on March 30, Tongrentang Health and Elderly Care announced on March 27 that it would delay its global offering and listing plan, mainly due to unfavorable current market conditions. Tongrentang Health and Elderly Care is directly held by the group at 83.98%, and has no direct equity relationship with the listed company Tongrentang. This delay in listing also forces the group to adjust the pace of industrial capitalization advancement in the elderly care sector.

In short, Tongrentang’s performance pressure in 2025 was the result of multiple factors working together. Whether the company can reverse the downturn in 2026, as it continues to push forward its strategy and deepen synergy at the group level, still needs to be tested by the market.