State-owned assets take control, executives are replaced, and ST Renfu submits its first annual report after the change of ownership! Can it shed its historical baggage?

On the evening of March 30, ST Renfu, a leading pharmaceutical anesthetic company (600079.SH), released its 2025 annual report. The company’s revenue declined, but its net profit attributable to shareholders showed a significant increase.

In 2025, ST Renfu went through multiple major events that impacted the company’s development, completed equity changes, changed hands to state-owned assets, and at the same time was subject to other risk warnings due to historical issues.

According to ST Renfu’s 2025 annual report, in 2025 the company achieved operating revenue of RMB 23.96B, down 5.79% year over year; net profit attributable to shareholders was RMB 1.86B, up 39.53% year over year.

In 2025, ST Renfu completed an equity change and became an entity under the China Merchants Group. The original controlling shareholder, Wuhan Contemporary Technology Industrial Group Co., Ltd. (hereinafter referred to as “Contemporary Technology”),’s reorganization plan was approved by the Intermediate People’s Court of Wuhan City, Hubei Province in April 2025. In June 2025, all 387 million shares of Renfu Pharmaceutical held by Contemporary Technology were transferred through a judicial share transfer, with the share-over registration procedures completed.

Through this share transfer, China Merchants Life Technology (Wuhan) Co., Ltd. (hereinafter referred to as “China Merchants Shengke”) directly holds, indirectly holds through limited partner entities controlled by it, and controls a total of 387 million ordinary shares of Renfu Pharmaceutical through voting rights entrustment under the trust plan, representing 23.70% of the company’s total share capital. As of July 30, 2025, China Merchants Shengke had completed procedures such as the reconstitution of the company’s board of directors, and the company’s controlling shareholder was changed to China Merchants Shengke.

△Image source: Tuchong

On December 12, 2025, Renfu Pharmaceutical released an announcement titled “Announcement on Implementing Other Risk Warnings and Suspension” (hereinafter referred to as the “Suspension Announcement”). The “anesthesia king,” which had long delivered steady performance, was suddenly subjected to other risk warnings, which also surprised the market. Behind this was the historical legacy issue of the former controlling shareholder. According to information disclosed by the Hubei Regulatory Bureau of the CSRC, during the period when “the Contemporary group” was the actual controller of Renfu Pharmaceutical, there were a large number of illegal financial activities.

On April 1, ST Renfu’s share price closed at RMB 19.07 per share, up 1.27%.

Selling assets and slimming down

Regarding the reasons for the changes in performance, ST Renfu stated in its annual report that during the reporting period, the company achieved operating revenue of RMB 23.96B, down 5.79% from the same period last year. This was mainly due to the structural reform in the payment side of the pharmaceutical industry, as well as the company’s implementation of its “core business focus” work to optimize its business structure.

Against this backdrop, by means such as refined management, optimizing the compensation system, controlling the scale of liabilities, and reducing financing costs, the company achieved net profit attributable to shareholders of RMB 1.86B, up 39.53% from the same period last year. It also achieved non-recurring profit after deduction of non-recurring items of RMB 1.76B, up 54.75% from the same period last year.

In its annual report, ST Renfu repeatedly mentioned the concept of “core business focus.” ST Renfu explained that during the reporting period, the company completed the disposal of equity in companies including Yichang Renfu Maternal & Infant Health Management Co., Ltd., Renfu Pharmaceutical Group Medical Supplies Co., Ltd., and Hangzhou Nuo’jia Medical Equipment Co., Ltd. It also deregistered multiple subsidiaries such as Yichang Renfu Medical Devices Co., Ltd. and Wuhan Zhiyingxinsheng Enterprise Consulting Co., Ltd. This effectively revitalized existing assets and reduced management costs.

At the same time, the company focused on the core biopharmaceutical business track, increased investment in high-value innovative projects and quality production capacity, promoted resource allocation to concentrate on core business and advantageous areas, and continued to improve the efficiency of resource utilization.

Currently, its anesthesia drugs business is still ST Renfu’s core business. According to ST Renfu’s annual report, in 2025, the subsidiaries engaged in research, development, production, and sales of anesthesia drugs, active pharmaceutical ingredients, and formulations—specifically Yichang Renfu—recorded revenue of RMB 8.81B and net profit of RMB 2.75B. The net profit was far higher than that of other important subsidiaries such as Getian Renfu, Xinjiang Weiya, and Hubei Renfu.

ST Renfu also introduced in its annual report that Yichang Renfu is a designated research and development and production base for anesthesia drugs, and also the commercialization production enterprise with the most complete range of fentanyl series products. Its domestic market share for anesthesia drugs exceeds 60%.

A person close to ST Renfu told the reporter from The Economic Times that under the “core business focus” strategy, ST Renfu divested diversified businesses with weak synergy with the company’s pharmaceutical main business and with lower asset quality or operating efficiency. It focused on core areas such as anesthesia and analgesia, hormones, and ethnic medicines, and expanded the industrial chain around core subsidiaries.

Historical liabilities from former shareholders

In 2025, ST Renfu saw a large increase in net profit, but its stock was still subjected to other risk warnings at the end of the year. The “Suspension Announcement” released by Renfu Pharmaceutical on December 12, 2025 stated that, because on December 12, 2025, Renfu Pharmaceutical received from the Hubei Regulatory Bureau of the CSRC the “Advance Notice of Administrative Penalty” (E-Penalty [2025] No. 8) (hereinafter the “Advance Notice”), and pursuant to what is stated in the “Advance Notice” and relevant regulations, the company’s stock would be subject to other risk warnings.

This other risk warning resulted from historical legacy issues of ST Renfu’s former controlling shareholder. During the period when Renfu Pharmaceutical’s actual controller was the “Contemporary group,” there were numerous violations in the company’s finances.

The “Advance Notice” mentions violations by Renfu Pharmaceutical between 2020 and 2022, including that Renfu Pharmaceutical failed to timely disclose non-operating fund occupation; its 2020 annual report had material omissions; Renfu Pharmaceutical failed to timely disclose related-party transactions; its 2022 annual report had material omissions; Renfu Pharmaceutical’s 2020 annual report, 2021 annual report, and 2022 interim annual report contained false records; and the controlling shareholder, Contemporary Group, concealed related-party relationships.

A few days later, ST Renfu received the “Decision on Administrative Penalty” issued by the Hubei Regulatory Bureau of the CSRC. The Hubei regulator issued administrative penalties to Renfu Pharmaceutical and its former controlling shareholder, former actual controller, and certain former directors, supervisors, and senior management personnel.

△Image source: Tuchong

In the “Suspension Announcement,” ST Renfu said that the company’s board of directors attaches great importance to the matters stated in the “Advance Notice,” will actively implement regulatory requirements, take effective measures, and make the utmost effort to eliminate the impact of the relevant matters on the company as quickly as possible. According to the relevant regulations of the SSE (Shanghai Stock Exchange), the company’s related work has already been rectified, and after meeting the conditions it will strive to apply to lift the risk warning as soon as possible.

On the same day it published its 2025 annual report, ST Renfu also released an announcement titled “Special Explanation from the Board of Directors on the Elimination of the Impact of the Matters Stated in the Emphasis Paragraph in the 2024 Audit Report,” in which it pointed out that the violations involved in the “Administrative Penalty Decision” occurred in 2022 and prior, and that all rectifications have been completed; they will not have any impact on Renfu Pharmaceutical’s future production and operations.

Changes in senior management

In 2025, ST Renfu completed the equity change. In July 2025, China Merchants Shengke completed procedures such as the reconstitution of ST Renfu’s board of directors. ST Renfu’s controlling shareholder was changed to China Merchants Shengke, and its actual controller was changed to China Merchants Group Co., Ltd.

With the advancement of the reorganization, Renfu Pharmaceutical also went through multiple rounds of management changes. Since the announcement titled “Announcement on the Controlling Shareholder Signing a Reorganization Investment Agreement” was published on January 15, 2025 (hereinafter the “Agreement Announcement”), Renfu Pharmaceutical experienced multiple senior personnel changes between January and February 2025. According to Renfu Pharmaceutical’s relevant announcements, 10 days after the “Agreement Announcement” was released, on January 25, 2025, Li Jie, then chairman of the board, and Li Qianlun, then secretary of the board of directors, resigned. On January 27, 2025, Zhang Xiaodong and Wang Xuehai, then directors, resigned. In early February 2025, at the resolution of the 75th meeting of the 10th session of the board of directors, Deng Weidong and Huang Xiaohua were nominated as directors of the 10th session of the board of directors.

△Image source: Tuchong

Starting in June 2025, Renfu Pharmaceutical again saw changes at the top. Its interim report also explained changes in the company’s directors and senior management. Because Li Jie and Deng Xiafei resigned as directors on June 9, 2025, on July 2, 2025 the company held a shareholders’ meeting and elected Chang Li and Xu Weina as directors of the company. Li Jie and Deng Xiafei ceased to be directors of the company effective July 2, 2025. By early August 2025, with China Merchants Shengke completing takeover, the management adjustments were temporarily concluded.

It is worth noting that not long ago, Renfu Pharmaceutical published a capital increase plan with participation by the controlling shareholder. On February 24, 2026, ST Renfu issued an announcement stating that it intends to issue shares to its controlling shareholder, China Merchants Shengke, to raise funds with a total amount of no less than RMB 3.0 billion and no more than RMB 3.5 billion. The number of shares to be issued will be no less than 201 million shares (inclusive) and no more than 234 million shares (inclusive), which does not exceed 30% of the company’s total share capital prior to this issuance.

According to the announcement’s plan, after deducting relevant issuance expenses, the net proceeds will be used for innovative drug R&D projects—specifically the subsidiary Yichang Renfu project and the headquarters research institute project—two-sex health and complex formulation manufacturing base construction, the smart digitalization construction project, and supplementing working capital. Among them, the subsidiary Yichang Renfu project is planned to use RMB 1.04B of the raised funds, representing the highest proportion of the total fund-raising amount.

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