State-owned assets take control, executives are replaced, and ST Renfu hands over its first annual report after the change in ownership! Can it shake off its historical baggage?

On the evening of March 30, the leading company in anesthetic drugs, ST Renfu (rights protection) (600079.SH), released its 2025 annual report. The company’s revenue declined, but the net profit attributable to the parent recorded a significant increase.

In 2025, ST Renfu went through multiple major events that affected the company’s development, completed an equity change to transfer control to state-owned assets, and was also 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 23.962 billion yuan, down 5.79% year over year; net profit attributable to the parent was 1.855 billion yuan, up 39.53% year over year.

In 2025, ST Renfu completed the equity change and became a company under China Merchants Group. The restructuring plan of its former controlling shareholder, Wuhan Contemporary Technology Industry Group Co., Ltd. (hereinafter referred to as “Contemporary Technology”), was approved by the Wuhan Intermediate People’s Court of Hubei Province on April 2025. In June 2025, the complete transfer of 387 million shares of Renfu Pharmaceutical held by Contemporary Technology was completed through judicial transfer and the share transfer registration procedures were completed.

Through this share transfer, China Merchants Life Science and Technology (Wuhan) Co., Ltd. (hereinafter referred to as “China Merchants Life Science”) directly held, indirectly held through limited partnership entities controlled by it, and also controlled through the trust plan voting rights entrustment arrangement in total 387 million ordinary shares of Renfu Pharmaceutical, accounting for 23.70% of the company’s total share capital. As of July 30, 2025, China Merchants Life Science had completed procedures such as the reorganization of the company’s board of directors, and the company’s controlling shareholder changed to China Merchants Life Science.

On December 12, 2025, Renfu Pharmaceutical issued an “Announcement on Implementation of Other Risk Warnings and Suspension of Trading” (hereinafter referred to as the “Suspension Announcement”). The “anesthesia boss” known for stable performance was suddenly subjected to other risk warnings, which surprised the market. Behind this, there were historical issues involving the former controlling shareholder. According to disclosures by the China Securities Regulatory Commission Hubei Regulatory Bureau, during the period when “Contemporary” was the actual controller of Renfu Pharmaceutical, there were many illegal financial activities.

On March 31, ST Renfu’s stock closed at 18.83 yuan per share, up 0.11% from the previous day.

Image source: TuChong Creative

Sell assets to slim down

Regarding the reasons for changes in performance, ST Renfu stated in its annual report that during the reporting period, the company achieved operating revenue of 23.962 billion yuan, down 5.79% from the same period of the previous year. The main reasons were the impact of structural reforms on the payment side in the pharmaceutical industry and the company’s implementation of the “core focus” work, which optimized its business structure.

Against this backdrop, through refined management, optimization of the compensation system, controlling the scale of liabilities and lowering financing costs, the company achieved net profit attributable to the parent of 1.855 billion yuan, up 39.53% from the same period of the previous year. It also achieved non-recurring net profit of 1.762 billion yuan, up 54.75% from the same period of the previous year.

ST Renfu repeatedly mentioned the concept of “core focus” in its annual report. ST Renfu explained that during the reporting period, the company completed the sale of equity in companies including Yichang Renji Maternal and Child Health Management Co., Ltd., Renfu Pharmaceutical Group Medical Supplies Co., Ltd., and Hangzhou NuoJia Medical Equipment Co., Ltd. The company also deregistered multiple subsidiaries, including Yichang Renfu Medical Devices Co., Ltd. and Wuhan Zhiying Xincheng Enterprise Consulting Co., Ltd., effectively revitalizing existing assets and reducing management costs.

At the same time, the company focused on its core business in biopharmaceuticals, increased investment in high-value innovative projects and high-quality production capacity, promoted the concentration of resource allocation toward core businesses and advantageous areas, and continuously improved the efficiency of resource utilization.

Currently, the anesthetic drug business remains ST Renfu’s core business. According to ST Renfu’s annual report, its subsidiary Yichang Renfu, which engages in R&D, production and sales of anesthetic drugs, raw materials, and formulations, recorded revenue of 8.810 billion yuan in 2025 and net profit of 2.748 billion yuan. The net profit is far higher than those of other major subsidiaries such as Gedian Renfu, Xinjiang Weiyao, and Hubei Renfu.

ST Renfu also introduced in its annual report that Yichang Renfu is the designated R&D and production base for anesthetic drugs, and also the commercial production enterprise with the most complete fentanyl series product offerings. Its domestic market share for anesthetic drugs exceeds 60%.

An insider close to ST Renfu told this reporter that under the “core focus” strategy, ST Renfu divested diversified businesses whose synergy with the company’s main pharmaceutical operations was weak and whose asset quality or operating efficiency was lower, focusing on core areas such as anesthesia analgesia, hormones, and ethnic medicines, and expanding the industrial chain around its core subsidiaries.

Historical baggage from the former shareholder

In 2025, ST Renfu achieved a large increase in net profit, but at the end of the year its stock was subjected to other risk warnings. On December 12, 2025, Renfu Pharmaceutical issued the “Suspension Announcement,” stating that because on December 12, 2025 Renfu Pharmaceutical received from the China Securities Regulatory Commission Hubei Regulatory Bureau the “Preliminary Notice of Administrative Penalty” ( E-Hu Penalty [2025] 8 ) (hereinafter referred to as the “Notice”), based on the contents stated in the “Notice” and according to relevant regulations, the company’s stock would be subjected to other risk warnings.

This other risk warning was triggered by historical issues related to ST Renfu’s former controlling shareholder. During the period when “Contemporary” was the actual controller of Renfu Pharmaceutical, there were many illegal financial activities.

The “Notice” mentioned illegal acts by Renfu Pharmaceutical between 2020 and 2022, including that Renfu Pharmaceutical did not disclose non-operating fund occupation in a timely manner, and the 2020 annual report had material omissions; that Renfu Pharmaceutical did not disclose related-party transactions in a timely manner, and the 2022 annual report had material omissions; that Renfu Pharmaceutical’s 2020 annual report, 2021 annual report, and the 2022 interim report contained false records; and that the controlling shareholder, Contemporary Group, concealed related-party relationships.

A few days later, ST Renfu received an “Administrative Penalty Decision” issued by the China Securities Regulatory Commission Hubei Regulatory Bureau. The Hubei Regulatory Bureau imposed administrative penalties on Renfu Pharmaceutical and the former controlling shareholder, former actual controller, and some former directors, supervisors, and senior management personnel.

In the “Suspension Announcement,” ST Renfu stated that the company’s board of directors attached great importance to the matters set out in the “Notice,” and would actively implement regulatory requirements and take strong measures, doing everything possible to eliminate the impact of the relevant matters on the company as soon as possible. According to relevant regulations of the Shanghai Stock Exchange, the company’s related work has been rectified. After meeting the conditions, it will strive to apply to revoke the risk warning as soon as possible.

On the same day as the release of its 2025 annual report, ST Renfu also issued an announcement titled “Special Explanation by the Board of Directors on the Elimination of the Impact of the Matters Described in the Emphasis Section of the 2024 Audit Report.” It stated that the illegal matters involved in the “Administrative Penalty Decision” occurred in 2022 and earlier, and have now all been fully rectified, and will not have any impact on Renfu Pharmaceutical’s future production and operations.

Management reshuffles

In 2025, ST Renfu completed the equity change. In July 2025, China Merchants Life Science completed procedures including the reorganization of ST Renfu’s board of directors. ST Renfu’s controlling shareholder changed to China Merchants Life Science, and its actual controller changed to China Merchants Group Co., Ltd.

Along with the advancement of the restructuring, Renfu Pharmaceutical also went through multiple rounds of management changes. Since the “Announcement on Controlling Shareholder Signing the Restructuring Investment Agreement” was released on January 15, 2025 (hereinafter referred to as the “Agreement Announcement”), Renfu Pharmaceutical experienced multiple personnel changes at the senior management level between January and February 2025. According to relevant announcements of Renfu Pharmaceutical, 10 days after the “Agreement Announcement” was issued, on January 25, 2025, Chairman Li Jie and Secretary of the Board Li Qianlun resigned; on January 27, 2025, Directors Zhang Xiaodong and Wang Xuehai resigned; in early February, the 75th meeting of the 10th session of the board of directors adopted a resolution to nominate Deng Weidong and Huang Xiaohua as directors of the 10th session of the board of directors.

Starting in June 2025, Renfu Pharmaceutical saw further management changes. The semi-annual report also described changes in the company’s directors and senior management personnel. Due to the resignations of Li Jie and Deng Xiafei as directors on June 9, 2025, the company held a shareholders’ meeting on July 2, 2025 to elect Chang Li and Xu Weina as directors. Li Jie and Deng Xiafei ceased to serve as directors effective from July 2, 2025. By early August 2025, with China Merchants Life Science having completed the takeover, the adjustments to the management were temporarily concluded.

It is worth noting that not long ago, Renfu Pharmaceutical released a private placement plan participated in by the controlling shareholder. On February 24, 2026, ST Renfu issued an announcement stating that it plans to issue shares to the controlling shareholder, China Merchants Life Science, to raise total proceeds of not less than 3.0 billion yuan and not more than 3.5 billion yuan. The number of shares to be issued is not less than 201 million shares (inclusive of this number) and not more than 234 million shares (inclusive of this number), which does not exceed 30% of the company’s total share capital before this issuance.

According to the announcement’s plan, after deducting relevant issuance costs, the net proceeds are planned to be used for innovative drug R&D projects—Yichang Renfu project, headquarters research institute project, two-sex health and complex formulations manufacturing base construction project, digitalization construction project—and for replenishing working capital. Among these, the Yichang Renfu project plans to use 1.042 billion yuan of the raised funds, the highest proportion of the total raised amount.

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