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?

Ask AI · How did ST Renfu achieve profit growth against the tide after state-owned capital took over?

This article is sourced from Shidai Zhoubao. Author: Lin Yunxiao

On the evening of March 30, ST Renfu (600079.SH), a leading company in the anesthesia drug sector, released its 2025 annual report. Revenue declined, but the attributable net profit recorded a substantial increase.

In 2025, ST Renfu went through multiple major events that significantly affected the company’s development. It completed an equity change and transferred control to state-owned assets, and it was also placed under other risk warnings due to historical issues.

According to ST Renfu’s 2025 annual report, in 2025 the company realized operating revenue of 23.962 billion yuan, down 5.79% year over year; attributable net profit 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 reorganization plan of its original controlling shareholder, Wuhan Contemporary Technology Industrial Group Co., Ltd. (hereinafter referred to as “Contemporary Technology”), was approved by the Wuhan Intermediate People’s Court in Hubei Province in April 2025. In June 2025, all 387 million shares of Renfu Pharmaceutical held by Contemporary Technology were completed via judicial transfer, and the share transfer registration procedures were finished.

Through this share transfer, China Merchants Life Technology (Wuhan) Co., Ltd. (hereinafter referred to as “China Merchants Shengke”) collectively controlled 387 million shares of Renfu Pharmaceutical by direct shareholding, indirect shareholding through limited partnership entities controlled by it, and the acceptance of voting-rights delegation under a trust plan; this represented 23.70% of the company’s total share capital. As of July 30, 2025, China Merchants Shengke had completed procedures such as the reorganization of the company’s board of directors, and the company’s controlling shareholder was changed to China Merchants Shengke.

On December 12, 2025, Renfu Pharmaceutical released the “Announcement on Implementing Other Risk Warnings and Suspending Trading” (hereinafter referred to as the “Suspension Announcement”). Even the “anesthesia elder” known for steady performance was suddenly placed under other risk warnings, which surprised the market. Behind this was related to historical issues of the former controlling shareholder: according to disclosures by the Hubei Regulatory Bureau of the China Securities Regulatory Commission, during the period when “the Contemporary-related party” was the actual controller of Renfu Pharmaceutical, there were large-scale illegal financial conduct.

On March 31, ST Renfu’s stock closed at 18.83 yuan per share, up slightly by 0.11%.

Image source: Tucong Creativity

Sell assets and slim down

Regarding the reasons for the changes in performance, ST Renfu said in its annual report that during the reporting period, the company realized operating revenue of 23.962 billion yuan, down 5.79% from the same period last year. This was mainly due to the structural reform affecting the payment side in the pharmaceutical industry, as well as the company’s implementation of “return to the core and focus,” optimizing its business structure.

Against this backdrop, through refined management, optimization of the compensation system, controlling the scale of liabilities, and reducing financing costs, the company achieved attributable net profit of 1.855 billion yuan, up 39.53% from the same period last year. It also achieved non-GAAP net profit of 1.762 billion yuan (after deducting non-recurring items), up 54.75% from the same period last year.

In its annual report, ST Renfu repeatedly mentioned the concept of “return to the core and focus.” 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 Nuoja Medical Equipment Co., Ltd. It also deregistered multiple subsidiaries such as Yichang Renfu Medical Devices Co., Ltd. and Wuhan Zhiyingxincheng Enterprise Consulting Co., Ltd., effectively revitalizing existing assets and reducing management costs.

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

Currently, the anesthesia drug business remains ST Renfu’s core business. According to ST Renfu’s annual report, Yichang Renfu, a subsidiary engaged in R&D, production, and sales of anesthesia drugs, raw materials, and formulations, had revenue of 8.810 billion yuan in 2025 and net profit of 2.748 billion yuan. Net profit was far higher than that of other important subsidiaries such as Gejiu Renfu, Xinjiang Weiya, and Hubei Renfu.

ST Renfu also stated in its annual report that Yichang Renfu is the designated R&D and production base for anesthesia drugs and the commercialization production enterprise with the most complete fentanyl-series product lines. The company’s domestic market share for anesthesia drugs exceeds 60%.

A person close to ST Renfu told reporters from Shidai Zhoubao that under the “return to the core and focus” strategy, ST Renfu spun off diversified businesses whose synergy with the main drug business was weak and whose asset quality or operating efficiency was lower. The company focused on core areas such as anesthesia analgesia, hormones, and ethnic medicines, and expanded the industrial chain around its core subsidiaries.

Historical baggage from former shareholders

In 2025, ST Renfu achieved a significant increase in net profit, but at the end of the year its stock was subject to other risk warnings. In its “Suspension Announcement” dated December 12, 2025, Renfu Pharmaceutical stated that because on December 12, 2025 Renfu Pharmaceutical received a “Administrative Penalty Preliminary Notice” issued by the Hubei Regulatory Bureau of the China Securities Regulatory Commission (E-penalty letter [2025] No. 8) (hereinafter referred to as the “Notice”), the company’s stock would, according to the contents stated in the “Notice” and in accordance with relevant regulations, be subject 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 “the Contemporary-related party” was the actual controller of Renfu Pharmaceutical, there were many illegal acts in terms of finances.

The “Notice” mentioned illegal acts of Renfu Pharmaceutical between 2020 and 2022, including that Renfu Pharmaceutical failed to timely disclose non-operating fund occupation, and its 2020 annual report had material omissions; that Renfu Pharmaceutical failed to timely disclose related-party transactions, and its 2022 annual report had material omissions; that Renfu Pharmaceutical’s 2020 annual report, 2021 annual report, and 2022 interim annual 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 Hubei Regulatory Bureau of the China Securities Regulatory Commission. The Hubei Regulatory Bureau imposed administrative penalties on Renfu Pharmaceutical as well as the former controlling shareholder, the former actual controller, and some then-sitting 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 stated in the “Notice,” would actively implement regulatory requirements by taking effective measures, and would do its utmost to eliminate the impact of the relevant matters on the company as soon as possible. In accordance with relevant rules of the Shanghai Stock Exchange, the company’s related work has been rectified; after meeting the conditions, it will strive to apply to remove the risk warning as soon as possible.

On the same day it released its 2025 annual report, ST Renfu also released an announcement titled “Special Explanation by the Board of Directors on the Impact of the Matters Stated in the Emphasis Section of the 2024 Audit Report Has Been Eliminated,” stating that the illegal matters involved in the “Administrative Penalty Decision” occurred in 2022 and earlier, and that all rectifications had been completed, so it would not have any impact on Renfu Pharmaceutical’s future production and operations.

Management changes at the top

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

With the restructuring being advanced, Renfu Pharmaceutical also went through multiple rounds of executive changes. Since it issued the “Announcement on the Controlling Shareholder Signing a Restructuring Investment Agreement” (hereinafter referred to as the “Agreement Announcement”) on January 15, 2025, multiple top-level personnel changes occurred at Renfu Pharmaceutical between January and February 2025. According to Renfu Pharmaceutical’s relevant announcements, 10 days after the “Agreement Announcement” was released, on January 25, 2025, the then-chairman Li Jie and the then board secretary Li Qianlun resigned; on January 27, 2025, then director Zhang Xiaodong and Wang Xuehai resigned; in early February 2025, at the resolution of the 75th meeting of the tenth session of the board of directors, it nominated Deng Weidong and Huang Xiaohua as directors of the tenth session of the board of directors.

Starting in June 2025, Renfu Pharmaceutical welcomed further top-level changes. The semi-annual report also explained changes in the company’s directors and senior management. As Li Jie and Deng Xiafei resigned from their director positions on June 9, 2025, on July 2, 2025 the company held a shareholders’ meeting to elect Chang Li and Xu Weina as directors of the company. Li Jie and Deng Xiafei have not served as company directors since July 2, 2025. By early August 2025, with China Merchants Shengke completing the takeover, the adjustments to management were temporarily concluded.

It is worth noting that shortly before, Renfu Pharmaceutical issued a private placement plan involving participation by the controlling shareholder. On February 24, 2026, ST Renfu announced that it plans to issue shares to its controlling shareholder, China Merchants Shengke, to raise funds with a total amount of not less than 3.0 billion yuan and not more than 3.5 billion yuan. The number of shares to be issued will be not less than 201 million shares (including this figure) and not more than 234 million shares (including this figure), not exceeding 30% of the company’s total share capital before this issuance.

According to the announcement of the offer plan, after deducting relevant issuance expenses, the net proceeds are proposed to be used for the innovative drug R&D projects—the subsidiary Yichang Renfu project and the innovative drug R&D project—headquarters research institute project, the construction project for the bilocal health and complex formulation manufacturing base, the digital and intelligent transformation construction project, and replenishing working capital. Among them, the Yichang Renfu project is proposed to use 1.042 billion yuan of the proceeds, the highest proportion among the proposed uses.