Kangzhe Pharmaceuticals 2025 Revenue Returns to Growth, but One-time Non-operating Items Cause Net Profit Decline on Books; Management: 2025 Marks New Starting Point for Long-cycle Growth

AI Inquiry · Southeast Asia Business Year One: How Can the Internationalization Strategy Be Deepened?

Daily Economic News Reporter: Zhen Sujing Daily Editor: Wei Guanhong

On the evening of March 16, Kangzhe Pharmaceutical released its 2025 annual performance report and held an online earnings presentation the next morning, attended by the company’s senior management team.

According to the annual report, in 2025, Kangzhe Pharmaceutical achieved a revenue of 8.212 billion RMB, a year-on-year increase of 9.9%; normalized net profit after deducting one-time non-operating items was 1.78 billion RMB, up 3.6% year-on-year. The company plans to pay a final dividend of 0.14 RMB per share, with total annual dividends per share increasing by 9.0% compared to the previous year.

Kangzhe Pharmaceutical told the Daily Economic News that since 2022, the company has used Singapore as a hub for its emerging Asia-Pacific markets, gradually building a full ecosystem covering R&D, manufacturing, and commercialization. 2025 is a key year for the company’s internationalization strategy to shift from system construction to in-depth advancement, and also the first year of commercialization for its international business, with some products beginning sales and promotion during the reporting period.

Revenue and normalized net profit have rebounded, but a one-time tax payment caused a decline in reported profits

After years of pain from centralized procurement and strategic transformation, Kangzhe Pharmaceutical saw revenue growth return in 2025, with innovative and exclusive drug revenues increasing by 44.1%, becoming the main growth drivers.

Specifically, in 2025, Kangzhe Pharmaceutical achieved drug sales revenue of 9.386 billion RMB, up 8.9% year-on-year. Major exclusive/brand and innovative products contributed 5.61 billion RMB, a 23.3% increase, accounting for 59.8% of total revenue. Revenue from exclusive and innovative drugs grew by 44.1% year-on-year.

Management stated that 2025 marks a new starting point for long-term growth, with the impact of centralized procurement largely cleared. Growth is driven by innovative and exclusive drugs. The management also revealed that Kangzhe Pharmaceutical has about 50 differentiated innovative pipelines, with 7 approved for listing in China, and 6 self-developed products with global rights entering clinical trials. The company continues to strengthen its focus on specialties, achieving scale effects in cardiology, nephrology, metabolism, digestive health, ophthalmology, and dermatology, forming a multi-polar growth pattern.

However, according to financial data, the company’s annual profit decreased by 10.5% to 1.443 billion RMB. Kangzhe Pharmaceutical explained that the decline was mainly due to a one-time payment of 279 million RMB for corporate income taxes and late fees related to taxes already enjoyed under local preferential policies from 2022 to 2024. Excluding this factor, normalized annual profit reached 1.78 billion RMB, a 3.6% increase.

Financial data shows that in 2025, Kangzhe Pharmaceutical’s gross profit margin was 71.5%, down 1.1 percentage points from the previous year; net cash flow from operating activities was 755 million RMB, down 40.2% year-on-year. As of the end of 2025, bank loans totaled 652 million RMB, with an asset-liability ratio of 3.4%.

Kangzhe Pharmaceutical stated it will strengthen shareholder returns, planning to pay a final dividend of 0.1366 RMB per share, with total annual dividends reaching 0.2921 RMB per share, a 9% increase, with a payout ratio of 47.5%.

Southeast Asia Business System Fully Operational, About 20 Products with Exclusive Rights Added

At the earnings presentation, DeMei Medicine, a core platform under Kangzhe Pharmaceutical focused on skin health, attracted investor attention regarding its operations and spin-off listing plans. Management reported that in 2025, DeMei Medicine achieved revenue of 1.07 billion RMB, a significant increase of 73%.

Regarding manufacturing layout, management said that since 2025, DeMei Medicine has started building its own production facility in Hainan, expected to be completed next year. This plant will produce some of the company’s key products, including Rucaparib phosphate cream.

For the DeMei Medicine IPO, the company plans to list independently on the Main Board of the Hong Kong Stock Exchange through a distribution-in-kind or introduction method. No new share financing will be involved in this spin-off. Kangzhe Pharmaceutical’s existing shareholders will hold DeMei Medicine shares proportionally and will be able to trade on the secondary market, sharing its independent valuation and growth benefits.

Internationalization is one of Kangzhe Pharmaceutical’s three major strategies, and market attention to its progress has been high. The management believes that 2025 will see a substantial breakthrough in this area. “2025 is the sales year for Southeast Asia business.”

Management said that, taking Southeast Asia as an example, after about three years of team and system development, 2025 marked a breakthrough from nothing to something. The company has completed the entire process from product introduction, registration, supply chain construction, to sales network development. This is a milestone; going abroad is difficult, but establishing the entire system is the beginning of growth.

Kangzhe Pharmaceutical reported that its holding subsidiary Rxilient has submitted nearly 20 drug and medical device listing applications in Asia-Pacific and the Middle East, with about 20 products with exclusive rights in Southeast Asia, the Middle East, North Africa, and other emerging markets. The licensed regions have expanded for the first time to Latin America and Australasia.

Management emphasized that the company has now built a multi-dimensional growth engine of “innovative drug volume + commercialization empowerment + internationalization breakthroughs,” steadily progressing toward an innovative-driven international pharmaceutical enterprise. As the strategy deepens, the company’s core competitiveness will continue to strengthen, providing long-term value anchoring and creating a moat to withstand economic cycles.

Daily Economic News