Shareholding is separated from control! The actual controller of Yixintang continuously transfers shares to his 90s-born daughter, maintaining control as steady as a rock

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Produced by | China Visit Network

Reviewed by | Li Xiaoyan

On March 16, the leading domestic chain pharmacy Yixintang announced that the company’s actual controller and chairman, Ruan Hongxian, plans to transfer no more than 1% of shares each to his two 90s daughters, Ruan Shengxiang and Ruan Aixiang, through block trades, with a total transfer ratio of no more than 2%, corresponding to a market value of about 154 million yuan. This is Ruan Hongxian’s second share arrangement with his daughters within half a year after his first transfer in November 2025, with a total market value of nearly 286 million yuan for both transfers. As a pharmaceutical retail giant with over 10,000 directly operated stores and serving over 200 million customers annually, this internal family equity adjustment is not just simple wealth distribution but a strategic layout balancing family inheritance, corporate governance, and industry transformation. It demonstrates the responsibility of private entrepreneurs and provides a compliant, stable model for family succession in A-share listed companies.

Yixintang’s development history is a microcosm of the rise of China’s private pharmaceutical retail industry. In 1987, Ruan Hongxian and Liu Qiong jointly founded Kaiyuan Hongxiang Medicine Business Department, starting from a small shop. After more than a decade of deep cultivation in the pharmaceutical field, they established Yunnan Hongxiang Traditional Chinese Medicine Co., Ltd. in 1997, beginning the layout of chain pharmacies. In 2014, Yixintang successfully listed on the Shenzhen Stock Exchange’s SME Board, becoming one of the first domestic pharmaceutical retail chain companies to go public. By the end of September 2025, the company operated 11,230 directly managed stores across 10 provinces and cities including Yunnan, Guizhou, Sichuan, and Chongqing, ranking at the top of the industry. Ruan Hongxian is also known as the “King of Medicine” in Yunnan. In 2016, the couple ranked second among Yunnan’s wealthy list with a fortune of 6.7 billion yuan, becoming a benchmark for private economy in Southwest China.

In 2017, Ruan Hongxian and Liu Qiong ended their marriage, which initially caused concerns about the stability of the company’s equity and future prospects. However, they rationally divided their shares: Ruan Hongxian held 33.75%, Liu Qiong held 18.37%, and they clearly defined their business roles—Ruan Hongxian focusing on the core pharmacy chain, while Liu Qiong concentrated on Shengai Chinese Medicine Clinic and other traditional Chinese medicine health sectors. This not only avoided intra-industry competition but also achieved industry complementarity. Ruan Hongxian once said, “Everything I do is for my daughters,” reflecting his sense of responsibility for family and enterprise, which has been consistent in every subsequent equity arrangement. Today, Liu Qiong still holds 11.53% of Yixintang’s shares and serves as a director, forming a healthy pattern of “divorced but not separated in business, divided but not divided in family,” laying a stable governance foundation for the next generation.

The core of this share transfer is a precise design of dividing shares without dividing power, ensuring smooth inheritance. According to the announcement, Ruan Hongxian has signed a “Consistent Action Agreement” with his two daughters. After the transfer, his personal shareholding will be 29.13%, and the three of them will hold a combined 31.12%, with no change in the company’s control rights, maintaining stable governance and decision-making. The transfer was conducted via block trade, strictly following listed company share reduction rules and information disclosure requirements, representing a compliant internal family asset plan that will not negatively impact daily operations or financial health. Compared to aggressive equity changes, this step-by-step, compliant, controllable inheritance approach avoids control risks from dispersed shares and signals stability and long-term growth to the capital market, showcasing Ruan Hongxian’s mature capital operation and corporate governance wisdom.

More notably, this equity arrangement is a systematic layout for intergenerational succession rather than a one-time wealth gift. His two daughters, both born in the 1990s, are already deeply involved in the family business, forming a clear division of roles and complementary strengths: the eldest daughter, Ruan Shengxiang, focuses on traditional Chinese medicine health care, serving as Vice Chairman of Shengai Chinese Medicine Group, inheriting her mother’s Chinese medicine career and promoting the integration of Chinese medicine culture and the health industry; the second daughter, Ruan Aixiang, concentrates on the listed company’s main business. In July 2025, she was appointed Vice President of Yixintang, after serving as an assistant to the chairman, with a master’s degree and solid professional and management experience. Through share transfers, both daughters have upgraded from “managers” to “owners,” aligning their interests closely with the company, which not only stimulates the younger generation’s entrepreneurial motivation but also ensures a smooth family business transfer, solving the “wealth does not pass three generations” inheritance challenge.

From an industry perspective, the current pharmaceutical retail sector is at a critical stage of quality improvement and transformation. Changes such as prescription outflow, medical insurance policy adjustments, and online-offline integration demand higher operational standards. In 2025, Yixintang proactively optimized its store network, closing inefficient outlets and focusing on quality locations, with a net reduction of 386 stores throughout the year. Meanwhile, it strengthened category management and health services, achieving a recovery in performance. The 2025 performance forecast shows a net profit attributable to the parent increased by 127.79% to 189.12%. At this pivotal moment of industry transformation, a stable equity structure and clear succession plan are essential for risk resistance and long-term development. Ruan Hongxian’s inheritance through equity transfer combines the innovative vision of the younger generation with decades of industry experience, injecting new momentum into Yixintang’s response to industry changes and consolidation of its leading position.

Of course, this inheritance plan also faces common industry challenges. Competition in pharmaceutical retail is intensifying, with online pharmacies and offline chains accelerating expansion. Store operation costs and compliance costs continue to rise. After the younger generation takes over, they need to maintain core business stability while promoting digital transformation, chronic disease management, and Chinese medicine health services, achieving scale and efficiency simultaneously. Additionally, in family business intergenerational transfer, balancing family interests with minority shareholders’ rights and maintaining professional, stable decision-making are ongoing concerns. From current arrangements, Ruan Hongxian’s use of a “Consistent Action Agreement” to lock in control, the deep involvement of his children, and strict compliance measures have minimized transfer risks.

From the perspective of private economy development, Yixintang’s inheritance case reflects a mature path for Chinese private enterprises entering the peak of intergenerational transfer. In the past, some family businesses experienced disorderly succession leading to disputes and operational instability. Ruan Hongxian’s “early planning, compliant operation, clear responsibilities, and division of labor” approach has deeply integrated family inheritance with modern corporate governance, protecting the family legacy while safeguarding the interests of employees, investors, and partners. As a company rooted in the people’s livelihood, Yixintang’s stable development is closely related to millions’ medication needs and health security. Its smooth inheritance has social value beyond commercial interests.

The two transfers within half a year, nearly 286 million yuan in equity transfer, demonstrate Ruan Hongxian’s commitment to “everything for his daughters, everything for the long-term of the enterprise.” From starting from scratch to a chain of thousands of stores, from entrepreneurial couple to intergenerational succession, Yixintang’s growth story is a microcosm of China’s private pharmaceutical industry’s striving and progress, and a model of family enterprise’s integrity, innovation, and steady inheritance. In the future, with the two “pharma second-generation” daughters fully integrated into core decision-making under Ruan Hongxian’s leadership and empowerment, Yixintang is expected to continue its steady development, write a new chapter in the industry’s growth, and contribute to high-quality development of the private economy.