Nanjing Pharma Undergoes "Major Reshuffle," Vice President Casts Three Abstention Votes

Ask AI · Can the merger of Guangzhou Pharmaceutical and Nanjing Pharmaceutical create a trillion-yuan circulation giant?

A simple announcement has revealed a not-so-dignified personnel reshuffle.

On March 16, Nanjing Pharmaceutical held a temporary two-day board meeting for the 10th session. The most important agenda was a major management overhaul. All six proposals were approved. Interestingly, Director Luo Xunjie abstained from voting on all three proposals, including his removal from the director position and his dismissal as vice president.

After the personnel changes, the foreign director Marco Kerschen, who was not present, also stepped down. The original terms were until 2028, but due to significant changes in Nanjing Pharmaceutical’s shareholding structure, with Guangzhou Pharmaceutical Group entering, Luo Xunjie, representing the exiting investor, is definitely being pushed out early. However, his abstention vote seems to carry a subtle message, as if making a final silent statement.

Recently, mergers among pharmaceutical companies have been frequent. Most management changes are relatively smooth, such as China Resources Sanjiu’s acquisition of Tasly, where the Yan family voluntarily withdrew, leaving face for both sides. Situations like Nanjing Pharmaceutical’s are quite rare.

Guangzhou Pharmaceutical’s “big reshuffle”

Luo Xunjie represented one of Nanjing Pharmaceutical’s important former shareholders: Alliance Healthcare, a subsidiary of the international pharmaceutical retail giant WBA.

On February 26, 2026, Alliance Healthcare transferred all 11.04% of its Nanjing Pharmaceutical shares to Guangzhou Pharmaceutical Group. The foreign investor announced a full exit, making Guangzhou Pharmaceutical Group the second-largest shareholder of Nanjing Pharmaceutical. In theory, the strategic cooperation agreement with foreign investors was voided, and Luo Xunjie and another director Marco Kerschen, both representing foreign interests, should have accepted their fates calmly.

But Luo Xunjie was indeed unwilling. With a background and capability that are top-notch—having held key positions at Emerson, Eaton, and other Fortune 500 companies—he was the only director at Nanjing Pharmaceutical with multinational corporate experience, and had worked there for nearly 10 years, leading multiple mergers and acquisitions that contributed to the company’s growth.

In 2014, when Nanjing Pharmaceutical decided to introduce foreign capital, the goal was to learn advanced international concepts and promote the upgrading of the domestic traditional industry. As a result, after the implementation of the “two-invoice system,” the Chinese pharmaceutical distribution industry saw significant changes. State-owned companies like China National Pharmaceutical Group, China Resources, and local giants like Shanghai Pharmaceuticals formed a “triumvirate,” with local firms either defecting to the big three, such as Chongqing Pharmaceutical, or holding their ground, making it difficult to make big moves.

Guangzhou Pharmaceutical’s acquisition of Nanjing Pharmaceutical shares is a rare merger between local distribution companies, seeking expansion in scale. This rendered Luo Xunjie’s multinational background less relevant. More importantly, as the saying goes, “The emperor changes, the ministers change,” old officials naturally give way to new ones.

Replacing Luo Xunjie is a seasoned Guangzhou Pharmaceutical veteran, Chen Guangyan, who joined Guangzhou Pharmaceutical Factory in 1988, starting as a workshop technician and steadily rising through roles such as quality inspection section chief and quality control department manager. Over thirty years, he has held several key positions within Guangzhou Pharmaceutical. In July 2025, Chen Guangyan was appointed chairman of Guangzhou Medical Co., Ltd.

Guangzhou Pharmaceutical’s appointment of him as an independent director at Nanjing Pharmaceutical indicates that Guangzhou Pharmaceutical aims not only to be a financial investor but also to deeply participate in Nanjing Pharmaceutical’s governance, paving the way for future strategic synergy.

Guangzhou Pharmaceutical’s ambition extends beyond just being a “South China tiger”

The partnership between Guangzhou Pharmaceutical and Nanjing Pharmaceutical is part of recent industry shifts in pharmaceutical distribution. Guangzhou Pharmaceutical Group’s subsidiary Baiyunshan has long been confined to South China. In the first half of 2025, South China’s revenue reached 31.19 billion yuan, more than nine times that of East China. Nanjing Pharmaceutical can fill this gap. As a leading enterprise in Jiangsu’s pharmaceutical distribution, its network covers Jiangsu, Anhui, Fujian, Hubei, and nearly 70 cities.

In the 2024 wholesale ranking of pharmaceutical distribution, Baiyunshan’s Guangzhou Pharmaceutical and Nanjing Pharmaceutical ranked sixth and seventh, respectively. Both are similar in size and regionally complementary. After forming a combined force, they aim to challenge the industry’s “Fourth” position held by Jiuzhou Tong. With Guangzhou Pharmaceutical’s recent leadership change, the company is rapidly reorganizing personnel, likely to position key staff early and quickly expand into the East China market.

At the end of 2024, Li Xiaojun took over as chairman of Guangzhou Pharmaceutical Group, proposing to “recreate a new Guangzhou Pharmaceutical.” Over the past year, the entire Guangzhou Pharmaceutical system has accelerated its transformation. Just at the end of December last year, Guangzhou Pharmaceutical invested 500 million yuan to acquire Zhejiang Medical Industry Company, marking its entry into Zhejiang’s market.

Previously, during a survey, Baiyunshan openly stated that Guangzhou Pharmaceutical lacked subsidiaries in the Yangtze River Delta region. By acquiring Nanjing Pharmaceutical shares and Zhejiang Medical, Guangzhou Pharmaceutical aims to optimize its industrial layout in East China and strengthen its competitive edge in pharmaceutical distribution.

Baiyunshan indeed needs to rapidly expand its business footprint. From the revenue perspective, in the first half of 2025, Guangzhou Pharmaceutical White Cloud Mountain reported revenue of 41.835 billion yuan, a 1.93% increase year-over-year, indicating slow growth. Its four main sectors are traditional Chinese medicine, health, commerce, and medical services. The commercial sector, which is the pharmaceutical distribution segment, earned over 27.2 billion yuan in the first half of 2025, but with a gross profit margin of only 6.13%.

A decade ago, Nanjing Pharmaceutical introduced foreign pharmaceutical distribution giants’ capital, hoping to learn from international experience and develop high-margin, refined business models. But ten years later, China’s pharmaceutical distribution industry has returned to a cycle of scale competition. Only by expanding scale can costs be spread out. In recent years, the distribution sector has been playing a game of “big fish eating small fish,” fearing that if they lag behind, they will become prey.

In the wave of industry consolidation, Guangzhou Pharmaceutical’s series of moves—can they eventually create a cross-regional, trillion-yuan distribution giant spanning South and East China? The entire industry awaits with anticipation.

Written by: Fang Taozhi

Edited by: Jiang Yun, Jia Ting

Operations: Li Muzi

Illustration: Visual China

Note: Original content by Jian Shi Ju. Please do not reprint without permission.