On the evening of September 29th, Luoxin Pharmaceutical (002793) announced that it plans to raise no more than 842 million yuan for innovative drug research and development projects, raw material drug expansion and freeze-drying workshop technology renovation projects, and to supplement working capital.

According to the data, Luoxin Pharmaceutical is mainly engaged in the research, development, production and sales of pharmaceutical products, focusing on digestion, respiration, anti-tumor and other advantageous fields. Its products are mainly chemical preparations, chemical raw materials, and traditional Chinese patent medicines and simple preparations. The company was listed on the Shenzhen Stock Exchange in April 2016.

Luoxin Pharmaceutical stated that in order to strengthen the company's innovative drug product layout and improve the market competitiveness of innovative drug products, the innovative drug research and development project in this fundraising investment project will focus on the Phase II and III clinical studies of LX22001 for injection to increase the indication for treating peptic ulcer bleeding, Phase III clinical studies of LX22001 for injection to increase the indication for preventing stress ulcer bleeding, and Phase III clinical studies of Tigerazone tablets to increase the indication for preventing aspirin related peptic ulcer bleeding.

In addition, in order to better meet the production requirements of sterile preparations, Luoxin Pharmaceutical plans to upgrade its production line through the renovation and expansion of raw materials and the technical transformation project of freeze-drying workshop, in order to optimize the production environment, iterate production equipment, improve automation level, and reduce quality risks.

The controlling shareholder of the company is Luo Xin Holdings, holding 21.79% of the shares of Luo Xin Pharmaceutical. Liu Baoqi and his son Liu Zhenteng jointly control 22.22% of the company's shares and are the actual controllers of the company. This issuance will not result in a change of control over the company.

From financial data, Luoxin Pharmaceutical has been deeply mired in losses in recent years, with non recurring net profits of -14.48 billion yuan, -6.39 billion yuan, and -7.68 billion yuan respectively from 2022 to 2024, resulting in a total loss of approximately 2.855 billion yuan over the three years. At the same time, the company's revenue continued to decline in 2022 and 2023. Although it stabilized in 2024, the revenue of 2.647 billion yuan is no longer on the same level as the 6.478 billion yuan in 2021.

In the first half of 2025, the company's revenue continued to decline by 14.45%, and after deducting non net profit, it turned losses into profits, recording a profit of 2.3007 million yuan.

It is worth mentioning that as of the end of the first half of 2025, the company's monetary funds have significantly declined, from 898 million yuan in the same period last year to 393 million yuan. As of the end of 2021, the company's monetary funds even reached 2.002 billion yuan, and have since declined to single digits.

Luoxin Pharmaceutical stated that the company will use a portion of the funds raised from this issuance to supplement working capital, which can effectively fill the operating capital gap generated by the company's business development, alleviate the working capital pressure faced by the company in the process of business development, and improve the company's profitability and risk resistance.

Luoxin Pharmaceutical also pointed out the risk of further increase in marketing expenses leading to a decline in profitability. To promote the sustained growth of the company's business scale, the increase in market share of old products and the introduction and promotion of new products will further increase the company's specialized promotion expenses. From 2022 to 2024 and the first half of 2025, the company's marketing expenses will be 1.311 billion yuan, 625 million yuan, 835 million yuan, and 244 million yuan, respectively. If the company's product promotion goals cannot be effectively achieved, or if the sales growth scale cannot cover the increase in marketing expenses, it will have a negative impact on the company's profitability and future development.

Source: Shenzhen Business Daily · Reading and Creativity