On the evening of April 28, Renmin Pharmaceutical disclosed its 2024 annual report. The company achieved operating income of 25.435 billion yuan for the whole year, a year-on-year increase of 3.71%; net profit attributable to the parent company was 1.33 billion yuan. The first quarter report on the same day showed that the company's current operations continued to be stable, with operating income of 6.137 billion yuan; net profit attributable to the parent company was 540 million yuan, a year-on-year increase of 11.09%. In addition, the bankruptcy reorganization of the company's controlling shareholder Contemporary Group is progressing smoothly. The announcement shows that the reorganization plan has been approved by the court. After the reorganization is implemented, China Merchants Group's China Merchants Innovation and Technology may become a strategic investor in the listed company.

The financial report shows that in 2024, Renmin Pharmaceutical's net profit attributable to the parent company decreased by 37.7% year-on-year, and the net profit after deducting non-recurring items was 1.139 billion yuan, a decrease of 37.50% from the same period last year. The main reasons were the increase in the company's sales expenses, administrative expenses and other expenses, the provision of credit impairment losses and asset impairment losses during the reporting period, and the decline in the operating performance of its subsidiary Beijing Barry Medical Devices Co., Ltd. due to changes in the medical device industry policies.

It is worth mentioning that Renmin Pharmaceutical has released a profit distribution plan for 2024, intending to pay a cash dividend of 0.32 yuan per share to all shareholders, with a cash dividend ratio of more than 57%.

The company continues to promote the "core focus" strategy, completes the divestiture of non-core assets such as Wuhan Kangle Pharmaceutical and Hubei Renmin Pharmaceutical, and accrues a total asset impairment of approximately 394 million yuan. Based on this, the company's asset-liability ratio dropped from 44.49% at the beginning of the reporting period to 43.32% at the end of the reporting period.

According to the data, in September 2024, Renfu Pharmaceutical announced that the controlling shareholder Contemporary Group had been applied for bankruptcy reorganization by creditors. Then the "white knight" China Merchants Group Co., Ltd. (hereinafter referred to as "China Merchants Group") entered the market. After 8 months of organization and coordination, the reorganization plan of Contemporary Technology was approved by group voting in April 2025 and approved by the court in the same month. After the implementation of this reorganization, China Merchants Group's China Merchants Innovation and Technology will become the main listed company as a strategic investor.

It is reported that China Merchants Group is a comprehensive central enterprise with total assets exceeding 14.7 trillion yuan and has been rated A by the State-owned Assets Supervision and Administration Commission of the State Council for 20 consecutive years. The group owns more than 10 listed companies including China Merchants Bank, China Merchants Securities, China Merchants Shipping, and China Merchants Port.

In 2024, China Merchants Group will fully accelerate the "third entrepreneurship", with annual operating income of 916.7 billion yuan, total profit of 227.2 billion yuan, net profit of 187.2 billion yuan, and total assets of 14.7 trillion yuan at the end of the year.

Industry insiders pointed out that China Merchants Group's "third entrepreneurial" strategy is deeply in line with the development direction of Renmin Pharmaceutical. At present, China Merchants Group is focusing on the life science industry, and Renmin Pharmaceutical is the leader in the sub-industry. The business of the two parties is highly compatible. After the completion of this reorganization, the listed company is expected to obtain more resource support from China Merchants Group and is expected to become the core platform of life science under its group.

For both parties, this strategic reorganization is not only an integration at the capital level, but also a deep integration of industrial resources and global capabilities.

In terms of R&D resources, China Merchants Group has deployed a number of scientific research resources in the field of life science. The two parties are expected to deepen cooperation in the field of R&D and accelerate the expansion of Renmin Pharmaceutical's innovative drug pipeline.

In terms of financial support, China Merchants Bank and China Merchants Securities under China Merchants Group can provide financial services to listed companies, empower listed companies' R&D, and have significant international synergy effects. With the help of China Merchants Group's ports, logistics outlets and overseas industrial park resources, the operating efficiency of Renmin Pharmaceutical's overseas sales network is expected to be improved, and the commercialization of overseas innovative drugs will be further accelerated.

After the completion of this restructuring, China Merchants Group will join hands with local governments to jointly empower the listed company's industrial upgrading, maintain the listed company's performance and operational stability, and strengthen Renmin Pharmaceutical's leading position in Hubei Province's pharmaceutical industry.

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