- 2025,04,14
In Dongtou, a seaside area on the coast of the East China Sea, an listed (here "listed" is used in context to indicate the company has gone public; for a more precise translation considering the sentence flow, it can be integrated into the following sentence as "a company that has gone public") company emerged from this island with a permanent resident population of less than 160,000. In March 2017, Chengyi Pharmaceutical was listed on the main board of the Shanghai Stock Exchange, becoming the 20th listed company in Wenzhou, the first listed pharmaceutical enterprise in Wenzhou, and the first listed marine biomedicine company in Zhejiang Province, elevating the high-quality development of Wenzhou's pharmaceutical industry to a new level.
From a small workshop-style pharmaceutical factory founded in 1966 by family members of military personnel to a modern garden-style health industrial park currently covering an area of 300 acres with an investment of RMB 1.5 billion, Chengyi Pharmaceutical has written a new chapter in capital market operations: making in-depth layouts along the marine healthcare industrial chain and securing its position as a leading enterprise in the marine biomedicine sector.
01 The first special loan for stock repurchase has been implemented/landed.
Looking back on Chengyi Pharmaceutical's journey to going public, every step, from its transformation from a collective enterprise to a private one and from a traditional enterprise to a joint-stock company, represented a metamorphosis akin to "a chrysalis emerging as a butterfly." Over the eight years since its listing, driven by the capital engine, Chengyi Pharmaceutical has pursued stability and long-term growth, consistently distributing dividends annually, with an average ratio of dividend amount to net profit for the year exceeding 34%, benefiting all investors.
"There's no doubt that going public has played a significant role in Chengyi Pharmaceutical's development," said Zhao Chunjian, the General Manager of Chengyi Pharmaceutical. Listing has greatly helped enhance the company's visibility, standardize its operations, and obtain direct financing. As the first listed company in Zhejiang Province deeply engaged in marine biomedicine, Chengyi Pharmaceutical has gained more policy support for its business operations amid the general trend of marine economic development. "Rational utilization of diversified capital market tools can enhance a company's financing capability, risk resistance, and market value," he added.
Stock repurchases and share increases are internationally recognized methods for listed companies to manage their market value. In recent years, at the national level, listed companies have been encouraged and supported to implement share repurchases in accordance with laws and regulations, aiming to stabilize market confidence, optimize capital structures, and facilitate sustainable corporate development. To assist in the market value management of listed companies, in October 2024, the People's Bank of China, adhering to market-oriented and law-based principles, collaborated with the China Securities Regulatory Commission and the National Financial Regulatory Administration to establish a policy tool for repurchase and share increase refinancing loans. This initiative encourages banks to extend unsecured loans and facilitates loan transactions between banks and enterprises, fully meeting the financing needs of listed companies for market value management.
Chengyi Pharmaceutical announced in an evening公告 (can be translated as "announcement" here for conciseness, though in a formal context "press release" might also be suitable) on the evening of March 3rd that as of February 28, 2025, the company had repurchased approximately 9.45 million shares through centralized competitive bidding transactions, accounting for 2.89% of the company's total share capital.
"As a high-tech enterprise focusing on the pharmaceutical and healthcare sector, Chengyi Pharmaceutical has confidence in its long-term development. Repurchasing shares is an affirmation of the company's value and provides reassurance to investors. The repurchased shares will be used for employee stock ownership or equity incentives to attract and retain core talents," Zhao Chunjian explained the motivations and purposes behind the share repurchase.
The share repurchase by Chengyi Pharmaceutical resulted in the first implementation of a special loan for share repurchase and increase by a listed company in Wenzhou. In early December 2024, China Construction Bank's Dongtou Branch in Wenzhou signed a "Letter of Commitment for Loan from China Construction Bank" with Chengyi Pharmaceutical, agreeing to provide a special loan for share repurchase not exceeding RMB 50 million, with a loan term of one year. This move marked the first implementation of a special loan for share repurchase and increase by a listed company in Wenzhou after the People's Bank of China, in conjunction with the National Financial Regulatory Administration and the China Securities Regulatory Commission, issued a notice on refinancing loans for share repurchase and increase. "The implementation of the first special loan for share repurchase and increase by a listed company by Chengyi Pharmaceutical not only supports the stable operation of the capital market but also accumulates valuable experience for financial institutions in handling the entire process of refinancing loans related to share repurchase and increase by listed companies," said industry insiders.
02 Building a grand health industry (or a comprehensive health industry) with matrix thinking
The 2025 Government Work Report mentioned "deep-sea technology" for the first time, indicating that China's marine economy is embracing a new round of development opportunities. In recent years, Chengyi Pharmaceutical has capitalized on local resources, starting with the concept of "exploring marine resources for medicines," to build a "marine pharmaceutical matrix" that weaves a health protection network for the "happy twilight years" of the middle-aged and elderly populations. In the Chengyi Pharmaceutical Health Industrial Park, high-purity fish oil, green pharmaceutical-grade glucosamine, nervonic acid series foods, and other products are being produced. Intelligent assembly lines operate at high speed, with workers fully focused on their respective tasks. Boxes of medicines are packaged, inspected, and shipped out via conveyor belts, distributing them across the country.
"In response to China's entry into an aging or even 'super-aging' era, we have focused on the health management of the middle-aged and elderly populations, initially establishing a life and health industry with Chengyi Pharmaceutical's unique characteristics. We are building a comprehensive health product matrix to provide systematic solutions for the chronic disease management of the middle-aged and elderly," Zhao Chunjian introduced. Currently, Chengyi Pharmaceutical has become a leading enterprise in the life and health industry chain in Wenzhou, with a gradually maturing "Chengyi segment" serving the health needs of the middle-aged and elderly populations nationwide. "We currently hold 73 drug approval numbers, 6 health food approvals, and 3 general food approvals, with 30 to 40 varieties produced year-round," he added.
Currently, the company is advancing its transformation from generic drugs to innovative drugs, centered around three major development directions: marine pharmaceuticals, biopharmaceuticals, traditional Chinese medicine, and the comprehensive health industry. We are achieving a full-process, full-category, and full-industry-chain layout spanning from food to health supplements to pharmaceuticals. We aim to set an example in leading the development of marine biopharmaceuticals, promoting the integration of medical care and elderly care, facilitating chronic disease management, and supporting the "silver economy" development, particularly in enhancing the health of the middle-aged and elderly populations.
From a traditional pharmaceutical enterprise to a rising star in the life and health industry, Chengyi Pharmaceutical has continually upgraded its development strategy with the support of the capital market: deepening research and development in marine pharmaceuticals and biopharmaceuticals, and expanding the international market for traditional Chinese medicine; collaborating with financial institutions to explore the "silver economy + insurance" model, developing long-term care insurance products, and improving risk protection; enhancing scientific and technological innovation through cooperation between its subsidiary Ruicheng Biomedical Technology Co., Ltd., and Shanghai Ruijin Hospital to develop a patented product for treating pancreatic cancer—the "Disposable Negative Pressure Drainage Kit," successfully achieving patent commercialization... "The company has set a dual goal of 'achieving a market value of 10 billion yuan and building a century-old Chengyi,' accelerating mergers and acquisitions, seizing strategic high ground, and empowering new enterprise value," said Zhao Chunjian.
Regarding Wenzhou's enterprises preparing for listing, Zhao Chunjian put forward three suggestions: Firstly, financial management should be standardized, with a firm rejection of any motivation or behavior for financial fraud, ensuring data authenticity and transparency. Secondly, companies should focus on their main businesses, excel in their core operations, and concentrate on their core businesses, avoiding the (chasing blindly) of market fads. Thirdly, companies should have a sense of social responsibility, establishing a business philosophy centered on investor returns, and avoiding any motivation or behavior to raise funds through listing for improper purposes (such as "making a quick buck"). (Note: "Making a quick buck" is a colloquial expression in English that conveys the idea of seeking immediate financial gain, often through unethical means. Since the original Chinese phrase implies an unethical or exploitative aspect to the fundraising, this expression is used here to capture that nuance.)
Source: WenDu News