With its market value declining over 30% this year, Zhejiang Jingxin Pharmaceutical Co.,Ltd. (002020.SZ), a Shanghai-listed company with a market cap around RMB 10 billion, has submitted its listing application to the Hong Kong Stock Exchange for the second time. The question now is whether this move can leverage the A-H share linkage to reshape its valuation. According to recent filings, the company has again applied for a main board listing in Hong Kong, with CITIC Securities acting as its sole sponsor. Zhejiang Jingxin Pharmaceutical Co.,Ltd. is a pharmaceutical group focused on two core therapeutic areas: central nervous system (CNS) disorders and cardiovascular and cerebrovascular diseases. Dazidazine (Jingnuoning®) is the company's only approved innovative drug, and it is also advancing a select pipeline of investigational drugs in these key therapeutic fields. Several of the company's products hold leading positions in the industry. According to Frost & Sullivan, based on 2025 sales revenue, in the neurological disease segment, its levetiracetam (one of the common drugs for treating epilepsy) ranks second in the Chinese levetiracetam market with a 19.2% market share; pramipexole hydrochloride (one of the treatments for Parkinson's disease, a brain disorder) also ranks second in the Chinese pramipexole hydrochloride market with a 12.2% share and first in the generic drug market with a 32.4% share. Performance has shown slight fluctuations: from 2023 to the first half of 2026, revenue growth was 5.79%, 3.99%, -2.14%, and -1.46% respectively, while net profit growth was -6.66%, 15.32%, 7.37%, and -10% over the same periods. The net profit margin for the first half of 2026 stood at 18%. The company maintains a relatively ample cash position, holding RMB 1.568 billion in cash equivalents and time deposits exceeding three months as of July 2026. Having been listed on the Shenzhen Stock Exchange since 2004, the company currently has a market value of approximately RMB 10 billion and a PE ratio of 13 times. This Hong Kong listing attempt could establish a dual A-H share platform, advancing its capital globalization strategy.

Three business segments drive performance with relatively stable profitability

The company's main operations include pharmaceuticals, active pharmaceutical ingredients (APIs), and medical equipment. Pharmaceuticals serve as the core revenue source, encompassing generics, innovative drugs, traditional Chinese medicine, and biologics, covering CNS disorders, cardiovascular and cerebrovascular diseases, digestive system diseases, and infectious diseases. As of June 2026, 40 of its marketed products had been included in national or provincial alliance volume-based procurement programs. From a revenue composition perspective, the contributions from pharmaceuticals, APIs, and medical equipment have remained dynamically stable, with pharmaceutical revenue showing minimal fluctuation and stable share. Medical equipment revenue has grown annually with an increasing share, while API revenue has declined year over year with a decreasing share. In the first half of 2026, these three segments contributed 58.5%, 21%, and 18.9% of revenue respectively, with other business activities accounting for 1.6%.

In the pharmaceutical segment, the company's marketed product portfolio includes over 60 approved drugs. CNS disorders and cardiovascular and cerebrovascular diseases are the two core product areas, together accounting for nearly 70% of pharmaceutical revenue. Generics form the bulk of the portfolio, contributing 40.6% of pharmaceutical revenue in the first half of 2026. Generics such as levetiracetam, rosuvastatin calcium tablets, amlodipine besylate tablets, and cefuroxime axetil tablets are all among the top ten commercialized products. Levetiracetam has shown strong performance, driving steady growth in CNS revenue. Innovative drugs carry significant growth potential: in the CNS field, Dazidazine (Jingnuoning®) was launched in Q4 2023 and has been included in the national medical insurance catalog, generating commercial revenue starting in 2024. In the first half of 2026, this product segment contributed 7.7% of revenue, and since its launch, Dazidazine has reached over 3,000 hospitals. In the cardiovascular and cerebrovascular field, the innovative product JX2201 successfully completed its Phase I clinical trial in Q1 2026, with potential performance release expected after commercialization. Additionally, traditional Chinese medicine and biologics contributed 10.2% of revenue, primarily driven by products like Jingxin® Kangfuxin Liquid, though this segment has shown relatively weak performance.

In the API segment, the company has established production facilities for APIs and intermediates through Shaoxing Jingxin and Shandong Jingxin. Core API products include quinolone anti-infective APIs, cardiovascular APIs, and CNS APIs. The medical equipment segment was established through the 2015 acquisition of Shenzhen Jufeng, entering the medical display resolution field with products including clinical displays, diagnostic displays, consultation display centers, and endoscopic surgical displays. Sales models differ across the three business segments: generics rely primarily on distributors, medical equipment uses a direct sales model, and APIs employ a hybrid model. In the first half of 2026, distribution and direct sales accounted for 66.9% and 33.1% respectively. Distribution serves as the core business model, with a network covering over 21 Chinese provinces and selected overseas markets, encompassing more than 1,500 distributors.

The company's customer concentration is relatively low, with the top five customers contributing 29.1%, 33.5%, 34.5%, and 34.2% of revenue from 2023 to the first half of 2026, while the largest customer contributed 15.2%, 15.9%, 16.8%, and 17.2% respectively. The company also has global market coverage: in the first half of 2026, domestic and overseas revenue accounted for 78.8% and 21.2% respectively, with overseas markets primarily distributed across Europe, Asia, and the Americas, together contributing 99% of overseas revenue. Notably, the company's profitability has remained stable, with gross margins of 49.2%, 48.5%, 48.2%, and 48% from 2023 to the first half of 2026. Pharmaceutical gross margins remain high and stable at 63-65%, medical equipment at 34-35%, while API margins show a declining trend but contribute minimally. Various expense ratios have offset each other within narrow fluctuation ranges, keeping overall performance stable, with net profit margins of 15.6%, 17.3%, 18.97%, and 18.02% over the same periods.

Structural opportunities exist in the industry with growth expectations remaining intact

From an industry perspective, the company faces growth risks from slowing sector expansion but also encounters structural opportunities. According to Frost & Sullivan, in the CNS drug market, the global market size reached RMB 1.9 trillion in 2025, with a compound annual growth rate (CAGR) of only 1.8% over the past five years. The Chinese market stood at RMB 168.8 billion with a CAGR of -0.7%, projected to reach RMB 179.1 billion by 2030 at a CAGR of just 1.6%. In the cardiovascular drug market, China's market size was RMB 178.9 billion in 2025, with a five-year CAGR of -1.5%, expected to grow to RMB 199.8 billion by 2030 at a CAGR of 2.7%. These two therapeutic areas form the core of the company's product portfolio, and with sluggish industry demand growth, capacity utilization rates across its products are generally low. In the first half of 2026, utilization rates for generics, Dazidazine, APIs, traditional Chinese medicine, biologics, and medical equipment were 61.3%, 90%, 80.7%, 24.9%, 75%, and 79.9% respectively. However, structural opportunities provide room for capacity utilization improvement.

On one hand, several of the company's products hold dominant positions in niche segments—for example, levetiracetam holds a 19.2% market share by sales revenue, pramipexole hydrochloride holds 12.2%, and sertraline hydrochloride holds 8.8%, ranking second, second, and third in their respective markets. On the other hand, multiple niche markets show impressive growth rates, such as the lipid-lowering drug market, which maintains a double-digit CAGR. The company is also actively increasing R&D investment to enrich its pipeline portfolio, with R&D expenses of RMB 165 million in the first half of 2026, representing an R&D expense ratio of 8.3%. The company has several key pipeline candidates: beyond the commercialized Dazidazine, innovative drugs JX2201 and JX6001 have entered Phase II and Phase III clinical trials respectively, and the medical device JXYY-JJU is approaching the registration stage, with commercialization expected to release performance.

In summary, with two core therapeutic tracks, three business segments, and combined efforts in domestic and international markets, Zhejiang Jingxin Pharmaceutical Co.,Ltd. maintains growth expectations despite current weak performance. First, diversified business operations provide growth resilience. Second, structural opportunities combined with the leading positions of core products create room for capacity utilization improvement. Third, the profitability trend is upward, with high profit margins, ample cash flow, and a low proportion of interest-bearing debt, which can support pipeline R&D and global market expansion needs. The company's Hong Kong listing initiative appears primarily aimed at achieving global business coverage, preparing for capital globalization, and establishing a dual A-H share listing status. If the Hong Kong listing succeeds, the H-share valuation reference to the A-share valuation is not high. Given the company's relatively stable fundamentals, rich pipeline resources, and growth expectations, it warrants close attention.