On July 7, Tongrentang Medical (02667.HK) plunged 41.09% in regular trading on its first day of listing, trading at HKD 3.1 per share with turnover of HKD 102 million, breaking sharply below its IPO price of HKD 5.5.

The stock had already signaled weakness during pre-listing dark pool trading on July 6, falling over 15%. The company explicitly warned that margin compression from nationwide centralized procurement of traditional Chinese medicine decoction pieces and new Beijing medical insurance regulations on TCM formula granules would persist throughout the full year. Combined with listing-related expenses, full-year net profit faces downside risk.

Despite strong subscription demand during the offering period — with Hong Kong public offering oversubscribed 251.74 times — the sharp first-day decline reflects market concerns over stagnant revenue growth and thin profitability. The company reported revenue of approximately RMB 1.171 billion for the year ended December 2025, with net profit of only RMB 33.75 million and a net margin of just 2.9%.

Tongrentang Medical is a subsidiary of the Tongrentang Group, strategically focused on traditional Chinese medicine healthcare services. It operates over 20 offline medical institutions across Beijing, Zhejiang, Shanghai, and other regions, providing modernized and customized TCM medical services through a tiered diagnosis and treatment network.

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