After failing in its attempt to list on the ChiNext board and an unsuccessful acquisition by Chengdu Pioneer (688222.SH), Nanjing Haina Pharmaceutical Technology Co., Ltd. (hereinafter referred to as "Haina Pharma") has now submitted an IPO application to the Hong Kong stock market, marking its third capital market endeavor in three years.

Haina Pharma, which claims to rank second in China's drug technology transfer CXO services, faces multiple challenges, including negative operating cash flow, surging receivables, and declining gross margins. The company's heavy reliance on CXO services has led to a dilemma of "revenue growth without profit growth," while frequent changes in major clients highlight structural instability. With repeated setbacks in its capital market journey, it remains uncertain whether Haina Pharma can revive its prospects through a Hong Kong listing.

**01. Bleeding Cash Flow** Founded in 2001, Haina Pharma is an integrated pharmaceutical R&D and manufacturing company offering CXO services, alongside a proprietary product pipeline commercialized through technology transfers.

The company’s financial performance has shown a downward trend after initial growth. In 2022, revenue and net profit stood at RMB 265 million and RMB 59.8 million, respectively. By 2023, revenue surged 54.7% to RMB 410 million, while net profit rose 22.17% to RMB 73 million. However, in 2024, revenue growth slowed to 3.65% (RMB 425 million), and net profit dropped to RMB 53.3 million. The first half of 2025 saw both revenue and net profit decline year-on-year to RMB 178 million and RMB 22.1 million, respectively.

Gross margins also fell sharply, from 60.1% in 2022 to 46% in 2024, with a partial recovery to 52.1% in H1 2025. More concerning is the cash flow deterioration: operating cash flow turned negative in 2024 (-RMB 34.6 million) and worsened to -RMB 42.5 million in H1 2025. Haina Pharma attributed this to adjustments for non-cash items, including depreciation (RMB 11.5 million) and receivables impairment (RMB 7.4 million). Accounts receivable and notes ballooned from RMB 44.7 million in 2022 to RMB 176 million in H1 2025, with turnover days extending from 43 to 176 days.

**02. Heavy CXO Dependence** Haina Pharma provides end-to-end or modular CRO and CMO solutions, covering drug development, CMC, clinical trials, bioequivalence studies, regulatory submissions, and contract manufacturing. According to Frost & Sullivan, it ranks second in China for approved clinical trials and marketing authorizations via drug technology transfer CXO services.

CXO services dominate revenue, contributing 65% (2022), 69.1% (2023), 87.8% (2024), and 78.2% (H1 2025). As of H1 2025, the company had 398 active CXO projects. However, industry experts warn that over-reliance on CXO exposes Haina Pharma to pricing pressures and policy-driven demand volatility. Notably, generic drug CRO services have faced a "low-price competition trap" since 2023.

In H1 2025, CRO revenue fell to RMB 132 million (74.3% of total revenue) from RMB 180 million a year prior, driven by fewer late-stage projects (with lower milestone payments) and declining new project intake.

**03. Unstable Major Clients** Haina Pharma’s revenue hinges on the scale and number of service contracts, making client stability critical. Yet, its top-five clients have fluctuated significantly. From 2022 to H1 2025, top clients contributed 33.6%, 32.3%, 26.7%, and 32.9% of revenue, respectively, with no consistent presence except Client A (a Zhengzhou-based pharmaceutical firm).

Regulators previously questioned Haina Pharma’s client stability during its ChiNext IPO review. Some clients also had personnel or equity ties—e.g., Fuzhou Taida Pharma (2022’s second-largest client) had a supervisor who was a former Haina employee, while Shanghai Yilun Investment (2023’s top client) was linked to a Haina shareholder.

**04. Failed A-Share IPO and M&A** Before pivoting to Hong Kong, Haina Pharma pursued a RMB 850 million ChiNext IPO in June 2023 but withdrew in June 2024 after two rounds of regulatory queries. Analysts cited fierce generic drug competition and financial concerns as key hurdles.

In March 2025, Chengdu Pioneer planned to acquire a 65% stake in Haina Pharma, but the deal collapsed three months later due to disagreements on terms. Industry observers view the Hong Kong IPO as a critical move to address cash flow challenges, though its success remains uncertain amid financial declines and investor exits.