Jiangxi Biological Products Research Institute Co., Ltd. ("Jiangxi Biological"), a provider of human tetanus antitoxin (TAT), recently submitted an IPO application to the Hong Kong Stock Exchange, seeking a listing on the main board.

According to its prospectus, the company has achieved rapid growth in recent years driven by its TAT product. From 2022 to 2024, total revenue rose from RMB 142 million to RMB 221 million, with a compound annual growth rate (CAGR) of 24.7%. Net profit surged from RMB 26.47 million to RMB 75.14 million during the same period, boasting a staggering CAGR of 68.5%. However, behind these impressive figures lie significant risks, including over-reliance on a single product and a convoluted equity structure, casting uncertainty over its IPO prospects.

**Overdependence on a Single Product, "Second Curve" Remains Distant** Founded in 1969, Jiangxi Biological originated as the Jiangxi branch of the Shanghai Biological Products Research Institute under the Ministry of Health. With over 50 years of experience in biopharmaceuticals, the company operates eight wholly-owned subsidiaries and is a national high-tech leader specializing in antitoxin and immune serum products.

Per Frost & Sullivan data, Jiangxi Biological is the largest provider of human TAT in China and globally, holding market shares of 65.8% and 36.6% by 2024 sales volume, respectively. TAT is an antiserum that neutralizes toxins produced by Clostridium tetani, offering immediate protection and treatment for tetanus infections. In 2024, the company sold 25.4 million doses of TAT, with 13.2 million sold domestically and 12.2 million exported.

Financially, the company has demonstrated steady growth. From 2022 to 2024, revenue climbed from RMB 142 million to RMB 221 million, while net profit soared from RMB 26.47 million to RMB 75.14 million, reflecting a 68.5% CAGR. In the first half of 2025, revenue grew by 13.0%, and net profit surged by 118.0%.

However, Jiangxi Biological’s revenue structure is heavily skewed toward TAT, exposing it to significant risks. TAT sales accounted for 93.9%, 93.0%, 93.3%, and 96.0% of total revenue from 2022 to H1 2025. Although TAT is covered under China’s Class A medical insurance reimbursement list, potential policy changes—such as adjustments to reimbursement standards or inclusion in volume-based procurement (VBP)—could severely impact pricing and sales.

Moreover, the TAT market is showing signs of slowing growth. Frost & Sullivan estimates China’s TAT market grew at a 9.1% CAGR from 2019 to 2024, reaching USD 33.5 million. While growth is projected to accelerate to 18.6% from 2024 to 2028, it is expected to decelerate to 5.7% from 2028 to 2033, indicating a looming growth ceiling.

To diversify, Jiangxi Biological is developing antivenom serums and equine rabies immunoglobulin. However, these pipelines remain in early-stage development, with antivenom serum for Agkistrodon halys expected to submit an application in early 2027, and multivalent antivenom serum and equine rabies immunoglobulin not slated for IND submission until 2029.

R&D investment has also been inconsistent, dropping 43.39% YoY to RMB 13.7 million in 2024, below sales and administrative expenses. Additionally, the company’s three veterinary drugs are not self-developed, lacking core technological barriers and long-term competitive advantages.

**Clouded Historical Background: Institutions Exit at a Loss, Large Dividends Before Listing Raise Governance Concerns** Jiangxi Biological’s highly concentrated ownership structure and complex related-party transactions pose another hurdle for its IPO. Originally state-owned, the company has transformed into a family-controlled enterprise through years of acquisitions and restructuring. Jing Yue, via Hainan Zhizheng and Qianhai Tianzheng, holds 76% of the shares.

Notably, the China Securities Regulatory Commission (CSRC) has raised questions about undisclosed shareholding arrangements. From 2003 to 2015, Jing Wei and Jiang Xue (Jing Yue’s mother) transferred shares at zero cost to designated nominees. In 2017, Jing Wei transferred a 10% stake to three nominees, also at no cost. While these arrangements have since been unwound, the recipients—Chengdu Shizhi Business Information Consulting, Shenzhen Xiangyi Investment Guarantee, and Chongqing Hanyi Cultural Exchange—are closely linked to Jing Wei’s family.

Valuation discrepancies in share transfers are also concerning. In August 2019, the company was valued at RMB 800 million, but by December 2019, Hanyi Cultural’s entry valued it at just RMB 600 million. Why were relatives allowed to buy in at a discount despite strong performance?

Furthermore, in June 2022, institutional investors, including Shenzhen High-Tech Investment and Xiaohe Venture Capital, participated in a Series B+ round at RMB 15 per share. Yet, in 2024, they sold their stakes back to Jing Yue-controlled Hainan Zhizheng at steep discounts (RMB 8.52–8.50 per share), incurring heavy losses. The reasons behind this remain unclear, raising suspicions of undisclosed agreements.

Jing Yue directly controls 76.64% of shares. Including suspected related parties and employee/shareholder platforms, her effective ownership could reach 87–94%, heightening corporate governance risks.

Meanwhile, the company distributed RMB 127 million in dividends from 2022 to 2024—80% of its total net profit (RMB 157 million). Most of these dividends flowed to Jing Yue and related parties. While the IPO is framed as a fundraising effort for R&D and expansion, the pre-listing payout raises questions about whether the listing is truly for long-term growth or a liquidity event for major shareholders.