CSPC Pharmaceutical Group (1093.HK), a pharmaceutical giant with a market cap exceeding HKD 100 billion, has been making strategic moves amid declining financial performance since 2024.

On December 22, CSPC announced its subsidiary CSPC Innovation would invest CNY 157.5 million (35% stake) alongside Zhongqi Pharmaceutical's CNY 292.5 million (65% stake) to establish Runshi Biotech. The joint venture will focus on R&D and commercialization of GLP-1-targeted drugs for diabetes and weight management.

This development follows a major leadership reshuffle on December 19. Zhang Cuilong stepped down as Vice Chairman and CEO but remains an executive director. Cai Lei, son of Chairman Cai Dongchen and brother of executive director Cai Xin, was appointed as the new Vice Chairman, CEO, and authorized representative. Wei Qingjie joined as Vice Chairman and COO.

Industry analysts note this "brother tandem" succession model could leverage complementary strengths while maintaining strategic continuity. CSPC's shares closed at HKD 8.77 on December 24, valuing the company at HKD 101.1 billion.

**The Cai Brothers: Divergent Paths to Leadership** Zhang Cuilong, a 28-year veteran who rose from grassroots positions, handed over to Cai Lei, who joined CSPC in 2014 overseeing U.S. R&D and international sales. Cai Xin, holding pharmacy and MBA degrees, transitioned from investment analysis at CDH Investments to spearheading CSPC's marketing operations in 2022.

The leadership transition comes after an insider trading scandal involving former executive director Pan Weidong, who resigned in September 2024 following a CNY 5 million regulatory penalty.

**Financial Performance Under Pressure** CSPC reported declining revenues and profits in 2024 (CNY 29.01 billion revenue, down 9.56%; CNY 4.33 billion core net profit, down 25.9%). The first three quarters of 2025 saw continued declines, with revenue dropping 12.32% to CNY 19.89 billion.

The company attributes this to China's volume-based drug procurement policy impacts. R&D spending grew 5.5% to CNY 2.68 billion in H1 2025, supporting 90 clinical-stage projects including 12 awaiting approval.

**Strategic Pivots** After abandoning a CNY 7.6 billion internal restructuring plan in April 2025, CSPC Innovation applied for a Hong Kong IPO in December. The unit, now controlling Jushi Biologics, has commercialized two antibody drugs and China's first domestic COVID-19 mRNA vaccine.

Chairman Cai Dongchen, who transformed from factory technician to Hebei's richest person (worth CNY 15.5 billion in 2025), has steered CSPC through multiple transitions since founding the company in 1997. With the new leadership focusing on metabolic diseases and international expansion, the pharmaceutical group aims to navigate its current challenges through innovation and global partnerships.