Recently, Deluxe Family Co.,Ltd.'s strategic transformation successfully passed the extraordinary shareholders' meeting with 94.5% approval votes. However, at this time, Deluxe Family's shareholder structure has undergone significant changes. According to Deluxe Family's interim report, Shanghai Zexi Zengxi Investment Center (Limited Partnership), which once witnessed the company's stock price glory, has quietly exited the scene. In its place, foreign giants like Morgan Stanley have rushed in, occupying three of the top ten tradable shareholders positions. What changes is Deluxe Family experiencing?

**1. Investment in Pharmaceutical Company Still Unprofitable**

On August 30, Deluxe Family's strategic transformation crossed the first hurdle - the proposal for cash capital increase in Shanghai Heho Pharmaceutical Research & Development Co., Ltd. (hereinafter referred to as "Heho Pharma") and related party transactions passed the extraordinary shareholders' meeting with 94.5% shareholder approval. The next step requires approval from the China Securities Regulatory Commission before implementation of subscribing to no less than 5% and no more than 8.09% of shares in innovative drug company Heho Pharma with cash not exceeding 300 million yuan.

This marks Deluxe Family's return to external investment and major strategic transformation after many years. Deluxe Family's main business is real estate development. In recent years, affected by the real estate industry cycle, performance has been poor, with losses already incurred in 2024. Facing industry difficulties that are hard to reverse in the short term, investors have been calling for the listed company's transformation.

Heho Pharma, which Deluxe Family intends to invest in, is an innovative drug company with deep accumulation in the small molecule field. Currently, it has 3 products commercialized on the market, 1 innovative oncology drug applied for NDA in Japan this year, and 2 innovative oncology drugs entering pivotal clinical studies, positioning it as a benchmark among unlisted small molecule innovative drug companies.

According to Tianyancha, Heho Pharma was established on March 11, 2011, with registered and paid-in capital of 718 million yuan. In fact, Deluxe Family and Heho Pharma have long-standing connections. As early as September 8, 2020, Dongnanjiang Group and its wholly-owned subsidiary Tibet Nanjiang collectively held approximately 11.54% of Heho Pharma, second only to the largest shareholder.

Heho Pharma is headquartered in Shanghai Zhangjiang, focusing on innovative drug research and development in the oncology field. It has a globalized research and management team led by academicians and has currently built over ten research and development pipelines.

Similar to many innovative drug companies in early commercialization stages, Heho Pharma has not yet achieved profitability due to substantial R&D investments, but has already launched 3 products in China and Japan. Looking at the transaction itself, Deluxe Family's subscription price is 4.75 yuan per share. Based on Heho Pharma's current total share capital of 718 million shares, the total valuation is 3.411 billion yuan. Corresponding to Heho Pharma's 2024 revenue of 323 million yuan, the price-to-sales ratio is approximately 10 times.

According to the prospectus disclosed when Heho Pharma applied for STAR Market listing in 2021, the post-investment valuation of the last round of financing before application was 6.2 billion yuan. At that time, Heho Pharma had no products on the market yet. According to preliminary statistics, Heho Pharma's price-to-sales ratio is relatively reasonable in the pharmaceutical industry pricing.

However, Heho Pharma's financial data is not ideal, with a net loss of 209 million yuan in 2024 and continued losses of 16.07 million yuan in the first two months of 2025.

**2. Shanghai Lan Kwai Fong: A Silver Lining in Adversity**

Deluxe Family's real estate main business is declining. The interim report shows revenue of only 138 million yuan, down 11.8% year-on-year; net profit attributable to shareholders lost 10.41 million yuan, down 437.6% year-on-year; non-GAAP net profit attributable to shareholders changed from a loss of 610,000 yuan in the same period last year to a loss of 11.51 million yuan, with losses further expanding; net operating cash flow was -70.6 million yuan, up 80.2% year-on-year.

Deluxe Family mentioned in its 2025 interim report that operating business underwent significant changes during the reporting period, mainly due to reduced delivery area of Suzhou subsidiary projects compared to the same period last year, and comprehensive pre-sales launch of Zunyi projects with increased sales expenses, leading to company losses.

However, Deluxe Family's real estate development businesses in Shanghai, Suzhou, and Zunyi are all progressing, especially the Shanghai Yangpu project's construction is proceeding smoothly. This project is located at Block 01D4-04 in Pingliang Community, Yangpu District, Shanghai, developed in cooperation between Deluxe Family and Poly Real Estate, with cooperation equity ratio of 51% for Shanghai Huazhi Lishang Real Estate and 49% for Shanghai Shengzhen Real Estate.

The Shanghai Yangpu project is located in the East Bund riverside area within Shanghai's inner ring, with superior geographical location as a low-density residential plot. The project is named Lan Kwai Fong 855, has obtained pre-sale permits, enjoys rare location advantages surrounded by three major CAZs, and is only 500 meters from Jiangpu Park Station on Metro Lines 12/18.

The project also plans 18 units of approximately 89-198㎡ garden houses and 15 units of approximately 180-240㎡ villas, with linked prices of 117,000 yuan/㎡ for garden houses and 148,000 yuan/㎡ for scenic villas. Deluxe Family has previously developed famous projects like the luxury residential "Tan Palace" in Shanghai, while Poly Real Estate has developed landmark buildings like Shanghai Securities Building in Shanghai. The strong alliance of these two companies targets the "one seat, one customization" high-end customization route, aiming at urban elite clientele.

Additionally, Shanghai's latest adjustments to purchase restrictions outside the outer ring and optimization of housing provident fund policies and personal credit policies will all stimulate real estate sales. The sale of these projects may realize approximately 800 million yuan in sales for Deluxe Family. Based on 51% equity calculation, there would be at least 400 million yuan in equity value, which may significantly boost Deluxe Family's performance this year.

However, after Lan Kwai Fong 855 is sold out, Deluxe Family will face the predicament of limited land reserves. Deluxe Family's interim report shows its land reserve area is only 52,900 square meters, including 23,200 square meters of undeveloped land in Suzhou and 29,700 square meters of undeveloped land in Zunyi. However, there are no land reserves in first-tier city Shanghai, which is bad news for Deluxe Family.

**3. Three Foreign Investors Enter Top Ten Tradable Shareholders**

Facing the continued downturn in the real estate market, Deluxe Family has never given up on transformation over the past decade. However, there have been constant doubts about Deluxe Family's transformation. The market questions its multiple rounds of speculation using hepatitis B vaccine, graphene concepts, and gold mining concepts, but ultimately these concepts have all faded into silence in the market.

Later, Deluxe Family was involved in concepts like aerial vehicles and robots, but these businesses have not significantly impacted Deluxe Family's performance. Although questioning its concept speculation, industry observers believe Deluxe Family's 300 million yuan investment in Heho Pharma is serious this time.

First, Dongnanjiang Group and its wholly-owned subsidiary held approximately 11.54% of Heho Pharma five years ago. After years of careful observation and understanding, they should believe Heho Pharma is on the eve of performance breakthrough.

Deluxe Family also has other pharmaceutical transformation activities, including participating in Shanghai Yuanneng Cell Biology Cryogenic Equipment Co., Ltd. in May 2022 with a 2.4577% stake. Yuanneng Biology's actual controller is Qu Jianguo, and this is his fourth startup company. According to media reports, Yuanneng Biology has initiated Series B financing with investment valuation around 1.8 billion yuan.

According to reports, Yuanneng Biology's president revealed the company is preparing for independent STAR Market listing with expected market value of no less than 4 billion yuan. If Yuanneng Biology successfully lists, Deluxe Family will benefit greatly, with its equity stake worth nearly 100 million yuan, representing significant appreciation.

Obviously, Deluxe Family saw the huge returns from pharmaceutical investment before choosing to invest in Heho Pharma again. Currently, various parties have significant disagreements about the prospects of Deluxe Family's transformation.

In the past month, Deluxe Family has hit daily limit three times. On August 19 and August 20, Deluxe Family hit consecutive daily limits, but in the following six trading days, the gains were completely digested. In recent days, Deluxe Family's stock price has begun to fluctuate upward again.

The top ten tradable shareholders shown in Deluxe Family's interim report also reveal each shareholder's view of its future. The first quarter report still showed Shanghai Zexi as Deluxe Family's second-largest shareholder holding 90 million shares, but it disappeared from the interim report. Related media reported that Shanghai Zexi's 90 million shares were auctioned in May, but no buyer was visible on auction websites.

The interim report shows Morgan Stanley, JP Morgan, and Swiss IG Bank entered the top ten tradable shareholders list, collectively holding more than 57.1 million shares. The three major QFIIs' optimism about Deluxe Family has attracted market attention.

The interim report also shows that CSI All Share Real Estate ETF increased its holdings in Deluxe Family, holding 20.45 million shares.

Through twists and turns, we quietly await the blooming and falling of flowers. Whether Deluxe Family's transformation path can proceed more smoothly in the future remains to be seen by all parties.