Since the beginning of this year, the improvement in global liquidity has injected new vitality into the Hong Kong market, making it a popular choice for healthcare companies to enter the capital market.
Data shows that among the top 50 IPO companies in Hong Kong this year, the healthcare industry accounts for 11, raising a total of approximately HKD 18.119 billion (including overallotment), surpassing the overall fundraising scale of the industry in 2023 and 2024.
On the other hand, if we exclude the HKD 11.3 billion raised by Heng Rui Medicine, the average subscription multiple for the remaining healthcare companies is 3.78 times, with an average fundraising of only about HKD 674 million. This fundraising amount is still far below the level of over HKD 1.5 billion in the same period of 2021, reflecting a more rational and cautious investment attitude in the secondary market despite the booming IPO background in the healthcare industry.
In this market context, some healthcare companies with unclear commercialization prospects and high valuations may find it difficult to attract market investors during the IPO subscription phase, such as Zhonghui Biotechnology, which recently submitted its application for the second time.
<h2>Holding high-end vaccine products, but commercialization remains in doubt</h2>
Zhonghui Biotechnology was established in October 2015, and the company is mainly engaged in the research, development, manufacturing, and commercialization of innovative vaccines and traditional vaccines using new technological methods.
The prospectus shows that the company has a total of 13 products in its research pipeline, including 1 commercialized vaccine product, 1 vaccine under research in the NDA (New Drug Application) stage, and 11 vaccines in clinical and preclinical development stages.
Among these, the quadrivalent influenza virus subunit vaccine (Hui Er Kang Xin®) is Zhonghui Biotechnology's only commercialized product.

For a domestic vaccine company, holding a single commercialized product clearly feels somewhat weak.
When mentioning the vaccine industry, many investors cannot help but think of &#34;involution.&#34; Taking the influenza vaccine as an example, there are currently 19 types of influenza vaccines that have been launched in China, including 10 trivalent vaccines and 9 quadrivalent vaccines; there are also 16 influenza vaccines in clinical development, including 4 trivalent vaccines and 12 quadrivalent vaccines.
In recent years, amid fierce homogenization competition, price wars in the domestic vaccine market have been frequent, leading to continuous compression of industry profits. The Wind Vaccine Index shows that the average operating income of vaccine companies in 2024 is expected to be HKD 7.131 billion, a year-on-year decrease of 21.63%; the average net profit attributable to the parent company is expected to decrease by 35.60% year-on-year. The reason for this is that the latest released Q1 2025 financial reports show that more than half of the vaccine companies listed in China have seen a year-on-year decline in net profit, with several leading companies even turning from profit to loss.
In contrast to the &#34;performance winter&#34; of leading companies, Zhonghui Biotechnology has achieved rapid growth against the trend. The prospectus shows that Zhonghui Biotechnology's revenue in 2024 increased significantly by 397.65% year-on-year, and its Q1 2025 revenue grew by 34.97% year-on-year
Zhonghui Biological's ability to establish itself in the &#34;involution&#34; industry is largely due to its differentiated technological advantages in high-end vaccine product lines.
According to Zhitong Finance APP, based on technical design, influenza vaccines are divided into the following types: inactivated whole virus vaccines, split vaccines, inactivated subunit vaccines, live attenuated vaccines, recombinant vaccines, and mRNA vaccines. The most common influenza vaccine on the market is the split vaccine, which has excellent immunogenicity and high safety, making it suitable for most populations.
Zhonghui Biological's core product, Huiruankangxin®, is a quadrivalent influenza virus subunit vaccine. Compared to split vaccines, subunit vaccines focus more on further purification after virus lysis, removing internal viral proteins and retaining only the highly pure HA and NA antibodies, ensuring better safety and lower risk of adverse reactions.
Clinical results show that the serum protection rates of Zhonghui Biological's quadrivalent influenza virus subunit vaccine against H1N1, H3N2, BV, and BY strains are 96.56%, 97.98%, 89.41%, and 95.88%, respectively, all exceeding the EU standard of 70.0%. Moreover, its safety results are also better than those of the split vaccine control group.
<img src="https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20250728/1753680206294179.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="image.png" original-src="https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20250728/1753680206294179.png"/>
However, from the current domestic &#34;involution&#34; influenza vaccine market perspective, a price advantage strategy is clearly superior to a technological advantage strategy.
Since influenza vaccines are classified as Category II vaccines, their sales are greatly influenced by price. Therefore, in response to the industry's involution situation, major vaccine companies such as HUALAN BIOLOGICAL, Beijing Kexing, and China National Pharmaceutical Group have significantly reduced the prices of quadrivalent influenza vaccines since 2023, with some products priced as low as 78 yuan per dose, and the general price range being between 100 yuan and 150 yuan. In contrast, the price of the high-end Huiruankangxin® remains at 319 yuan per dose.
However, according to Southwest Securities, all quadrivalent influenza vaccines launched in Q1 of this year came from Kexing. Huiruankangxin® only received its first batch of approvals in June this year, two months later than those from China National Biotech Changchun and Kexing.
<img src="https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20250728/1753680242622247.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="image.png" original-src="https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20250728/1753680242622247.png"/>
The later market launch of the core commercial product is clearly not favorable for Zhonghui Biological. To mitigate this impact as much as possible, Zhonghui Biological is also continuously expanding its sales network. Currently, the company has completed market access for Huiruankangxin® in 30 provinces nationwide, with over 1,100 district and county-level disease control centers selecting it. This has driven the company's production to reach 1.2 million doses in 2023 and 1.8 million doses in the first nine months of 2024
However, the prospectus shows that the company's revenue in Q1 2025 is only 413,000 yuan, and there is still a significant gap in the scale of commercialization compared to its peers during the same period, indicating that its current ability to realize commercialization still has obvious seasonal shortcomings.
<h2>Financial Losses, Overvaluation, Market Hard to &#34;Close Eyes and Subscribe&#34;</h2>
As a vaccine company that has just entered the commercialization threshold, Zhonghui Biological inevitably faces a &#34;latecomer dilemma&#34; in the increasingly &#34;cutthroat&#34; industry environment.
For example, Zhonghui Yuantong only began selling its first commercial product, the quadrivalent influenza virus subunit vaccine, in September 2023, which is already late for that year's flu season. Subsequently, to cope with the industry's price-cutting trend, Zhonghui Biological chose to expand its sales channels and increase its commercialization ceiling. Therefore, in 2024, it will increase product promotion efforts and expand market coverage and penetration in major cities.
These operational activities and strategies will also reflect on the company's finances. According to Zhitong Finance APP, in 2024, the company's sales expenses increased by 153.10% year-on-year, reaching 140 million yuan. At the same time, the company also needs to maintain continuous R&amp;D of its product pipeline, with R&amp;D expenses reaching 206 million yuan during the same period. Therefore, even if it achieves 260 million yuan in revenue in 2024, Zhonghui Biological will still incur a net loss of 259 million yuan.
<img src="https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20250728/1753680260506796.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="image.png" original-src="https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20250728/1753680260506796.png"/>
On the other hand, since the company's operating cash flow is still negative at this stage, its self-sustaining ability still needs to be improved, and thus cash flow mainly comes from external financing activities, which also affects the company's net asset performance to some extent. Data shows that in 2024, the company's net asset value is 147 million yuan, a year-on-year decrease of 59.65%.
In terms of valuation, referencing Zhonghui Biological's last post-investment valuation of 4.189 billion yuan in 2021, combined with the 2024 operating revenue of 260 million yuan, the company's PS valuation is approximately 16.1x, significantly higher than the average PS valuation level of comparable companies at 7.55x, indicating that the current company valuation is relatively expensive. This suggests that the company is still in the early stages of commercialization and urgently needs to explore subsequent growth potential, requiring time to realize its valuation; but on the other hand, it also indicates that for ordinary investors, the IPO subscription cost of Zhonghui Biological is not cost-effective

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Zhonghui Biological has performed well in the high-end vaccine sector but still faces the dilemma of industry competition. Although the company has a commercialized vaccine, the market holds a cautious attitude towards its future growth potential, resulting in the IPO subscription costs being unattractive to ordinary investors. In 2023, IPO activities for healthcare companies in Hong Kong were active, but the overall fundraising level was lower than in 2021, reflecting investors' rationality and caution

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Zhonghui Biological: Holding high-end vaccine single product performance surges, yet still struggling to break the industry's involution dilemma?