New Stock Preview | After filing for Hong Kong listing twice, can Zhejiang Jingxin Pharmaceutical successfully achieve a dual A+H listing?

Title context: New Stock Preview | After filing for Hong Kong listing twice, can Zhejiang Jingxin Pharmaceutical successfully achieve a dual A+H listing? Text: With market value down more than 30% since the start of this year, can Zhejiang Jingxin Pharmaceutical (002020.SZ), an A-share company with a market value of over ten billion yuan, reshape its valuation through A+H linkage after filing with the Hong Kong Stock Exchange twice? It is understood that Zhejiang Jingxin Pharmaceutical has recently once again submitted a listing application to the Main Board of the Hong Kong Stock Exchange, with CITIC SEC as its sole sponsor. The company is a pharmaceutical group focusing on two core therapeutic areas: the central nervous system and cardiovascular and cerebrovascular diseases. Didaxini (Jingnuoning) is the company's only approved innovative drug, and the company is also advancing selected pipeline drugs in its key therapeutic areas. Several of the company's products hold leading positions in the industry. According to Frost & Sullivan, based on 2025 sales revenue, in the field of neurological diseases, its levetiracetam (one of the common drugs for treating epilepsy) ranks second in China's levetiracetam market with a market share of 19.2%; pramipexole hydrochloride (one of the treatments for the brain disease Parkinson's disease) also ranks second in China's pramipexole hydrochloride market with a market share of 12.2%, and ranks first in the generic drug market with a market share of 32.4%. Zhejiang Jingxin Pharmaceutical's performance has fluctuated slightly. From 2023 to the first half of 2026, revenue growth was 5.79%, 3.99%, -2.14%, and -1.46%, respectively, while net profit growth was -6.66%, 15.32%, 7.37%, and -10%, respectively. In the first half of 2026, its net profit margin was 18%. The company has relatively ample cash flow. As of July 2026, it had cash equivalents and time deposits of more than three months totaling 1.568 billion yuan. The company was already listed on the Shenzhen Stock Exchange in 2004. It currently has a market value of approximately 10 billion yuan and a PE ratio of 13 times. This Hong Kong listing is expected to create a dual A+H listing platform and promote the globalization of its capital. Driven by three major businesses, profitability is relatively stable It is understood that Zhejiang Jingxin Pharmaceutical's main businesses include pharmaceuticals, active pharmaceutical ingredients, and medical devices. Pharmaceuticals are the core source of revenue, including generic drugs, innovative drugs, and traditional Chinese medicines and biologics, covering central nervous system diseases, cardiovascular and cerebrovascular diseases, digestive system diseases, and infectious diseases. As of June 2026, the company had 40 marketed products included in national or provincial alliance volume-based procurement programs. From the perspective of revenue composition, the revenue contributions of pharmaceuticals, active pharmaceutical ingredients, and medical devices have remained dynamically stable. Among them, pharmaceutical revenue has fluctuated little and its business share has remained stable, while medical device revenue has grown year by year and its revenue share has shown an upward trend, whereas active pharmaceutical ingredient revenue has declined year by year and its revenue share has decreased. In the first half of 2026, the revenue contributions of the above three major businesses were 58.5%, 21%, and 18.9%, respectively, while other businesses accounted for 1.6% of revenue. Image source: Company hearing materials In the pharmaceutical business, Zhejiang Jingxin Pharmaceutical's marketed product portfolio includes more than 60 approved drugs. Central nervous system diseases and cardiovascular and cerebrovascular diseases are the two core product areas, together accounting for nearly 70% of pharmaceutical revenue, while generic drugs are the largest part of the product portfolio. In the first half of 2026, generic drugs accounted for 40.6% of revenue. Levetiracetam, rosuvastatin calcium tablets, amlodipine besylate tablets, and cefuroxime axetil tablets are all among the top ten commercialized products, with levetiracetam performing strongly, driving stable revenue growth in central nervous system diseases. Innovative drugs have high growth potential. In the central nervous system field, Didaxini (Jingnuoning) was launched in Q4 2023 and has been included in the medical insurance catalog. It generated commercialization revenue in 2024. In the first half of 2026, this business accounted for 7.7% of revenue. Since its launch, Didaxini has covered more than 3,000 hospitals. In the cardiovascular and cerebrovascular disease field, the innovative product JX2201 successfully completed Phase I clinical trials in the first quarter of 2026 and is expected to release performance after commercialization. In addition, traditional Chinese medicines and biologics accounted for 10.2% of revenue, with main products including Jingxin Kangfuxin Liquid, and revenue performance has been relatively weak. In the active pharmaceutical ingredient business, Zhejiang Jingxin Pharmaceutical has mainly established production layouts for active pharmaceutical ingredients and intermediates through Shaoxing Jingxin and Shandong Jingxin. Core active pharmaceutical ingredient products include quinolone anti-infective APIs, cardiovascular APIs, and central nervous system APIs. In the medical device business, through the acquisition of Shenzhen Jufeng in 2015, it entered the field of medical display resolution. Products include clinical displays, diagnostic displays, consultation display centers, and endoscopic surgical displays. The sales models for the products of the three major businesses differ. Generic drugs are mainly distributor-based, medical devices are mainly direct sales, and active pharmaceutical ingredients use a mixed sales model. In the first half of 2026, distribution and direct sales accounted for 66.9% and 33.1%, respectively. Distribution is the core business model. As of now, the company's distribution network has covered more than 21 provinces in China and selected overseas markets, with more than 1,500 distributors. Zhejiang Jingxin Pharmaceutical's customer concentration is not high. From 2023 to the first half of 2026, the revenue contributions of the top five customers were 29.1%, 33.5%, 34.5%, and 34.2%, respectively, while the revenue contributions of the largest customer were 15.2%, 15.9%, 16.8%, and 17.2%, respectively. In addition, the company's market coverage is global. In the first half of 2026, domestic and overseas revenue accounted for 78.8% and 21.2%, respectively, with overseas revenue mainly distributed in Europe, Asia, and the Americas, which together contributed 99% of overseas revenue. It is worth noting that the company's profitability is stable. From 2023 to the first half of 2026, gross margins were 49.2%, 48.5%, 48.2%, and 48%, respectively. Among them, the gross margin of pharmaceuticals is relatively high, stable at 63-65%, that of medical devices is stable at 34-35%, and that of active pharmaceutical ingredients shows a downward trend but contributes relatively little. Narrow fluctuations in various expense ratios offset each other, keeping the overall level stable. During the above periods, net profit margins were 15.6%, 17.3%, 18.97%, and 18.02%, respectively. Structural opportunities exist in the industry, and growth expectations remain From an industry perspective, Zhejiang Jingxin Pharmaceutical faces the growth risk of a slowing industry, but there are also structural opportunities. According to Frost & Sullivan, in central nervous system drugs, the global market size in 2025 was 1.9 trillion yuan, with a compound growth rate of only 1.8% over the past five years. Among this, the Chinese market was 168.8 billion yuan, with a compound growth rate of -0.7%, and is expected to reach 179.1 billion yuan by 2030, with a compound growth rate of only 1.6%. In cardiovascular drugs, the Chinese market size in 2025 was 178.9 billion yuan, with a compound growth rate of -1.5% over the past five years, and is expected to reach 199.8 billion yuan by 2030, with a compound growth rate of 2.7%. These two major drug areas are the core of Zhejiang Jingxin Pharmaceutical's product portfolio. Industry demand growth is slow, and the capacity utilization rates of Zhejiang Jingxin Pharmaceutical's various products are generally low. In the first half of 2026, the capacity utilization rates of generic drugs, Didaxini, active pharmaceutical ingredients, traditional Chinese medicines, biologics, and medical devices were 61.3%, 90%, 80.7%, 24.9%, 75%, and 79.9%, respectively. However, structural opportunities bring room for improvement in the company's capacity. Image source: Company hearing materials On the one hand, several of the company's products occupy core positions in segmented fields. For example, levetiracetam has a market share of 19.2% by sales revenue, pramipexole hydrochloride has a market share of 12.2%, and sertraline hydrochloride has a market share of 8.8%, ranking second, second, and third in the industry, respectively. On the other hand, several segmented markets show impressive growth rates. For example, in the lipid-lowering drug market, the industry size has maintained double-digit compound growth. Zhejiang Jingxin Pharmaceutical is also actively increasing R&D investment to enrich its pipeline product portfolio. In the first half of 2026, R&D expenses were 165 million yuan, with an R&D expense ratio of 8.3%. The company has multiple key pipelines. In addition to the already commercialized innovative drug Didaxini, several drugs are under development, including JX2201 and JX6001, which have entered Phase II and Phase III clinical trials, respectively. The medical device JXYY-JJU will also enter the registration stage, and commercialization will release performance. Overall, with two core tracks + three major businesses + joint efforts in both domestic and overseas markets, although Zhejiang Jingxin Pharmaceutical's current growth is weak, it still has growth expectations: first, diversified businesses drive resilience in performance growth; second, structural opportunities, combined with the leading position of core products, leave room for improvement in capacity utilization; third, profitability is on an upward trend, the company has relatively high profit margins, ample cash flow, and a low proportion of interest-bearing debt, which can meet the needs of pipeline R&D and global market expansion. Zhejiang Jingxin Pharmaceutical's Hong Kong listing this time may mainly be to prepare for capital globalization given the company's global business coverage and to achieve dual A+H listing status. If the Hong Kong listing proceeds smoothly, the Hong Kong listing valuation, referencing the A-share valuation, is not high, and the company has relatively solid fundamentals, abundant pipeline resources, and growth expectations, making it worthy of close attention.