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Securities Times reporter Liu Qian

Tasly (600535) issued an announcement on the evening of July 31, because the company's controlling shareholder Tasly Biomedicine Industry Group Co., Ltd. is planning to transfer the company's shares, which may lead to a change in the company's control. The company's stock will be suspended from trading on August 1, and the suspension is expected to last no more than two trading days.

Tasly said that during the suspension period, the company will fulfill its information disclosure obligations in accordance with relevant regulations based on the progress of the matter. The company and its controlling shareholder will determine as soon as possible whether to proceed with the above-mentioned major matters, and will promptly announce the progress and resume trading in accordance with relevant regulations.

Tasly started out as a traditional Chinese medicine company, and its exclusive development of compound Danshen dripping pills has always been the "leader" in revenue. In 2021, compound Danshen dripping pills were approved for a new indication of diabetic retinopathy. Today, Tasly's main business focuses on the research and development, production and sales of modern Chinese medicine, biological drugs, chemical drugs and other products.

From a loss of 264 million yuan to a profit of 1.071 billion yuan, Tasly's performance in 2023 increased more than five times year-on-year. According to the annual report data, Tasly achieved operating income of approximately 8.674 billion yuan in 2023, a year-on-year increase of 0.42%; net profit attributable to the parent company was approximately 1.071 billion yuan, a year-on-year increase of 505.34%.

It is worth noting that as competition in the domestic pharmaceutical retail industry becomes increasingly fierce, Tianshili began to shrink its pharmaceutical retail chain business in 2020.

Last September, Tasly announced that it planned to sell 90% of the shares of Liaoning Tasly Pharmacy Chain Co., Ltd. and 60% of the shares of Jinan Pingjia Pharmacy Co., Ltd. held by its wholly-owned subsidiary Tianjin Tasly Pharmaceutical Commercial Co., Ltd. to Shuyu Pingmin Pharmacy Chain Co., Ltd. for 660 million yuan. The announcement stated that after this round of sales, the company will no longer engage in retail chain business and will focus on pharmaceutical manufacturing, "further focusing on the development of the pharmaceutical industry and building an innovative pharmaceutical research and development cluster."

However, the above transaction ultimately failed at the end of 2023. Tasly said that during the transaction process, the parties had further communication on the transaction plan, but ultimately failed to reach a consensus on the supplementary matters. Combined with the actual external and transaction situation, it was believed that the conditions for continuing to promote this major asset restructuring were not yet fully mature at this stage, and decided to terminate the transaction.

Financial data shows that in 2023, Tianshili’s revenue sources are divided into pharmaceutical industry and pharmaceutical commerce, among which the pharmaceutical industry achieved operating income of approximately 7.421 billion yuan, accounting for 85.56%, a year-on-year increase of 3.22%; the pharmaceutical commerce achieved operating income of approximately 1.215 billion yuan, accounting for 14.01%, a year-on-year decrease of 14.21%.

Although the transaction failed, Tasly's development strategy of focusing on the pharmaceutical industry is also reflected in the 2023 annual report. Tasly mentioned that "it insists on focusing on the three major diseases of cardiovascular and cerebrovascular diseases, digestive metabolism, and tumors, quickly integrates global cutting-edge technologies, deploys leading targets, and creates integrated solutions for disease prevention and treatment. Through the 'four-in-one' R&D model, it will carry out technology updates, innovation sources, and resource integration, strengthen cooperation, introduction, and mergers and acquisitions, accelerate the pace of new product launches, and achieve high-quality development driven by science and technology."

In the pharmaceutical industry, Tasly's main focus is on traditional Chinese medicine. In 2023, Tasly's revenue from traditional Chinese medicine business was about 5.971 billion yuan, a year-on-year increase of 6.62%. In the first quarter of this year, under the background of national policies favorable to the traditional Chinese medicine industry, Tasly achieved operating income of 2.049 billion yuan, a year-on-year decrease of 1.73%; and realized a net profit attributable to the parent of 295 million yuan, a year-on-year increase of 11.58%.

The 2023 annual report shows that Tasly has 9 innovative Chinese medicines entering Phase III clinical trials. In terms of the scale of its R&D pipeline, Tasly's modern Chinese medicine pipeline has 25 products, 19 of which are in Phase II and III clinical research stages.

Research reports from multiple brokerages pointed out that this also shows that Tasly is entering a period of sustained high production and is expected to gradually launch new products approved for listing in the next few years. According to a research report from SDIC Securities, Tasly has a rich pipeline of mid- and late-stage clinical research and development and is about to enter the stage of mass production. A research report from Everbright Securities believes that the company's innovative Chinese medicine research and development is expected to yield a bumper harvest.