Baiyunshan's GPG Phase II Fund to Acquire 11.04% Stake in Nanjing Pharma for RMB 749 Million

On the afternoon of September 28, Guangzhou Baiyunshan Pharmaceutical Holdings Company Limited (“Baiyunshan”) and Nanjing Pharmaceutical Co., Ltd. (“Nanjing Pharmaceutical”) issued announcements,Guangzhou Baiyunshan Pharmaceutical Holdings Company’s Guangyao Phase II Fund plans to invest RMB 749 million to acquire 145 million non-restricted shares of Nanjing Pharmaceutical held by AHAPL, the company’s second-largest shareholder, representing 11.04% of Nanjing Pharmaceutical’s total share capital. Upon completion of the acquisition, Guangyao Phase II Fund will become the second-largest shareholder of Nanjing Pharmaceutical.

The Guangyao Phase II Fund is a fund established in July this year by Baiyunshan as a limited partner using its own funds. The total subscribed capital commitment of the fund amounts to RMB 1.5 billion, entirely in cash contributions. Of this, Baiyunshan contributed RMB 1.4985 billion, accounting for 99.90%, while the remaining RMB 15 million was subscribed by Guangyao Capital, representing 0.10%. Guangyao Capital is a holding subsidiary with 80% ownership by Guangyao Group and also serves as the manager of the Guangyao Phase II Fund.

The fund will be deployed, either directly or indirectly, for equity investments in the biopharmaceutical sector. Aligned with Guangzhou Baiyunshan Pharmaceutical Holdings Company’s strategic planning, it will channel capital into biopharmaceutical and healthcare fields—such as pharmaceuticals, medical devices, and healthcare services—through sub-fund investments and direct project investments. It is foreseeable that, with the fund’s support, Guangzhou Baiyunshan, as a leading enterprise in traditional Chinese medicine, will undertake a series of innovations, focus on emerging high-growth segments in the pharmaceutical industry, and announce a number of significant strategic initiatives.

Guangzhou Baiyunshan Pharmaceutical Holdings Company, a listed company controlled by Guangzhou Pharmaceutical Holdings Limited, primarily operates across four business segments: Great Southern Medicine, Great Health, Great Commerce, and Great Medical Care.

 Baiyunshan’s Business Layout, Image Source: Baiyunshan Official Website

In the Great Southern Medicine segment,Guangzhou Baiyunshan Pharmaceutical Holdings Company’s core business is pharmaceutical manufacturing, with 27 subordinate pharmaceutical manufacturing enterprises and institutions engaged in the research and development, manufacturing, and sales of Chinese and Western proprietary medicines, chemical active pharmaceutical ingredients (APIs), API intermediates, biopharmaceuticals, and natural drugs. As a leading enterprise in the Southern School of Traditional Chinese Medicine (TCM), it owns 13 China Time-Honored Brand pharmaceutical companies, including Zhongyi Pharmaceutical, Chen Liji Pharmaceutical Factory, Qixing Pharmaceutical, Jingxiutang Pharmaceutical, Pan Gaoshou Pharmaceutical, Caizhilin Pharmaceutical, and Caishantang. Its major TCM products include Xiaochaihu Granules, Zishen Yutai Pills, Qingkailing series, Huatuo Zaizao Pills, Angong Niuhuang Pills, and Shujin Jianyao Pills, demonstrating significant brand and product advantages in proprietary Chinese medicines across South China and nationwide. In addition, Guangzhou Baiyunshan holds the well-known trademark “Kangzhiba,” which occupies a prominent position in the domestic market for oral antibacterial and anti-inflammatory drugs. Its chemical drug product, sildenafil citrate (brand name “Jinge”), is also widely recognized.

It is worth noting that Baiyunshan’s Jinge is the first domestically launched generic sildenafil in China.Following its market launch, Jingeo rapidly captured a significant share of the market from the originator drug, Viagra. Reportedly, leveraging a lower pricing strategy (approximately RMB 48 per tablet, representing a 25% reduction compared to the originator drug), localized marketing campaigns, and policy support, Jingeo generated RMB 234 million in revenue in its first year on the market. In 2019, it officially surpassed the originator sildenafil to become the leading erectile dysfunction (ED) medication in the Chinese market.Since its market launch in 2014, Jinge has achieved a total transaction value approaching RMB 8 billion in the domestic market, while maintaining a gross profit margin consistently above 90%.

In the broader health and wellness sector,Guangzhou Baiyunshan Pharmaceutical Holdings Company has strategically laid out its production, R&D, and sales operations in beverages, food, and health supplements. Its key operating entities include subsidiaries such as Wang Lao Ji Da Health Company and Wang Lao Ji Pharmaceutical. Major products include Wang Lao Ji Herbal Tea, the Ciningji series, the Lixiaoji series, Yerou Coconut Juice, throat lozenges, and Guilinggao (herbal jelly). Among these, Wang Lao Ji Herbal Tea boasts strong brand value and product competitiveness, standing as one of the leading brands in China’s beverage market and holding a significant share of the Chinese herbal tea industry. According to the China Brand Power Index (C-BPI) assessments, Wang Lao Ji Herbal Tea has topped the herbal tea sector for eight consecutive years, ranking first among non-alcoholic beverages in 2024.

“Wang Lao Ji” is another cash cow that cannot be overlooked by Guangzhou Baiyunshan Pharmaceutical Holdings Company.According to Guangzhou Baiyunshan Pharmaceutical Holdings Company’s 2024 annual report, Wang Lao Ji Health Industry Company recorded main business revenue of RMB 8.764 billion and net profit of RMB 1.104 billion in 2024. In the first half of 2025, Wang Lao Ji Health Industry Company achieved main business revenue of RMB 6.499 billion and net profit of RMB 1.295 billion. It is reported thatIn the first half of 2025, Wang Lao Ji Great Health was the only subsidiary that contributed at least 10% to Guangzhou Baiyunshan Pharmaceutical Holdings Company’s net profit.Wang Lao Ji Health Industry Company’s influence weight exceeds that of the pharmaceutical companies under Guangzhou Baiyunshan Pharmaceutical Holdings Company.

In the large commercial sector,Guangzhou Baiyunshan Pharmaceutical Holdings Company has primarily laid out its pharmaceutical distribution business, including the wholesale, retail, and import-export of pharmaceutical products, medical devices, and health supplements. Its key enterprises include subsidiaries such as Guangzhou Medicine, GPC Supply Chain Company, and Caizhilin Pharmaceutical. Guangzhou Medicine is a leading enterprise in pharmaceutical distribution in South China and serves as the core entity within Baiyunshan Group’s commercial sector, mainly engaged in the wholesale and retail of pharmaceuticals. GPC Supply Chain Company primarily provides centralized procurement services for raw materials, excipients, and packaging materials for Baiyunshan. Leveraging its strengths in traditional Chinese medicine (TCM), Caizhilin Pharmaceutical conducts the production and sales of TCM medicinal materials and decoction pieces.

In the broader healthcare sector,Guangzhou Baiyunshan Pharmaceutical Holdings Company is currently in a phase of strategic layout and investment expansion. Leveraging its subsidiaries, Baiyunshan Medical Health Industry Company and Medical Device Investment Company, as primary entities, the company is prioritizing development in three key areas—medical services, Traditional Chinese Medicine (TCM) wellness, and modern elderly care—as well as the medical device industry, through various approaches including new construction, joint ventures, and collaborations. Current invested or partially owned projects include Baiyunshan Hospital, Baiyunshan TCM Hospital, and Runkang Yuezi Center, among others.

Based on the aforementioned business operations, Guangzhou Baiyunshan Pharmaceutical Holdings Company achieved a revenue of RMB 41.835 billion in the first half of this year. In the pharmaceutical sub-sector ranking of the Fortune Global 500 list, released at the end of July 2025, Guangzhou Pharmaceutical Group Co., Ltd. (the parent company of Baiyunshan) was the only Chinese enterprise to be included. This marks the third consecutive year that Guangzhou Pharmaceutical has been listed in the pharmaceutical sub-sector, ranking 14th this year, just behind GlaxoSmithKline.

Guangzhou Baiyunshan Pharmaceutical Holdings CompanyGuangzhou Baiyunshan Pharmaceutical Holdings Company’s pharmaceutical distribution business is also a segment worth detailing in depth. As the leading pharmaceutical distributor in South China, it boasts one of the largest wholesale, distribution, and delivery networks in China, along with an extensive and stable customer base. Furthermore, it was among the first batch of pharmaceutical commercial enterprises in Guangdong Province to obtain Good Supply Practice (GSP) certification, andEstablished the largest pharmaceutical terminal sales network and pharmaceutical logistics distribution center in South China.

Nanjing Pharmaceutical, which is being acquired this time,It is also well-known in the pharmaceutical distribution sector. As a leading enterprise in Jiangsu Province’s pharmaceutical distribution industry, Nanjing Pharmaceutical focuses its core business on pharmaceutical wholesale and retail, expanding rapidly in East and Central China with continuously increasing market share.Its market network covers provinces such as Jiangsu, Anhui, Hubei, and Fujian, as well as Kunming City in the Southwest region.Possesses extensive experience, resources, and brand recognition in pharmaceutical commercial operations within the regional market.

It is evident that, from a strategic perspective, Nanjing Medicine, as a regional leader in pharmaceutical distribution with a mature sales network, enables Guangzhou Baiyunshan Pharmaceutical Holdings Company to rapidly penetrate markets in Jiangsu, Anhui, Fujian, and Hubei provinces, thereby addressing gaps in its layout while promoting the distribution of its industrial products in East China and creating a “manufacturing-distribution synergy” effect. From an industry perspective, this acquisition aligns with the trend of increasing concentration in the pharmaceutical distribution sector. The model whereby leading companies strengthen regional control through equity cooperation may become a new trend, potentially triggering more cases of “strong alliances.”

Guangzhou Baiyunshan Pharmaceutical Holdings Company also mentioned in its announcement,This transaction is conducive to further strengthening the Company’s business cooperation with Nanjing Pharmaceutical, through collaboration in areas such as capital investment, development of proprietary pharmaceutical product distribution channels, and the traditional Chinese medicine sector.Optimize the company’s industrial layout in East China and enhance its competitive advantages in pharmaceutical distribution.and drive the growth of the pharmaceutical manufacturing business, thereby continuously promoting the Company’s business development.

Specifically, both parties can integrate and optimize supply chain resources and logistics distribution networks to establish a stable and efficient supply chain system. For their proprietary industrial products, they can facilitate market access and channel sales through effective mechanisms, thereby elevating the level of industrial chain cooperation, focusing on the profitability of core businesses, and enhancing the competitiveness of products and services offered by both listed companies. Furthermore, through collaboration, both parties can actively promote cooperation among their respective traditional Chinese medicine (TCM) subsidiaries, drive the transformation and upgrading of the TCM industry, accelerate the standardization and modernization of TCM production processes and workflows, and collaboratively build a modern circulation system for TCM materials, establishing a full-chain traceability system covering cultivation, processing, and sales.

In summary, Guangzhou Baiyunshan Pharmaceutical Holdings Company’s acquisition of Nanjing Pharmaceutical represents a typical “capital + channel” strategic investment. While its impact on financial statements is limited in the short term, it is expected to strengthen the company’s nationwide layout and industry influence over the medium to long term. Regarding future development, Guangzhou Baiyunshan revealed in its semi-annual report that the company will promote external expansion, enhance value realization, and continue to build an investment fund system covering the entire lifecycle. It will carry out capital operations around the industrial chain of its existing businesses, accelerate venture capital projects, and advance investment and M&A activities across various business sectors. Thus, the acquisition of Nanjing Pharmaceutical is only the beginning; Guangzhou Baiyunshan is poised for further significant moves.