Near-10B Yuan Market Cap Biopharma Leader Set for Control Change: Kanghua Bio Submits New Filing

On the evening of July 13, Kanghua Biological announced that on July 11, it received a notice from its controlling shareholder and actual controller, Wang Zhentao, stating that he was planning matters related to a change in corporate control. This matter may result in a change in the company’s controlling shareholder and actual controller. Currently, no relevant agreements have been signed by the parties involved; they are still conducting feasibility studies and negotiations regarding specific transaction plans and agreements. The specific details shall be subject to the relevant agreements executed by the parties. 

At the request of Kanghua Biological to the Shenzhen Stock Exchange, its shares (stock code: 300841; stock abbreviation: Kanghua Biological) were suspended from trading at the market open on Monday, July 14, 2025, with an expected suspension period of no more than two trading days. On the last trading day before the suspension (July 11), Kanghua Biological’s share price surged by 16.2% in a single day, with a turnover amounting to RMB 1.08 billion, a turnover rate of 12.94%, and a total market capitalization of RMB 9.574 billion.

In 2004, Wang Zhentao established Kanghua Biological in Chengdu. The company is primarily engaged in the research and development, production, and sales of human vaccines. It is equipped with an animal testing center and high-tech GMP production workshops for bacterial and viral vaccines. Its current product portfolio includes the "ACYW135 Group Meningococcal Polysaccharide Vaccine" (brand name: Maikexin®) and the "Lyophilized Human Rabies Vaccine (Human Diploid Cell)" (brand name: HDCV®).

When it comes to Wang Zhentao, the founder of Kanghua Biological, he may not be widely recognized by the general public. However, many people may have heard of Wang Zhentao, the “Wenzhou Shoe King.” This once-prominent figure, known as the “Wenzhou Shoe King,” was elected as one of the “Top Ten Influential Zhejiang Entrepreneurs” three times, an honor shared only with the well-known Jack Ma. Aokang International, the leading leather shoe enterprise founded by Wang Zhentao, once long held the position of primary sponsor for China’s most popular dating show, “If You Are the One.”

The story of the “leading leather shoe brand” and the “Wenzhou Shoe King” dates back to the last century. In 1965, Wang Zhentao was born in Yongjia, Zhejiang Province, and his first job was as a carpenter in Wuhan. While in Wuhan, Wang met fellow natives from Wenzhou and began engaging in the leather shoe business. In 1998, with a loan of 30,000 yuan, Wang co-founded the Yongjia Aolin Shoe Factory with friends. He transformed this family workshop into one of China’s largest privately-owned footwear manufacturing enterprises, with its flagship brand, “Aokang Leather Shoes,” becoming an iconic name in China’s leather shoe industry.

In 2012, Aokang International listed on the Shanghai Stock Exchange, becoming the “first publicly traded Chinese men’s footwear company.” It was also the first private footwear enterprise from Wenzhou—and indeed Zhejiang Province—to be listed on the main board, and the first company to go public after Wenzhou was approved as a “Financial Comprehensive Reform Pilot Zone.” Notably, with an oversubscription amount exceeding RMB 1 billion, Aokang International became the “oversubscription king” at that time, and its founder Wang Zhentao was hailed as the “Wenzhou Footwear King.”

While dominating the leather shoe industry, Wang Zhentao was also continuously expanding his business frontiers. According to a report by Wenzhou News Network, in 2002, Wang Zhentao met with several teams engaged in biological research, who presented him with product research reports and development directions. Wang Zhentao stated that although he did not fully understand the technical details, he recognized the significant importance of biological vaccines to human health.

After learning that RMB 80 million would be sufficient to cover the company’s operating expenses for five years, Wang Zhentao decided to diversify into the pharmaceutical sector and founded Kanghua Biological in 2004. In June 2020, Kanghua Biological was listed on the ChiNext board of the Shenzhen Stock Exchange.As of now, Wang Zhentao directly holds a 10.53% equity interest in Kanghua Biologicals, while Aokang Group holds a 12.26% equity interest in Kanghua Biologicals. Wang Zhentao holds a 69.23% equity interest in Aokang Group. Therefore, Wang Zhentao directly and indirectly holds a 19.02% equity interest in Kanghua Biologicals.

Although Wang Zhentao himself lacks pharmaceutical expertise, Kanghua Bio boasts a highly efficient, stable R&D team with extensive industry experience. Leveraging this team, the company has established multiple innovative vaccine platforms, including an mRNA vaccine platform, a recombinant protein VLP vaccine platform, a polysaccharide-protein conjugate vaccine platform, a live-attenuated vaccine platform, an inactivated vaccine platform, and a novel vaccine adjuvant platform.

All manufacturing processes and technologies for its marketed products are independently developed by the company’s R&D team. Leveraging its proprietary technology platform, industrialization expertise, and capabilities, the company has been recognized as a High-Tech Enterprise. It has established multiple R&D platforms, including the Sichuan Provincial Enterprise Technology Center, Postdoctoral Innovation Practice Base, Chengdu Academician (Expert) Innovation Workstation, Chengdu Engineering Technology Research Center for Novel Human Vaccines, and the Sichuan Provincial Engineering Research Center for Cell Substrate Viral Vaccines, while further strengthening its R&D capabilities through collaborative research and development.

Kanghua Biological's core product is the freeze-dried human rabies vaccine (human diploid cell).Human diploid cell rabies vaccine is referred to by the World Health Organization as the gold-standard vaccine for rabies prevention. It elicits a reliable immune response, generates high titers of neutralizing antibodies, and has a low incidence of adverse reactions.Kangh’s Freeze-Dried Human Rabies Vaccine (Human Diploid Cell) adopts the domestically leading “100L large-volume bioreactor microcarrier-based scalable culture and expansion technology for human diploid cells.” Purified via chromatography, it is the first human diploid cell rabies vaccine marketed in China, breaking the long-standing reliance on animal cell-based production for rabies vaccines in the country.

Driven by cutting-edge technology and breakthrough products, Kanghua Biologicals, the first A-share listed company specializing in human diploid cell rabies vaccines, reached its peak moment in 2020. The combination of the pandemic and its exclusive rabies vaccine concept enabled Kanghua Biologicals to achieve a net profit attributable to shareholders of RMB 408 million in 2020, which more than doubled to RMB 829 million in 2021. The company’s stock price once surged to a high of RMB 658 per share, with its market capitalization approaching RMB 60 billion, solidifying its position as China’s undisputed leader in the rabies vaccine industry. It was hailed by Wang Zhentao as the “second growth curve” for Aokang.

However, peak moments are also the zenith; since 2022, Kanghua Biologics has seen consecutive annual declines in both net profit and stock price.From 2022 to 2024, Kanghua Biological’s revenue stood at RMB 1.447 billion, RMB 1.577 billion, and RMB 1.432 billion, respectively; its net profit attributable to shareholders of the parent company was RMB 598 million, RMB 509 million, and RMB 399 million, respectively. In the first quarter of 2025, Kanghua Biological reported revenue of RMB 138 million, a year-on-year decline of 55.7%; net profit attributable to shareholders of the parent company amounted to RMB 20.7086 million, down 86% year on year. Its market capitalization has also plummeted from a peak of nearly RMB 60 billion to approximately RMB 9.6 billion currently.

Furthermore, Wang Zhentao’s leather shoe business has underperformed in recent years. According to the financial reports of Aokang International, the company sold 12.0034 million pairs of men’s shoes and 7.0931 million pairs of women’s shoes in 2015. By 2024, sales volume had declined to 7.3834 million pairs for men’s shoes and 3.9108 million pairs for women’s shoes. In the first half of this year, Aokang International continued to report losses. Based on its 2025 semi-annual performance forecast, the company expects a net profit of approximately RMB -87 million for the first half of 2025, with a net profit excluding non-recurring items of RMB -116 million, indicating a year-on-year increase in the scale of losses.

From this perspective, the pressure on financial performance may be the primary reason for Wang Zhentao’s decision to sell his equity stake. How will Kanghua Biologics develop following this significant change?Regarding future development, Kanghua Biological previously stated in its announcements that in 2025, the company will focus on key R&D projects to facilitate the commercialization of R&D outcomes; promote capacity expansion and enhance quality control standards. In terms of production, Kanghua Biological will advance the production expansion project funded by capital raising and obtain the production license for its bacterial vaccine workshop, while integrating production resources to boost product capacity and manufacturing capabilities. Meanwhile, Kanghua Biological will strengthen marketing management and further expand its market presence.

References:

1. “Is the ‘Wenzhou Shoe King’s’ Cross-Industry Venture Reaching Its Endgame?”

2. “Kangh Becomes Wang Zhentao’s ‘Castoff’: Is the ‘Shoe King’ Shrinking His Capital Empire to Save Himself?”