China Resources is stuck in acquisitions, Boya Bio is stuck at the pulp station | [On-site Research]

Asset Reallocation, Report Restructuring, and Scale Expansion

Boyaa Bio (300294.SZ), hereafter “the Company,” is in turmoil.

According to announcements, President Ren Hui left the company at the end of February. He served for only nine months, with his term originally scheduled until March 2027. Reportedly, after leaving, Ren Hui took on the role of Discipline Inspection Secretary at China Resources Pharmaceutical Commercial Group.

Since the acquisition by China Resources, this blood product company has shown a clear development path: setting strategy → organizational restructuring → high-premium acquisition of Green Cross. From top to bottom, from inside out, the restructuring revolves around “license dividends + large capital investments to create miracles.” However, changes in industry fundamentals have interrupted the company’s attempt to capitalize on dividends through funding, leading to disconnection in steering and acceleration, resulting in declining performance and ongoing personnel instability.

In other words, China Resources’ transformation is not about deep integration and efficiency overhaul but a game of asset reallocation, report restructuring, and scale piling. Perhaps when capital operations outweigh industry fundamentals, and scale expansion takes precedence over efficiency, even strong capital cannot overcome industry cycles.

01. Systematic Restructuring by China Resources

In 2021, China Resources Pharmaceutical spent over 4.5 billion yuan to acquire Boyaa Bio, marking the company’s entry into the “state-owned enterprise era.” For the resource-rich China Resources, acquisition was a key step in deploying the entire pharmaceutical industry chain. At that time, approvals for plasma stations were gradually loosening, and a land grab was about to unfold.

Focusing on restructuring development, China Resources’ transformation from the start concentrated on a comprehensive overhaul of management. Through a three-step plan, China Resources gradually took control of the core team, establishing absolute dominance over the company.

First, Tao Ran, Vice President of China Resources Pharmaceutical, was appointed Chairman of Boyaa Bio, with Liang Xiaoming promoted internally to President, completing the first management change for a smooth transition. Second, around 2023, Vice President Qiu Kai succeeded Tao Ran as Chairman to strengthen control. Third, in 2025, China Resources veteran Ren Hui took over as President, with Lin Qingsong appointed Vice President, and Pan Yuxuan from China Resources replaced Liang Huacheng as CFO. At this point, leadership and core operations are fully under China Resources’ control.

Simultaneously, the company restructured its organizational framework, integrating strategic planning, investment decisions, and resource allocation into the China Resources system. On the front end, marketing was reorganized into hospital, retail, and academic promotion divisions, enhancing synergy with China Resources Pharmaceutical Commercial channels. The plasma station management department was made independent as a core unit, responsible for expansion, plasma collection operations, and quality control.

More critically, after the acquisition, China Resources clarified the company’s strategic direction: reduce core business scope, divest non-core assets, and focus on blood products. Subsequently, the company divested assets such as Biochemical Drugs and Pharmaceutical Commercial, selling stakes in Guangdong Fuda Pharmaceutical and Guizhou Tian’an Pharmaceutical. By 2024, revenue from blood products accounted for over 85%, a significant increase from 35.5% in 2020.

As resource scarcity and strict regulation of blood products persist, the core logic of the sector is license dividends: the more plasma stations, the greater the plasma collection volume, and the faster the performance growth. Soon, a grand capital race across the industry began.

02. “Wealth Code” Turns into “Risk Trap”

For a long time, plasma stations faced license scarcity due to strict approvals, and high barriers to entry due to long construction cycles and high costs. Therefore, acquisitions became the shortcut to achieve leapfrog growth in plasma collection.

In 2024, Boyaa Bio acquired all shares of Green Cross Hong Kong for over 1.8 billion yuan, indirectly acquiring the domestic core entity Green Cross (China), with a premium of over 180%. Although the target was loss-making in 2022, it owned four plasma stations with annual collection exceeding 100 tons and multiple blood and medical aesthetic products. Post-transaction, the core team of Green Cross was largely retained to handle daily operations and business coordination.

If the earlier restructuring by China Resources aimed to build “infrastructure” from the top down, acquiring Green Cross was a “big gamble” with a clear goal: rapidly increase plasma collection scale through high-premium capital transactions, leveraging financial advantage to crush competitors, and seize market share in the blood product sector.

This model is essentially “license dividends + large capital investments to create miracles,” a path easily replicated by cash-rich groups. Over recent years, major conglomerates like Haier and China National Pharmaceutical have made acquisitions and布局 in Shanghai Laisi and Pailin Bio, transforming the industry landscape into a competition among giants.

This capital-driven approach indeed boosted company performance. In 2021 and 2024, the company’s plasma collection exceeded 400 and 600 tons respectively, with over 10 and 20 plasma stations, and net profits of 345 million and 397 million yuan. Additionally, asset divestments led to a decline in revenue.

However, since 2025, the blood product sector has undergone fundamental changes. The country has gradually relaxed import restrictions, and with cost and scale advantages, imported products are capturing market share at prices below domestic brands. Data shows, for example, 10g human serum albumin imported brands like BiLif and CSL are priced at 353-440 yuan and 345-372 yuan respectively, while domestic brands like Hualan Biological are at 393-450 yuan, and Boyaa Bio at 380-399 yuan.

In other words, foreign entrants are “flooding” the low-price market, breaking the price advantage of domestic products. Facing this price assault, domestic competitors are forced to lower prices. The era of “winning by license” has ended; industry competition has shifted from “number of plasma stations” to “cost, efficiency, and product strength.”

The most significant impact is on performance. According to forecasts, in 2025, revenue is expected to be between 1.908 billion and 2.169 billion yuan, a 10%-25% increase; net profit attributable to the parent is only 105-137 million yuan, down 65.62%-73.55%. Meanwhile, non-recurring profit is expected to show a loss of 7.5 to 15 million yuan, marking the first time since listing that non-recurring net profit is forecasted to be negative.

The company attributes the decline to impacts from centralized procurement and import competition, but the core issues include inventory write-downs from valuation increases due to acquisitions, asset depreciation, and impairment of intangible assets and goodwill.

Furthermore, in the first three quarters of 2025, net cash flow from operating activities was only 26 million yuan, down 90.05% year-on-year, mainly due to expanded scope to include Green Cross and reduced cash receipts. To ease financial pressure, the company plans to divest non-core assets and transfer remaining stakes in Nanjing Xinbai Pharmaceutical’s biochemical drug business.

Thus, the paradigm shift in blood products has distorted the company’s acquisition narrative. The diminishing significance of licenses means the underlying logic of certainty is disappearing; the former “wealth code” has turned into a “risk trap,” with acquisition targets potentially becoming liabilities.

03. Capital Operations Bring Scale, Not Competitiveness

From a macro perspective, Boyaa Bio’s declining performance reflects a common industry challenge.

As an industry leader, Tsingtao Biologicals reported revenue of 4.465 billion yuan in the first three quarters of 2025, up 9.62%, with net profit attributable to the parent of 819 million yuan and non-recurring net profit of 803 million yuan, down 21.86% and 22.16% respectively. Clearly, revenue growth still depends on plasma station scale, but profit decline is driven by imported competitors’ impact.

To navigate industry cycles, companies need to make changes at the micro level. The systematic restructuring by China Resources was not a “panacea”; while control was transferred, it failed to achieve a leap in operational capability. Organizational restructuring involved rebranding, department setup, and strategic planning, but deep coordination between front, middle, and back offices is crucial.

Interestingly, Boyaa Bio is not an isolated case within China Resources. Past acquisitions, such as Kunming Pharmaceutical Group, also faced difficulties. For example, in January this year, four senior executives resigned, and in the first three quarters of 2025, revenue and profit declined by double digits.

The paradigm shift in the blood sector will force the industry to shift from focusing on scale to emphasizing efficiency. Capital operations by major groups have bought scale but not competitiveness; assets have increased, but efficiency has not improved. While piling up plasma stations and collection volume, organizations have become increasingly bloated, leading to slow responses when sector logic changes, ultimately causing performance declines.

A common issue is that, historically, to grow large, many companies adopted a “centralized authority” organizational structure. But as industry logic is overturned, this model struggles to respond quickly to price wars and new competitive environments. Long decision chains hinder rapid response. Since competition now involves plasma station sourcing, regional pricing, and terminal promotion, agility and operational granularity are key to winning.

In fact, Tsingtao Biologicals has recognized this and made adjustments. With over 100 plasma stations, it is shifting from “centralized control” to a “department + regional” dual management model, decentralizing decision-making, improving market responsiveness, and strengthening its competitive edge.

Ultimately, the core competitiveness of the blood product industry is shifting from capital and station accumulation to refined operations, including plasma station management, product R&D, channel synergy, and rapid market response. To survive industry cycles, streamlining organizational structures and focusing on core businesses are essential for enhancing competitiveness and pursuing long-term growth. (Produced by Think Finance)■

Image source | Setuptw