73-year-old Cai Dongchen's pharmaceutical capital map expands again; the 150 billion yuan "Stone Pharma" group’s transformation into innovative drugs faces growing pains

Questioning AI · What are the deeper reasons behind the pain points in the transformation of CSPC’s innovative drug sector?

Changjiang Business News ● Changjiang Business Reporter Pan Ruidong

CSPC Group’s leader Cai Dongchen has once again gained control of a listed company on the A-share market.

On March 19, 2026, *ST Jingfeng (000908.SZ) announced that CSPC Holdings Group officially became the company’s largest shareholder, holding 26%, with the actual controller changing to 73-year-old Cai Dongchen. This not only marks a rescue for a nearly delisted pharmaceutical company but also represents another key move by Cai Dongchen in the capital market.

From promoting Hebei Pharmaceutical to list in Hong Kong in 1994, to spinning off XinNuoWei to list on the A-share market in 2019, and now taking control of *ST Jingfeng, Cai Dongchen has over thirty years of experience, evolving from a workshop technician to head of a trillion-yuan pharmaceutical enterprise, building a multi-platform capital structure of “H-shares + A-shares.” Currently, the combined market value of the three listed companies in the “CSPC system”—CSPC Group (01093.HK), XinNuoWei (300765.SZ), and *ST Jingfeng—is about 150 billion yuan.

CSPC is now in a critical period of innovation-driven transformation. Its innovative drug business continues to require high investment, with phased performance pressures. Coupled with industry-wide procurement reforms and intensified market competition, the company urgently needs new growth drivers and synergy points.

While expanding its capital footprint, the pressures of transforming into an innovative drug company are significant, testing Cai Dongchen’s resolve and endurance.

From Technician to Industry Leader

Cai Dongchen’s journey in pharmaceuticals began in 1973. At age 20, he joined Hebei Pharmaceutical Factory as a workshop technician, working on the production line for nearly a decade. While mastering every aspect of pharmaceutical manufacturing, he also deeply felt the backwardness of China’s pharmaceutical industry at the time.

In 1984, at just 31, Cai Dongchen was appointed director of Hebei Pharmaceutical Factory, marking his first key milestone in entrepreneurship; in 1994, at age 41, he became chairman and CEO of Hebei Pharmaceutical Group, the same year the company was listed on the Hong Kong Stock Exchange under the name China Pharmaceutical.

In 1997, Cai Dongchen reached another milestone—forming CSPC Group. Under his leadership, four powerful pharmaceutical companies—Shijiazhuang Pharmaceutical Factory, Hebei Pharmaceutical Factory, Shijiazhuang First Pharmaceutical Factory, and Shijiazhuang Second Pharmaceutical Co., Ltd.—merged to create China’s first large-scale national pharmaceutical enterprise—CSPC Group Co., Ltd., with Cai serving as chairman and CEO.

By the late 1990s, CSPC had become one of China’s largest raw material drug producers, with vitamin C and antibiotics sold globally and generating substantial profits. At this stage, Cai began to focus on innovative drugs. In 1999, he made a surprising decision: investing 50 million yuan to acquire the patent for Butylphthalide (marketed as “Enbipuo”) from the Institute of Materia Medica, Chinese Academy of Medical Sciences.

Despite strong opposition at the time, Cai persisted. He saw the potential of Butylphthalide as “the world’s first innovative drug targeting multiple pathological processes in ischemic stroke.” The development process was arduous, involving clinical trials and process scale-up, fraught with uncertainties. It wasn’t until 2005 that Enbipuo soft capsules were officially launched, with total R&D investment exceeding 400 million yuan.

In 2006, Cai transferred the patent rights for Enbipuo to the US and South Korea, pioneering a precedent for Chinese pharmaceutical companies to transfer drug intellectual property rights to developed countries. In 2007, CSPC licensed Enbipuo’s patent and market rights in South Korea from Nitto Denko, further expanding its international influence and gaining recognition for its innovation capabilities.

Time proved Cai’s vision correct. After its launch, Enbipuo quickly became CSPC’s flagship product and one of the few “blockbuster” innovative drugs in China’s pharmaceutical industry. More importantly, this deal laid the foundation for CSPC’s shift from raw materials to innovative drugs.

In fact, after 2006, China’s pharmaceutical industry entered a new phase driven by innovation, with increasing competition from generic drugs. Cai realized that for CSPC’s long-term development, it was essential to break free from reliance on raw materials and focus on R&D of innovative drugs.

Cai proposed a “dual-drive” strategy of innovation and internationalization, placing R&D at the core of corporate development, investing heavily each year. Under his leadership, CSPC developed a series of core-competitiveness innovative drugs, including Enbipuo, Xuanning, and Jinyouli. As part of the transformation, CSPC also restructured strategically in 2012, officially adopting the name “CSPC Group,” marking a successful full transition.

Since then, CSPC’s R&D expenses have increased year by year. In 2013, R&D spending first exceeded 100 million yuan; by 2018, it surpassed 1 billion yuan. From 2020 to 2024, CSPC’s R&D investments were approximately 2.89 billion, 3.43 billion, 3.99 billion, 4.83 billion, and 5.19 billion yuan respectively, totaling over 20.3 billion yuan in five years. In the first three quarters of 2025, R&D expenses reached 4.185 billion yuan, a 7.9% increase, underpinning its innovation and industry upgrade efforts.

Building “One H-shares + Two A-shares” Platforms

Innovative drug R&D is a “money-burning and long-term” process, and CSPC’s valuation in Hong Kong is relatively low. Facing this, Cai made a key decision—expanding into the A-share market by splitting assets and injecting assets to create new listing platforms, broadening financing channels and boosting valuation.

In 2019, Cai promoted CSPC’s subsidiary XinNuoWei to list on the Shenzhen Stock Exchange’s ChiNext board, becoming his second listed company. Initially focused on functional foods and raw materials, after listing, XinNuoWei continued to optimize its business through asset injections.

In 2023, XinNuoWei acquired a 51% stake in CSPC’s wholly owned subsidiary Jushi Bio, which has products and pipelines including ADCs and RNA vaccines. It was renamed CSPC Innovation, becoming the core platform for integrating CSPC’s innovative drug assets and leading the company’s shift from generics to innovative drugs.

Following the asset injection, CSPC Innovation’s market value rose from less than 100 billion yuan to over 500 billion yuan, but the transition has faced challenges. In 2024, due to falling caffeine prices, CSPC Innovation’s revenue declined sharply, with net profit attributable to shareholders plummeting by 92.89%. Additionally, the acquisition of Jushi Bio brought non-controlling interests expenses, pushing the company toward losses.

In 2025, CSPC Innovation reported revenue of 2.158 billion yuan, up 8.93%, but net loss was 241 million yuan. The company explained that this was due to increased R&D spending (over 1 billion yuan, up 23%), lower gross margins on core caffeine products, and the impact of holding 80% of Jushi Bio, which posted a net loss of 904 million yuan in 2025.

Meanwhile, CSPC’s overall performance also faced pressure. In the first three quarters of 2025, net profit attributable to shareholders declined 7.06% to 3.511 billion yuan. To cope, Cai increased R&D investment, accelerated innovative drug approvals, partnered with AstraZeneca and others for licensing, expanded overseas markets, and optimized management and costs.

In March 2026, Cai reached another milestone—taking control of *ST Jingfeng. CSPC used a “capital reserve conversion + industry investor takeover” model to participate in restructuring *ST Jingfeng and gain control. This marked his third listed platform, further expanding his capital layout.

However, taking over *ST Jingfeng also presents challenges. In the first three quarters of 2025, the company’s revenue was 272 million yuan, with a net loss of 44.57 million yuan, and it has applied for “star delisting.”

How to revitalize *ST Jingfeng’s assets and operations will determine whether CSPC can develop a new profit growth point within the “CSPC system.” The future development of CSPC’s system will continue to be followed by Changjiang Business News.