Jinan Zhuocheng Bio-Tech Co., Ltd.

Bulk APIs are the foundation of China’s pharmaceutical industry. Mature product categories such as antibiotics, vitamins, antipyretic analgesics, and sartan drugs have long supported China’s export advantages in APIs and underpinned the revenue scale of many listed companies. However, the core challenge facing the industry is that while production scale continues to expand, profit margins are being persistently compressed.

In 2024, China’s API export value reached USD 42.98 billion, up 5.1% year-on-year, while the average export price declined by 12.0%. Amid overall volume growth, companies increasingly relied on price competition to maintain market share. In 2025, exports of Western medicine APIs reached USD 42.867 billion, down slightly by 0.27% year-on-year. Traditional leading product categories remained stable in overall volume, but growth elasticity has clearly weakened.

Among them, Guobang Pharma reported API and intermediate revenue of RMB 5.967 billion in 2025, accounting for 99.27% of its main business revenue, indicating a highly concentrated structure in APIs and related products. Its pharmaceutical segment revenue was RMB 3.475 billion, down 9.1% year-on-year, mainly affected by weak antibiotic demand.

While traditional pharmaceutical operations came under pressure, Guobang Pharma has begun seeking growth buffers in specialty products, animal health, and regulated markets. In 2025, its animal health business generated revenue of RMB 2.492 billion, up 23.6% year-on-year. Florfenicol shipments exceeded 4,000 tons, and doxycycline hydrochloride shipments exceeded 3,000 tons, both achieving growth of over 30%. The company also advanced international registrations: in 2025, doxycycline hydrochloride obtained EU CEP certification, and florfenicol received U.S. FDA approval.

Similarly, XinHua Pharmaceutical, Zhejiang Medicine Co., Ltd., and North China Pharmaceutical are all facing similar pressures. In 2025, XinHua Pharmaceutical reported API and intermediate revenue of RMB 4.782 billion, accounting for 54.62% of total revenue. The company has long focused on traditional categories such as antipyretic analgesics and anti-infectives, with a solid industrial foundation, but these products are also most exposed to commoditized competition.

Zhejiang Medicine recorded API and intermediate revenue of RMB 4.765 billion, accounting for 53.65% of total revenue. Its life nutrition products and pharmaceutical manufacturing segments show clear cyclical characteristics. North China Pharmaceutical reported API and intermediate revenue of RMB 2.673 billion, accounting for 29.25% of total revenue. While its traditional antibiotic business still maintains scale, pricing pressure, centralized procurement, and intensified competition continue to erode profitability.

Sitaijia and Tianyuan Biopharmaceutical face even more direct pressure. In 2025, Sitaijia’s API and intermediate revenue reached RMB 2.212 billion, accounting for 90.43% of total revenue; Tianyuan Biopharmaceutical’s API and intermediate revenue reached RMB 2.614 billion, accounting for 85.40% of total revenue.

With such highly concentrated revenue structures, fluctuations in API pricing are directly reflected in earnings performance. During low-cycle periods, these companies experience more pronounced pressure.

The earlier expansion of bulk API capacity is still being released. Small and medium-sized enterprises can only sustain cash flow through low-price orders, while the exit of inefficient capacity remains slow. India continues to participate in competition in certain segments due to cost advantages and policy support, further compressing pricing power for Chinese companies. Meanwhile, chemical raw material and labor costs are difficult to reduce in parallel.

Prices are already at low levels, but industry recovery still requires time.