On the evening of January 21, the pharmaceutical company Ling Pharmaceutical disclosed its performance forecast for the year 2024, anticipating a net loss of 600 million to 800 million yuan. This marks the first annual performance loss for Ling Pharmaceutical since its listing in 2011. Despite the official endorsement of its product Lianhua Qingwen during the pandemic, the company’s stock price has continued to decline after the end of the epidemic.
According to the announcement by Ling Pharmaceutical, the company expects a net loss of 600 million to 800 million yuan for 2024, compared to a profit of 1.352 billion yuan in the same period last year.
Ling Pharmaceutical explained that the substantial decline in operating profit in 2024 was due to the approaching expiration of certain respiratory system products, the company’s decision to offset related product sales revenue, the provision for impairment losses on inventory near expiration, reduced revenue during the reporting period, decreased gross profit margin due to rising raw material prices, continued high investment in research and development, among other factors.
Public records show that Shijiazhuang Ling Pharmaceutical Co., Ltd., known as Ling Pharmaceutical, was founded in 1992 by Wu Yiling, an academician of the Chinese Academy of Engineering. With Ling Pharmaceutical’s listing on the A-share market and the success of its product Lianhua Qingwen, Wu Yiling gradually became one of the wealthiest academicians in China.
In 2003, before being elected as an academician of the Chinese Academy of Engineering, Wu Yiling and his team developed the traditional Chinese medicine Lianhua Qingwen capsules in just 15 days. Subsequently, it was recommended 18 times by the National Health Commission and other departments of the Chinese Communist Party. Following the outbreak of the COVID-19 (Chinese Communist Virus) pandemic, Lianhua Qingwen was included in the “Diagnosis and Treatment Plan for Novel Coronavirus Pneumonia” jointly issued by the National Health Commission and the State Administration of Traditional Chinese Medicine, as well as in the diagnosis and treatment plans for COVID-19 in more than 20 provinces and cities.
The Chinese academician Zhong Nanshan has endorsed Lianhua Qingwen multiple times through CCTV and other official media. On May 4, 2020, the Chinese Foreign Ministry and the National Health Commission invited Zhong Nanshan, a member of a high-level expert group of the Chinese Communist Party’s Health Commission, to explain the current epidemic via video link with overseas students through CCTV. Zhong Nanshan specifically recommended Lianhua Qingwen for the treatment of pneumonia. On the evening of April 14, Zhong Nanshan also praised the efficacy of Lianhua Qingwen when answering questions online about the epidemic through Chinese media.
With official endorsements from the government and experts, Ling Pharmaceutical, the manufacturer of Lianhua Qingwen, saw a steady increase in income. During the pandemic, Lianhua Qingwen in China once faced a situation of high demand. However, with the Chinese authorities ending nearly three years of epidemic control policies on December 7, 2022, Ling Pharmaceutical’s stock price began to decline continuously, with the company’s market value evaporating by 26.081 billion yuan within just two weeks.