Breaking Down Sichuan Kelun Pharmaceutical Co., Ltd. Financial Health: Key Insights for Investors

Sichuan Kelun Pharmaceutical Co., Ltd., founded in 1996, has evolved from a domestic drugmaker into a vertically integrated pharmaceutical group that expanded into medical devices in 2004, secured GMP certification in 2010, began exporting to Southeast Asia in 2015, launched Kelun‑Biotech in 2020 to drive oncology and immunology innovation, and by 2025 reported consolidated revenue of approximately 21.34 billion CNY; the Shenzhen‑listed company (002422.SZ) is majority‑owned by Sichuan Kelun Industry Group and traded near 31.15 CNY per share with an implied market capitalization of about 60 billion CNY, while its Kelun‑Biotech arm raised roughly US$250 million in June 2025 via a placement of 5,918,000 H shares-backing a pipeline of over 30 innovative drug projects (including 3 marketed, 1 in NDA stage and more than 10 in clinical trials); operating with a vertically integrated R&D‑to‑commercial model, Kelun runs facilities meeting FDA/EMA standards, invests an annual R&D budget exceeding 400 million CNY, partners with over 50 research institutions, exports roughly 25% of sales (2022), and pursues sustainability goals such as a targeted 25% carbon reduction by 2025 while generating revenue from APIs, injectables, OTC products and global distribution channels.

Sichuan Kelun Pharmaceutical Co., Ltd. (002422.SZ) - Intro

• Founded: 1996 in Sichuan, China - focused on R&D, production and sales of pharmaceuticals.
• IPO / Listing: Listed on Shenzhen Stock Exchange (002422.SZ).

History & Milestones

• 1996 - Company established to research, develop, produce and sell pharmaceutical products in China.
• 2004 - Expanded product portfolio to include medical devices (infusion sets, syringes, nebulizer sets), strengthening market presence.
• 2010 - Achieved Good Manufacturing Practice (GMP) certification for manufacturing facilities.
• 2015 - Began international expansion with exports to Southeast Asia.
• 2020 - Launched subsidiary Sichuan Kelun‑Biotech Biopharmaceutical Co., Ltd., targeting innovative oncology and immunology drugs.
• 2025 - Reported revenue of approximately 21.34 billion CNY.

Ownership & Corporate Structure

• Publicly traded A‑share company on Shenzhen Stock Exchange (ticker: 002422.SZ).
• Typical shareholder mix: institutional investors, retail investors, and management / founding shareholders (public disclosures provide exact top‑holder stakes by filing).
• Operates through multiple subsidiaries including manufacturing units and the Kelun‑Biotech R&D arm.

Mission, R&D & Product Portfolio

• Mission: Develop and deliver safe, effective pharmaceuticals and medical devices; expand into innovative biologics in oncology and immunology.
• Core products: Small‑molecule pharmaceuticals, infusion systems, syringes, nebulizer sets, and biologics development via Kelun‑Biotech.
• Quality & compliance: GMP‑certified manufacturing, regulatory submissions for domestic and export markets.

How It Works - Operations & Value Chain

• R&D: In‑house small‑molecule development and growing biologics pipeline through Kelun‑Biotech.
• Manufacturing: GMP‑certified plants producing finished pharmaceuticals and medical devices.
• Regulatory & quality: Compliance with national GMP and export regulatory pathways for Southeast Asia and other markets.
• Sales & distribution: Domestic hospital and retail channels, plus export partnerships and distributors for international sales.

How It Makes Money - Revenue Drivers

• Product sales: Core revenue from pharmaceuticals and medical devices sold domestically and exported.
• Therapeutic focus: Chronic disease and acute care drugs provide steady hospital demand; devices supply consumables market.
• Pipeline & licensing: Potential future revenue from biologics commercialization, licensing deals and contract manufacturing as R&D advances.
• Geographic expansion: Export growth starting in 2015 supports incremental top‑line from Southeast Asian markets.

Sichuan Kelun Pharmaceutical Co., Ltd. (002422.SZ): History

• Listed on Shenzhen Stock Exchange under ticker 002422.SZ.
• Majority-owned and strategically directed by Sichuan Kelun Industry Group Co., Ltd., the controlling shareholder.
• Expansion into biopharma via subsidiaries (notably Kelun-Biotech) and capital markets financing.
• Regular external audits and disclosure practices to comply with exchange and regulatory requirements.

• Ownership split (illustrative approximate): Sichuan Kelun Industry Group ~41%; institutional investors ~35%; individual investors ~24%.
• Governance: listed-company board, independent directors, periodic external audits and public financial reporting.

Sichuan Kelun Pharmaceutical Co., Ltd. (002422.SZ): Ownership Structure

• Mission: develop, manufacture, and market high-quality pharmaceutical products that address significant medical needs, enhancing global health.
• Core values: integrity, innovation, quality assurance, collaboration and social responsibility.
• R&D emphasis: partnerships with over 50 research institutions globally and sustained R&D spending to drive new therapies.
• Environmental & social targets: commit to reducing carbon footprint by 25% by 2025 and invest in community health initiatives.

How It Makes Money

• Manufacturing & Sales of APIs and finished dosage forms (branded generics and specialty drugs) - core revenue driver.
• Proprietary biologics and innovative drug candidates - future high-margin pipeline with out-licensing and partnership opportunities.
• Contract manufacturing for third parties leveraging GMP-certified facilities.
• Export sales to international markets and selective licensing agreements.

Ownership Breakdown

Sichuan Kelun Pharmaceutical Co., Ltd. (002422.SZ): Mission and Values

• Business segments: Twinings (branded generics & OTC), Botai (innovative drugs and hospital-focused products), Other Business (API supply, CMO services, distribution).
• Vertical integration: in-house R&D, GMP-compliant manufacturing, QA/QC, regulatory affairs and sales/marketing to control quality and margins.
• Regulatory reach: manufacturing sites hold certifications aligning with international standards (FDA/EMA-equivalent GMP approvals and overseas audit clearances) enabling exports to Europe and other regulated markets.

• R&D-driven pipeline: annual R&D investment exceeds 400 million CNY focused on oncology, cardiology and specialty therapeutics; pipeline includes both small molecules and biologics/complex generics.
• Manufacturing & CMO: in-house capacity produces finished dosage forms and APIs; CMO/contract manufacturing adds utilization revenue and supports global partners.
• Commercialization: hospital tender channels, retail pharmacies and export markets; a mix of high-margin innovative products and scale generics provides revenue stability.

• Kelun invests heavily in discovery and clinical development; core therapeutic focuses are oncology, cardiology and specialty hospital drugs.
• Strategic collaborations with universities, CROs and international pharma companies accelerate IND/CTA filings and co-development of novel assets.
• Out-licensing and co-commercialization deals provide non-dilutive revenue and broaden geographic reach for select products.

• Facilities follow GMP standards with third-party audits and certifications aligned to FDA/EMA expectations, enabling exports and tender participation in regulated markets.
• Quality control systems and supply-chain traceability support product acceptance in export markets and reduce regulatory risk.

• Carbon reduction: achieved a 15% reduction in carbon footprint to date and targets a further 20% reduction by 2025 via energy efficiency upgrades and process optimization.
• Waste management: investments in wastewater treatment and solvent recovery to minimize environmental impact and maintain compliance with evolving regulations.

• Proprietary/innovative drugs - higher gross margins but longer development timelines.
• Branded generics/OTC - stable cash flow and scale-driven margin contribution (Twinings segment).
• CMO/API exports - utilization of manufacturing capacity to improve fixed-cost absorption and boost operating leverage.

Sichuan Kelun Pharmaceutical Co., Ltd. (002422.SZ): How It Works

• Core revenue streams: manufacturing & sale of injectables and finished formulations, API sales, OTC products, and biotech-derived therapeutic launches via Kelun-Biotech.
• Geographic mix: domestic Chinese market plus exports to North America, Europe and Southeast Asia; international sales ≈25% of total revenue in 2022.
• Subsidiary role: Kelun-Biotech handles R&D, manufacturing, commercialization and international partnerships for innovative biologics and small molecules, adding recurring and milestone-based income.
• Strategic partnerships: collaborations with research institutions and international pharma companies for co-development, licensing and contract manufacturing (CDMO) work.
• Quality & compliance: GMP, international regulatory alignment and product quality enable premium pricing and market access in regulated markets.

• Commercial sales: hospital tenders, distributors, retail pharmacies and direct export contracts.
• API sales: long-term contracts with domestic and international generic drugmakers.
• CDMO/R&D services: fee-for-service manufacturing and co-development milestones/licensing fees.
• Product lifecycle monetization: patented/first-in-class launches via Kelun-Biotech, then generic/API spinouts for sustained margins.

• Scale manufacturing: high-capacity sterile injectable lines and API synthesis facilities lower unit costs.
• Product mix optimization: higher-margin specialty injectables and innovative biologics lift blended margins.
• Regulatory approvals: approvals in regulated markets (e.g., EU/US filings, where applicable) expand pricing power and contract opportunities.
• Partnership monetization: licensing, milestone payments and co-commercialization deals accelerate revenue realization from pipeline assets.
• Export growth: international sales diversify revenue and improve average selling prices when accessing higher-priced markets.

• Direct hospital tenders and provincial procurement (domestic).
• Distributor agreements and Rx/OTC retail networks.
• Export sales via local partners or direct supply contracts.
• CDMO and contract research/manufacturing agreements with global pharma players.

Sichuan Kelun Pharmaceutical Co., Ltd. (002422.SZ): How It Makes Money

• Revenue sources: finished dosage forms, biologics/biopharmaceuticals, APIs, contract manufacturing and technical services, licensing and collaborations.
• Geographic mix: strong domestic sales complemented by exports (~25% of total revenue in 2022).
• R&D-driven growth: Kelun-Biotech's pipeline supplies future revenue via new drug approvals, NDAs and clinical-stage candidates.

• Product mix optimization - balancing mature generics/APIs with high-margin innovative drugs.
• International expansion - scaling exports and overseas registrations to capture higher-margin markets.
• Partnerships and licensing - monetizing clinical-stage assets via collaborations and out-licensing.
• Manufacturing scale - leveraging contract manufacturing and API production for stable cash flows.
• Sustainability initiatives - operational efficiencies and a 25% carbon reduction target to lower costs and appeal to global customers.

• Market position: established domestic leader with growing international footprint, supported by a robust biotech pipeline.
• Future growth drivers: commercialization of Kelun-Biotech assets, expanded export channels, and continued investment in innovation and quality.
• Risks to monitor: regulatory approvals, competition in generics/biologics, and execution of international expansion.