Breaking Down Beijing Tongrentang Co., Ltd Financial Health: Key Insights for Investors

From its founding in 1669 by Yue Xianyang to its modern incarnation as Beijing Tongrentang Co., Ltd. (ticker 600085.SS), this venerable Traditional Chinese Medicine house has evolved into a diversified healthcare group with over 1,300 retail outlets in China and roughly 100 international stores, a workforce of 17,883 (Dec 2024), and operations across Manufacturing, Pharmaceutical Retail and Other Business segments that span plantation, aquaculture, 11 self-owned medical institutions and integrated online-offline services; listed on the Shanghai Stock Exchange in 2000 and expanding its capital footprint thereafter, the firm reported CNY 18.60 billion in revenue for 2024 (up 4.12% year-over-year) with earnings of CNY 1.53 billion (down 8.54%), a market capitalization near CNY 44.67 billion as of Dec 2025, strategic moves such as a May 2023 minority biotech investment expected to add about CNY 200 million over five years, and a digital pivot targeting online sales to comprise up to 30% of revenue by 2025-facts that set the stage for how Tongrentang's historic brand, product portfolio (Liuwei Dihuang, Tongren Dahuoluo, Angong Niuhuang and more), and multi-channel model generate cash flow and shape forecasts including analyst projections of a 12% CAGR from 2024-2026.

Beijing Tongrentang Co., Ltd (600085.SS): Intro

• 1669 - Tong Ren Tang founded by Yue Xianyang in Beijing; established reputation as imperial and public TCM supplier.
• 1997 - Beijing Tongrentang Co., Ltd established as a subsidiary focusing on industrialized TCM production and commercialization.
• 2000 - Listed on the Shanghai Stock Exchange (600085.SS), providing public capital and governance transparency.
• 2010 - Corporate development and market positioning led to a strategic transfer/listing activities reflecting maturity and international ambitions.
• By 2024 - Retail footprint expanded to over 1,300 domestic outlets and ~100 international stores across the United States, Canada and Australia.
• As of December 2025 - Continued leadership position in the TCM sector with a strong brand, quality controls and an integrated value chain.

• Parent: China Beijing Tong Ren Tang Group Co., Ltd (state-influenced group holding with operational subsidiaries).
• Public shareholders: Shanghai Stock Exchange-listed free float alongside strategic and institutional investors.
• Operating subsidiaries: manufacturing, retail, R&D, export and international retail operations managed under the listed company and group umbrella.
• Governance: Board and management aligned to blend traditional brand stewardship with modern compliance, productization and commercialization.

• Mission: Preserve and modernize authentic TCM, ensuring safety, efficacy and accessibility.
• Vision: Be the global ambassador of high-quality traditional Chinese medicine and integrated healthcare solutions.
• Core values: Authenticity of ingredients and recipes; rigorous quality control; research-driven modernization; service-oriented retail and patient care.

• Vertical integration across the value chain: raw material sourcing, standardized production of Chinese patent medicines, proprietary formulas, quality testing, distribution and retail.
• Product mix: branded patent medicines, granules, decoctions, health supplements, proprietary tonic formulas and over-the-counter TCM preparations.
• Sales channels: corporate and hospital procurement, franchise and self-operated retail outlets, e-commerce platforms, and international stores/exports.
• R&D and standardization: investment into clinical validation, modern extraction and formulation technologies, and quality assurance systems to meet domestic and international regulatory standards.
• Brand & services: traditional consulting, TCM clinics and pharmacist-led retail service improve customer retention and upsell higher-margin health-management products.

• Product sales - largest revenue contributor from Chinese patent medicines and proprietary formulations sold through retail, hospitals and distributors.
• Retail operations - revenue and margin from self-owned and franchised stores; services, consultations and adjacent health products increase basket size.
• Export and international retail - direct store sales and cross-border e-commerce to overseas Chinese and health-conscious consumers.
• Licensing, private label and contract manufacturing - leveraging manufacturing capabilities for third parties and partner brands.
• Value-added services - clinic services, custom prescriptions, health management programs and online consultation platforms.

• Heritage brand advantage: deep consumer trust and high recognition for authenticity and quality.
• Scale and distribution: extensive retail network and multi-channel sales capability.
• Product R&D and standardization: pathway to premiumization, regulatory approvals and export growth.
• Digital & e-commerce expansion: omnichannel integration to capture younger, health-focused consumers.
• Internationalization: leveraging diaspora demand and wellness trends to expand overseas revenue streams.

Beijing Tongrentang Co., Ltd (600085.SS): History

• Parent: China Beijing Tong Ren Tang Group Co., Ltd. (state-owned background)
• Incorporation: March 22, 2000 (joint stock company, PRC)
• Stock Exchange: Shanghai Stock Exchange - 600085.SS
• Employees: 17,883 (as of December 2024)
• Strategic minority investment: Acquired a minority stake in a biotech firm specializing in herbal medicine research (May 2023)

• Manufacturing - production of proprietary Chinese patent medicines, herbal extracts and granules
• Pharmaceutical Retail - branded retail network and franchised TCM pharmacies
• Other Business - health services, international distribution, licensing and R&D partnerships

• Manufacturing sales: large-scale production and sale of finished TCM products to distributors, hospitals and its own retail channels
• Retail margin: operated and franchised pharmacies provide recurring margin and direct consumer reach
• IP and licensing: proprietary formulations and brand licensing to partners both domestically and abroad
• R&D and partnerships: strategic investments (e.g., May 2023 biotech stake) to expand product pipeline and drive higher-margin speciality products

Beijing Tongrentang Co., Ltd (600085.SS): Ownership Structure

• Mission and values: preserve classical TCM formulas, ensure product quality and safety, expand R&D into modern dosage forms, and deliver patient-focused, customized TCM medical services.
• Strategic focus: vertical integration from raw-material plantation to retail distribution, leveraging brand heritage and retail footprint to scale modern TCM offerings.
• Service model: blend of medical care and wellness-clinic-style customized prescriptions, OTC patent medicines, and wellness product lines.

• Operating segments: Manufacturing (Chinese patent medicines), Pharmaceutical Retail (Tongrentang retail pharmacies and franchised stores), and Other Business (plantation, aquaculture, investment management, service operations).
• Dosage forms: pills, powders, alcoholic preparations, capsules, oral liquids, dripping pills, and customized decoctions.
• Therapeutic areas served: cardiovascular, gynecology, respiratory, digestive, pediatrics, dermatology, and general wellness.

• Manufacturing: sale of Chinese patent medicines across multiple dosage forms to hospitals, distributors and retailers-primary revenue driver.
• Pharmaceutical Retail: proprietary and franchised Tongrentang pharmacies provide recurring OTC sales, prescription fulfillment, and wellness services.
• Clinical/custom services: revenue from TCM clinics, personalized decoctions, and integrated medical-wellness programs.
• Other: plantation (control of herb supply chain), aquaculture, licensing, and investment returns.

Beijing Tongrentang Co., Ltd (600085.SS): Mission and Values

• Manufacturing - production of Chinese patent medicines and herbal preparations using traditional formulations enhanced by modern GMP-compliant facilities and quality control systems.
• Pharmaceutical Retail - management and franchising of retail pharmacies and TCM shops providing direct-to-consumer sales and branded service experiences.
• Other Business - plantations for medicinal herbs, aquaculture, logistics, and investment management supporting raw material security and diversified income streams.

• Focus: mass production of Chinese patent medicines, decoction pieces and health supplements based on classical recipes adapted for contemporary dosage forms (capsules, granules, syrups).
• Quality controls: modernized production lines, GMP certification, and in-house R&D and QC labs to combine traditional processing (Paozhi) with chemical and biological testing.
• Contribution: historically the highest-margin segment by product unit economics and bulk institutional sales to hospitals and large chains.

• Retail footprint: over 1,300 stores in China and approximately 100 international outlets (flagship stores and franchised partners) providing branded retailing and health consultation services.
• Omnichannel: integration of online storefronts, app-based ordering and offline consultative sales; loyalty programs and dispensing services to increase basket size and repeat purchase.
• Service network: hierarchical diagnosis and treatment model linking retail points to clinical services and telemedicine platforms.

• Includes plantation operations for key medicinal herbs, selective aquaculture, warehousing/logistics and investment management activities that stabilize supply and create non-pharmaceutical revenue.
• Backwards integration reduces raw-material volatility and supports product traceability-critical for premium TCM positioning.

• Hierarchical diagnosis & treatment: 11 self-owned offline medical institutions and one Internet Plus-related hospital, plus nine offline managed medical institutions, forming a national service network for integrated care.
• Online-offline integration: telemedicine, remote prescription review and e-commerce are linked with brick-and-mortar clinics and pharmacies to route patients/customers through diagnosis → prescription → medication → follow-up.

• Annual revenue (FY2023, reported): approximately RMB 14.3 billion.
• Net profit (FY2023, reported): approximately RMB 1.1 billion.
• Gross margin (company-wide, FY2023): around 40%-50% depending on segment mix (manufacturing typically higher).
• R&D and quality investment (FY2023): >RMB 300 million directed at product development, QA/QC modernization and digital health platforms.
• Retail footprint: >1,300 domestic stores; ~100 international outlets.
• Medical institutions: 11 self-owned offline, 1 Internet Plus-related hospital, 9 managed offline institutions.

• Vertical integration-control of cultivation, production and retail reduces cost volatility and improves traceability.
• Brand premium-heritage brand allows premium pricing on certain tonic and specialty products.
• Omnichannel sales-higher customer lifetime value from integrated online/offline channels and medical service referrals.
• Portfolio diversification-other business units (plantation, aquaculture, investments) smooth cyclical pharmaceutical demand.

Beijing Tongrentang Co., Ltd (600085.SS): How It Works

• Core product portfolio: branded Chinese patent medicines (e.g., Liuwei Dihuang Pill, Tongren Dahuoluo Pill, Angong Niuhuang Pill) sold across multiple therapeutic categories.
• Retail & distribution: company-owned stores, franchised outlets and third‑party distribution both inside China and selectively overseas.
• Upstream production: plantation and aquaculture operations supplying medicinal herbs and animal-sourced ingredients to ensure quality, traceability and cost control.
• Investment & financial services: investment management arm and strategic minority stakes in biotech and related firms to capture tech-driven growth and yield additional income.

• Product sales - finished goods: highest-margin revenue from established patent medicines and proprietary formulas marketed under the Beijing Tongrentang brand.
• Retail channel sales: direct-to-consumer revenue from company-operated pharmacies and e‑commerce channels, supporting brand premiums and retail margins.
• Manufacturing & OEM: sales to third parties and internal transfer pricing from group manufacturing facilities.
• Raw-material sales: revenue from the sale of cultivated herbs/aquatic products to external buyers and internal consumption savings realized as cost of goods sold reductions.
• Investment income: returns, dividends and capital gains from strategic stakes and a regulated investment management business.

• Branded medicines: retail pricing, hospital procurement, OTC retail and e‑commerce listings generate direct product revenue.
• Retail network: markups on goods, loyalty programs and private-label items increase per-store revenue; physical footprint supports brand discovery and repeat purchases.
• Plantation & aquaculture: sells raw herbs and animal-based inputs at wholesale rates and reduces internal input costs, improving gross margins.
• Manufacturing & contract production: fees and transfer pricing for OEM/contract manufacturing produce B2B revenue streams.
• Investment & biotech stakes: expected dividend income, milestone payments and potential upside from portfolio company growth (e.g., the May 2023 biotech deal tied to an estimated CNY 200M incremental revenue over five years).

• Vertical integration: upstream cultivation reduces input volatility and supports higher gross margins; traceability enhances premium pricing power.
• Retail mix optimization: shifting sales to higher-margin proprietary formulas and e‑commerce channels improves blended margins.
• Product portfolio renewal: launching value-added patent medicines and refined formulations supports ASPs (average selling prices).
• Strategic investments: targeted biotech partnerships and minority stakes accelerate access to IP and new revenue streams without full-scale M&A capital outlay.

Beijing Tongrentang Co., Ltd (600085.SS): How It Makes Money

• Branded retail and wholesale of TCM products (granules, decoctions, capsules, patent medicines)
• Franchise and self-operated pharmacies across China providing stable brick‑and‑mortar sales
• Healthcare services: TCM clinics, diagnosis and personalized treatments
• Licensing, OEM manufacturing and export of specialty TCM formulations
• Online retail and O2O channels (own e‑commerce, marketplaces, livestreaming partnerships)

• Heritage brand premium: strong customer loyalty and pricing power in TCM retail.
• Channel diversification: balancing brick‑and‑mortar margins with higher-growth online sales.
• Digital transformation: investment in e‑commerce, data analytics, and O2O to capture younger consumers.
• Service expansion: clinics and wellness programs improve customer lifetime value and recurring revenue.
• Product mix optimization and internationalization to offset margin pressures.