Luzhu Group's Annual Report Evolution: AI Reshaping the Business Chain, Internationalization "System Going Global"

In 2025, centralized procurement becoming routine, Medicare reimbursement cost controls, and innovation “over-competition” have become a “new normal” that many pharmaceutical companies must face. Against this backdrop, Zhuhai Lizhu Group (000513.SZ, 01513.HK) has turned in a performance scorecard for its evolutionary capabilities.

The annual report disclosed on March 25 shows that last year Zhuhai Lizhu Group achieved operating revenue of RMB 12.02B, up 1.76%; net profit attributable to shareholders was RMB 2.02B, and adjusted non-recurring net profit was RMB 2.01B, up 1.51%. Behind the “stability” lies an evolution driven by AI, accelerated internationalization, and a refreshed organization.

Breaking down this financial report, on the revenue side, chemical pharmaceuticals (especially gastrointestinal products and reproductive hormone products) and TCM injection/prescription formulations serve as the “keystone” for performance, together contributing more than 60% of revenue. Among them, the TCM formulations segment performed remarkably: revenue grew 18.81% year over year, showing that with policy support, the market potential of the modernization of traditional Chinese medicine is being released.

As the lifeblood of the company’s operations, last year Zhuhai Lizhu Group’s net cash flow from operating activities reached RMB 3.15B, up 5.58%. Abundant cash flows not only support large-scale share repurchases and dividends—last year the company cumulatively used about RMB 580 million to repurchase A-share and H-share company shares and cancel them, and it also planned to distribute a cash dividend of RMB 14.30 per 10 shares to all shareholders (including tax); on the other hand, they also support the company’s heavy R&D investment.

On the R&D front, Zhuhai Lizhu Group showed two important changes last year.

First, its R&D capitalization rate rose significantly. Last year the company’s R&D expenses were RMB 1.06B, accounting for 8.79% of total operating revenue. The capitalized amount of R&D investment was RMB 144 million, up 293.99% year over year. The capitalization rate increased from 3.51% to 13.67%. This indicates that many of the company’s R&D projects have successfully moved beyond the research stage and entered a more development stage with higher certainty of results-to-commercialization.

The key driving force behind this is AI enablement. This is not just a gimmick at the concept level, but a “core operating system” that runs through the entire R&D, production, and marketing value chain.

For example, on the R&D side, AI’s value has evolved from an assisting tool into a core driver. The company built a laboratory data automation management platform, breaking “data silos” and providing high-quality data assets for AI models. The effectiveness in specific projects has been validated. For instance, the four-valent influenza re-assortment protein vaccine optimizes the process through AI, shortening the R&D cycle by more than 50% compared with the traditional model (from over half a year), increasing antigen expression levels by 4 times, and improving product yield by 6 times.

With the AI engine driving it, Zhuhai Lizhu Group’s R&D pipeline entered a phase of intensive value realization, forming a differentiated matrix centered on “indications.” The three major core areas—gastrointestinal, GnRH/reproductive assistance, and mental/neurological—continue to deepen. Early results have also emerged in chronic disease areas such as autoimmune/metabolic and cardiovascular and cerebrovascular.

Second, looking at the R&D team, last year the number of personnel increased by 7.93% to 980 people. The proportion of R&D personnel as a share of total employees increased from 10.01% to 11.04%. R&D personnel aged 30–40 increased 14.89% year over year, and those aged 40–50 increased 26.37%. The share of middle-aged and young R&D backbone staff rose, enhancing both team stability and advantages in experience.

In fact, organizational refresh has become an important lever for Zhuhai Lizhu to unlock vitality. Last year, Zhuhai Lizhu completed a key management-level iteration. “Post-85” Liu Daping became CEO, and a group of younger and more professional executives entered the core decision-making layer.

Internationalization implementation is another major highlight. Last year, Zhuhai Lizhu Group’s overseas revenue reached RMB 1.93B, up 11.97%, and its share of the company’s total operating revenue increased to 16.06%. The overseas expansion model achieved a qualitative change. The active ingredient (API) business continued to deepen and strategic cooperation with global leading pharmaceutical companies was sustained. The export share reached 60%, and the proportion of compliant market sales continued to improve. The construction of its API plant in Jakarta, Indonesia, marks the company’s transition from “export supply” to “global manufacturing,” providing capacity support to overcome barriers in high-end overseas markets.

Overseas expansion of formulations also achieved systematic breakthroughs. In 2025, the company officially passed Malaysia’s PIC/S GMP certification. Its quality management system fully aligned with international top-tier standards, and on this basis it advanced registration in core Latin American markets such as Brazil.

A step with strategic significance is that the company initiated the acquisition of Imexpharm Corporation (IMP), the third-largest listed pharmaceutical company in Vietnam. This is the first Chinese pharmaceutical company to acquire a Vietnamese listed company, meaning that Zhuhai Lizhu’s overseas expansion has entered the deep waters of “localized operations.” By integrating IMP’s EU-GMP production lines and its mature channel network, Zhuhai Lizhu will turn Vietnam into a strategic foothold radiating the entire Southeast Asian market—moving from “going out” to “putting down roots.”

The foregoing characteristics are interconnected. Younger teams are more sensitive to new technologies (such as AI), and are more decisive in judging international market trends, leading to higher decision-making and execution efficiency. Therefore, organizational refresh is beneficial for injecting strength into deeper AI enablement, the realization of the innovation pipeline, and global layout, and for conveying the company’s determination to move across to “high-quality innovation.”

Some long-term capital is optimistic about Zhuhai Lizhu Group’s innovative evolution. In the fourth quarter of last year, 2 social security funds appeared among the top ten circulating shareholders. Among them, China Securities Co., Ltd.—Social Security Fund 1106 portfolio newly added 3.6268 million shares. In addition, entities such as Shanghai Bank Co., Ltd.—Yinhua CSI Innovative Drug Industry Exchange-Traded Open-Ended Index Securities Investment Fund increased their holdings, and Northbound capital—“smart money”—also increased its position by more than 500k shares.

A wealth of information and precise analysis—right on the Sina Finance APP