The largest stock price decline is nearly 90%! Two major IPO fundraising projects will incur losses by 2025. TuoXin Pharmaceutical announces a private placement plan.

Source: Daily Economic News

Reporter: Zhang Guangri | Editor: Wu Yongjiu

On the evening of March 27, Tuo Xin Pharmaceutical released its 2025 annual report. In the past two years, the company has continued to incur losses, and the loss amount has also increased. Due to performance declines and other reasons, Tuo Xin Pharmaceutical’s share price has fallen sharply as well; compared with its historical high, the maximum drop in the company’s share price is nearly 90%. Tuo Xin Pharmaceutical also released a plan for a private placement of shares; however, a reporter from Daily Economic News (hereinafter referred to as “Daily Economic News reporter”) noted that the benefits of the company’s two major IPO projects have not met expectations, and in 2025 it was in a loss-making position as well.

Net profit has declined sharply for two consecutive years

Tuo Xin Pharmaceutical is a technology innovation company that integrates the research, production, and sales of chemical synthesis and bio-fermentation nucleoside (acid) category APIs (active pharmaceutical ingredients) and pharmaceutical intermediates. It has strong capabilities in the development and production of nucleoside (acid) category APIs and pharmaceutical intermediate products in China.

In the past two years, Tuo Xin Pharmaceutical’s performance has continued to decline sharply. The 2025 annual report released by the company on the evening of March 27 shows that in 2025, the company achieved operating revenue of 378 million yuan, down 10.28% year over year compared with 2024; net profit was a loss of 69.661 million yuan, with the year-over-year decline reaching as much as 250.32%. In 2024, Tuo Xin Pharmaceutical’s net profit was a loss of 19.8849 million yuan, representing a year-over-year decline of 108.18% compared with 2023.

The main reasons for Tuo Xin Pharmaceutical’s pressure on 2025 performance are as follows: affected by fluctuations in the end-market demand for some API products and the decline in market prices, the scale of sales revenue and the gross margin of the company’s relevant products both decreased to a certain extent, directly affecting the company’s overall profitability performance.

In terms of operational development and layout, there are three points worth paying attention to: after the company’s fund-raising investment projects completed capitalization, the additional production capacity is still in the ramp-up stage of gradual release, resulting in higher unit fixed costs; to expand the big health business segment, the company’s related new products began to be rolled out to the market in 2025, and the relatively small initial production scale makes unit costs higher; finally, the company actively lays out specialty APIs with potential for market development, with high R&D spending, which creates period-based pressure on profits.

Due to performance declines and other reasons, over the past two years, Tuo Xin Pharmaceutical’s share price has also fallen sharply. When calculated using the prior adjusted basis with reinvested cash dividends, the company’s share price peaked at 229.25 yuan in 2020, while in 2025 the company’s share price fell to a low of 23.20 yuan. Compared with the peak, Tuo Xin Pharmaceutical’s share price has dropped by nearly 90%! As of March 30, 2026, the closing price of Tuo Xin Pharmaceutical was 28.44 yuan, with a market capitalization of about 3.599 billion yuan.

However, Tuo Xin Pharmaceutical’s balance sheet is still relatively healthy. According to East Money, as of December 31, 2025, the company had about 140 million yuan in cash and cash equivalents, about 105 million yuan in trading financial assets, and it had no short-term or long-term borrowings.

IPO fund-raising projects have not delivered results as expected

On the same day it released its 2025 annual report, Tuo Xin Pharmaceutical also released a plan for issuing shares to specific targets using the simplified procedure for fiscal year 2026. The plan shows that the total amount of proceeds raised from this offering will not exceed 227.8895 million yuan (including this amount); after deducting issuance expenses, all the net proceeds will be used for the “API and health dietary supplement biomanufacturing base construction project (Phase I)” project.

(Image source: Screenshot from the announcement of Tuo Xin Pharmaceutical)

Tuo Xin Pharmaceutical listed on the ChiNext board in 2021, and its IPO fund-raising projects failed to achieve expected benefits. Among Tuo Xin Pharmaceutical’s IPO fund-raising projects, two major projects pledged to deliver benefits: the “Nucleoside series specialty API and pharmaceutical intermediate construction project” (hereinafter referred to as the “API and intermediates project”) and the “Annual production of 1,000 tons of nucleoside series food nutritional fortifiers project” (hereinafter referred to as the “fortifier project”). After completion of the pledged targets, the average annual net profits were expected to be 65.327 million yuan and 73.8373 million yuan, respectively.

The actual investment amounts for the “API and intermediates project” and the “fortifier project” were approximately 240 million yuan and 61.03 million yuan, respectively. Both projects reached the scheduled condition for being ready for use in June 2025; however, the actual benefits in 2025 for these two projects were clearly much lower than expected. The loss amounts were 6.9474 million yuan and 9.6841 million yuan, respectively.

(Image source: Screenshot from the announcement of Tuo Xin Pharmaceutical)

Tuo Xin Pharmaceutical said that because the above projects are in the production capacity ramp-up stage, the scale benefits have not yet been fully released; in addition, with intensifying industry competition and changes in the market supply-demand landscape, the company adjusted the production schedule for some products, and the utilization rate of the capacity for the relevant products has not reached the optimal level, resulting in the actual benefits not meeting expectations.

Will the company’s capacity utilization rate for the IPO fund-raising projects in 2026 rise significantly? Can it turn losses into profits? With the company having sufficient funds on hand, why is it still choosing to raise funds through a private placement? Over the past two years, the company’s share price has fallen by a large margin; what measures does the company have in terms of market capitalization management? A Daily Economic News reporter sent the above questions to the securities department of Tuo Xin Pharmaceutical; but as of the time of publication, no response had been received.

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