A leading biopharmaceutical company has recently made some moves. On December 24th, this global largest producer of synthetic caffeine submitted an application for listing on the Hong Kong Stock Exchange, planning to list on the Main Board of Hong Kong. Once the news broke, industry insiders started to speculate: why would this veteran company, which makes money from caffeine, be so eager to venture into the Hong Kong stock market?

Let's first talk about the company's background. Its A-share listed company is XinNuoWei, with a current stock price of 39.44 RMB and a total market capitalization of 55.45 billion RMB. As the world’s leading producer of synthetic caffeine, it supplies major beverage giants like Coca-Cola and Pepsi. A true hidden champion.

However, its operational data in recent years has been interesting: in 2022, revenue was 2.838 billion RMB; in 2023, it dropped to 2.539 billion RMB; in 2024, it continued to decline to 1.981 billion RMB; and in the first seven months of this year, it was only 1.241 billion RMB. Revenue is shrinking, and the proportion of functional raw materials and health food business has decreased from 90.6% to 88.4%. In plain terms, its traditional main business is in decline.

They have also realized this, so they are starting to bet on biopharmaceutical innovation. In 2024, they acquired Jushi Biotech, and now hold an 80% stake. This is a big move, but the path of innovative drugs requires huge capital consumption and carries significant risks.

The funds raised through this Hong Kong IPO will mainly be allocated to biopharmaceutical R&D, new product commercialization, and operational support. In essence, they aim to leverage new drug capabilities to offset the decline of their traditional business. Whether they can successfully take over remains to be seen, depending on the progress of clinical trials for their innovative drugs.