Zejing Pharma (688266.SH) restarted its Hong Kong IPO on August 12, with China International Capital Corporation serving as the sole sponsor, marking the company's second attempt at the HKEX Chapter 18A listing pathway after its previous filing lapsed in December 2025. As the first biotech to go public on the STAR Market without a profitable track record, Zejing Pharma recorded its first-ever semi-annual profit in the first half of 2026, yet the substance of this earnings report warrants closer scrutiny. With over half of its revenue derived from one-time out-licensing income, the company's commercial viability remains unproven, and its A+H capitalization path is fraught with multiple challenges.

Profit Emerges, But Concerns Linger

In the first half of 2026, Zejing Pharma posted revenue of RMB 1.2045 billion, a year-on-year surge of 220.88%, with net profit attributable to shareholders reaching RMB 640 million, successfully reversing its loss position. Breaking down the revenue structure reveals the true picture: of the RMB 1.2 billion in total revenue, technology licensing income from ZG006 to AbbVie accounted for RMB 662 million, representing over 54% of the total—a one-time, non-recurring gain. Drug sales revenue stood at RMB 550 million, up just 44.30% year-on-year. Quarterly data further exposes the weakness of the core business: excluding BD income, the second-quarter non-GAAP net profit had already swung to a loss of RMB 15 million, highlighting the fragility of the company's organic earnings foundation.

Meanwhile, multiple operational metrics are under pressure at Zejing Pharma. In the first half of 2026, selling expenses reached RMB 285 million, up 34.75% year-on-year, as the expanding commercial team drives elevated operating costs. According to the prospectus, the top five customers account for a staggering 90.4% of total revenue, a concentration level far exceeding industry averages. AbbVie, the largest customer, contributes over half of all revenue, meaning the stability of this partnership directly underpins the company's operational fundamentals. With accumulated uncovered losses still on the books, Zejing Pharma acknowledged in its filing that new drug market expansion and R&D investment will continue to drain cash flow, and the ability to achieve sustained profitability in the future carries significant uncertainty.

Products Launched, Pipeline Building a Foundation

Founded in 2009, Zejing Pharma focuses on three therapeutic areas: oncology, autoimmune diseases, and hemostasis/blood disorders. After years of R&D accumulation, the company has established a dual-driven product system combining small-molecule innovative drugs and biologics. All four self-developed drugs are domestic firsts or exclusive varieties, forming a stable commercial base. Zepsun® (donafenib) is China's first self-developed multi-target small-molecule drug for first-line advanced liver cancer, with both indications covered by medical insurance and terminal coverage exceeding 2,400 hospitals. Zepsun® (recombinant human thrombin) is China's only commercially available recombinant DNA technology thrombin product, with sales steadily ramping up following insurance coverage. Zepsun® (gicaperceptinib) is the first domestic JAK inhibitor for myelofibrosis, with a new indication for severe alopecia areata approved in 2026 and rapid market penetration following insurance price reductions. Zesuning® (thyrotropin beta) fills a gap in post-operative diagnosis for thyroid cancer in China and has entered an exclusive promotion partnership with Merck, marking the start of global commercialization.

On the R&D front, Zejing Pharma has built a tiered, cutting-edge pipeline. Since 2016, cumulative R&D investment has exceeded RMB 3 billion, incubating 10 drug candidates and 29 clinical programs, with 8 indications advancing to pivotal Phase III trials or regulatory submission stages. Among these, the core asset ZG006 is a first-in-class DLL3/CD3 trispecific antibody with dual clinical qualifications in both China and the U.S., and the collaboration with AbbVie carries total potential value of up to USD 1.235 billion. ZG005, a PD-1/TIGIT bispecific antibody, is among the most advanced globally in clinical development, with the liver cancer indication entering registration-stage trials. Combined with next-generation antibody programs such as ZGGS18 and ZGGS34, the company has built differentiated global innovation moats. While insurance-driven sales of the four marketed products generate steady cash flow, the frontier pipeline opens up long-term growth potential.

Hong Kong Listing Push, Insider Selling

At a pivotal juncture in its earnings trajectory, Zejing Pharma is advancing a dual listing in Hong Kong, primarily to broaden global financing channels and reserve capital for antibody drug clinical development and global commercialization. According to the HKEX filing, proceeds from the Hong Kong offering will be primarily allocated to clinical trials for core pipelines like ZG006, with remaining funds earmarked for working capital. The HKEX Chapter 18A has long been the core capital-raising venue for China's innovative drug companies. According to Ryanben Capital statistics, 11 pre-revenue biotech companies listed in Hong Kong in the first half of 2026, collectively raising over HKD 12.4 billion, with the A+H listing model emerging as the mainstream choice for leading innovative drug firms seeking access to international capital. For Zejing Pharma, the Hong Kong platform can connect with overseas investors, ease short-term earnings assessment pressure from the A-share market, and support global BD partnerships and multi-center clinical trials.

However, the company still faces multiple risks. Innovative drug development has long cycles and high clinical failure probabilities—if core pipelines like ZG006 underperform expectations, it would directly impact the company's valuation. Competition in China's innovative drug sector is intensifying, with medical insurance negotiations and centralized procurement price cuts continuously squeezing product profitability. Ahead of the filing, substantial shareholder Sheng Zelin and related parties reduced their holdings, cashing out approximately RMB 260 million, raising market questions about insider confidence. One-time BD gains cannot replace routine organic cash generation. To transition from episodic profitability to sustainable earnings, Zejing Pharma must navigate the lengthy journey of commercial ramp-up and pipeline maturation.

Zejing Pharma's growth trajectory is a typical microcosm of how the STAR Market's registration-based system empowers hard-tech enterprises. From being the first pre-revenue biotech to list on the STAR Market to achieving its first semi-annual profit and pursuing a dual Hong Kong listing, the company has both validated the R&D strength of domestic innovative drug firms and exposed the real-world challenges of commercial transformation. Short-term earnings positives do not change the industry's long-term logic—subsequent product launches and pipeline clinical progress will ultimately determine the realization of long-term value.