Investment Value Assessment of Renfu Medicine After China Merchants Group Takes Control and Impact Analysis on the Narcotics and Psychotropic Drugs Industry

Renfu Medicine, as a leading enterprise in China’s narcotics and psychotropic drugs industry with a market share of about 1/3, has its industry position supported by its layout in the nervous system drug field and the national designated R&D and production qualification for narcotics and psychotropic drugs [0]. In September 2024, the controlling shareholder Contemporary Technology was applied for restructuring due to a debt crisis; in July 2025, China Merchants Group invested 11.8 billion yuan through China Merchants Life Science to obtain 23.7% voting rights, completing the transformation from a family-owned enterprise to a central SOE-controlled enterprise [0].

Being controlled by a central SOE brings multiple advantages to the company: First, China Merchants Group’s resource integration capabilities are expected to improve the synergy efficiency of the company’s business segments such as pharmaceutical distribution and generic drugs; second, as a central SOE-controlled enterprise, it has advantages in policy support and financing channels [0]. However, attention should be paid to the handling of subsequent debt restructuring matters and the integration of the central SOE management system with the original family-owned enterprise operation model.

The company’s current valuation level (PE 21.76x, PB 1.64x) is in the medium range of the industry. The governance structure optimization and resource support brought by central SOE control are expected to enhance the valuation repair space [0]. However, the long-term stock performance (5-year decline of 38.55%, 1-year decline of 20.72%) reflects the market’s concerns about the company’s previous debt issues and business stability [0].

1. Stability of Industry Position
   : Renfu Medicine’s leading position in the narcotics and psychotropic drugs industry is based on product layout and policy qualifications. The control transfer will not change this core competitive advantage, but the central SOE background may enhance its voice in the industry.
2. Business Synergy Potential
   : China Merchants Group’s resources in pharmaceutical distribution and other fields have synergy space with the company’s existing businesses. If integration is smooth, it will promote the improvement of business scale and profitability.
3. Valuation Repair Logic
   : Governance structure optimization and resource support are the main drivers of valuation repair, but the market needs to gradually recognize the actual benefits brought by central SOE control.

1. Business Integration Risk
   : The integration of the central SOE management system with the original operation model takes time. If the synergy effect is not good, it may affect business development.
2. Subsequent Impact of Debt
   : Although the control transfer is completed, the subsequent matters of debt restructuring still need attention, which may have a continuous impact on the company’s financial status.
3. Market Volatility Risk
   : The short-term market reaction to the control transfer is uncertain, and the stock price may continue to fluctuate.

1. Resource Support
   : China Merchants Group’s capital and channel resources will enhance the company’s business expansion capabilities and risk resistance capabilities.
2. Policy Advantages
   : The central SOE background may help the company obtain more policy support in fields such as narcotics and psychotropic drugs.
3. Valuation Repair
   : Governance structure optimization and business synergy are expected to promote valuation repair.

As a leader in the narcotics and psychotropic drugs industry, Renfu Medicine’s control transfer to central SOE brings opportunities for resource support and governance structure optimization, but attention should be paid to business integration and subsequent debt impact. The current valuation level has repair space, and the company’s investment value needs to be further evaluated based on business synergy progress and market reaction.