Qizheng Tibetan Medicine’s 800 million yuan convertible bond is set to be listed soon, which will help break through capacity bottlenecks and continue expanding its marketing network.

　　On October 23, Qizheng Tibetan Medicine released the “Announcement on the Listing of Publicly Issued Convertible Corporate Bonds.” The company plans to raise 800 million yuan through the issuance of convertible bonds, which will be used for the construction of the Qizheng Tibetan Medicine Pharmaceutical Industry Base project. It is understood that this is the first refinancing since Qizheng Tibetan Medicine went public, and the bonds are scheduled to be listed on the 27th of this month.

　　On the morning of October 23, Qizheng Tibetan Medicine held a Beijing investor meeting. Qizheng Tibetan Medicine stated that its products have now achieved nationwide coverage. However, current production capacity has reached a bottleneck, and future growth will require a larger industrial base. After the completion of this fundraising and investment project, the Lintao production base will become the company’s primary production hub, responsible for large-scale manufacturing of its core products. The existing Yuzhong production base will undergo comprehensive renovation and upgrading once the Lintao base begins operations, transforming it into the company’s center for productivity development—a key site for R&D of new products, small-batch custom production, and pilot testing. The bases in Lhasa and Linzhi, Tibet, which currently serve as production centers for Tibetan-region products, will continue to operate, but the company’s main production capacity will be concentrated in Lintao. The Lintao production base will also reserve space for future projects, allowing the company to strategically deploy new products such as medical devices.

　　Qizheng Tibetan Medicine is primarily engaged in the research and development, production, and sales of Tibetan medicines, including topical pain-relief products and orally administered Tibetan proprietary formulations. Currently, the company has 16 wholly-owned and controlling subsidiaries, including a GMP-compliant pharmaceutical factory and a GSP-certified marketing company. At present, the company offers 55 Tibetan medicine varieties, centered around 12 exclusive products or exclusive dosage forms such as Xiaotong Paste and Bai Mai Ointment, with a total of 72 approved drug registration numbers. Among these, 9 are OTC products and 2 are classified as State Technical Secrets (Confidential Level).

　　Qizheng Tibetan Medicine stated that the company will actively implement measures to absorb the production capacity funded by the fundraising. Taking the company’s flagship product category—transdermal patches—as an example: First, the steady growth in transdermal patch sales has created the possibility of absorbing the newly added production capacity. Based on an average annual growth rate of 12%, by the time the fundraising project reaches full production capacity in 2026, the company’s sales volume of transdermal patch products will reach 250 million patches. Therefore, there are no anticipated obstacles to absorbing the production capacity designed for this fundraising project.

　　Second, the continuous expansion of the company’s marketing network provides a solid guarantee for absorbing the newly added production capacity. As of now, the company’s pain-relief plaster product marketing network has already reached 14,000 medical outlets and 32,000 retail outlets. The company remains committed to building a nationwide marketing network, with a particular focus on expanding into core cities and strengthening coverage at lower-tier channels—adding 25 to 30 new cities each year. In the future, the further expansion of marketing channels will further boost sales of the pain-relief plaster.

　　In addition, Qizheng Tibetan Medicine stated that the biggest bottleneck for future development is the insufficient penetration of distribution channels at lower levels. However, the company already has a clear expansion plan in place. Qingpeng Ointment and Baimai Ointment are products that the company will vigorously develop in the future. Moreover, there are several “small but exquisite” products—such as the Influenza Pills, which have proven highly effective in treating influenza and have received widespread attention during this epidemic—these all represent promising growth areas for the company going forward. With its modern R&D capabilities combined with the rich resource base accumulated through traditional Tibetan medicine, the company is well-positioned to drive its future growth. Furthermore, the company boasts an in-house marketing team of over 1,400 members, strategically distributed across the country, enabling it to conduct both academic and brand marketing more effectively and giving it strong control over its retail outlets. From a financial perspective, the company’s sales expenses have yielded exceptionally high marginal growth rates; moreover, its in-house marketing team demonstrates robust control over accounts receivable. High-quality products, effective marketing strategies, and a capable management team all serve as powerful pillars supporting the company’s future development.

　　In addition to continuously expanding its distribution channels into hospitals and retail outlets, the company is actively exploring internet-based marketing, promoting brand rejuvenation, and extending its reach into the broader health-care sector. In 2019, the company developed e-commerce channels while also pioneering new retail approaches—for instance, leveraging the rapid pain-relief effect of its pain-relieving patches and aligning them with the health needs of today’s young consumers. By partnering with Meituan and Ele.me, the company introduced the “1-Hour Pain Relief Solution”—delivering pain relief within half an hour and taking effect within another half hour—thus swiftly meeting the needs of office workers. On e-commerce platforms, the company has launched foot bath products centered around the “Tibetan Herbal Bath,” a traditional Tibetan medicine treatment recognized as a UNESCO Intangible Cultural Heritage, highlighting its unique characteristics.

　　Reporting media: Securities Daily

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