"Fallen" vaccine star receives discounted private placement, real estate tycoon invests 2 billion yuan, can Watson Bio turn the tide?

Ask AI · Why Did Watson Biologics Choose a Discounted Private Placement to Bring in Real Estate Capital?

Our reporter, Na Yi, Beijing, from chinatimes.net.cn

What kind of story will the real-estate bosses taking over a vaccine star company bring to the capital markets?

Recently, China’s vaccine leader Watson Biologics (300142.SZ) suddenly released a package of announcements, setting a private placement deal that drew significant market attention: the company will issue, at a price of 9.63 yuan per share, no more than 208 million shares to Beijing Tengyun Xinwo Biological Technology Partnership (Limited Partnership) through a targeted private placement. The total proceeds will be no more than 2.003 billion yuan, all of which will be used to replenish the company’s working capital. Compared with the closing price of 12.28 yuan per share before the trading suspension, the discount rate of this private placement is 21.6%. This “discount” move immediately sparked heated discussion in the capital markets.

Even more noteworthy is that the sole subscriber for this private placement, Tengyun Xinwo, is backed by Huang Tao, the leader of Century Jinyuan Group and one of China’s top private capital figures. In the 2025 Hurun Rich List, the net worth of Huang RuLun and the Huang Tao family is 35.5 billion yuan. This real-estate tycoon will become Watson Biologics’ actual controller through this private placement, putting an end to the situation in which this vaccine leader had no controlling party for 16 years since its listing. After it resumed trading on March 19, Watson Biologics’ share price saw a move characterized by strong volume followed by a rally that then pulled back, and differences between bulls and bears were fully exposed. The capital market is filled with doubts and expectations about this cross-industry combination of “real estate + vaccines.”

However, from the perspective of the vaccine industry, as a leading enterprise that is the first in China to independently develop a 13-valent pneumococcal vaccine and the first batch to commercialize mRNA vaccines, why did Watson Biologics willingly accept a “discounted” private placement and hand over control?

Will a real-estate tycoon taking the helm inject new momentum into a vaccine giant mired in a performance downturn, or will the cross-industry barrier issues create new hidden risks?

A predicament or a necessary choice

In the capital markets, discounted private placements are not unusual, but this time Watson Biologics’ discount exceeds 20%, which still makes many investors feel surprised.

As an established vaccine-industry leader, Watson Biologics once delivered rapid growth backed by core products such as the 13-valent pneumococcal vaccine and the 2-valent HPV vaccine. Between 2019 and 2022, the company’s revenue surged from 1.121 billion yuan to 5.086 billion yuan, and its net profit attributable to shareholders rose from 142 million yuan to 729 million yuan, at one point becoming a “vaccine star” in the capital markets. But since 2023, the company’s performance has been under sustained pressure and has fallen into a growth bottleneck.

_ (Source: Watson Biologics’ 2024 annual report) _

According to financial report data, in 2023 Watson Biologics’ revenue fell to 4.114 billion yuan and its net profit attributable to shareholders was 419 million yuan; in 2024, revenue further declined to 2.821 billion yuan, and net profit attributable to shareholders was only 142 million yuan, a year-on-year drop of more than 66%. The company’s 2025 performance forecast shows it expects revenue of 2.4 billion—2.43 billion yuan, down from 2.821 billion yuan in the same period last year. Net profit attributable to shareholders is expected to be 160 million—190 million yuan, up 13%—34%. Non-recurring items net profit attributable to shareholders is forecast to decline 9%—22% to 85 million—99 million yuan. The increase in net profit attributable to shareholders is mainly due to non-recurring gains and growth in overseas vaccine revenue, but the company’s overall performance downturn still has not improved materially.

Behind Watson Biologics’ decline in performance are multiple pressures, including intensifying industry competition, weak growth in core products, and high R&D spending. Watson Biologics’ 13-valent pneumococcal vaccine, after being launched in 2020, quickly captured market share. In the initial period after launch, its gross margin was as high as 93.6%, but as competitors such as Zhifei Biotech and CanSino Biologics later launched similar products, competition intensified and a price war played out fiercely, directly causing the gross margin of the company’s product to decline year by year. In 2022, Watson Biologics’ 2-valent HPV vaccine (Wozewui) entered public-funded procurement for the first time in Jiangsu Province, Nanjing City. It won the bid at 246 yuan per dose, only 75% of the same-period WanTai Biologics’ 329 yuan per dose. By the 2024 centralized procurement under the National Immunization Program in Shandong Province, the product’s price per dose fell to 27.5 yuan, a drop of more than 88% from its initial pricing of 329 yuan per dose. At the same time, Watson Biologics has kept its annual R&D expenses at a relatively high level for its 9-valent HPV vaccine and its mRNA shingles vaccine, further exacerbating capital pressure.

From a cash-flow perspective, Watson Biologics’ funding situation is also not encouraging. The 2025 interim report shows that Watson Biologics has total assets of 14.003 billion yuan and total liabilities of 3.236 billion yuan, with its asset-liability ratio falling to 23.11%. While the asset-liability ratio is not high, the net cash flow from operating activities is only 117 million yuan. Net cash flow from financing activities is -1.202 billion yuan, indicating considerable pressure on cash recovery. This private placement raised 2 billion yuan, all of which will be used to replenish working capital. This can effectively ease the company’s tight funding situation, ensure the progress of R&D for its core pipelines, support the production of existing products and market promotion, and provide funding support for the company’s performance recovery.

In addition, since listing in 2010, Watson Biologics has always been in a state with neither controlling shareholders nor an actual controller, and its shareholding structure is highly dispersed. By the end of the third quarter of 2025, the company’s largest shareholder was the E Fund CSI 300 Venture Board ETF, holding only 2.16% of the shares. The direct shareholding proportion of founder and chairman Li Yunchun was only 1.70%. Another founder, Liu Junhui, held 1.81% directly. Li Yunchun’s direct plus indirect shareholding proportions were not explicitly disclosed, and the shares are clearly dispersed.

A former senior executive of a listed company and a medical-industry market expert Zhang Biao told reporters from the Huaxia Times that because of dispersed shareholding, Watson Biologics has long faced problems such as low decision-making efficiency, strategic wavering, and shareholder infighting. Introducing Huang Tao as the actual controller through this private placement, he said, can fundamentally change this situation.

As for why it is conducting a discounted private placement, an investor who has followed pharmaceutical stocks for a long time told reporters from the Huaxia Times that this is a standard operation for price-locked private placements. Under the China Securities Regulatory Commission’s “Administrative Measures for the Registration of Securities Issuance and Underwriting by Listed Companies,” the floor price of a price-locked private placement must not be lower than 80% of the average price over the 20 trading days preceding the pricing benchmark date. Watson Biologics’ private placement price of 9.63 yuan per share is exactly calculated according to this rule. This private placement adopts a “price-locked” model with a lock-up period of as long as 18 months. The subscriber, Tengyun Xinwo, must not transfer the shares it subscribes to within 18 months. For long-term investors, a discount is a reasonable compensation for locking in funds and bearing risk. After all, during the 18-month lock-up period, there are many uncertainties in the market, and the share price may fluctuate; the discounted portion effectively serves as a risk hedge for investors.

Can cross-industry marriage achieve win-win results?

It is undeniable that Huang Tao’s taking over can bring positive short-term factors to Watson Biologics in its predicament, such as relief of funding pressure. However, this cross-industry marriage of “real estate + vaccines,” and the multiple risks behind it, deserve greater caution.

The most core risk of cross-industry involvement lies in the “mismatch of local conditions,” caused by industry barriers. The vaccine industry is a typical technology-intensive and tightly regulated sector: long R&D cycles, high technical barriers, and stringent quality-control requirements. From candidate vaccine R&D, to clinical trials, to approval for commercialization, each step requires professional technical teams, abundant industry experience, and a mature operations system—far from something that can be quickly achieved by relying on capital alone.

Zhang Biao believes that Huang Tao and its core team have long focused on the real-estate sector. Even if Century Jinyuan has laid out a healthcare track, it has not been involved in vaccine core R&D and operations. There is a lack of core technical reserves and professional management experience in the vaccine industry, so it may be difficult to provide effective guidance to Watson Biologics on key areas such as R&D, production, and quality control. Watson Biologics has managed to take root in the vaccine field mainly depends on its R&D team developed over many years. If Huang Tao’s team is eager to step into the company’s day-to-day operations, or even interfere with decision-making on R&D directions, once core talent is lost, it will directly affect the progress of major pipelines such as the 9-valent HPV vaccine and the mRNA shingles vaccine, further dragging down the company’s performance recovery.

As an investor deeply involved in capital operations, whether Huang Tao can become a “firefighter” is also a question. Huang Tao is the eldest son of the well-known Fujian merchant Huang RuLun. In 2018, he took over from his father as the group’s actual controller. Before that, he had already held controlling stakes in two listed companies, WATONG Technology and Anai’er. However, after his control, the performance of both companies did not see substantive improvement and instead fell into a prolonged slump. Among them, Anai’er has been loss-making for five consecutive years since 2020, which makes investors worry that Watson Biologics could become a “new platform” for his capital operations rather than truly achieving business upgrading.

An imbalance of shareholder interests and governance risks are potential minefields in this cross-industry marriage. After this private placement, Huang Tao will hold 14.46% of the voting rights through Tengyun Xinwo and persons acting in concert, becoming Watson Biologics’ absolute controlling shareholder. By contrast, founder Li Yunchun directly holds only 1.70%, a very low shareholding proportion. Although both sides have agreed that Li Yunchun will be responsible for day-to-day operations, given the huge difference in shareholding, if disagreements arise between Huang Tao and Li Yunchun’s teams on core issues such as corporate strategy, R&D investment, and market layout, Li Yunchun’s team will find it difficult to form effective constraints, which can easily lead to renewed shareholder infighting and repeat the governance difficulties caused by Watson Biologics’ previously dispersed shareholding.

In addition, the feasibility of industrial synergy also has many uncertainties. Even though Century Jinyuan has laid out a healthcare track, it mainly focuses on areas such as medical devices and elderly care services, which have relatively weak synergy with vaccine R&D and production. Whether the so-called “geographic advantages” and “capital-operation advantages” can truly be converted into Watson Biologics’ core competitiveness still needs to be tested over time.

Zhang Biao said that whether this cross-industry marriage can avoid risks and achieve win-win results depends not only on Huang Tao’s team’s ability to adapt across industries, but also on whether it can respect the rules of the vaccine industry and uphold the bottom line of professional operations. Everything, he said, remains to be further tested by the capital markets.

Editor: Jiang Yuqing; Chief Editor: Chen Yanpeng