Nostge, increasing revenue without increasing profit

On the evening of March 27, Norsh Group disclosed its 2025 annual performance. Judging from the figures in the announcement, Norsh Group’s 2025 performance showed a “higher revenue but no higher profits” pattern. In 2025, the company recorded operating revenue of RMB 851 million, up 14.38% year over year; the net profit attributable to shareholders of the listed company was RMB 137 million, down 2.37% year over year.

Image source: Company announcement

Net cash flow from operating activities was RMB 114 million, down 26.21% year over year; net cash flow from financing activities was -RMB 69.0331 million, decreasing by RMB 20.29 million year over year; net cash flow from investing activities was RMB 19.1066 million, compared with -RMB 44.3315 million in the same period last year.

Image source: Company announcement

Declining number of R&D personnel

The company is a specialized provider of clinical trial outsourcing services, that is, a clinical CRO company. It provides end-to-end integrated drug clinical research services for global pharmaceutical companies and research institutions, with the capability to provide full-chain clinical trial services.

In 2025, the company had 264 R&D personnel, down 3.65% year over year. In 2025, the number of R&D personnel accounted for 10% of the total; in 2024, the number of R&D personnel accounted for 12%.

In its annual report, the company highlights risk, stating that clinical trial outsourcing business is greatly affected by pharmaceutical R&D policy. Requirements for NMPA drug approvals, changes in the timing of drug approvals, or changes in related regulatory policies will affect pharmaceutical companies’ R&D spending and the progress of drug registration and application, thereby impacting the operating performance of clinical CRO companies. In recent years, China’s drug review and approval system has been continuously improved, and there are many new policies in the pharmaceutical R&D industry. The state’s regulation of drug registration and listing is becoming more stringent, and requirements for clinical trials are being made more规范, more detailed. If in the future the company is unable to continue meeting the requirements of industry regulatory policies, it will have an adverse impact on the company’s operations.

The CRO industry in which the company operates belongs to a fully competitive market, facing competition from numerous CRO companies at home and abroad. In the international market, the degree of marketization is relatively high and market concentration is also relatively high. In the domestic market, the CRO industry is similarly highly competitive. Unlike the international market with higher concentration, because the domestic CRO industry is still in its early development stage, the domestic CRO industry has lower concentration. In recent years, China’s domestic pharmaceutical R&D outsourcing industry has developed rapidly; a group of companies mainly engaged in clinical research have grown step by step and successfully gone public. The rapid growth of domestic CRO companies has intensified competition in China’s CRO industry.

At the same time, the company states that the entry threshold for China’s CRO industry is relatively low. Newly entered CRO companies and other market participants may seize market share through low-price competition, and the highly competitive environment imposes higher requirements on the company’s market promotion and service level. If the company cannot promptly grasp industry trends and maintain or enhance its existing advantages in future market competition, it may have an adverse impact on its profitability.

Major shareholders plan large-scale share reductions

On the evening of March 3, Norsh Group disclosed a pre-disclosure announcement regarding share reductions by shareholders holding more than 5% of the company’s shares and certain specific shareholders.

According to the announcement, Ningbo Kangyunfu Equity Investment Co., Ltd. (hereinafter “Kangyunfu Company”), a shareholder holding 11.52 million shares of the company (after excluding the number of repurchased shares, approximately 12% of the company’s share capital), plans to reduce its holdings of the company’s shares by no more than 1.088 million shares (1.13% of the company’s share capital) through block trading within three months after 15 trading days from the date of publication of the share reduction plan announcement.

Ningbo Ruiguang Venture Capital Partnership (Limited Partnership) (hereinafter “Ruiguang Partnership”), a shareholder holding 6.84 million shares of the company (after excluding the number of repurchased shares, approximately 7.13% of the company’s share capital), plans to reduce its holdings of the company’s shares by no more than 127,300 shares (0.13% of the company’s share capital) through block trading within three months after 15 trading days from the date of publication of the share reduction plan announcement.

Ningbo Ruiming Equity Investment Co., Ltd. (hereinafter “Ruiming Company”), a shareholder holding 1.152 million shares of the company (after excluding the number of repurchased shares, approximately 1.20% of the company’s share capital), plans to reduce its holdings of the company’s shares by no more than 704,000 shares (0.73% of the company’s share capital) through block trading within three months after 15 trading days from the date of publication of the share reduction plan announcement.

Kangyunfu Company, Ruiguang Partnership, and Ruiming Company are acting in concert. The reason for the share reduction is their own capital needs.