Apeloa Pharmaceutical (000739.SZ), a Chinese pharmaceutical company listed on the Shenzhen Stock Exchange, delivered a mixed half-year report. Financial data for the first half of 2026 disclosed on August 20 showed the company generated revenue of 4.823 billion yuan (approximately $717.6 million), down 11.41% year-on-year, while net profit attributable to shareholders of the listed company came in at 522 million yuan (approximately $77.7 million), down 7.22%. Against the backdrop of sustained pressure on its traditional API business, the innovative drug R&D and manufacturing services (CDMO) segment posted 14.17% revenue growth, making it the company’s only growing business pillar.
From a business mix perspective, the API and intermediates segment—which accounts for more than half of total revenue—remained the primary drag on overall performance. The segment generated revenue of 2.851 billion yuan (approximately $424.2 million) in the first half, down 20.88% year-on-year. In its financial report, the company explained that the API industry’s oversupply has not yet been fully cleared, and combined with intense competition in both Chinese and overseas markets, overseas geopolitical conflicts, and other external disruptions, the traditional API segment continues to face periodic operating pressure.
The pharmaceutical products business was equally weak, posting first-half revenue of 533 million yuan (approximately $79.3 million), down 8.64% year-on-year. In stark contrast, the CDMO business generated revenue of 1.412 billion yuan (approximately $210.1 million), up 14.17% year-on-year, making it the only growth driver among the company’s three main business lines.
CDMO Business Continues to Scale Up
Apeloa Pharmaceutical’s CDMO business spans R&D services, commercialized human drug projects, and commercialized veterinary drug projects, offering one-stop R&D and manufacturing services across the full product lifecycle for innovative drug clients worldwide. In the first half, orders from Chinese and international innovative drug companies were delivered steadily and new project pipelines continued to ramp up. The company’s active project count reached 1,620, up 37% year-on-year. Among these, projects in the commercialization stage (including Phase III clinical trials) grew 11% year-on-year, while R&D-stage projects surged 50% year-on-year.
This is not the first time the CDMO business has served as the company’s performance ballast. Looking back at full-year 2025, Apeloa Pharmaceutical’s revenue and net profit fell 18.62% and 13.62% year-on-year respectively. The API and intermediates segment saw revenue decline 28.74%, and the pharmaceutical products business dropped 8.42%, while CDMO was the only segment to achieve revenue growth of 16.66% and gross profit growth of 28.54%.
The CDMO segment’s weight in the company’s business portfolio is rising rapidly. Its share of total revenue has climbed from 15.67% in 2024 to 29.27% in the first half of 2026, and “strengthening CDMO” has accordingly become a core element of Apeloa Pharmaceutical’s development strategy.
From an industry outlook perspective, the CDMO track still offers considerable growth potential. As a key link in the refined division of labor within the pharmaceutical industry, CDMO providers—leveraging an integrated R&D and manufacturing service model—are deeply embedded in the entire workflow of pharmaceutical companies, from preclinical process development to commercial production. Driven by global capacity transfer and the release of domestic innovative drug demand in China, the Chinese CDMO market is growing significantly faster than the global average. Data shows that the global CDMO market reached approximately $82 billion in the first half of 2026, with full-year projections of $161 billion and a compound annual growth rate of approximately 9.0% from 2025 to 2030. Over the same period, the Chinese market is estimated at approximately 76 billion yuan (approximately $11.3 billion) for the first half, with full-year projections of 152.6 billion yuan (approximately $22.7 billion) and a CAGR of approximately 13.5%.
Medical Aesthetics Business Yet to Scale
While traditional businesses remain under pressure and CDMO continues to gain momentum, Apeloa Pharmaceutical is also actively laying out new growth curves. According to the company’s 2030 development strategy released in August 2024, “expanding into medical aesthetics” was incorporated into the strategic blueprint for the first time, alongside “refining APIs, strengthening CDMO, and doing well in pharmaceuticals.” In November of the same year, the company established a Medical Aesthetics and Cosmetics Ingredients Business Unit, leveraging technology R&D platforms in synthetic biology, chemical synthesis, and peptides to build a presence in the upstream segment of the medical aesthetics and cosmetics industry chain.
In the medical aesthetics and cosmetics ingredients space, Apeloa Pharmaceutical has enriched its self-developed product lines covering sun protection, moisturizing, and anti-aging, and has entered into CDMO collaborations with multiple well-known cosmetics ingredient companies in China and abroad. The company previously disclosed in investor relations activities that its medical aesthetics ingredient-related business has already exceeded 200 million yuan (approximately $29.8 million) in scale. In March this year, during a research meeting, the company further stated that it plans to grow the medical aesthetics and cosmetics ingredients business to 1 billion yuan (approximately $148.8 million) within three to five years.
However, judging from the current revenue scale, the medical aesthetics business still has a considerable gap to close before it occupies a significant position in the overall revenue mix. According to the 2025 annual report, the company’s medical aesthetics and cosmetics ingredients business is primarily concentrated in overseas regions including Europe, Japan, South Korea, and Southeast Asia. As the self-developed product lines expand, the Chinese domestic customer base is expected to grow gradually. In April this year, the company indicated that the medical aesthetics and cosmetics ingredients business is currently in the new product and new customer development stage and is expected to become a new highlight of business development.
Key Financial Metrics
| Metric | H1 2026 | YoY Change |
|---|---|---|
| Revenue | 4.823 billion yuan | -11.41% |
| Net profit attributable to shareholders | 522 million yuan | -7.22% |
| Net profit attributable to shareholders (excluding non-recurring items) | 495 million yuan | -4.88% |
| Net cash flow from operating activities | 74.3295 million yuan | -81.75% |
| Basic earnings per share | 0.4515 yuan | — |
| Weighted average return on equity | 8.05% | — |
Note: Data sourced from the company’s 2026 semi-annual report
Worth noting is that net cash flow from operating activities fell 81.75% year-on-year to just 74.3295 million yuan (approximately $11.1 million), a significant gap relative to net profit that reflects certain pressures on the company’s working capital management. Additionally, the company’s first-half R&D investment was 301 million yuan (approximately $44.8 million), down 16.54% year-on-year. As of the end of the reporting period, the company’s total assets stood at 12.101 billion yuan (approximately $1.8 billion), and net assets attributable to shareholders of the listed company were 6.568 billion yuan (approximately $977.2 million), up 3.62% from the end of the prior year.
Facing a complex and volatile external environment, Apeloa Pharmaceutical stated in its financial report that the company is firmly implementing its established development strategy. The CDMO business has maintained a steady and relatively fast growth trajectory, while the API and intermediates and pharmaceutical products businesses are in the process of continuously optimizing product and customer structures, with operating fundamentals steadily bottoming out and recovering. Driven by the gradual stabilization of traditional businesses, continued CDMO scaling, and the medical aesthetics business poised for takeoff, the company’s overall operations remain on a stable footing.