While China's pharmaceutical industry remains cautious about development directions for the new year, Jiuzhitang has already initiated a new round of strategic expansion. At the beginning of 2026, this pharmaceutical giant rapidly established five subsidiaries, demonstrating its ambitious plans in the healthcare sector. These moves represent both strategic enhancements to existing operations and precise anticipation of future industry trends.
Five New Subsidiaries Expand Business Footprint
Corporate records show that since January 2026, Jiuzhitang has established five new subsidiaries focused on high-potential sectors including medical devices, biotechnology, medical testing, and healthcare information technology. The new companies are:
- Jiuzhitang Kangmai (Fujian) Medical Equipment Co., Ltd.
- Beijing Jiuzhitang Biotechnology Co., Ltd.
- Chongqing Jiuzhitang Qiangyu Technology Co., Ltd.
- Jiuzhitang Medical Testing (Anhui) Co., Ltd.
- Beijing Jiuzhitang Chenyang Technology Co., Ltd.
Geographically spanning Beijing, Chongqing, Anhui, and Fujian, these establishments reflect Jiuzhitang's nationwide strategic deployment. The company maintains 51% ownership in each subsidiary through its parent entities, ensuring operational control while partnering with local enterprises or technical teams holding the remaining 49% stake. This collaborative model enables rapid integration of regional resources while minimizing expansion costs and risks.
Strategic Enhancement for Profit Optimization
This expansion represents calculated strategic reinforcement rather than indiscriminate growth. Jiuzhitang's 2025 interim report revealed that while its core subsidiaries primarily engage in pharmaceutical wholesale with nationwide distribution networks, regional profitability varies significantly. Notably, Jiuzhitang Medical Equipment Group emerged as one of the most profitable units with approximately 770 million yuan in net profit.
The new subsidiaries concentrate on high-margin sectors like medical devices and biotechnology, aiming to optimize the profit structure and enhance overall profitability. Jiuzhitang has also extended its industrial chain through strategic investments in pharmaceutical manufacturing and innovative medical device CXO fields, forming a synergistic loop between R&D and commercialization.
Corporate Governance Upgrades Align With New Regulations
Concurrent with business expansion, Jiuzhitang has upgraded its corporate governance structure. The company eliminated its supervisory board in accordance with China's new Company Law, transferring oversight functions to a financial and audit committee under the board of directors. The board structure was optimized with one additional employee representative director and one independent director, ensuring independent directors comprise at least one-third of the board.
This adjustment aligns with regulatory trends, as China's securities regulator mandated that companies applying for initial public offerings after January 1, 2026 must establish audit committees within their boards to assume former supervisory board responsibilities. Jiuzhitang's proactive compliance positions it advantageously for future development.
Capital Support Through Innovation Bonds
On the capital front, Jiuzhitang successfully issued 300 million yuan in science and technology innovation bonds on January 20, with proceeds earmarked for technological R&D and business expansion. This financial injection provides substantial support for the company's innovation initiatives in healthcare technology.
Restructuring *ST Meigu Brings Cosmetic Medicine Opportunities
Jiuzhitang achieved a breakthrough in its restructuring of *ST Meigu through subsidiary Hubei Jiuzhitang Industrial Park Operation Management Co. Following the restructuring plan, share transfers were completed on January 14, with Jiuzhitang-affiliated companies acquiring 24.39% ownership to become the largest shareholder with a 36-month lock-up period.
While *ST Meigu maintains dual warning status due to financial challenges, Jiuzhitang's involvement brings new prospects for its cosmetic medicine business. The pharmaceutical giant's resources and management expertise may help *ST Meigu overcome difficulties and return to sustainable development.
Conclusion: Steady Expansion Promises Future Growth
Jiuzhitang's series of strategic moves at the beginning of 2026 demonstrate its methodical approach to expansion. Through subsidiary establishment, upstream investments, governance upgrades, bond issuance, and corporate restructuring, the company has strengthened its position in China's healthcare sector. Whether Jiuzhitang can maintain its leadership through this forward-looking strategy remains to be seen as market competition intensifies.