Kangmei Pharmaceutical banks on centralized procurement for expansion, upgrading

Kangmei Pharmaceutical Co Ltd, a traditional Chinese medicine enterprise based in Jieyang, Guangdong province, has positioned centralized procurement as a key breakthrough for market expansion and quality upgrading, according to the company’s 2026 half-year performance report.

In the recent second round of national centralized procurement for TCM decoction pieces, the company won bids for 41 varieties and 65 specifications, ranking among the top in the industry.

TCM decoction pieces are raw Chinese medicinal materials that have been cleaned, cut, and sometimes processed further to prepare them for use in TCM prescriptions.

With its quality advantage, the Shanghai-listed company, which introduced state-owned funds and strong industrial investors in 2021, has carved out a differentiated path amid price competition, the report said.

In the first batch of TCM decoction pieces for centralized procurement in Guangdong, the company covered nearly one-third of the province's graded medical institutions and secured around one-quarter of the agreed allocation from reporting institutions within the province.

The company reported revenue of 2.29 billion yuan ($340 million) in the first half, down 11.13 percent year-on-year. Profit before tax rose 43.75 percent to 41 million yuan, while net profit attributable to shareholders reached 36.03 million yuan. However, the company recorded an adjusted net loss of 59.59 million yuan, with asset disposals contributing substantially to reported earnings.

Net cash generated from operating activities reached 36.05 million yuan, compared with a net cash outflow of 82.12 million yuan a year earlier.

While consolidating its presence in medical institutions, the company has expanded into the consumer market, promoting the TCM extension from treatment scenarios to a healthy lifestyle approach.

In terms of channel development, Kangmei's ginseng products have successfully entered Sam's Club, with cumulative sales through the channel exceeding 100 million yuan in the first half of the year.