Three Deputy General Managers in One Year? China Resources Takes Over Tasly, Reform Not Internal Strife

Listing | Zhongfang.com

Review | Li Xiaoyan

On March 6th, Tasly announced the resignation of Vice General Manager Lu Zhen, marking the departure of three core business vice presidents within a year. These personnel changes are not merely management reshuffles but key steps in CR Sanjiu’s systematic governance upgrade, business model reshaping, and strategic realignment after acquiring Tasly. Against the backdrop of profound reforms in the pharmaceutical industry and the modernization and innovation of traditional Chinese medicine, this integration demonstrates a firm reform stance, helping this leading traditional Chinese medicine company move away from past path dependence toward a more sustainable and competitive development cycle.

In March 2025, CR Sanjiu acquired a 28% stake in Tasly for 6.212 billion yuan, officially becoming the controlling shareholder, marking the end of the “Yan family era” at Tasly and the full implementation of a standardized state-owned enterprise governance system. Along with the change in control, the company’s board and management team were quickly optimized, with the original family leadership smoothly stepping down and a market-oriented, professional management team gradually taking their place. The departure of three vice presidents within a year is a natural continuation of this governance reform.

Lu Zhen, a veteran in Tasly’s local marketing team for nearly two decades, grew from regional representative to a core executive overseeing pharmaceutical commerce and medical business divisions. He witnessed and participated in the company’s golden period of channel expansion. After CR’s acquisition, he was promoted to vice general manager, reflecting the company’s emphasis on its local team. His departure is not only a personal career choice but also an objective result of the company’s strategic transformation, management methodology, and capability model iteration.

Previously, vice presidents Li Jiangshan and Xi Kai, responsible for OTC and terminal business divisions and core operations, respectively, also aligned with CR’s management logic of “efficiency first, synergy for added value.” After CR’s entry, the company abandoned reliance on “headcount tactics” and traditional academic promotion marketing models, shifting toward refined operations, omni-channel collaboration, and lean cost management. This transition aims to move Tasly from high marketing expenditure-driven growth to a dual focus on R&D efficiency and capital return rate. In this process, management team capability adaptation and structural optimization are essential steps toward modern governance.

Compared to market concerns about personnel fluctuations, the positive significance of this adjustment should be emphasized: Tasly has completely shed its family-run management model and established a standardized, transparent, and efficient modern corporate governance mechanism under the background of a central enterprise. Decision-making processes are more scientific, resource allocation is more optimized, and risk control is more rigorous, laying a solid institutional foundation for long-term stable development.

2025 is the first full fiscal year of CR’s ownership of Tasly. The company’s performance shows a divergence: “growth in net profit attributable to the parent” and “short-term pressure on net profit excluding non-recurring gains and losses,” which are typical features of a transitional period rather than signs of operational disorder. Data shows that in 2025, Tasly achieved revenue of 8.236 billion yuan, a slight decrease of 3.08% year-on-year; net profit attributable to the parent was 1.105 billion yuan, up 15.68%; and net profit excluding non-recurring gains and losses was 787 million yuan, down 24.06%.

Revenue fluctuations mainly result from external industry and policy impacts, such as outpatient policy reforms affecting the pharmaceutical commercial sector and contraction of chain pharmacy business, rather than internal operational decline. Conversely, the growth in net profit attributable to the parent indicates initial success in asset optimization, resource integration, and cost control after CR’s entry. The company has improved its profit statement by divesting non-core assets, optimizing asset structure, and enhancing capital efficiency, demonstrating strong operational adjustment capabilities.

More notably, Tasly’s solid financial fundamentals include over 4 billion yuan in cash assets and a debt ratio below 20%. Its very low debt level and ample cash flow provide sufficient buffers for the company to withstand transitional pains, promote R&D innovation, and channel integration. Comparing the operational data of CR Sanjiu and Tasly, the nearly 10 percentage point difference in sales expense ratio is a key breakthrough in CR’s efforts to reduce costs and improve efficiency at Tasly.

Leveraging its mature OTC, pharmaceutical commercial, and retail terminal operations, CR helps Tasly rebuild its sales network, cut redundant expenses, and strengthen budget constraints, gradually aligning its sales expense ratio with industry best practices. This shift from “scale-driven” to “efficiency-driven” will cause some short-term pain during business adjustments but will significantly enhance profitability quality and operational resilience in the long run, allowing profits to return to core businesses.

As a leader in traditional Chinese medicine, Tasly has long relied on Fufang Danshen Dripping Pills as its flagship product, leading the cardiovascular and cerebrovascular Chinese patent medicine market. However, with normalized centralized procurement, deeper medical insurance cost controls, and evidence-based clinical use, growth driven by a single product faces bottlenecks. Diversification of product structure and modernization of R&D are inevitable.

Post-CR acquisition, the company has precisely targeted Tasly’s core strengths and weaknesses, promoting its transformation from a “traditional Chinese medicine manufacturer” to a “dual-driven” comprehensive pharmaceutical enterprise combining traditional Chinese medicine and modern innovative drugs. While Fufang Danshen Dripping Pills are affected by procurement price cuts, they maintain stable sales through grassroots market penetration and volume-for-price strategies, remaining a steady cash flow source. Meanwhile, specialty products like Yangxue Qingnao Granules and Kunxin Ning Granules are rapidly growing, gradually building a multi-product matrix to reduce dependence on a single product.

In R&D, Tasly maintains high investment, with over 30 innovative drug projects covering cardiovascular, metabolic, and neurological chronic diseases, some of which have entered clinical stages. Relying on the resources of CR, Tasly receives funding, technical platforms, and clinical resources to accelerate the commercialization of its innovative pipeline, addressing limitations in evidence-based research and mechanistic studies of traditional Chinese medicine, and promoting the modernization and internationalization of Chinese medicine.

In response to the impact of new biopharmaceuticals like siRNA and GLP-1 receptor agonists on the chronic disease market, Tasly, empowered by CR, clarifies its differentiated positioning of Chinese patent medicine in chronic disease management, focusing on symptom relief, chronic disease regulation, and adjunct therapy. It aims to enhance product value through evidence-based research and also plans to develop innovative drugs, creating a complementary product system of traditional Chinese medicine and modern innovative medicines, aligning with industry trends.

CR’s involvement in Tasly is not merely capital investment but deep industry synergy and resource empowerment. As a leading enterprise in the pharmaceutical industry, CR Sanjiu has a nationwide sales network covering 400,000 pharmacies and 8,000 medical institutions, along with mature OTC branding, channel management, and supply chain integration capabilities. Through resource sharing, Tasly’s core products are quickly integrated into CR’s omnichannel system, expanding its outpatient and retail market coverage and increasing product penetration and market share.

In industry layout, CR promotes Tasly’s optimization of the pharmaceutical commercial sector, shrinking low-margin distribution businesses and focusing on high-value-added manufacturing and brand retail, thereby improving overall gross profit margin. Additionally, leveraging CR’s full industry chain advantages, Tasly is being upgraded in raw materials, manufacturing, and quality control to enhance product competitiveness and brand influence.

From an industry perspective, CR’s integration of Tasly signifies a milestone in increasing the concentration of the Chinese medicine industry and strengthening leading enterprises. Under the policy encouragement of Chinese medicine innovation and industrial upgrading, the combination of central enterprises and traditional Chinese medicine leaders will accelerate resource concentration on high-quality companies, expedite the exit of small and medium capacities, and help Tasly seize opportunities amid industry transformation.

The departure of three core vice presidents, short-term performance fluctuations, and product restructuring are all challenges faced by Tasly in its transformation toward modernization and innovation under CR’s leadership. This systemic reform, based on governance iteration, cost reduction, and efficiency enhancement, with innovation and industry collaboration at its core, aims to break through past bottlenecks and reshape core competitiveness.

In the short term, personnel adjustments and business optimization will cause some pain, and the recovery of net profit excluding non-recurring gains and losses and the realization of innovative drug pipelines will take time. But in the long run, standardized governance, efficiency improvements, product diversification, and innovation-driven growth will open new development horizons for Tasly.

From a family business to a state-owned controlling enterprise, from high marketing-driven growth to dual engines of R&D and efficiency, from reliance on a single product to full-category synergy, Tasly, empowered by CR, is undergoing a profound strategic upgrade. For this deeply rooted Chinese medicine leader, short-term adjustments are necessary for more stable long-term development. As integration deepens and reforms take effect, Tasly is expected to return to a high-quality growth trajectory and become a benchmark in the modernization and innovation of Chinese medicine.