Behind Keli's submission, an 'underestimated pharmaceutical business' returns to the spotlight

Against the backdrop of slowing growth in China's pharmaceutical industry and declining investor patience for pure innovation drugs, a seemingly less glamorous but cash-flow-stable business is regaining market favor.

Recently, Keli Limited (hereinafter referred to as "Keli") officially submitted a listing application to the Main Board of the Hong Kong Stock Exchange. Unlike most pharmaceutical companies, Keli does not bet on a single R&D pipeline but has long played a more "invisible" role in China's pharmaceutical system—a marketing, promotion, and sales service provider connecting drugmakers, channels, and end-users.

On one hand, Keli firmly controls key access points for pediatric drugs outside hospitals in China with core prescription drugs like "Mummy Love" and "E-Tan Jing." On the other hand, it is attempting to open a second growth curve with consumer-oriented product lines such as probiotics and maternal-infant nutritional supplements.

However, challenges arise. When a company's growth heavily relies on a few core products and a single supplier, and when its stability and constraints stem almost entirely from the same source, the premium that capital markets are willing to pay for such "certainty" remains uncertain.

The Business Logic of an "Invisible Champion": An Underestimated Pediatric Pharmaceutical Backbone

Keli is neither a drug R&D company nor a consumer health business with strong brand recognition but a typical "middle-layer company." Yet, this very layer constitutes the most authentic and complex operational fabric of China's pharmaceutical system.

The prospectus shows that Keli's core business has long focused on pharmaceutical marketing, promotion, and sales services, particularly in the out-of-hospital market for pediatric prescription drugs. By 2024 revenue, the company ranked among the top ten in China's pharmaceutical marketing, promotion, and sales market, with a 15.9% market share, making it the largest pediatric pharmaceutical marketing, promotion, and sales service provider in China.

This achievement is built on a high-density offline network. By the end of June 2025, Keli's sales network covered 31 provinces in mainland China, reaching approximately 110,000 clinics, 310,000 pharmacies, and 3,600 hospitals, including top-tier tertiary hospitals. For pediatric drugs, such high-density，下沉式 coverage outside hospitals is itself a scarce resource.

More importantly, Keli has captured the relatively "protected" niche of pediatrics in healthcare reform. Compared to adult drugs, pediatric drugs face milder pricing pressures under centralized procurement and 医保控费. With policies increasingly emphasizing child health 保障， pediatric drug demand exhibits stronger rigidity.

Frost & Sullivan data indicates that China's pediatric pharmaceutical market is expected to expand at a 5% CAGR, reaching RMB 123.2 billion by 2029. The 配套 pediatric pharmaceutical marketing, promotion, and sales service market is also expanding in tandem.

Against this backdrop, Keli has chosen to build barriers through 单品 penetration. Its current pharmaceutical marketing business heavily relies on two flagship pediatric prescription drugs—Mummy Love and E-Tan Jing.

These products are not self-developed but were created and produced by South Korea's Hanmi Group, with Keli serving as the long-term exclusive distributor in China's out-of-hospital 细分 market. By deeply 铺设 channels around these high-frequency, essential, and standardized products, Keli has achieved efficient penetration into grassroots 医疗终端。

The advantages of this model are directly reflected in financial metrics. Despite a 阶段性 revenue dip in 2024, gross margins have consistently risen, from 43.6% in 2022 to 56% in the first half of 2025.

This stems from enhanced channel control and service 溢价. As pharmaceutical marketing outsourcing becomes a "standard" for drugmakers, service providers offering stable coverage and execution capabilities are being 重新评估 for their pricing power.

Overall, Keli's core competitiveness lies not in "which drugs it sells" but in its position at the most critical 流量入口 for pediatric out-of-hospital 用药 in China. This is also why, amid slowing industry growth, such companies exhibit stronger defensive attributes.

Underlying Constraints: Where Is Keli's Ceiling?

Like all highly structured businesses, Keli's certainty comes with clear boundaries.

First is its heavy reliance on core suppliers and products. The prospectus shows that purchases from its top five suppliers consistently account for over 60% of total procurement, with the largest supplier, Hanmi Group, exceeding 50% annually.

Meanwhile, Mummy Love and E-Tan Jing 几乎 form the foundation of its pharmaceutical marketing business. Such concentration brings efficiency and stable cash flow but also 意味着难以分散的风险。

Notably, the company's executive director and controlling shareholder, Mr. Lin, is also a shareholder in Hanmi Group. This deep 绑定 has 商业合理性 but raises governance and related-party transaction concerns. Should core partnerships change, whether Keli can swiftly restructure its product and revenue mix remains to be seen.

Hence, the company has recently sought a second growth curve, venturing into maternal-infant and nutritional supplements, particularly functional products like probiotics.

From an industry perspective, this is a vast but fiercely competitive 赛道. China's probiotic supplement market is projected to grow from RMB 24.6 billion in 2024 to RMB 40 billion by 2029, a >10% CAGR.

The challenge is that this path lacks 天然衔接 with Keli's existing strengths. Pharmaceutical marketing emphasizes 合规执行，终端覆盖， and 专业信任， while supplements rely more on brand 心智， consumer education, and sustained marketing 投入. Transitioning from 渠道驱动 to 品牌驱动 requires not just product shifts but 能力重构。

This raises the key question for investors: Will Keli be priced as a stable but ceiling-bound pharmaceutical services firm, or can it craft a "pharma + digital + consumer health" narrative for higher valuation elasticity?

In today's Hong Kong market, preference for profit certainty is rising, but growth expectations persist. Keli's edge lies in proving its irreplaceability in a niche; the test is unlocking new growth without compromising stability.

Conclusion

As the 创新药 narrative cools, capital is revisiting another pharma play: unglamorous but profitable; nondisruptive yet indispensable. Keli's listing significance lies not in grand new stories but in whether markets will 重新 price such 稳态能力 at a decent multiple.

If the answer is yes, what gets 重新 seen may be more than just one company.