Zhifei Biological (300122) Solvency Analysis of RMB10.2 Billion Syndicated Loan

Based on the obtained financial data and market information, I provide a detailed analysis of Zhifei Biological’s solvency after securing the RMB10.2 billion syndicated loan.

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According to public information, Zhifei Biological obtained a syndicated loan led by Chongqing Jiangbei Sub-branch of Agricultural Bank of China in January 2026

:

• Loan Quota
  : Up to RMB10.2 billion
• Tenor
  : Up to 3 years (medium-to-long term)
• Purpose
  : Working capital and optimizing existing debts
• Guarantees
  : The controlling shareholder Jiang Rensheng’s family provides full joint liability guarantees, and pledges equity of core subsidiaries and huge accounts receivable

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Indicator	2024 Data	Industry Reference Value	Assessment
Current Ratio	2.24	>2.0 (Good)	Up to Standard
Quick Ratio	1.03	>1.0 (Good)	Up to Standard
Cash Ratio	14.64%	>20% (Excellent)	Weak

: Based on the indicators, the company’s short-term solvency is within a safe margin, with current assets covering 2.24 times short-term debts.

Indicator	2024 Data	2023 Data	Trend
Asset-liability Ratio	24.57%	5.95%	Deteriorated ↑
Debt-to-Equity Ratio	39.78%	9.49%	Deteriorated ↑
Net Debt/EBITDA	3.53	-0.35	Deteriorated ↑
Interest Coverage Ratio	12.74	79.82	Deteriorated ↓

: Long-term solvency indicators have deteriorated significantly. The company’s debt level surged in 2024, with the interest coverage ratio plummeting from 79.82 to 12.74, a decrease of 84%, reflecting a significant increase in debt-servicing pressure.

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• Total Debt
  : RMB12.265 billion
  • Short-term Debt: RMB11.902 billion (97% of total)
  • Long-term Debt: RMB0.363 billion (3% of total)
• Net Debt
  : RMB9.564 billion
• Cash and Cash Equivalents
  : RMB2.7 billion
• Current Liabilities
  : RMB18.441 billion

Cash Flow Indicator	2024	2023	Change
Operating Cash Flow	-RMB5.344 billion	+RMB8.994 billion	Turned Negative
Free Cash Flow	-RMB5.61 billion	+RMB7.861 billion	Turned Negative
Revenue Quality	-2.19	+1.11	Deteriorated

: In 2024, the company’s operating cash flow turned from positive to negative with a net outflow of RMB5.344 billion, which is an extremely dangerous signal . Sustained negative cash flow will severely erode the company’s debt-servicing foundation.

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According to the latest data

, the company faces significant asset impairment risks:

• Inventory
  : RMB20.2 billion (as of Q3 2025)
• Accounts Receivable
  : RMB12.8 billion
• Total
  : RMB33 billion, equivalent to more than 4 times the annual revenue of the current period
• Inventory Turnover Period
  : Approximately 2 years at the current sales rate
• Shelf-life Risk
  : HPV vaccines have a shelf life of only 36 months, posing risks of impairment due to expiration

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Dimension	Assessment	Explanation
Liquidity	Neutral	Current ratio >2, but cash reserves are insufficient
Profitability	Negative	Expected loss in 2025, cash flow deteriorated
Debt Structure	Negative	Overly high proportion of short-term debt (97%), debt surged
Guarantees	Positive	Controlling shareholder provides full guarantee
External Support	Positive	Banks provide RMB10.2 billion syndicated loan support

1. Short-term Debt-servicing Pressure is Controllable
   : With a current ratio of 2.24 and support from the bank syndicated loan, the company’s short-term debt-servicing pressure is within a manageable range.

2. Significant Medium-to-Long Term Risks
   :
   • Sustained negative operating cash flow, lacking endogenous debt-servicing capacity
     [0]
   • Debt level in 2024 increased by over 4 times compared to 2023, debt structure deteriorated sharply
   • Significant impairment risks from RMB33 billion in inventory and accounts receivable
     [2]

3. Core Dependency Risk
   : The company is still bound by the RMB98 billion HPV vaccine procurement agreement with Merck & Co., and revenue from self-developed products (only RMB1.182 billion in 2024) is insufficient to support the company’s operations
   [2]

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1. If operating cash flow remains negative, the company may need to rely on external financing for liquidity, increasing financial costs
2. Inventory impairment risks may erode profits and net assets
3. The large-scale guarantee provided by the controlling shareholder means the family has tied its main assets to the company, leading to highly concentrated risks if problems arise

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[1] People’s Daily Online Chongqing Channel - Zhifei Biological: Multiple Measures to Optimize Business Strategies and Enhance Future Development Resilience (http://cq.people.com.cn/n2/2026/0113/c365412-41470906.html)

[2] Guancha.cn - Behind the RMB10.2 Billion Loan: Zhifei Biological Fulfills the “Indentured Agreement” of RMB98 Billion with Merck & Co. (https://www.guancha.cn/economy/2026_01_12_803573.shtml)

[3] Sina Finance - Behind the RMB10.2 Billion Loan: Zhifei Biological Fulfills the “Indentured Agreement” of RMB98 Billion with Merck & Co. (https://finance.sina.com.cn/roll/2026-01-12/doc-inhfzysr9941603.shtml)

[0] Jinling AI Financial Database - Zhifei Biological Financial Data