Is Yunnan Baiyao Group profitable in 2026?

Yes. Q1 2026 revenue was RMB 11.60 billion (up 7.02% YoY) with net profit of RMB 2.04 billion (up 5.31% YoY), continuing FY2024's record net profit of RMB 4.75 billion, up 16.02% YoY, as of 2025-12-26.

Who owns Yunnan Baiyao Group?

It is a state-anchored mixed-ownership enterprise: Yunnan Provincial SASAC holds about 26.2%, private conglomerate New Huadu Industrial Group holds about 24.4%, and Hongta Tobacco Group holds about 8.19%, per ownership data with no listed as_of date.

Could AI replace Yunnan Baiyao's core hemostatic medicine?

No. The Yunnan Baiyao formula is one of only two Class-1 legally protected trade secrets in Chinese pharma law, carrying up to 20 years of enhanced secrecy protection, a legal barrier AI cannot replicate or disclose; AI (via Huawei's Pangu-based Leigong Model, 2025) is used internally for supply-chain tracing, not formula replacement.

Who is Yunnan Baiyao's biggest competitor?

In toothpaste, Xiaokuo Technology's Canban brand is the fastest-rising rival, holding 9.2% of China's toothpaste market with 231.7% offline growth from 2023 to 2025 and a Hong Kong IPO filing in April 2026, though it has not entered the protected pharma core.

Does Yunnan Baiyao face regulatory risk from pangolin sourcing?

Yes. China's 2025 Pharmacopoeia update, effective October 1, 2025, removed pangolin-scale-based TCM formulas from the approved drug list, and Norway's Government Pension Fund excluded Yunnan Baiyao from its portfolio in December 2021 over pangolin-scale sourcing concerns.

What is Yunnan Baiyao Group's market value and ticker?

Yunnan Baiyao Group trades on the Shenzhen Stock Exchange under ticker 000538, with a market capitalization of roughly RMB 87 to 91 billion (about US$12 billion) as of mid-2026, per Morningstar data dated 2026-06-30.

Pharma and healthcare groups · state-owned · China

Yunnan Baiyao Group

Chinese state-linked maker of the Yunnan Baiyao hemostatic formula, toothpaste, and other TCM pharma products.

Hard to displace

Assessed 26 July 2026 · Evidence as of 26 July 2026

Strong structural protection; the business model survives ai pressure.

On the recordSince 26 July 2026 · Checkable from 2026-08-29 · Every call on the record Checkpoint: Q2 2026 earnings report, watch oral-care segment share versus Xiaokuo

The call

The core pharma formula stays legally shielded and profitable, while a fast domestic rival chips at the toothpaste business without touching the protected core.

Yunnan Baiyao Group makes traditional Chinese medicine and toothpaste. The company is hard to copy in its core drug business because the government has legally protected its formula for up to 20 years, blocking competitors by law rather than just by being faster. However, a new Chinese toothpaste brand called Xiaokuo (also known as Canban) is growing three times faster and stealing customers away from Yunnan Baiyao's toothpaste line. The key thing to watch is whether Xiaokuo keeps grabbing toothpaste market share after it goes public in 2026, which could slow the company's overall growth even though its protected drug business would likely stay solid.

Why

AI pressure: None apparent. Huawei's Pangu-based Leigong Model helps run Yunnan Baiyao's own supply chain and R&D, it doesn't threaten the company. Could AI do the core job? Unlikely.

Bigger players: Xiaokuo Technology (Canban toothpaste brand). Canban grew 231% offline from 2023 to 2025 and hit 9.2% of toothpaste, cutting into Yunnan Baiyao's oral-care lead. Could a giant copy it? No, they are blocked.

What protects it. Its hemostatic formula is one of only two Class-1 legally protected trade secrets in Chinese pharma law, blocking copycats for up to 20 years.

What would change this call

Yunnan Baiyao's oral-care/toothpaste category share in Q2 2026 earnings (due Aug 29, 2026). Shows whether Xiaokuo/Canban is eroding its ~13-25% toothpaste lead.
Completion of Xiaokuo Technology's Hong Kong IPO filed April 2026. Would confirm institutional validation of the domestic toothpaste challenger.
Enforcement outcomes of the 2025 Pharmacopoeia pangolin-formula ban after Oct 1, 2025. Would show whether core hemostatic SKUs face forced reformulation or discontinuation.

Key numbers

FY2024 revenue RMB 40.03B, net profit RMB 4.75B, up 16.02% (2025-12-26)
Q1 2026 revenue RMB 11.60B, up 7.02% YoY (2026-06-30)
Canban toothpaste rival at 9.2% share, up 231% since 2023 (2025-12-31)

Named risks

Xiaokuo/Canban eroding Yunnan Baiyao's toothpaste category leadership via rapid online-native growth. Severity: medium
2025 Pharmacopoeia pangolin-formula ban (effective Oct 2025) could force reformulation or discontinuation of legacy SKUs. Severity: medium
Reputational/ESG divestment pressure over pangolin sourcing, as seen with Norway's 2021 exclusion. Severity: low
Recurring international anti-doping advisories (HIWU, reissued May 2026) limiting equine/veterinary market use. Severity: low

Rivals, as read in July 2026

Rival	Direction	Evidence
Xiaokuo Technology (Canban)	gaining on	9.2% toothpaste share, 231.7% offline growth 2023-2025, HK IPO filed 2026-04-02
Procter & Gamble	contesting	~9% China oral-care value share in 2025 per Euromonitor
Colgate-Palmolive (Darlie/Hawley & Hazel)	contesting	~9% China oral-care share in 2025 per Euromonitor

Questions people ask

Is Yunnan Baiyao Group profitable in 2026?: Yes. Q1 2026 revenue was RMB 11.60 billion (up 7.02% YoY) with net profit of RMB 2.04 billion (up 5.31% YoY), continuing FY2024's record net profit of RMB 4.75 billion, up 16.02% YoY, as of 2025-12-26.
Who owns Yunnan Baiyao Group?: It is a state-anchored mixed-ownership enterprise: Yunnan Provincial SASAC holds about 26.2%, private conglomerate New Huadu Industrial Group holds about 24.4%, and Hongta Tobacco Group holds about 8.19%, per ownership data with no listed as_of date.
Could AI replace Yunnan Baiyao's core hemostatic medicine?: No. The Yunnan Baiyao formula is one of only two Class-1 legally protected trade secrets in Chinese pharma law, carrying up to 20 years of enhanced secrecy protection, a legal barrier AI cannot replicate or disclose; AI (via Huawei's Pangu-based Leigong Model, 2025) is used internally for supply-chain tracing, not formula replacement.
Who is Yunnan Baiyao's biggest competitor?: In toothpaste, Xiaokuo Technology's Canban brand is the fastest-rising rival, holding 9.2% of China's toothpaste market with 231.7% offline growth from 2023 to 2025 and a Hong Kong IPO filing in April 2026, though it has not entered the protected pharma core.
Does Yunnan Baiyao face regulatory risk from pangolin sourcing?: Yes. China's 2025 Pharmacopoeia update, effective October 1, 2025, removed pangolin-scale-based TCM formulas from the approved drug list, and Norway's Government Pension Fund excluded Yunnan Baiyao from its portfolio in December 2021 over pangolin-scale sourcing concerns.
What is Yunnan Baiyao Group's market value and ticker?: Yunnan Baiyao Group trades on the Shenzhen Stock Exchange under ticker 000538, with a market capitalization of roughly RMB 87 to 91 billion (about US$12 billion) as of mid-2026, per Morningstar data dated 2026-06-30.

Timeline

2026-06-05YNBY International shareholders approve 2026 Framework Agreement with Yunnan Baiyao
2026-05-27HIWU reissues advisory warning horsemen to dispose of Yunnan Baiyao/Paiyao products
2026-04-02Rival Xiaokuo Technology (Canban) files for Hong Kong IPO, claims 9.2% toothpaste share
2026-02YNBY International converts HK$500 million convertible bonds into shares
2025-10-01China's 2025 Pharmacopoeia update removes pangolin-based TCM formulas from approved list
2025-01Huawei publishes case study on joint Leigong Model built on Pangu for TCM traceability
2024-09-072024 interim report shows Aerosol product line sales over RMB 1.2 billion, up 30% YoY
2022-07-25Yunnan Baiyao signs cooperation agreement with Huawei for AI drug R&D
2021-12-21Norway's Government Pension Fund excludes Yunnan Baiyao over pangolin-scale sourcing
1993Yunnan Baiyao becomes first Yunnan enterprise listed on Shenzhen Stock Exchange (000538)

Revision history

26 July 2026

First assessed. Hard to displace. The text above is fixed as of this date and is not edited afterwards.

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