Deluxe Family Co Ltd: A Bold Leap into the Biotech Sector Amid Real Estate Challenges

In a decisive move that underscores the urgency of diversification, Deluxe Family Co Ltd, a stalwart in China’s real estate sector, has announced its foray into the biotech industry. This strategic pivot comes as the company grapples with the cyclical downturns and transformation demands of the property market. On August 11, 2025, Deluxe Family Co Ltd revealed plans to invest up to 3 billion CNH in acquiring a stake of 5% to 8.09% in Shanghai Haihe Pharmaceutical Research and Development Co., Ltd., marking its entry into the innovative pharmaceuticals arena.

Real Estate Woes and the Quest for Diversification

Deluxe Family Co Ltd, headquartered in Changning District, has long been synonymous with property development, specializing in apartment construction, interior furnishing, and real estate management. However, the company’s fortunes have been marred by the volatile nature of the real estate market, culminating in a loss-making year in 2024. This downturn has intensified investor calls for the company to explore alternative growth avenues beyond its traditional real estate stronghold.

A Strategic Investment in Biotech

The decision to invest in Haihe Pharmaceutical is not merely a diversification tactic but a calculated move to tap into the burgeoning biotech sector. Haihe Pharmaceutical, renowned for its focus on oncology and a robust pipeline of small molecule drugs, presents an attractive proposition for Deluxe Family Co Ltd. The company’s flagship products, including a MET exon 14 skipping mutation non-small cell lung cancer first-line treatment and the world’s first oral paclitaxel RMX3001, have already made significant inroads in the market, with the former achieving a landmark approval in Japan.

Financial Implications and Market Reaction

The investment comes at a critical juncture for Deluxe Family Co Ltd, as it seeks to mitigate the impacts of the real estate sector’s downturn. The company’s stock has seen a notable uptick, with an 8.19% increase on August 19, 2025, buoyed by the announcement. This move is part of a broader trend within the A-share market, where the real estate sector has emerged as a leading performer, with Deluxe Family Co Ltd leading the charge with a 10.14% gain.

Looking Ahead

Deluxe Family Co Ltd’s venture into biotech through its investment in Haihe Pharmaceutical is a bold step towards reshaping its business model and securing a foothold in a high-growth industry. This strategic pivot not only reflects the company’s adaptability but also its commitment to leveraging long-standing relationships, such as its ties with the controlling shareholder Nanjiang Group, which has been a significant investor in Haihe Pharmaceutical.

As Deluxe Family Co Ltd navigates the complexities of the biotech sector, its success will hinge on its ability to integrate this new venture with its core real estate business, ensuring a balanced and diversified portfolio that can withstand the ebbs and flows of market dynamics. The company’s bold move into biotech is a testament to its proactive approach to transformation and growth, setting a precedent for other real estate firms facing similar challenges.