By-Health pivots ¥340M into AI and chip investments as supplement business slumps
What's the deal? By-HealthDealroom has a profile for this one. Try Dealroom → (300146.SZ), China's largest dietary supplement company, is pivoting its investment strategy toward hard tech. Since April, it has deployed over ¥340M (roughly $47M) across AI and chip ventures — including $10M for a stake in Moonshot AIDealroom has a profile for this one. Try Dealroom →'s D-round, ¥70M into a fund backing large language model startup Stepfun, and $10M into chip developer XG TECH. On June 1, it announced a further ¥130M investment into a Tianjin-based venture fund focused on undisclosed frontier tech targets.
The company described these moves as financial investments aimed at building "a window into frontier technology" and generating returns.
Why now? By-Health's core business is under serious pressure. Revenue fell from ¥9.4B in 2023 to ¥6.3B in 2025 — a 33% decline in two years. Net profit dropped from ¥1.75B to ¥653M before recovering slightly to ¥782M. The company's offline pharmacy channel, which once generated over 70% of revenue, has been squeezed by tighter medical insurance regulations and shifting consumer habits. Its distributor count shrank nearly 40%, from 938 to 588, between 2023 and 2025.
Online channels haven't compensated. Both direct and distributor e-commerce revenue fell in 2024, and direct online sales continued declining in 2025.
Meanwhile, By-Health sits on substantial cash. At the end of 2025, it held ¥24.5B in cash and ¥36.1B in tradeable financial assets, against just ¥9.5B in short-term liabilities. With deposit yields falling and investment returns turning negative, hard tech offers a potentially higher-return outlet for idle capital.
The timing also reflects a booming market: recently listed AI companies Zhipu and MiniMax have surged over 1,100% and 300% above their IPO prices, respectively.
What could go wrong? These bets are far from By-Health's expertise in supplements and consumer health. The company is chasing financial returns in sectors it has no operational knowledge of, relying entirely on external fund managers. It has also kept details of its latest ¥130M investment confidential, citing competitive sensitivity — limiting investor scrutiny.
Founder and chairman Liang Yunchao has acknowledged the core business failures are largely internal. Diverting management attention and capital toward tech speculation while the supplement business needs fixing could backfire on both fronts.
The signal: By-Health isn't alone. Fellow healthcare company Andon HealthDealroom has a profile for this one. Try Dealroom → (002432.SZ) has made nearly identical bets — backing Moonshot AI, XG TECH, and Stepfun through the same fund vehicles. A pattern is emerging: cash-rich Chinese consumer and healthcare companies, facing slowing growth in their core markets, are becoming unlikely LPs and direct investors in the country's AI boom. It's a sign of both the frenzy around Chinese AI and the lack of compelling reinvestment opportunities in traditional sectors.
Read more: jiemian.com
