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Chinese herbal medicine firm with no revenue sends investors in frenzy, shares rise 58,000%

The Hong Kong-based firm sells traditional herbal medicine to treat ADHD and autism spectrum disorder. It is largely self-funded by Au and is still in the research and development phase read more A small-scale Chinese herbal medicine manufacturing company was losing money until recently, when its fortunes turned overnight as its shares rose 58,000 per cent as of Monday. The firm, named Regencell Bioscience Holding Ltd., witnessed a phenomenal revenue growth this week after its shares exploded. The move has increased the value of Chief Executive Officer Yat-Gai Au's 86 per cent stake to $25.6 billion, according to the Bloomberg Billionaires Index, pushing Au's paper wealth above that of longtime rich-list figures like Jerry Jones and Masayoshi Son. STORY CONTINUES BELOW THIS AD About the company The Hong Kong-based firm sells traditional herbal medicine to treat ADHD and autism spectrum disorder. It is largely self-funded by Au and is still in the research and development phase. Regencell Bioscience did not turn a profit since it went public, and in fact lost $4.4 million in the fiscal year through June 30, 2024, as per its filings. The company does not have a chief medical officer since the last person resigned in 2022. 'Both entities [Regencell and its associated foundation] are Gai's passion projects, and he will continue to invest his personal funds to defend what he believes in,' Au's bio page on the company's website says. 'He has literally put his money where his mouth is by investing over US$9 million in RGC to demonstrate his personal belief and commitment,' it added. Founded in 2014, Regencell primarily focuses on marketing and licensing traditional remedies developed by the founder's father, Sik-Kee Au. A former security alarm business owner in California with a background in electrical engineering, the father was found guilty of professional misconduct in August 2021 by a Hong Kong practitioners' board for overprescribing medication, according to a public order. What's behind the rally? The rally comes amid US interest in alternative medicine and regulatory changes, but analysts warn the surge is unsustainable. Previous speculative bubbles in similar stocks have ended in sharp corrections.