Leading multinational pharmaceutical company Haipu Rui (002399.SZ, stock price of 10.25 yuan, market value of 15.04 billion yuan) with an A+H dual financing platform announced on January 14 that its wholly-owned subsidiary, Techdow Pharma Italy S.R.L. (referred to as “Techdow Italy”), recently fell victim to a telecommunications fraud scheme, amounting to more than 11.7 million euros (approximately 92 million yuan) at the current exchange rate.
This incident has had a significant impact on Haipu Rui’s financials, as it represents approximately 12.63% of the company’s net profit attributable to shareholders for the year 2022, which amounted to 727 million yuan. Generally, if a loss exceeds 5% of the net profit for the latest fiscal year, it is considered a significant event. As a result, Haipu Rui’s A-shares experienced a nearly 7% drop on the morning of January 15. By the close of the day, the stock was trading at 10.25 yuan per share, down 4.92%. Haipu Rui’s H-shares also followed suit, closing at HKD 3.08 per share, a decline of 4.644%.
Haipu Rui has reported the incident to local law enforcement and is fully cooperating with authorities to minimize the impact of the fraud. The company’s management has dispatched personnel to handle the matter at the subsidiary and has expressed its commitment to strengthening internal control management, improving governance standards, and enhancing risk prevention awareness.
According to the 2022 annual report, Haipu Rui’s revenue heavily relies on foreign markets, with over 90% of its revenue coming from overseas in both 2021 and 2022. As for its product portfolio, heparin sodium and low molecular weight heparin sodium raw materials accounted for 37.35% of the revenue, while formulations accounted for 44.84%. The gross profit margins for these two product categories were 27.74% and 35.32%, respectively.
Public information shows that Haipu Rui was founded in Shenzhen in 1998 and is a leading multinational pharmaceutical company with an A+H dual financing platform. Its main businesses include the entire heparin industry chain, biopharmaceutical CDMO, and investments, development, and commercialization of innovative drugs.
Due to factors such as destocking in the heparin industry and fair value changes in investment projects, Haipu Rui’s performance declined in the first three quarters of 2023. The company’s revenue for the period amounted to 4.063 billion yuan, a decrease of 24.69% compared to the same period last year. Net profit attributable to the company’s shareholders was 143 million yuan, a decrease of 78.05%.
Haipu Rui stated that the decline in net profit for the first three quarters of 2023 was mainly due to the impact of heparin industry destocking and fair value changes in investment projects. The company’s foreign exchange gains or losses are related to foreign currency transactions and the translation of financial statements, involving multiple currencies such as the US dollar, euro, pound sterling, and Polish zloty. The company aims to manage the gains or losses resulting from exchange rate fluctuations through natural hedging of foreign currency assets and liabilities.
Source: https://www.thepaper.cn/newsDetail_forward_26011849