Huadong Medicine: The core commercial subsidiary of the medical aesthetics sector intends to liquidate and cancel

Huadong Medicine issued an announcement on December 21 stating that the notice of the company's ninth session of the board of directors will be held on-site and combined with communication on December 20, 2021
.
The meeting passed the "Proposal on Liquidation of the Holding Subsidiary East China Ningbo After Expiry", and agreed that the holding subsidiary East China Ningbo Pharmaceutical Co.
, Ltd.
will not extend its operating period (December 31, 2021) after the expiration date.
Ningbo conducts liquidation and cancellation in accordance with the law
.
Established in November 1993, Huadong Ningbo is mainly engaged in the agency sales of biological blood products and the Chinese market agency sales of South Korea’s LG Life Sciences Ewan series of hyaluronic acid, and has obtained the Chinese market agency rights of Korean Jetema’s medical beauty product botulinum toxin
.
In March 2001, Huadong Medicine purchased 51% of Huadong Ningbo's equity for 3.
315 million yuan.
The original shareholders owned 49% of the shares.
Huadong Ningbo was consolidated into a listed company, and Huadong Medicine also started the path of medical beauty layout
.
With the blessing of East China Ningbo, the new medical beauty of East China Medicine has gained a lot
.
The financial report shows that in 2018 and 2019, the sales scale and amount of hyaluronic acid of Huadong Medicine have ranked first in the domestic market
.
Although the medical beauty business is not currently the top source of Huadong Pharmaceutical's revenue, medical beauty as an important growth point for the company in the future is certain
.
So, why did Huadong Medicine make the decision to liquidate and write off Huadong Ningbo? It is understood that the internal conflict is protracted.
In 2018, Huadong Medicine plans to negotiate the acquisition of Sinclair, a foreign medical beauty company
.
At this time, Huadong Medicine has not reached an agreement with Huadong Ningbo on the purchase price of the remaining shares in Huadong Ningbo, and it is in suspicion
.
It can also be seen from the several announcements made this year that this has a foreboding of the eccentricity of the parent and subsidiary companies
.
In August, the conflict between East China Medicine and its subsidiary, East China Ningbo, broke out, and East China Ningbo was facing dissolution
.
On September 30, Huadong Medicine disclosed its response to the inquiries of the supervisory authorities, and the relevant content involved disputes between it and its subsidiary Huadong Ningbo.

.
In terms of control rights, Huadong Medicine responded to the Shenzhen Stock Exchange's letter of concern, stating that Huadong Ningbo’s daily operations are under the authority of the board of directors and the management team led by Feng Xingfu is responsible
.
Currently, the company agrees to continue to leave the relevant seals to the East China Ningbo management team for safekeeping and legal use until the expiration of the East China Ningbo business period
.
Up to now, Huadong Medicine has actually enjoyed variable returns to Huadong Ningbo and affected the amount of return
.
Therefore, Huadong Medicine has not lost control of the management of East China Ningbo, and still has control over the whole
.
In addition, Huadong Medicine's reply letter pointed out that it plans to enter the statutory liquidation stage after its business expires on December 31 in Ningbo, East China
.
East China Ningbo's revenue and profit accounted for a relatively low proportion of listed companies, and its contribution to the company was gradually reduced, which did not constitute a significant impact
.
Through the liquidation of East China Ningbo, its existing fixed assets will have a certain value-added income, which is also conducive to the overall planning and unified management of the medical aesthetics business in the future
.
On December 21, Huadong Medicine finally officially announced that it would start liquidation work
.
Regarding the impact that investors are concerned about after the liquidation, the company said that it is not expected to have a significant impact on the company's operating results, overall business development, and production and operation
.
It is reported that Huadong Medicine is actively deploying the pharmaceutical market through cooperation in recent years
.
For example, on October 8, Huadong Medicine announced that it had cooperated with Takeda Pharmaceuticals and obtained the exclusive commercialization rights of Takeda’s innovative product Alogliptin benzoate tablets in mainland China, thereby further increasing the company’s layout in the diabetes market; September 30 On Japan, Sinclair, a wholly-owned subsidiary of Huadong Medicine in the United Kingdom, joined hands with KiOmed Pharma SA of Belgium to obtain a number of its global innovative chitosan medical aesthetic products under development and all subsequent development of chitosan-related medical aesthetic products in companies other than the United States.
Global rights to expand the medical beauty market
.
Behind this series of addition and subtraction actions, the future layout and development of Huadong Medicine deserves continuous attention
.