Matters

The company resumed trading earlier and issued a "pre-plan for issuing shares to purchase assets and related party transactions", which intends to purchase a total of 50% of its minority stake in Intel Pharmaceutical, a subsidiary of the company, by issuing shares to related parties of the company. We recently conducted a survey of the company and exchanged views on issues of concern.

According to the Dingzeng plan, the company plans to issue 57142856 A shares to Huachen Investment, the largest shareholder of the company, and Huazi Industrial, the second largest shareholder, to purchase a total of 50% minority shares in its subsidiary, Intel Pharmaceutical, which is jointly held by the company. to complete the company's wholly-owned control of Intel Pharmaceutical. The issue price is 14.07 yuan per share, the estimated value of the underlying assets is 804 million yuan, and the lock-up period is 36 months. The actual controller of the company does not change before and after the issue, and it is still Sinochem.

Main viewpoints

1. Solve the problems left over by history and remove the obstacles to future development. Intel Pharmaceutical has been almost all the source of the company's revenue and profits, but the company failed to recover 49% of its stake in the company after the sale of its 49% stake due to financial pressure in the early stage of development, which hindered the sustainable and healthy development of the company. As the company's acquisition of the remaining stake in Intel Pharmaceutical is on the right track, on the one hand, it will directly increase the company's net profit and net assets, but also lay a solid foundation for the company's long-term and orderly development in the future. After the completion of this acquisition, Sinochem Group indirectly holds 33.24% of the company through China Capital Industry, Hualong Real Estate and Dongpu Industry, which is still the actual controller. Zhejiang SASAC indirectly holds 31.05% of the company through Huachen Investment, Huiyuan Investment and Zhejiang International Trade.

two。 Located in the tuyere of Zhejiang medical reform, the good wind can be expected in the future. The health care reform policy in Zhejiang Province has been in the forefront of the country, from the "zero price difference" of public hospitals spread out in the province in the early days to a substantial reduction in the price of drugs for centralized procurement, and then to encourage public hospitals and grass-roots medical institutions to set up a medical federation to carry out secondary bargaining, and so on. Every time the introduction of medical reform policy in Zhejiang Province, it is both an impact and an opportunity for related industries. As a leading enterprise in the field of pharmaceutical circulation in Zhejiang Province, on the one hand, the company has established cooperative relations with 40 of the top 50 pharmaceutical enterprises in the world and the top 100 domestic pharmaceutical enterprises, on the other hand, it has achieved full coverage of medical institutions and chain drugstores above the county level, and the coverage rate of grass-roots medical institutions has reached nearly 90%. We believe that with the integrated layout built by years of intensive cultivation in Zhejiang Province, the company is expected to take the lead in realizing the exploration and transformation to a new business model with the help of the medical reform policy.