China news, Jingwei, May 12 - Fuxiang pharmaceutical was criticized by the Shenzhen Stock Exchange on the 12th because the information disclosure of the intermediate business of mupiravir and redcivir was inaccurate and incomplete, and the rumor of supplying Xinguan therapeutic drug intermediates to Pfizer and other enterprises was not clarified in time.

The Shenzhen Stock Exchange said that it was found that Jiangxi Fuxiang Pharmaceutical Co., Ltd. (hereinafter referred to as “Fuxiang pharmaceutical”) and relevant parties had the following violations:

1、 The information disclosure on the intermediate business of mopiravir and redcivir is inaccurate and incomplete

On January 24, 2022, Fuxiang pharmaceutical said in the announcement on abnormal fluctuations in stock trading disclosed that Fuxiang pharmaceutical had supplied the core intermediate samples of mupiravir and redcivir to customers with the R & D basis of its joint-stock subsidiary Shanghai lingfu Pharmaceutical Research Co., Ltd. (hereinafter referred to as “Shanghai lingfu”) and passed the customer’s verification.

Fuxiang pharmaceutical has cooperated with Shanghai lingfu, and now has the R & D and production capacity of Xinguan therapeutic drug intermediates, and expects to enter the supply chain system of Xinguan therapeutic drug production of Pfizer and other enterprises. At present, the revenue of Fuxiang pharmaceutical related to Xinguan therapeutic drugs accounts for a small proportion of the company’s revenue, which has not had a significant impact on the company’s current operating performance.

According to the reply announcement on the letter of concern to Shenzhen Stock Exchange disclosed by Fuxiang pharmaceutical on January 29, 2022, at present, the on hand orders of intermediate products produced and supplied by Fuxiang pharmaceutical for the production of new crown therapeutic drugs mopiravir and redcivir are 3.25 million yuan and 5.5 million yuan respectively, accounting for only 0.2% and 0.4% of the revenue in 2020, and the corresponding R & D investment is 3 million yuan and 5 million yuan.

At present, the core intermediates of mupiravir and redcivir produced by Fuxiang pharmaceutical have not formed income yet; Fuxiang pharmaceutical can only supply the above-mentioned related products to Shanghai lingfu, and has not directly or indirectly supplied them to Pfizer, Gilead and MSD. Fuxiang pharmaceutical has not signed contracts with Pfizer, MSD, real life and Gilead related to Xinguan therapeutic drugs.

Shenzhen Stock Exchange believes that Fuxiang pharmaceutical did not accurately and completely disclose the actual situation of orders in hand, proportion in revenue and R & D investment in the production of mupiravir and redcivir intermediate business in the announcement of abnormal fluctuations in stock trading disclosed on January 24, nor did it The announcement on abnormal fluctuations in stock trading, the supplementary announcement on abnormal fluctuations in stock trading and the announcement on serious abnormal fluctuations in stock trading disclosed on January 26 accurately and completely disclosed the fact that the above products can only be supplied to a single customer, Shanghai lingfu, and have not generated income, and have not been supplied directly or indirectly to Pfizer, Geely De, MSD, etc. The relevant information disclosure of Fuxiang pharmaceutical is inaccurate and incomplete.

2、 Failed to clarify in time after media rumors that may have a great impact on the stock trading price or investment decision of listed companies

According to the reply announcement on the letter of concern to Shenzhen Stock Exchange disclosed by Fuxiang pharmaceutical on January 29, 2022, the company organized exchange activities with investors on January 18, 2022. Since then, a document named “exchange of chairman of Fuxiang pharmaceutical 20220118” (hereinafter referred to as “exchange minutes”) appeared on the market. According to the exchange minutes, some investors mentioned “what intermediates are supplied by the company’s new crown, how much is supplied and who is supplied”. The company replied that it supplies “Pfizer, MSD and real organisms”. At present, there are three kinds of raw materials supplied to Pfizer, and “100 kg raw materials have been provided” and “it will reach the ton level soon”.

On January 19, the company’s share price rose by the limit; On January 20, the company’s share price hit the intraday limit.

After there was a rumor that Fuxiang pharmaceutical supplied Xinguan therapeutic drug intermediates to Pfizer and other enterprises, the company failed to clarify in time. It did not clarify in the reply announcement to the letter of concern of Shenzhen stock exchange until January 29.

The Shenzhen Stock Exchange pointed out that the above-mentioned acts of Fuxiang pharmaceutical violated the relevant provisions of the gem stock listing rules (revised in December 2020).

At the same time, Bao Jianhua, chairman of Fuxiang pharmaceutical, Qiao Xiaoguang, general manager and Huang Xiaodong, then Secretary of the board of directors, failed to fulfill their duties and fulfill their obligations of integrity and diligence, and were responsible for the above violations of Fuxiang pharmaceutical.

In accordance with the relevant provisions of the GEM Listing Rules (revised in December 2020) and the guidelines for self discipline supervision of listed companies No. 12 - implementation standards of disciplinary measures, the Shenzhen Stock Exchange has made the following disciplinary decisions:

1、 Jiangxi Fuxiang Pharmaceutical Co., Ltd. shall be given the punishment of circulating a notice of criticism;

2、 Bao Jianhua, chairman of Jiangxi Fuxiang Pharmaceutical Co., Ltd., Qiao Xiaoguang, general manager and Huang Xiaodong, then Secretary of the board of directors, were given the punishment of circulating a notice of criticism.

The above violations of Jiangxi Fuxiang Pharmaceutical Co., Ltd. and relevant parties and the sanctions given by Shenzhen Stock Exchange will be recorded in the integrity archives of listed companies and made public to the public.

Just one day ago, Fuxiang pharmaceutical was just issued an annual report inquiry letter by the Shenzhen stock exchange due to investment losses, requiring it to explain the reasons and rationality of the company’s double high deposit and loan, the decline of API and intermediate gross profit margin, and the large difference between the change trend of accounts receivable and operating income; It also asked whether there was any interest transfer in the loss of Fuxiang Wuming investment invested by Fuxiang pharmaceutical in 2021.

According to the 2021 annual report of Fuxiang pharmaceutical, the operating revenue in 2021 was 1.43 billion yuan, of which the operating revenue of API was 390 million yuan, with a gross profit margin of 36.3%, a year-on-year decrease of 15.16 percentage points, the operating revenue of intermediate was 977 million yuan, with a gross profit margin of 25.95%, a year-on-year decrease of 8.05 percentage points.

According to the company’s official website, Jiangxi Fuxiang Pharmaceutical Co., Ltd., founded in 2002, is a pharmaceutical enterprise specializing in the R & D, production, sales and service of chemical drugs. The company has core technology, which is an important enterprise in the industry β- Lactamase inhibitor API production base is also one of the main suppliers of carbapenems.

In the secondary market, as of the closing on the 12th, Fuxiang pharmaceutical reported 15.76 yuan / share, up 2.8%, with a total market value of 8.668 billion yuan. (Zhongxin Jingwei APP)

(Editor: Guo Jinjia)