Harbin Pharmaceutical Group intends to change the controlling person, Harbin SASASAC, to retire as a shareholder.

category:Finance
 Harbin Pharmaceutical Group intends to change the controlling person, Harbin SASASAC, to retire as a shareholder.


Harbin Pharmaceutical Group is the controlling shareholder of Harbin Pharmaceutical Stock, and Harbin Pharmaceutical Group holds 46.49% of Harbin Pharmaceutical Stock. Harbin Pharmaceutical Co., Ltd. is the controlling shareholder of People Tongtai. Harbin Pharmaceutical Group is the indirect controlling shareholder of People Tongtai. Harbin Pharmaceutical Co., Ltd. holds 74.82% of the companys shares.

After the failure of CITIC Capital Tianjin to increase its investment in Kazakhstan Pharmaceutical Group, Kazakhstan Pharmaceutical Share and People Tongtai issued a notice on Nov. 13, 2018. Kazakhstan Pharmaceutical Group has considered and approved the related matters of restarting the mixed ownership reform of Kazakhstan Pharmaceutical Group. On May 27, this year, the Harbin Municipal Government issued the Approval for Capital Increase of Harbin Pharmaceutical Group, which agreed in principle with the plan of capital increase and equity increase of Harbin Pharmaceutical Group; and agreed in principle that Harbin Pharmaceutical Group should publicly solicit investors at the bottom price of 1.85 yuan per yuan of registered capital in Harbin Public Resource Trading Center, and introduce no more than three investors on the basis of preference. Increase capital in cash to Kazakhstan Pharmaceutical Group.

Two months later, Kazakhstan Pharmaceutical Group made progress in publicly soliciting additional capital and expanding shares. According to the announcement of the two listed companies, as of the expiration of the announcement of capital increase, two intentional investors, Harper Investment Fund and Heima Qihang Capital Management, were obtained. The proportion of the proposed registered capital to the registered capital of Kazakhstan Pharmaceutical Group after the capital increase is 10% and 5%, respectively. Kazakhstan Pharmaceutical Group will organize the adjustment work and finally confirm the qualified investors. If the transaction is completed, Kazakhstan Pharmaceutical Group will be transformed from a state-owned holding enterprise into a state-owned shareholding enterprise.

On August 8, the board of directors of Harbin Pharmaceutical Group held a meeting to confirm that the two investors collected by Harbin Pharmaceutical Group through the Harbin Public Resources Trading Center meet the corresponding qualifications and requirements of investors. A day later, Chongqing Harper, Heima Qihang and the original shareholders of Harbin Pharmaceutical Group signed an agreement to increase capital. They increased capital of Harbin Pharmaceutical Group with cash of RMB 805 million yuan and RMB 403 million yuan, respectively. They pledged additional registered capital of Harbin Pharmaceutical Group of RMB 435 million and RMB 218 million yuan, respectively, which accounted for 10% and 5% of the shareholding of Harbin Pharmaceutical Group after the increase.

Controller Change

Chongqing Harper is an investment limited partnership founded on July 4, 2019. Its executive partner is Harper Investment Consulting (Zhuhai) Co., Ltd. and its actual control is Chen Rui. Heima Qihang is an investment management company founded on April 8, 2018. It has no actual controller. A brief statement of rights and interests change disclosed by Harbin Pharmaceutical Co. Ltd. and Tongtai People said that since the establishment of the two companies, no major violations of laws and regulations and bad integrity records have been found. The two companies have the ability to pay for the capital increase and the source is reasonable and legitimate. Moreover, their governance institutions are perfect, and they have the ability to promote the sustainable development of Harbin Pharmaceutical Group and improve the legal person of Harbin Pharmaceutical Group. Ability to govern structures.

It is reported that after the completion of the capital increase, the shareholding structure of Harbin Pharmaceutical Group is 38.25%, CITIC Iceland, Huaping Iceland and Heilongjiang CITIC 19.125%, 18.7%, 0.425%, state-owned enterprise restructuring company 8.5%, Chongqing Harper 10%, Heimaqi Airlines 5%.

Before the completion of this transaction, the SASASAC of Harbin was the controlling shareholder and actual controller of Harbin Pharmaceutical Group. After the completion of this transaction, the shareholding ratio of the SASAC in Harbin will be reduced from 45% to 38.25%. The board of directors of Harbin Pharmaceutical Group will be increased from 5 directors to 6 directors, of which two are appointed by the SAC in Harbin. CITIC Iceland, Huaping Iceland, State-owned Enterprise Restructuring Company and Chongqing Harper have the right to appoint one director respectively. The chairman of Harbin Pharmaceutical Group is elected by more than half of the directors of the company, and the chairman acts as the legal representative of the company. Harbin Pharmaceutical Group has changed from a state-owned holding enterprise to a state-owned shareholding enterprise. There are no shareholders who can control more than half of the shares or more than half of the board seats. Therefore, the control right of Harbin Pharmaceutical Group will be changed.

Helping Harbin Pharmaceutical Group to Develop

The pharmaceutical manufacturing and circulation industry of Harbin Pharmaceutical Group belongs to a fully competitive industry, facing fierce market competition, and the market environment is changing rapidly. Restricted by the state-owned enterprise system and operating mechanism, Kazakhstan Pharmaceutical Group has developed slowly in recent years, and its operating efficiency and market competitiveness have declined. Kazakhstan Pharmaceutical Group urgently needs to further deepen the reform in order to change the current operational difficulties.

On the other hand, Kazakhstan Pharmaceutical Group introduced the two wars investment through capital increase and share expansion, which is closely related to the background of the domestic pharmaceutical industry. Since 2014, with the implementation of the new GMP certification, generic drug consistency evaluation, medical insurance control fee, two-vote system and other policies, the industry reform has been accelerated to enter the deep water area. Affected by this, nearly two-thirds of domestic pharmaceutical enterprises and product production numbers will be eliminated in the next few years, the industry structure will be reconstructed, and the market competition will become increasingly fierce. Due to the aging of product structure, the market scale and benefit of Harbin Pharmaceutical Group have been declining and the development situation is extremely severe under the policy impact of the upgrading of resistance policy, the increasing efforts of health insurance control, and the restriction of the use of auxiliary drugs. Therefore, Harbin Pharmaceutical Group urgently needs to introduce funds, enrich product lines, optimize its product structure, constantly enhance market competitiveness, out of the predicament to achieve better and faster development. Through this capital increase and share expansion, Harbin Pharmaceutical Group can use the raised funds for the operation and development of its subsidiary enterprises or industrial integration through mergers and acquisitions, which will help Harbin Pharmaceutical Group maintain a rapid and healthy development momentum and further consolidate and move forward the industry ranking. To sum up, this capital increase and share expansion is the strategic choice of Harbin Pharmaceutical Group to cope with the changes in the industry. Through this capital increase and share expansion, it will greatly enhance the market competitiveness and financial strength of Harbin Pharmaceutical Group, give full play to the role of market mechanism, and enhance the market position of Harbin Pharmaceutical Stock and Tongtai People. Source: Author of Securities Times: Sun Xianchao Responsible Editor: Wang Xiaowu_NF

Therefore, Harbin Pharmaceutical Group urgently needs to introduce funds, enrich product lines, optimize its product structure, constantly enhance market competitiveness, out of the predicament to achieve better and faster development. Through this capital increase and share expansion, Harbin Pharmaceutical Group can use the raised funds for the operation and development of its subsidiary enterprises or industrial integration through mergers and acquisitions, which will help Harbin Pharmaceutical Group maintain a rapid and healthy development momentum and further consolidate and move forward the industry ranking.

To sum up, this capital increase and share expansion is the strategic choice of Harbin Pharmaceutical Group to cope with the changes in the industry. Through this capital increase and share expansion, it will greatly enhance the market competitiveness and financial strength of Harbin Pharmaceutical Group, give full play to the role of market mechanism, and enhance the market position of Harbin Pharmaceutical Stock and Tongtai People.