On September 25, Humanwell Pharmaceutical announced that it had received a "Notification Letter on the Company's Application for Reorganization" from Wuhan Contemporary Technology Industry Group Co., Ltd. (hereinafter referred to as "Modern Technology"), the controlling shareholder of the company, the day before, and Wuhan Credit Risk Management Financing Guarantee Co., Ltd. and Tianjin Shengcao Law Firm had applied to the Intermediate People's Court of Wuhan City, Hubei Province for the reorganization of Modern Technology.

At present, Humanwell Pharma has not received the documents of the Wuhan Intermediate People's Court on the acceptance of the above-mentioned application for reorganization, and it is not yet known whether the court will accept it and whether Modern Technology will enter the reorganization procedure in the future. In this regard, many investors took the lead in voting in favor, believing that the replacement of the major shareholder of Modern Technology will be more conducive to the business development and valuation repair of Humanwell Pharmaceutical.

From September 25th to 26th, Humanwell Pharmaceutical's share price rose for two consecutive days, with an increase of 5.57% and 2.89% respectively, and the total market value rose to more than 30 billion. On September 27, Humanwell Pharmaceutical continued to open high and go high, and as of the close of the day, the stock price rose 4.42% to 19.36 yuan per share, with a total market value of 31.6 billion yuan. As of September 25, 2024, Modern Technology held a total of about 387 million shares of Fu Pharmaceutical, with a shareholding ratio of 23.7%, making it the largest shareholder and actual controller of the latter. However, due to debt problems, all of the above-mentioned shares have been judicially marked and frozen.

The debt boom of contemporary technology has been traced as early as 2022. In April of that year, the first phase of the 2019 medium-term notes issued by it defaulted substantively, which subsequently led to a series of defaults, and even affected Humanwell Pharmaceutical. According to Humanwell Pharmaceutical's announcement on September 24, in the past year, 12 bills or bonds have been overdue or defaulted, and 161 lawsuits and arbitrations have been involved in debt issues, with a total target amount of about 32.33 billion yuan.

In addition, since 2022, Modern Technology has reduced its holdings of Humanwell Pharmaceutical several times to cash out, and it has been more frequent since mid-2023. Today, Modern Technology's stake in Humanwell Pharmaceutical has been reduced to 23.7%, and all of them have been frozen. Humanwell Pharmaceutical said that it and Modern Technology do not have non-operating capital occupation, illegal guarantees and other situations that infringe on the company's interests, and have independent and complete business and independent management capabilities, and are independent of the controlling shareholder in terms of business, personnel, assets, institutions, finance, etc., so the share freeze will not have an impact on the company's daily production and operation.

However, if the creditor's reorganization application is approved, the corresponding shares of Modern Technology will be disposed of in the future, and the change in the equity structure of Humanwell Pharmaceutical may also be a high probability event. There are numerous cases of bankruptcy and reorganization in the capital market due to various reasons, resulting in the change of controlling interest. In the field of medicine, the most concerned in recent years is that after the financial fraud of Kangmei Pharmaceutical in 2019, Guangzhou Pharmaceutical Group was appointed to participate in its reorganization and finally became the new controlling shareholder of Kangmei Pharmaceutical. ST Jingfeng also entered the reorganization process due to debt problems, and ushered in CSPC Pharmaceutical Group as the lead investor in its reorganization, and the former's stock price also reversed the downward trend, with dozens of price limits in two months.

For Humanwell Pharmaceutical, although the debt problem of the controlling shareholder has no direct impact on the company's operation, if the actual controller of the company changes in the future, the company's business and development strategy may also be adjusted accordingly. Some industry analysts pointed out that if contemporary technology is reorganized, the market sentiment brought about by the debt problem of Humanwell Pharmaceutical due to the debt problem of major shareholders may be released as a positive, and the equity of Humanwell Pharmaceutical held by it may be transferred, and it is more likely to be auctioned as an asset. Prior to this, Modern Technology had sold assets several times to repay debts, so much so that only one listed company remained, Humanwell Pharmaceutical.

In May and November 2023, due to related debt disputes, about 10.4132 million shares and about 59.83 million shares of Humanwell Pharmaceutical held by Modern Technology were successively auctioned by the judiciary, accounting for about 2.28% and 3.67% of the total share capital of Humanwell Pharmaceutical, respectively. According to the China Enforcement Information Disclosure Network, in 2024, a total of 61 cases of Modern Technology will be executed, and they will still be executed, which also means that their assets may continue to be auctioned.

It is worth noting that Wuhu Xinfu Equity Investment Partnership (Limited Partnership), the third largest shareholder of Humanwell Pharmaceutical, holding 3.67% of the shares, was acquired through judicial auction in November 2023, with a total turnover of more than 1.4 billion yuan. According to the information of the enterprise, Wuhu Xinfu Equity Investment Partnership (Limited Partnership) is a Cinda fund, and China Cinda Asset Management Co., Ltd. subscribes to 99.89% of its capital contribution.

Some people also believe that it cannot be ruled out that Cinda will continue to increase its shareholding in Renfu Pharmaceutical in the future, and even become the latter. Although Humanwell Pharmaceutical's business operation has not been directly affected by the debts of its controlling shareholder, it has also been in the process of business adjustment in recent years, and it has also been a problem to be solved by increasing revenue or not increasing profits. In 2023, Humanwell Pharmaceutical's revenue and net profit will be 24.525 billion yuan and 2.134 billion yuan respectively, an increase of 9.79% and a decrease of 14.07% year-on-year, respectively. In the first half of 2024, Humanwell Pharmaceutical's revenue increased by 3.86% year-on-year to 12.861 billion yuan, but the net profit attributable to the parent company in the same period decreased by 16.07% year-on-year to 1.111 billion yuan, mainly due to the increase in non-recurring profit and loss due to the sale of some assets and debt restructuring in the same period of 2023, which was higher than that in the current period.

After deducting non-recurring gains and losses, Humanwell Pharmaceutical's net profit attributable to the parent company in the first half of this year was 1.089 billion yuan, a year-on-year increase of 1.68%. Due to the frequent business expansion in the early days, Humanwell Pharmaceutical has laid out many fields such as biomedicine, blood products, drug circulation, diagnostic reagents, etc., and has also entered the capital market and invested in Huatai Insurance, Tianfeng Securities and other companies, resulting in the diversification of its assets, pressure on capital flow, and the overall performance is affected.

In 2017, Humanwell Pharma put forward the strategy of "focusing on core research", and in 2018, it began to clean up assets with no obvious competitive advantages and weak synergy, including non-core pharmaceutical industrial and commercial assets, medical service assets, and some financial assets, so as to optimize its business and asset structure. According to the research report of Soochow Securities, the number of consolidated subsidiaries of Humanwell Pharmaceutical has decreased from 177 in 2018 to 143 in 2023, the cumulative amount of asset transfer has exceeded 9.4 billion yuan, and the company's asset-liability ratio has also decreased from 60.0% to 44.5%.

In the 2024 semi-annual report, Humanwell Pharma mentioned that in addition to strengthening the sales and promotion of core products, promoting the research and development of project pipelines, and actively laying out overseas markets and expanding international business, it is still actively promoting the "core focus" work and continuously optimizing the asset business. At present, the sale of shares of Wuhan Kangle Pharmaceutical Co., Ltd., Hubei Renfu Chengtian Pharmaceutical Co., Ltd., Renfu Dacheng (Wuhan) Investment Management Co., Ltd. and other companies is being promoted. As of the end of the first half of 2024, Humanwell Pharma has a total of 8 major holding subsidiaries, involving nervous system drugs, steroid hormone drugs, Uygur ethnic medicines, antibiotic raw materials, chemical generics and other fields. Among them, Yichang Renfu, a subsidiary, has the largest R&D and production base of narcotic drugs in Asia, and is also the only full-range fentanyl manufacturer in China.