Pharmaceutical giant Fosun Pharmaceuticals cut its holdings, what happened?
, Fosun Pharmaceuticals announced that the company's controlling shareholder, Shanghai Fosun Hi-Tech Co. Ltd. plans to reduce its holdings of no more than 3% of the company's total share capital of A shares by means of centralized bidding and bulk trading, calculated on the basis of the company's total share capital as of September 2, 2022, i.e., no more than 800,897,000 A shares. So today I am here to organize the Fosun Pharmaceuticals reduction, let's take a look together!
A share price fell more than 60%, Hong Kong shares hit a 2-year low
September 5, Fosun Pharmaceuticals A shares fell in volume, the share price hit a new low of nearly one and a half years. As of the close of business, Fosun Pharmaceuticals A shares reported 36.19 yuan / share, down 10.00%, turnover rate of 2.75%, turnover of 2.029 billion yuan; Fosun Pharmaceuticals H shares closed at 21.85 Hong Kong dollars / share, down 12.948%, turnover rate of 3.44%, turnover of 422 million yuan, hitting a new low of 2 years. The total market capitalization of Fosun Pharma A+H is close to 90 billion yuan.
From the perspective of historical performance, Fosun Pharma's A-share price had hit an all-time high of 90.50 yuan (ex-complexed) on Aug. 5, 2021, but since then it has entered a downward channel, and as of the close of business on Sept. 5, Fosun Pharma's A-share has fallen more than 60 percent from its high point.
The after-hours LW list data show that on September 5, the day, Fosun medicine suffered two institutional seats net selling 106 million yuan, Shanghai stock pass net selling 65,676,200 yuan, and Shenwan Hongyuan Securities Co., Ltd. Shanghai Jing'an District extension of the middle of the Securities Department, the Oriental Fortune Securities Co., Ltd. Lhasa, East Ring Road, the first securities business department and other seats are a larger buy operation, business department Seats total net buy 43.4505 million yuan.
In the news, on Friday (September 2) evening, Fosun Pharmaceuticals released on the controlling shareholders to reduce shareholding plan announcement. The company's controlling shareholder, Fosun Hi-Tech, plans to reduce its holdings of A shares of not more than 3% of the company's total share capital through centralized bidding and block trading, calculated on the basis of the company's total share capital as of September 2, 2022, i.e., not more than 80,089,700 A shares, and the price of the reduction will be determined according to the market price.
Wherein, the reduction of A shares by way of centralized bidding shall not exceed 1% of the total share capital of the Company, calculated on the basis of the total share capital of the Company as at September 2, 2022, i.e., not more than 26,696,600 A shares, such reduction may be carried out after 15 trading days from the date of disclosure of the announcement, and the planned period of the reduction shall be from September 27, 2022 to March 26, 2023 (including the first and the last two days).
Reduction of A shares not exceeding 2% of the total share capital of the Company by way of bulk trading, calculated on the basis of the total share capital of the Company as at September 2, 2022, i.e., not exceeding 53,393,100 A shares, such reduction may be carried out after 3 trading days from the date of disclosure of the announcement, and the planned period for such reduction shall be from September 8, 2022 to March 7, 2023 (inclusive of the first and last two days).
First time since the listing of the controlling shareholders to reduce
It is worth noting that this is the first time since the listing of Fosun Pharmaceuticals suffered controlling shareholders to reduce their holdings, and the reduction is not an unusual high level of selling, but the share price fell to 60% of the cash after the listed companies in the A-share market is relatively rare.
The reason for the reduction, Fosun Hi-Tech said in the announcement for "their own business plan needs".
Fosun Hi-Tech is 100% owned by Hong Kong-listed Fosun International, which is the controlling platform of the entire Fosun family. According to Fosun International's interim report, in the first half of 2022, Fosun International's total assets amounted to 849.685 billion yuan, of which the total liabilities amounted to 651.157 billion yuan, with a debt ratio as high as 76.64%, current liabilities amounted to 375.395 billion yuan, short-term borrowings amounted to 123.692 billion yuan, and the money funds on the books amounted to 117.654 billion yuan, which puts pressure on the short-term debt repayment.
International rating giant Moody's downgraded the senior unsecured debt rating of bonds issued by Fosun International to B1 from Ba3, due to Fosun's weak liquidity at the holding company level, and the cash held by the holding company is not enough to cover short-term debts due in the next 12 months. Moody's predicts Fosun will scale up asset sales to pay down maturing debt.
In order to release the pressure of debt, since 2022, Fosun has frequently reduced its holdings to cash out.
For example, on May 31, Fosun International announced that Tsingtao Brewery H-share liquidation reduction; June 16, Fosun International significantly reduced its holdings of Zhongshan Public Utilities, intends to reduce its holdings of 29,522,000 shares, cashing out about 250 million yuan; August 27, Hainan Mining announced that the company's controlling shareholders and concerted action of Fosun Industry and Investment intends to reduce its holdings of more than 61 million shares, intends to cash out of about 500 million yuan.
At the same time, Fosun Pharmaceuticals also launched a new round of fixed-price increase in July, the issuance of 107 million A shares, the issue price of 42 yuan/share, raising a total of 4.484 billion yuan. But according to the fixed-price plan, only 1.26 billion yuan of this is used to supplement working capital.
And this time Fosun Hi-Tech reduced its stake in Fosun Pharmaceuticals, the market is also widely believed to be a move by Fosun Galaxy to reduce the pressure of debt.
Multiple star fund managers to reduce their holdings of Fosun Pharmaceuticals
As a domestic pharmaceutical giant, Fosun Pharmaceuticals first half of the performance is not as satisfactory. In the first half of this year, Fosun Pharmaceuticals operating income of 21.34 billion yuan, an increase of 25.88%; attributable to shareholders of listed companies net profit of 1.547 billion yuan, a year-on-year decrease of 37.67%. The decrease in profit was mainly due to the shrinking stock price of Fosun Pharma's investment in BionTech (from a high of $457.93 per share to $143 per share as of the end of the reporting period).
Fosun Pharma said that China's pharmaceutical industry as a whole is in a period of accelerated transformation and the pace of industrial restructuring has accelerated. With the normalized operation of band purchasing and product expansion, the profit of generic drugs continues to narrow, and the growth of the revenue side is also facing greater challenges.
According to Wind data, as of the end of the second quarter of 2022, *** there were 351 funds holding Fosun Pharmaceuticals, with a total combined holding of about 86,930,300 shares, compared with 135,802,700 shares at the end of the second quarter of 2021, a year-on-year decrease of about 36%.
Specifically, a number of star fund managers have reduced their holdings in Fosun Pharma in the first half of this year.
For example, Qi He and Yang Zongchang's Efonda New Silk Road, Sun Wei's Oriental Red Zhiyuan three years are in the first half of the Fosun Pharmaceuticals to liquidate the position, respectively, reduced holdings of 272,800 shares, 331,000 shares, as of 2022 semi-annual report, the Fosun Pharmaceuticals has been withdrawn from the list of the two funds' holdings; in addition, Tian Hanqing and Xu Shuaiyu's Huatai Berrill quantitative enhancement, Fang Yuhan's investment Morgan Medical Health reduced their holdings of 6.30 million shares, 6.17 million shares, respectively.