Asset-liability ratio exceeds 90%, with net profit expected to record losses for three consecutive years. Hainan Haiyao plans to reduce its holdings of China Antibody shares for cashing out.

(Source: Beijing Business Daily)

Hainan Haiyao (rights protection) (000566) plans to sell equity assets.

Hainan Haiyao’s most recent announcement shows that the company plans to reduce its holdings of shares in Hong Kong-listed China Antibody (03681.HK) through centralized bidding transactions and block trades, with the number of shares sold not exceeding 68 million shares, representing no more than 5% of its total share capital.

According to information, China Antibody was established in April 2001, registered in Hong Kong, and listed on the Hong Kong Stock Exchange in November 2019. As of now, its total share capital is 1.39B shares. China Antibody mainly develops biologics based on monoclonal antibodies. China Antibody is a participating enterprise of Hainan Haiyao; Hainan Haiyao holds 159 million shares of China Antibody, accounting for 11.46% of its total share capital.

Oriental Fortune reports that China Antibody’s latest share price is HK$1.76 per share, with a market capitalization of HK$2.44 billion. Based on this price, the maximum market value of the shares that Hainan Haiyao can potentially sell in this round is approximately HK$120 million. However, Hainan Haiyao states that due to large fluctuations in stock trading prices in the securities market, and because the timing of this disposal is uncertain, it is currently unable to precisely predict the specific impact of this transaction on the company’s performance.

Regarding the reasons for the proposed sale of equity assets, Hainan Haiyao stated that this reduction is to optimize the company’s asset structure, improve asset liquidity, and enhance utilization efficiency.

It is worth noting that Hainan Haiyao faces a situation of high asset-liability ratio. As of the end of the third quarter of 2025, the company’s asset-liability ratio is as high as 94.43%.

Among them, the company’s cash and cash equivalents have decreased year by year in recent years. From 2020 to 2024, they were RMB 1.26B, RMB 751 million, RMB 395 million, RMB 367 million, and RMB 330 million respectively. As of the end of the third quarter of 2025, they further decreased to RMB 260 million. Meanwhile, as of the end of the third quarter of 2025, the company’s current liabilities have increased to RMB 4.36 billion, with short-term borrowings reaching RMB 1.26B.

In addition to repayment pressure, Hainan Haiyao’s performance has also come under pressure. The company’s attributable net profit has been in the red for two consecutive years, and it is expected to continue to incur losses in 2025. Hainan Haiyao’s 2025 performance forecast shows that in 2025 the company’s attributable net profit is expected to be between -RMB 350 million and -RMB 430 million, narrowing losses year over year.

Hainan Haiyao stated that in 2025, under the impact of policy environments such as medical insurance and central procurement, market competition intensified. The company’s innovative drugs have not yet been launched, and newly launched generic drugs have not yet seen large-scale sales. The conversion of raw-material drug projects to fixed assets has led to an increase in depreciation expense. Also, the size of interest-bearing liabilities is relatively large, resulting in higher interest expense, thereby affecting the company’s performance.

Judging from non-recurring profit and loss (after excluding non-recurring items), Hainan Haiyao has even been loss-making for eight consecutive years from 2017 to 2024. In 2025, the company expects its non-recurring profit and loss to be between -RMB 380 million and -RMB 480 million, and it is expected to record losses for a ninth consecutive year.

Zhang Yue, Chairman of Aoyou International, said in an interview with a reporter from Beijing Business Daily that with a high asset-liability ratio, consecutive losses, and tight cash flow, the company’s reduction of financial assets to bring back cash, reduce liabilities, and stabilize liquidity is a typical self-rescue action. This reduction is beneficial for easing short-term repayment pressure and improving asset liquidity. It may also improve current-period performance and stabilize market confidence. However, volatility in Hong Kong stocks is high, and actual cash proceeds and returns are difficult to predict.

At present, Hainan Haiyao is vigorously developing innovative drugs. The company’s 2025 interim report shows that the company continues to strengthen innovation investment and team building, accelerates R&D of innovative drugs, continuously carries out R&D of generic new products and consistency evaluation work for products already in production, further improves the company’s ability to obtain market access for its products, and promotes the company’s transformation toward a combination of innovation and generic production.

Earlier this year, Hainan Haiyao announced that its wholly-owned subsidiary, Haikou Pharmaceutical Factory Co., Ltd., together with the Shanghai Institute of Materia Medica, Chinese Academy of Sciences, jointly developed the innovative drug Peyn-? (Perin-? ) project, and has recently completed Phase IIa clinical trials. Preliminary research results show that it has achieved the primary and secondary clinical endpoints. In addition, the company’s innovative drug projects also include the Class 1 new drug for anti-liver fibrosis, flufen? (Flufinone) capsules, which have been included by the National Medical Products Administration’s Drug Evaluation Center in the list of breakthrough therapy products.

In response to relevant questions from the reporter, Beijing Business Daily sent an interview letter to Hainan Haiyao, but as of the time of publication, no reply had been received.

Beijing Business Daily Reporter Ding Ning

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