Hainan Haiyao plans to reduce its holdings in China Antibody for cashing out

Hainan Haiyao (000566) plans to sell stock assets.

According to the company’s latest announcement, Hainan Haiyao plans to reduce its holdings of shares in the Hong Kong-listed antibody company China Antibody (03681.HK) through centralized bidding transactions and block trades. The number of shares to be disposed of will not exceed 68 million shares, representing no more than 5% of its total share capital.

Data show that China Antibody was established in April 2001 and is registered in Hong Kong. It was listed on the Hong Kong Stock Exchange in November 2019. As of now, its total share capital is 1.387 billion shares. China Antibody mainly develops biologics based on monoclonal antibodies. China Antibody is an investee company 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 HKD 1.76 per share, with a total market capitalization of HKD 2.44 billion. Based on this price, the maximum market value of the shares that Hainan Haiyao can sell in this round is approximately HKD 120 million. However, Hainan Haiyao states that due to significant volatility in stock trading prices in the securities market, and because the timing of this disposal is uncertain, it is currently unable to accurately predict the specific impact of this transaction on the company’s performance.

Regarding the reasons for the planned sale of stock assets, Hainan Haiyao says 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 is facing a high asset-liability ratio. As of the end of the third quarter of 2025, the company’s asset-liability ratio has already reached 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 1.256 billion yuan, 751 million yuan, 395 million yuan, 367 million yuan, and 330 million yuan, respectively. By the end of the third quarter of 2025, they further decreased to 260 million yuan. Meanwhile, as of the end of the third quarter of 2025, the company’s current liabilities have increased to 4.36 billion yuan, of which short-term borrowings reached 1.263 billion yuan.

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

Hainan Haiyao says that in 2025, under the influence of policy environments such as medical insurance and volume-based procurement, market competition has intensified. The company’s innovative drugs have not yet been launched, and newly launched generic drugs have not yet scaled up in sales. The ongoing conversion of raw material drug projects to fixed assets has led to increased depreciation expenses. The company’s interest-bearing debt scale is relatively large, resulting in higher interest expense, thereby affecting the company’s performance.

Judging from non-recurring profit or loss, Hainan Haiyao has even recorded losses for eight consecutive years from 2017 to 2024. In 2025, the company expects non-recurring profit or loss to be between -380 million yuan and -480 million yuan, which is expected to extend the consecutive loss-making streak to nine years.

Zhang Yue, Chairwoman of Aoyou International, said in an interview with Beijing Business Today 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 standard “self-rescue” move. This reduction is beneficial for easing short-term repayment pressure, improving asset liquidity, and may also improve current-period performance and stabilize market confidence. However, with volatility in the Hong Kong stock market, the actual cash realized and returns are difficult to estimate.

At present, Hainan Haiyao is actively developing innovative drugs. The company’s 2025 interim report shows that it continues to strengthen innovation investment and team building, accelerates R&D of innovative drugs, and continues to carry out R&D of generic new products and consistency evaluation work for products already in production, further improving the company’s product market access capability and promoting transformation through a combination of innovation and generics.

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

Regarding related issues, a reporter from Beijing Business Today sent an interview request letter to Hainan Haiyao. However, as of the time of this press release, no response has been received.