Former Hunan's richest man Shuai Fangwen family once again announces a share reduction plan. Erkang Pharmaceutical's stock price has already fallen by as much as 90%.

Eerkang Pharmaceutical recently announced a plan for its controlling shareholder and actual controller, Shuai Fangwen, to reduce his holdings, marking his second such plan in the past six months.

The “Daily Economic News” reporter found that behind Shuai Fangwen’s announcement of a reduction plan is the company’s continuous losses over the past three years, with revenue from its traditional pharmaceutical main business also shrinking for five consecutive years. However, due to the volume increase in the new energy business, the company reversed its previous declining revenue trend in 2025.

Company’s Loss Forecast for Last Year

On March 31, Eerkang Pharmaceutical announced that its controlling shareholder and actual controller, Shuai Fangwen, plans to reduce no more than 42 million shares of the company within three months after 15 trading days from the date of this announcement (from April 23, 2026, to July 22, 2026), representing 2.04% of the total share capital. Based on the closing price of 3.93 yuan on March 31, the market value of 42 million shares is 165 million yuan.

Shuai Fangwen currently holds 854 million shares of Eerkang Pharmaceutical, accounting for 41.38% of the total share capital. However, his equity pledge ratio is high. Data from Tonghuashun shows that 97.94% of his pledged shares are pledged against his holdings.

This reduction plan is his second announcement of an equal amount of reduction within about six months. In September 2025, the company announced that Shuai Fangwen planned to reduce no more than 42 million shares between October 29, 2025, and January 28, 2026, but no reduction was carried out after the plan expired.

Accompanying Shuai Fangwen’s reduction plan is the pressure on Eerkang Pharmaceutical’s performance. The company’s earnings forecast shows an expected net loss of 325 million to 385 million yuan in 2025.

The company explained that the main reason for the expected loss in 2025 is due to conservative impairment testing on assets and some inventories, based on the current capacity utilization rate being insufficient, and the difficulty in restoring to a reasonable level in the short term given the current market environment and the company’s own operational plans.

In fact, this is not the first time Eerkang Pharmaceutical has reported losses. From 2021 to 2024, the company’s net profits were -791 million yuan, 46 million yuan, -195 million yuan, and -373 million yuan, respectively. Except for 2022’s profit of 46 million yuan, the other years have shown significant losses since 2021.

In the “2014 Hurun Rich List,” Shuai Fangwen and his family ranked as Hunan’s richest with wealth of 9.5 billion yuan, ranking 177th among the wealthy. As Eerkang Pharmaceutical’s performance declined, Shuai Fangwen’s wealth also shrank significantly. According to the “Hurun Rich List,” from 2015 to 2021, the wealth of Shuai Fangwen and his wife was 21 billion yuan, 14.5 billion yuan, 13.5 billion yuan, 5.7 billion yuan, 6.7 billion yuan, 6.5 billion yuan, and 5.5 billion yuan, respectively, showing an overall downward trend.

Traditional Main Business Under Pressure

It is worth noting that the company’s operating income decreased from 2.74B yuan in 2019 to 1.14 billion yuan in 2024. However, the company reversed its previous declining revenue trend in 2025, achieving an operating income of 1.01B yuan in the first three quarters, a year-on-year increase of 17.81%.

In its earnings forecast, the company stated that in 2025, its main business grew compared to the same period in 2024 and showed a steady positive trend. This was mainly due to the commissioning and operation of the lithium ore beneficiation plant project in Nigeria, with the company’s lithium concentrate business maintaining stable output and generating revenue of over 200 million yuan during this reporting period. As a core raw material for lithium carbonate production, lithium concentrate benefited from the overall favorable market conditions for lithium carbonate during the reporting period, with smooth production and sales, becoming a new profit growth point for the company. Meanwhile, the company’s operating cash flow remained ample, with net cash flow from operating activities significantly increasing compared to 2024.

The “Daily Economic News” reporter found that in the first half of 2025, Eerkang Pharmaceutical’s revenue from the new energy industry was 127 million yuan, accounting for 18.57%; in 2024, it was only 9.9916 million yuan, accounting for 0.88%. However, the revenue from the pharmaceutical industry in the first half of 2025 still showed a shrinking trend, at 541 million yuan, down 11% from 608 million yuan in the first half of 2024.

Given the company’s ongoing losses in recent years and the reduction plans by its controlling shareholder, can the company’s traditional pharmaceutical business reverse its previous downward trend? Will the development of the new energy business offset the negative impact of the pharmaceutical business decline in the future?

In response, the “Daily Economic News” reporter sent an interview email to the company but has not received a reply as of press time.

Public information shows that Eerkang Pharmaceutical’s main business involves the production and sales of excipients, raw materials for drugs, finished pharmaceuticals, and new energy materials.

Looking at the stock price trend, as of April 2, Eerkang Pharmaceutical closed at 4.02 yuan, with a total market value of about 8.29B yuan. On April 3, the stock price further declined. Since the peak in 2015, the company’s stock price has fallen by as much as 90%.

Daily Economic News