HISUN(SH:600267) Zheng Quan Zhi Xing·2025-07-24 16:33Core Viewpoint - Zhejiang Haizheng Pharmaceutical Co., Ltd. is involved in a significant arbitration case regarding the buyback of shares from its subsidiary, Zhejiang Daoming Pharmaceutical Technology Co., Ltd., which has implications for its financial obligations and control over the subsidiary [2][3][4]. Group 1: Background and Agreements - In 2017, Haizheng Pharmaceutical approved a financing agreement for its subsidiary Daoming Pharmaceutical, allowing it to borrow 100 million RMB from Shenzhen Songhe Growth No. 1 Equity Investment Partnership, with conditions for share conversion [2]. - The agreement included a buyback clause, which became relevant when Daoming Pharmaceutical failed to meet the conditions for "qualified listing" or "qualified merger" by the end of 2022 [2][3]. - In June 2023, the company reached a settlement regarding the buyback obligations with one of the investors, Shancheng Investment [2]. Group 2: Arbitration Details - The arbitration was conducted by the Hong Kong International Arbitration Centre, with Genius III Found Limited as the claimant, seeking a buyback of 805,249 shares of Cayman Daoming [3]. - The arbitration ruling mandated Haizheng Pharmaceutical and DTRM Innovation to jointly repurchase the shares for a total price of approximately 129.44 million RMB [3][4]. - The ruling also included provisions for the payment of legal fees and interest on the amounts owed, with a specified interest rate of 6% per annum until payment is made [4]. Group 3: Financial Implications - The company has recognized a financial liability of 34.43 million RMB in its financial statements related to the buyback obligation, which will impact its net profit for the first half of 2025 [4]. - The arbitration outcome clarifies the financial obligations of the company and DTRM Innovation regarding the buyback, which is expected to affect the company's consolidated financial statements [4].