PKU HealthCare (SZ:000788) Mei Ri Jing Ji Xin Wen·2025-11-10 15:08Core Viewpoint - The recent criminal detention of Xu Xiren, chairman and president of Beijing University Pharmaceutical (000788.SZ), has plunged the company and its controlling entity, Southwest Synthetic Pharmaceutical Group, into a public relations crisis, raising concerns about management changes and employee dissatisfaction [2][4][11]. Group 1: Management Changes and Employee Sentiment - Xu Xiren acquired control of Beijing University Pharmaceutical in December 2024 for a symbolic price of 1 yuan, which led to a significant drop in the company's stock price by approximately 15% in the following days [7][8]. - Employee sentiment shifted from initial acceptance to growing dissatisfaction, particularly after the cancellation of holiday benefits and high-temperature subsidies, which had not occurred before [8][11]. - The departure of several key executives shortly after Xu's takeover, including the resignation of the former president Yuan Pingdong, has created uncertainty among employees regarding future operations [11][12]. Group 2: Internal Conflicts and Investigations - Internal conflicts have escalated, particularly regarding employee welfare and historical issues related to staff placement, which have remained unresolved since the company's acquisition by the Fangzheng Group in 2003 [14][29]. - The situation intensified with reports of labor disputes and protests from retired employees over housing and welfare issues, which are believed to have contributed to Xu's criminal investigation [12][13]. - Investigations by local authorities began in October, leading to Xu's detention at the airport on charges of embezzlement, with concerns raised about the management of company assets and funds [18][19]. Group 3: Financial Performance and Business Impact - The company has faced significant financial challenges, including a projected revenue decline of approximately 600 million yuan (29.13% of recent audited revenue) due to the loss of its largest client, Beijing University International Hospital [33]. - In the third quarter, Beijing University Pharmaceutical reported a revenue drop of 47.95% year-on-year, indicating the adverse effects of the ongoing management turmoil [33]. - The company's historical performance had shown a net profit increase of 211% in 2024, but the recent changes have raised concerns about future profitability and operational stability [11].