PKU HealthCare (SZ:000788) Hua Xia Shi Bao·2025-11-14 09:15Core Viewpoint - The arrest of Xu Xiren, Chairman and President of Peking University Pharmaceutical Co., Ltd., due to criminal charges has created significant turmoil in the capital market, raising concerns about the company's future and its operational challenges [2][6]. Company Overview - Xu Xiren, who previously worked at Standard Chartered Bank, took control of Peking University Pharmaceutical in December 2024 for a symbolic price of 1 yuan, acquiring a company valued at nearly 4 billion yuan with a debt of 2.392 billion yuan for just 33 million yuan [3][4]. - Under Xu's leadership, the company began a process of "de-Peking University" to sever ties with its former parent institution, which included a name change and the termination of key partnerships [5][6]. Operational Challenges - The termination of a long-term service contract with Peking University International Hospital in May 2025 resulted in a significant revenue loss, with the hospital accounting for 78.15% of the company's drug distribution revenue in 2024 [6][7]. - The company anticipates a revenue decline of approximately 600 million yuan and a net profit decrease of around 40 million yuan for the second half of 2025 due to the loss of this major client [6][7]. Financial Performance - Peking University Pharmaceutical reported a 47.95% year-on-year decline in revenue for Q3 2025, amounting to 274 million yuan [6][8]. - The company's drug manufacturing business, which generated 623 million yuan in 2024, is being prioritized as a potential growth area, despite facing challenges from increased competition and declining profit margins [7][8]. Management Changes - Frequent management changes have occurred since 2025, with several key personnel resigning and Xu Xiren appointing his associates to leadership positions, raising concerns about the company's expertise in the pharmaceutical sector [8][9]. - The lack of relevant industry experience among the new board members has led to market skepticism regarding the company's operational capabilities [8][9].