HWHG(SH:600079) Jin Rong Shi Bao·2025-12-23 03:33Core Viewpoint - The ongoing investigation into "Contemporary System" highlights severe regulatory scrutiny over the misuse of control by major shareholders, particularly concerning the financial misconduct of companies like Renfu Pharmaceutical and its former controlling shareholder, Contemporary Group [1][2]. Group 1: Regulatory Actions and Violations - Renfu Pharmaceutical has been officially designated as ST (Special Treatment) due to multiple violations, including significant fund occupation and false financial reporting, leading to a total fine of 36.7 million yuan for both Renfu and Contemporary Group [1][2]. - The investigation revealed four main violations by Renfu Pharmaceutical from 2020 to 2022, including non-operational fund occupation totaling 12.785 billion yuan, which represented a significant percentage of the company's audited net assets during those years [3]. - The second violation involved undisclosed related-party transactions, where Renfu's subsidiaries purchased assets from a closely related company for 1.645 billion yuan, which was not reported due to a lack of timely disclosure from Contemporary Group [4]. - The third violation was the manipulation of net profits through off-balance-sheet entities, resulting in inflated profits in annual reports for 2020, 2021, and the first half of 2022 [5]. - The fourth violation involved the concealment of related-party relationships, which led to undisclosed transactions that affected Renfu's financial reporting [5]. Group 2: Market Reactions and Future Outlook - Following the regulatory penalties, Renfu Pharmaceutical's stock initially dropped but subsequently rebounded, indicating a market shift in focus towards the company's future governance and resource framework under new management [2]. - The company has stated that all past violations have been rectified and will not impact future operations, suggesting a stabilization in its business activities [6]. - The restructuring of Contemporary Group has led to the appointment of China Merchants Group as the new controlling entity of Renfu Pharmaceutical, which is expected to enhance the company's governance and operational capabilities [7][8]. - As of the first three quarters of 2025, Renfu Pharmaceutical reported revenues of 17.883 billion yuan, a year-on-year decrease of 6.58%, while net profit increased by 6.22% to 1.689 billion yuan [9].