YABAO PHARM.CORP(SH:600351) Xin Lang Cai Jing·2025-12-23 12:14Core Viewpoint - The transfer of 62% equity of Taiyuan Pharmaceutical from Yabao Pharmaceutical to Shanxi Tongxiang Times Technology marks a significant shift in ownership, with the new focus on developing a technology innovation park for automotive sales and smart manufacturing instead of pharmaceutical production [1][3][9]. Group 1: Transaction Details - Yabao Pharmaceutical announced the sale of 62% of its subsidiary Taiyuan Pharmaceutical for 87.1887 million yuan, reducing its stake from 67% to 5% [1][10]. - The transaction was initiated on November 17, 2023, and completed with the registration of changes on December 19, 2023 [1][10]. - Shanxi Tongxiang has previously invested 19.8 million yuan for a 33% stake in Taiyuan Pharmaceutical, bringing its total investment to 107 million yuan for a 95% controlling interest [2][10]. Group 2: Financial Performance of Taiyuan Pharmaceutical - Taiyuan Pharmaceutical reported revenues of 906.71 million yuan in 2024, with a net loss of 1,537.85 million yuan; in the first eight months of 2025, revenues further declined to 39.04 million yuan with a net loss of 614.73 million yuan [3][11]. - The company ceased production entirely in August 2024, highlighting a stark contrast between its designed capacity and actual output [3][11]. - Yabao Pharmaceutical's overall revenue for the first three quarters of 2025 was 1.709 billion yuan, a year-on-year decrease of 19.46%, with a net profit of 215 million yuan, down 8.44% [3][11]. Group 3: New Ownership and Future Plans - Shanxi Tongxiang, established in January 2024, is primarily engaged in scientific research and technology services, with no revenue reported for 2024 and the first eight months of 2025 [4][12]. - The acquisition aims to collaborate with Shanxi Yijia Automotive Sales Service Co., a major player in the second-hand car market, to develop a technology innovation park [4][13]. - The new project, named "Intelligent Manufacturing New City," will focus on smart manufacturing, electronic information, biopharmaceuticals, new materials, and digital economy sectors, with an investment of several billion yuan [5][14]. Group 4: Strategic Adjustments by Yabao Pharmaceutical - Concurrently with the sale, Yabao Pharmaceutical completed a share buyback of 8 million shares, reducing its total shares from 700 million to 692 million, aimed at enhancing per-share earnings and shareholder value [6][15]. - The company faced setbacks in innovative drug development, notably terminating the clinical research of its diabetes drug SY-009, which had incurred a capitalized investment of 55.7933 million yuan [6][16]. - Revenue from key pediatric products, such as the Dinggui Er Qi贴, has significantly declined, with a 16.04% drop in pharmaceutical production revenue in 2024 [6][16]. Group 5: Industry Transformation Insights - This transaction reflects a broader trend in Shanxi's traditional industries, focusing on revitalizing existing assets and exploring cross-industry integration [7][17]. - The shift from a pharmaceutical production base to an automotive-focused technology park illustrates the strategic adjustments of traditional pharmaceutical companies in response to market pressures [7][17]. - The collaboration between Shanxi Tongxiang and Yijia Automotive signifies a move towards integrating traditional service industries with industrial real estate, marking a notable transformation in the region's economic landscape [7][17].