Core Viewpoint - Huachuang Securities has filed a lawsuit against the major shareholder of Guizhou Bailing, involving a total amount exceeding 1.7 billion yuan due to a failure to fulfill obligations related to a financial rescue plan and stock pledge disputes [2]. Summary by Sections Legal Dispute - The dispute originates from a financial rescue plan initiated in 2019, where Huachuang Securities provided 1.4 billion yuan in funding to Jiang Wei and others in exchange for an 11.54% equity stake in Guizhou Bailing [5]. - Huachuang Securities also lent Jiang Wei 361 million yuan against a stock pledge of 110 million shares of Guizhou Bailing [5]. - The rescue plan is set to expire in July 2022 and March 2024, while the stock pledge matures in August 2024 [5]. - Despite multiple reminders from Huachuang Securities, Jiang Wei and others have not repaid the principal or provided viable solutions [5]. - The lawsuit seeks repayment of the principal amount of 1.4 billion yuan, along with fixed returns, penalties, and other related costs [5]. Company Background - Guizhou Bailing, established in 1999, is a pharmaceutical company known for its products like Yindan Xinnaotong soft capsules and Xiaoer Cha Gui Tui Re granules [7]. - The company was previously under a risk warning label due to a negative internal control audit report but has since rectified the issues and removed the warning [7]. - However, Guizhou Bailing is still under investigation by the China Securities Regulatory Commission for suspected violations of information disclosure laws [7]. Financial Performance - In 2024, Guizhou Bailing reported revenues of 3.825 billion yuan and a net profit attributable to shareholders of 33.62 million yuan, marking a return to profitability [8]. - Despite this, the company's net profit excluding non-recurring items remains a loss of 82.44 million yuan, indicating ongoing challenges in core business profitability [8]. - In the first quarter of the year, the company's performance declined significantly, with revenues dropping over 40% and net profits down more than 50% year-on-year [8]. Market Position - As of August 14, Guizhou Bailing's stock price was 6 yuan per share, giving it a total market capitalization of 8.386 billion yuan [9].