Core Viewpoint - Kanghua Biological has undergone a change in control, with its major shareholder Wang Zhentao transferring part of his equity and voting rights to Shanghai Wankexin Biological, raising questions about the company's future direction amid declining performance [1][2]. Group 1: Ownership Change - On July 20, Kanghua Biological announced that Wang Zhentao and his associates plan to transfer 21.91% of their shares and voting rights, with a total transaction value of 1.85 billion yuan [1][2]. - Wang Zhentao is expected to gain approximately 960 million yuan from this transaction, with the breakdown showing direct and indirect benefits from the sale [2]. Group 2: Financial Performance - Kanghua Biological has faced declining financial performance, with revenue growth stagnating and a projected revenue drop of 9.23% to 1.432 billion yuan in 2024 [6]. - The company's net profit peaked at 830 million yuan in 2021 but has since halved, with a forecasted net profit of 399 million yuan for 2024 [6][7]. - The first quarter of 2025 showed a significant decline, with revenue down 56% year-on-year and net profit down 86% [7]. Group 3: Market Position and Competition - Kanghua Biological's core product, the freeze-dried rabies vaccine, has been under pressure due to high production costs, leading to a price disadvantage compared to competitors [8][9]. - The market share of Kanghua's rabies vaccine has decreased, with a 43.83% drop in the number of vaccine batches approved for sale in 2024 [9]. Group 4: Management and Governance - Despite a reduction in employee numbers to 620, the chairman's salary has increased to a five-year high of 2.3745 million yuan, raising concerns about management decisions amid financial struggles [7]. - Wang Zhentao has high levels of pledged shares, indicating financial pressure, with 89.20% of his directly held shares in Kanghua Biological pledged [9][10]. Group 5: Future Prospects with State-Owned Enterprises - The acquisition by Shanghai Wankexin Biological, linked to state-owned enterprises, is seen as a potential turning point for Kanghua Biological, providing new resources and governance improvements [15][20]. - The Shanghai Biomedicine M&A Fund, which has a significant stake in Wankexin, aims to support Kanghua Biological's restructuring and integration within the biopharmaceutical industry [19][20].