Watson Biotech Set to Welcome Second-Generation Shengji Capital as New Controller; Revenue Declined 3 Years, 5-Year 3 Regulatory Measures

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China Economic Net Beijing, March 19 — Watson Biotech (300142.SZ) resumed trading today, opening at 12.59 yuan, up 2.52%.

Last night, Watson Biotech disclosed its 2026 targeted issuance plan for A-shares to specific investors, with an estimated total fundraising of no more than 2,002.88 million yuan. After deducting issuance costs, all funds will be used to supplement working capital.

The issuance price is 9.63 yuan per share. The total number of shares issued will not exceed 207,983,751 shares (including this issuance), representing no more than 30% of the company’s total shares before the issuance.

The target investors for this issuance are Tengyun Xinwo. Tengyun Xinwo will subscribe to the shares issued by the company in cash.

According to the Partnership Agreement of Tengyun Xinwo, Tengyun Biotech is the general partner and executive partner of Tengyun Xinwo, with Tengyun Health, Xixing Management, and Yuxi Zhengxinli as limited partners. Tengyun Biotech has established an Investment Decision Committee, which is the highest decision-making body for investment decisions, discussing and deciding on project investments and exits. The committee consists of five members; Tengyun Biotech has the right to appoint three members, Xixing Management one, and Yuxi Zhengxinli one. Each member has one vote. Decisions require the approval of at least half of all members; in particular, for project exits, approval must be obtained from more than two-thirds of the members. Tengyun Biotech holds the right to appoint more than half of the committee members. Tengyun Biotech and its wholly owned subsidiary Tengyun Health together hold 80% of Tengyun Xinwo’s equity, enabling control over its investment decisions.

As of the signing date of the plan, Tengyun Health held 100% of Tengyun Biotech’s shares, Shiji Jinyuan held 100% of Tengyun Health’s shares, and Huang Tao, an individual, held 60% of Shiji Jinyuan, making him the actual controller of Tengyun Xinwo.

Prior to this issuance to specific investors, Tengyun Xinwo did not directly or indirectly hold any shares of Watson Biotech.

Before the issuance, Watson Biotech’s shareholding was relatively dispersed, with no shareholder able to control the company through direct or indirect holdings or investment relationships; no shareholder could control the appointment of more than half of the board members or decisions of the board, so Watson Biotech has no controlling shareholder.

This issuance will result in a change of control of Watson Biotech. According to the Share Subscription Agreement signed by Tengyun Xinwo and Watson Biotech on March 17, 2026, after the issuance to specific investors, Tengyun Xinwo will hold 207,983,751 shares, representing 11.51% of the listed company. The combined shareholding of Tengyun Xinwo and its actual controllers will reach 14.46% of the total share capital after issuance, and they will nominate more than half of the directors. After completion of this issuance, Tengyun Xinwo will become the controlling shareholder, and Huang Tao, the actual controller of Tengyun Xinwo, will become the actual controller of Watson Biotech.

The plan for the issuance to specific investors has been approved by the company’s sixth board of directors and is pending approval by the shareholders’ meeting, review and approval by the State Administration for Market Regulation (if required), approval by the Shenzhen Stock Exchange, registration with the China Securities Regulatory Commission, and other necessary administrative approvals.

In 2022 and 2023, Watson Biotech’s operating revenues were 5,086.45 million yuan and 4,113.77 million yuan, respectively.

In 2024, Watson Biotech’s operating revenue was 2,821.44 million yuan, a decrease of 31.41% year-over-year; net profit attributable to shareholders was 142.16 million yuan, down 66.10%; net profit after deducting non-recurring gains and losses was 108.40 million yuan, down 81.10%; net cash flow from operating activities was 1,036.52 million yuan, a decrease of 8.58%.

The 2025 performance forecast shows that Watson Biotech expects revenue of 2,400 million to 2,430 million yuan, compared to 2,821.44 million yuan in the same period last year; net profit attributable to shareholders is expected to be 160 million to 190 million yuan, a growth of 13.00% to 34.00%; net profit after deducting non-recurring gains and losses is expected to be 85 million to 99 million yuan, a decrease of 9.00% to 22.00%.

The main factors affecting the 2025 performance are: during the reporting period, the overall domestic and international vaccine markets remain in a downward cycle; the company’s vaccine product revenue decreased by about 8% compared to the previous year. Revenue from domestic vaccine products narrowed and stabilized, while export vaccine revenue continued to grow, increasing by about 35% year-over-year. The company has strengthened cost reduction and efficiency improvement measures, continuously enhanced operational management, and achieved a year-over-year increase in net profit attributable to shareholders. During the period, non-recurring gains and losses amounted to about 80 million yuan, compared to 33.76 million yuan in the same period last year.

In the past five years, Watson Biotech has received two regulatory measures from the Yunnan Regulatory Bureau of the China Securities Regulatory Commission (CSRC) and one from the Shenzhen Stock Exchange Growth Enterprise Market (GEM) Management Department.

On July 1, 2021, the Yunnan CSRC issued Decision [2021] No. 3, requiring Watson Biotech to rectify issues related to investment decision procedures and post-investment management in its investment in Zhuhai Hengqin Watson Investment Fund Partnership. The company was ordered to take corrective measures, which were recorded in the integrity records of the securities and futures market. The company has rectified according to the requirements and submitted a completion report on October 28, 2021.

On December 18, 2025, the Yunnan CSRC issued Decision [2025] No. 015, requiring Watson Biotech to rectify issues related to the failure to submit director and senior management compensation for shareholder approval in 2023 and 2024. The company was ordered to take corrective actions within 30 days of receipt and submit a written report to the Yunnan CSRC.

On December 19, 2025, the GEM Management Department issued Regulatory Letter [2025] No. 165, urging Watson Biotech to address issues related to director and senior management compensation approval, and to prevent recurrence.

As of the date of this announcement, the rectification measures are not yet fully completed. The company will strictly implement the corrective actions and complete all within the specified timeframe, reporting progress to the Yunnan CSRC upon completion.

The Daily Economic News today published a report titled “Watson Biotech Announces New Actual Controller Huang Tao, ‘Second Generation’ of Shiji Jinyuan, Secures Control of Three Listed Companies in Eight Years.” The report reveals Huang Tao’s true identity as the “second generation” leader of Shiji Jinyuan.

According to a report in Xiamen Evening News, Huang Tao, born in 1976, is the eldest son of Huang Rulun, founder of Shiji Jinyuan Group. He graduated from Xiamen University with a degree in Business Management and joined the group in 1999. He is now the Group President.

Shiji Jinyuan’s official website states that the group was founded in 1991 and is a comprehensive, cross-industry international enterprise. By 2025, it has invested 400 billion yuan in China, paid nearly 60 billion yuan in taxes, and owns core industries including real estate development, hotels and tourism, commercial operations, lifestyle services, health, and smart mobility. It has also invested in children’s education, financial services, AI technology, new energy, and mining.

Beyond its origins in Shiji Jinyuan, Huang Tao has repeatedly gained control of listed companies through capital operations. As early as 2018, he used Tibet Jingyuan Investment Management Co., Ltd. (“Tibet Jingyuan”) to acquire control of Wuantong Technology, successfully taking it over in 2022, marking his first control of an A-share listed company.

In November 2025, Wuantong Technology again initiated capital operations, planning to issue shares to Tibet Tengyun Investment Management Co., Ltd. and other entities, raising up to 920 million yuan. After issuance, Huang Tao’s stake will increase from 21.01% to 39.24%, further consolidating control.

In June 2025, Huang Tao’s capital influence extended further. At that time, Annor, known as the “first children’s clothing stock,” announced that its founders, Cao Zhang and his wife, transferred shares to Shenzhen Xinchuyuan Investment Partnership, making Xinchuyuan the controlling shareholder and Huang Tao the new actual controller. Notably, Xinchuyuan was established just three days before the transfer, paying an earnest money of 80 million yuan, demonstrating aggressive tactics similar to those used in acquiring Watson Biotech.

According to Annor’s June 2025 disclosure, Huang Tao also holds strategic stakes in several other companies: 6.29% of Tuo Lu Zhe, 10.84% of Xinming Life Technology, 12.53% of First Service Holdings, and 9.11% of China Financial International.

Additionally, his controlled platform, Tibet Tengyun Investment Management, has long maintained 110 million shares, ranking among CITIC Construction’s top ten tradable shareholders. Platforms like Tibet Jingyuan and Tibet Wanquing have also appeared among the top ten shareholders of Orient Zhongke.

Since 2018, when he began investing in Wuantong Technology, Huang Tao has been active in capital markets for eight years. With Watson Biotech now under his control, the “second generation” of Shiji Jinyuan is expanding his strategic footprint significantly.

(Responsible Editor: Cai Qing)