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Suspected of manipulating the securities market in violation of laws and regulations,Jincheng Pharmaceutical(300233.SZ) Chairman Zhao Liqing was recently placed under investigation. Less than a week ago, his father Zhao Hongfu and another actual controller of Jincheng Pharmaceutical just completed a share reduction plan and cashed out 43.17 million yuan.

Jincheng Pharmaceutical issued an announcement on the evening of August 16, stating that the company's actual controller and chairman Zhao Yeqing received a "Notice of Case Filing" issued by the China Securities Regulatory Commission on August 14, 2024. The China Securities Regulatory Commission decided to file a case against Zhao Yeqing for suspected illegal and irregular behavior of manipulating the securities market. The announcement stated that this case investigation is an investigation into personal behavior, and the company will continue to pay attention to the progress of the above matters and strictly fulfill its information disclosure obligations in accordance with regulatory requirements.

Jincheng Pharmaceuticals was founded in 2004 and is headquartered in Zibo, Shandong Province. It is mainly engaged in the research and development, production and sales of pharmaceutical intermediates, APIs, pharmaceutical preparations, health products, and synthetic biology products, as well as pharmaceutical intermediates and API CMO/CDMO services. In June 2011, Jincheng Pharmaceuticals was listed on the Shenzhen Stock Exchange.GEMListed on the stock market.

Jincheng Pharmaceutical's 2023 annual report stated that "the lower of the company's net profit before and after deducting non-recurring gains and losses in the last three fiscal years was negative, and the audit report for the most recent year showed that there is uncertainty about the company's ability to continue operating."

The reporter noticed that Jincheng Pharmaceutical's gross profit margin has been declining for five consecutive years, from 58.47% in 2019 to 43.73% in 2023. The indicator improved slightly in the first quarter of this year, rising to 44.50%, but still lower than the level in 2022. In the first quarter of this year, Jincheng Pharmaceutical's main revenue was 932 million yuan, up 12.32% year-on-year; net profit attributable to the parent was 82.97 million yuan, up 65.43% year-on-year; non-net profit was 80.3136 million yuan, up 87.19% year-on-year.

Since the beginning of this year, Jincheng Pharmaceutical has interacted with investors on synthetic biology many times. From February to April this year, during the craze for synthetic biology concept stocks, Jincheng Pharmaceutical's stock price began to rise continuously, and continued to rise in late April and early May, reaching this year's highest price of 20.30 yuan per share on May 6. However, after May 7, the company's stock price began to gradually fall, and closed at 14.38 yuan per share on the latest trading day (August 16).

The latest disclosed first quarter report information shows that among the top ten shareholders of Jincheng Pharmaceutical, the actual controllers Zhao Hongfu and Zhao Yeqing, father and son, hold a total of 4.4% of the shares, and hold 20.46% of the shares through Zibo Jincheng Industrial Investment Co., Ltd. (hereinafter referred to as "Jincheng Industrial"). According to Tianyancha information, Zhao Hongfu is the chairman of Jincheng Industrial, holding 35.26% of the shares, and the actual ultimate beneficial shares are 66.22%; Director Zhao Yeqing owns 2.09% of the shares, and the actual beneficial shares are 4.89%.

According to Jincheng Pharmaceutical's announcement on July 12, Zhao Hongfu planned to reduce his holdings by no more than 3 million shares within three months due to his own capital needs. On the evening of August 12, the company announced that Zhao Hongfu reduced his holdings by 2.9995 million shares through centralized bidding within a week from August 5, with an average price of about 14.39 yuan per share, cashing out a profit of 43.16 million yuan.

At the end of last month, Jincheng Pharmaceutical also announced that Jincheng IndustrialHaitong SecuritiesA total of 5.3903 million shares were pledged, accounting for 1.41% of the total share capital. As of the announcement date, Jincheng Industrial has pledged a total of 39.0742 million shares, accounting for 49.74% of its total shareholdings.

(This article comes from China Business Network)