Performance Under Continued Pressure, Internal Management Disorder……Multiple Difficulties May Lead to Change in Watson Biotech's Control Rights | Announcement Quick Read

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Caixin News, March 16 — (Reporter He Fan) The announcement shows that Watson Biotech (300142.SZ) is planning to issue A-shares to specific investors, which could change the company’s long-standing situation of having no actual controller or major shareholder. Previously, due to intensified industry competition and dispersed shareholding structure, Watson Biotech faced internal control disorder and slowing performance.

Tonight, Watson Biotech announced that it is planning to issue A-shares to specific investors, which may lead to a change in control of the company. Currently, all parties are discussing and negotiating specific plans, agreements, and related matters.

The company stated that, due to the uncertainty of the matter, to protect investors’ interests and prevent abnormal fluctuations in the stock price, the company applied to the Shenzhen Stock Exchange for a trading suspension. The stock will be suspended from the market opening on March 17, 2026 (Tuesday), with an expected suspension period of no more than two trading days. During the suspension, the company will strictly follow relevant laws and regulations and disclose information in a timely manner based on the progress of the matter. Once the matter is confirmed and the relevant announcement is disclosed, trading will resume.

It is known that Watson Biotech has long had a highly dispersed shareholding structure, with no shareholder holding more than 50%. The 2025 semi-annual report shows that the company has no controlling shareholder or actual controller. As of the end of June 2025, the largest shareholder was Industrial and Commercial Bank of China Limited – E Fund Innovation Board ETF, holding 2.52%. The other shareholders with over 5% holdings or the top 10 shareholders have very similar shareholding proportions, making it impossible to form actual control over the company.

In fact, Watson Biotech is under pressure from multiple sides. On one hand, in December 2025, the company received a regulatory decision from the Yunnan Securities Regulatory Bureau, due to the company’s failure to submit director compensation matters for 2023 and 2024 for shareholder approval, and the failure to submit senior management compensation for 2023 and 2024 for board approval. Prior to this, the company had also received multiple regulatory inquiries due to abnormal accounting subject changes, share repurchase disclosures, decision-making procedures, and other issues, exposing internal management irregularities.

On the other hand, the recently released 2025 performance forecast shows that Watson Biotech’s performance continues to be under pressure. The company stated that during the reporting period, the overall domestic and international vaccine markets are still in a downward cycle. The total revenue from the company’s vaccine products decreased by about 8% compared to the same period last year. Although net profit attributable to the parent increased year-on-year, non-recurring net profit is still expected to decline by 9% to 22%.