Guizhou Bailing Group Pharmaceutical Co Ltd

Guizhou Bailing Group Pharmaceutical Co., Ltd., listed as ST Bailing, announced that its actual controller Jiang Wei has received an advance notice of administrative penalty from the China Securities Regulatory Commission. For suspected insider trading, violations of information disclosure rules, and transferring shares in breach of restrictive regulations, Jiang Wei is to have about 156 million yuan of illegal gains confiscated and be fined about 157 million yuan, bringing the total confiscation and fines to about 313 million yuan. He will also be barred from the securities market for five years. Another party involved, Gu Zili, is to be fined a total of 3 million yuan for helping Jiang Wei hold shares and derivative contracts on his behalf, participating in insider trading decisions, and relaying instructions. Investigations found that Jiang Wei held company shares and over-the-counter derivative contracts through private fund products. During the sensitive period for insider information in April 2024, he decided to sell shares and terminate derivative contracts early, avoiding losses of about 156 million yuan. From 2022 to 2024, he failed to truthfully report his shareholdings, causing false records of shareholding information in multiple announcements. Between October 2022 and January 2023, he transferred shares in violation of restrictive regulations. The company said the matter does not involve the listed company, will not affect normal production and operations, and does not trigger mandatory delisting for major violations.

ST Bailing released its 2026 interim report, with net profit attributable to the parent company at 30.03 million yuan, down 42.07% from the same period last year. Total operating revenue was 970 million yuan, down 33.62% year-on-year. Net cash inflow from operating activities was 72.64 million yuan, down 70.87% year-on-year. The latest asset-liability ratio was 43.95%, gross margin was 41.78%, ROE was 0.94%, and diluted earnings per share was 0.02 yuan.

ST Bailing released its 2026 interim report, showing operating revenue of 970 million yuan, down 33.62 percent year on year, net profit of 30.03 million yuan, down 42.07 percent, and non-GAAP net profit of 27.69 million yuan. The company said the decline was affected by multiple overlapping factors including market demand, the industry environment and policy changes, with pressure on product end prices and compressed profit margins. The traditional Chinese medicine industry has entered a period of structural adjustment. In 2025, operating revenue and total profit of the Chinese patent medicine industry fell 6 percent and 2.9 percent year on year respectively, but policy dividends continue to be released, and centralized procurement rules have been optimized from a sole focus on low prices toward quality first and reasonable pricing. In July this year, the National Essential Medicines List 2026 edition was released. Twelve of ST Bailing's main products, including Yindan Xinnaotong soft capsules, Xiaoer Chaigui Tuire granules and Hugan tablets, were selected, which will give them priority in deployment and use and accelerate coverage of primary-level channels. In addition, Compound Yizhihuanghua spray was approved as the first second-class protected variety of traditional Chinese medicine, with its indicated population expanded to children aged 6 to 13. In terms of production capacity, the company's preprocessing capacity for Chinese medicinal materials has been raised from 25,000 tonnes per year to 60,000 tonnes per year, and its granule workshop renovation project has received 15 million yuan in funding support from national ultra-long-term special government bonds.

Chengdu University of TCM Yin Hai Eye Hospital has seen its owners’ equity turn negative due to persistent losses, reducing shareholder Taiji Group’s investment book value to zero. Taiji Group’s 2025 annual report shows the investment cost in this associate was 53.99 million yuan, with a year-end book value of zero yuan, as cumulative losses exceeded the initial investment cost. Another shareholder, Tibet Pharmaceutical, disclosed in its 2025 annual report that cumulative unrecognised losses for the hospital amounted to 12.05 million yuan. It invested 32.996 million yuan for a 9.57 percent stake in 2016, and its financial reports over the years have also reflected years of losses. The hospital was established in 2016 as a tertiary-level eye hospital, led by Professor Duan Junguo of Chengdu University of Traditional Chinese Medicine, together with social capital including Taiji Group, Tibet Pharmaceutical, and Guizhou Bailing. However, it has been loss-making since its inception, and recently has experienced situations such as suspension of outpatient services, a deadline to vacate the premises, and wage arrears.