KANGHUI PHARMACEUTICAL's subsidiary Shaanxi Youbang has suspended production
KANGHUI PHARMACEUTICAL's subsidiary Shaanxi Youbang has decided to fully suspend production in Workshop 1, Workshop 2, and Workshop 3 due to intensified market competition and ongoing losses. The suspension aims to avoid further losses and protect shareholder interests. Shaanxi Youbang mainly produces chemical drug intermediates, with an expected net profit of -52.5128 million yuan in 2024, impacting the company's net profit attributable to shareholders by 29.88%. Future production resumption will be determined based on market conditions
According to the Zhitong Finance APP, KANGHUI PHARMACEUTICAL (603139.SH) announced that due to the impact of the industry environment, market competition for the company's products has intensified, and the gross profit from product sales has continued to decline. The company's holding subsidiary, Shaanxi Youbang, plans to adjust other products and replace multiple products for trial production. However, due to reasons such as product processes, equipment updates, and immature technology, the production of the adjusted products has not gone smoothly, resulting in continuous losses for Shaanxi Youbang. To prevent further losses and protect shareholder interests, Shaanxi Youbang has decided to fully suspend production in workshops 1, 2, and 3 starting soon, and will decide whether to resume production based on market conditions in the future.
Shaanxi Youbang is a holding subsidiary of the company, primarily producing chemical pharmaceutical intermediates, and has incurred continuous losses in recent years. This suspension of production is expected to help the company avoid further losses and reduce its impact on the company's performance, preventing larger-scale losses and capital investment from continued production, which is beneficial for lowering operating costs, aligning with the company's strategic development direction, and serving the interests of the company and all shareholders. Additionally, this suspension of production is expected to have a certain impact on the completion of performance commitments related to Shaanxi Youbang. The specific impact of this suspension on the company's operating data will be subject to the audited financial report.
As of the end of 2024, the total assets of Shaanxi Youbang accounted for 16.91% of the company's most recent audited total assets, and the operating revenue for 2024 accounted for 1.42% of the company's consolidated revenue. The net profit for 2024 is projected to be -52.5128 million yuan, affecting the company's most recent audited net profit attributable to shareholders of -26.7815 million yuan, accounting for 29.88% of the company's net profit attributable to shareholders
