On August 23, 2011, the stock price of Zhongheng Group, which had always been outstanding, suddenly dropped to the limit, causing an uproar in the market.
Various rumors even circulated on the Internet, and the company's announcement later that night made the reasons behind the drop begin to surface.
Zhongheng Group announced that the company has major business negotiations with Shandong Buchang Pharmaceutical Sales Co., Ltd. (hereinafter referred to as "Shandong Buchang"), and there are still uncertainties in relevant matters.
In order to avoid a significant impact on the company's stock price, upon application, the company's stock has been suspended from trading since August 23, 2011. Relevant progress will be announced and trading will resume within five trading days.
According to the data, Zhongheng Group announced on November 6, 2010 that the company's holding subsidiary Wuzhou Pharmaceutical signed a general product distribution agreement with Shandong Buchang, and handed over all its products that meet the national drug quality standards to Shandong Buchang for general distribution.
, the performance period is five years from December 1, 2010 to November 30, 2015***.
According to calculations in the agreement, the pharmaceutical sector of Zhongheng Group will achieve tax-included sales revenue of approximately 2.3 billion yuan in 2011 and approximately 3 billion yuan in 2012, with an increase in each of the next three years.
Zhongheng Group's total operating income in 2009 was only 712 million yuan, of which the pharmaceutical sector's operating income was 520 million yuan; in the first half of 2010, the total operating income of the pharmaceutical sector was only 367 million yuan.
The performance did not grow as expected according to the contract, which obviously became the trigger of the conflict between Zhongheng Group and Shandong Buchang.
The industry also agrees that the limit drop on the 23rd and subsequent announcements have clearly shown that this seemingly beautiful contract may be unsustainable.
Once the good contract expectations of public funds that caused huge losses to cause the stock price to skyrocket were shattered, the stock price in the secondary market quickly fell to the limit and then was suspended, making the funds that gathered together become ants in the hot pot.
Statistics show that as of the end of the first half of this year, a total of 47 major institutions held Zhongheng Group, including 45 funds, holding a total of 182 million shares, accounting for 16.7% of its circulating stock.
%.
It is worth noting that compared with the first quarter, a total of 12 funds increased their holdings by 86.33 million shares, and no institution reduced its position.
Among them, Guangfa Group and Huashang Group hold the largest number of shares.
Twelve funds including Alpha under the Huashang Group, and 19 funds including the Strategy Preferred Hybrid Securities Investment Fund under the Guangfa Group hold huge amounts of shares in Zhongheng Group.
The Chinese funds that had previously been heavily stocked seemed to have not been spared either.
Just from the list of the top ten shareholders of tradable shares disclosed in the semi-annual report of Zhongheng Group, we can find that China Advantage Growth still bought 10.4 million shares in the second quarter, entering the top ten list.
Obviously, the impact of the news that the contract may change on the stock price in the secondary market has made these institutions restless.
On August 25, 2011, GF and Huashang Fund, which hold a large amount of Zhongheng Group, jointly issued an announcement stating that starting from August 23, the shares of Zhongheng Group held by their funds would be valued at 14.80 yuan per share.
In this way, the valuation of Zhongheng Group was lowered by two lower limits.
Previously, due to the "clenbuterol" incident, Shuanghui Development became the first stock to have its valuation lowered by two levels by a fund company.
Huashang Fund stated that if major events occur during the subsequent suspension period of Zhongheng Group, it will conduct a reasonable assessment to further determine its valuation price.
From the date that Zhongheng Group's shares resume trading and their transactions reflect the characteristics of active market transactions, the closing price of that day will be resumed for valuation.
Zhongheng Group issued an announcement in the evening on August 28, 2015. The company received an official letter from the Hunan Provincial People's Procuratorate. According to the Supreme People's Procuratorate's "Notice on Designating Jurisdiction for Xu Shuqing's Suspected Criminal Clues", the Hunan Provincial People's Procuratorate prosecuted the company's chairman Xu Shuqing in accordance with the law.
A case was filed for suspected bribery by an employer and compulsory measures were taken. The case is under investigation.
Xu Shuqing has signed a written power of attorney entrusting the company's director Jiang Chenghou to perform the duties of the company's legal representative, chairman and general manager.
Zhongheng Group stated that the company's production and operations are normal.