On the morning of April 1, 2026, MIRXES-B (02629.HK), a prominent early cancer screening company listed for less than a year, was officially suspended from trading by the Hong Kong Stock Exchange due to its failure to publish its audited 2025 annual report on time. One day prior to the suspension, the company's total market capitalization stood at approximately HK$3.7 billion, having decreased by more than half from its post-listing peak of over HK$8 billion, falling below the eligibility threshold for the Hong Kong Stock Connect program.
The following day, MIRXES-B disclosed further details that raised deeper market concerns. Its auditor, KPMG, identified 14 prepayment transactions during the annual report audit, totaling about $14.8 million. Notably, approximately $9.5 million of this amount had already been refunded by the relevant service providers, accounting for over 64% of the total. This sum is nearly double the total prepayments made by the company over the previous four years combined (prepayments and deposits for MIRXES-B were $3.97 million in 2022, $3.79 million in 2023, and $3.49 million in 2024), indicating a sharp increase in prepayment volume following its listing.
Event Details: Rapid Inflow and Outflow of $14.8 Million in Prepayments Raises Audit Concerns March 31, 2026, was the statutory deadline for Hong Kong-listed companies to publish their annual reports. On that day, MIRXES-B announced that its auditor, KPMG, required additional time to assess certain prepayments made by the company to service providers and suppliers, preventing the timely completion of the 2025 results audit. According to Hong Kong listing rules, failure to publish an audited annual report on schedule triggers a mandatory trading suspension. If the suspension persists for more than 18 months, the company faces the risk of delisting.
Details disclosed the next day surprised the market: most of the 14 prepayments occurred in the second half of 2025, shortly after MIRXES-B's listing, with a total value of about $14.8 million. More notably, as of the announcement date, approximately $9.5 million had been refunded by the relevant parties, while the remaining $5.3 million related to prepayments for work either completed or in progress. The company explained to media that "some projects were cancelled, leading to the corresponding prepayment refunds," characterizing the $9.5 million in refunds as compliant handling resulting from project adjustments.
Suspicious Circumstances: Why Were Multiple Projects Initiated and Abandoned Rapidly Post-IPO? The unusual nature of these prepayments centers on two key aspects. First, the amount and timing are highly sensitive. MIRXES-B's IPO in May 2025 raised net proceeds of approximately HK$881 million. Within just a few months after listing, the scale of prepayments surged dramatically to $14.8 million, compared to an annual level of around $4 million in each of the previous four years. This suggests an abrupt acceleration in the company's project execution pace post-listing, which was subsequently followed by the cancellation or suspension of multiple new projects corresponding to the approximately $9.5 million in refunds within a six-month period.
Second, the pattern of making large prepayments only to have a significant portion refunded shortly afterward—a "fast-in, fast-out" cash flow model—itself constitutes a red flag for auditors. KPMG's in-depth scrutiny during the audit, focusing on the commercial substance of the prepayments, the background of the counterparties, and the recoverability of the funds, reflects the heightened vigilance regarding asset quality within the current Hong Kong audit environment.
Operational Performance: Cumulative Losses Near $218 Million Over Three Years; Halved Market Cap Falls Below Stock Connect Threshold MIRXES-B's core business is early cancer screening based on miRNA technology. Its flagship product, GASTROClear™, is the world's first and only approved molecular in-vitro diagnostic (IVD) product for stomach cancer screening. In October 2025, this product obtained a Class III Medical Device Registration Certificate from China's National Medical Products Administration.
However, technological barriers have not translated into profitability. According to its IPO prospectus, MIRXES-B's revenues were $17.76 million in 2022, $24.19 million in 2023, and $20.28 million in 2024. Conversely, its annual losses were substantial: $56.20 million in 2022, $69.57 million in 2023, and $92.21 million in 2024, resulting in a cumulative three-year loss of approximately $218 million. These losses have been widening consistently and far exceed the scale of its revenues.
The trading suspension crisis has further exacerbated the company's valuation challenges. Prior to the suspension, the company's total market capitalization was about HK$3.7 billion, having decreased by over 50% from its initial post-listing level of over HK$8.2 billion. This places it well below the HK$5 billion average daily market capitalization threshold required for inclusion in the Hong Kong Stock Connect program for Hang Seng Composite SmallCap Index constituents. Consequently, the company has lost access to investment from mainland Chinese funds via the Stock Connect channel, which is likely to further constrain its future financing options and trading liquidity.
Company Response: Establishes Independent Investigation Committee, Stresses Fundamental Differences from Other Cases Following the suspension, MIRXES-B's board of directors acted swiftly. On April 2, the board approved the establishment of an independent investigation committee, to be led by independent non-executive directors, and appointed law firm and forensic investigation agency as independent professional advisors to assist the investigation. This "dual-advisor" structure is relatively uncommon among Hong Kong-listed biotech companies, signaling the company's attempt to demonstrate governance sincerity to the market through external expertise.
The company has repeatedly emphasized that the current review is fundamentally different from malicious issues such as financial fraud or fund misappropriation, characterizing it instead as a procedural compliance check against the backdrop of tightening regulatory scrutiny. A company representative also pointed out that the remaining $5.3 million in prepayments is relatively small compared to the company's total expenditures of $81.2 million in 2024, and that the company is providing the necessary information as required by the audit.
Nevertheless, market doubts have not been entirely dispelled by this "procedural" characterization. Analysts note that the occurrence of such large-scale prepayment refunds less than a year after listing still raises a core question: Why were multiple new projects cancelled collectively within a six-month period? This prompts scrutiny over whether the project approval and review mechanisms were sufficiently rigorous.
Industry Context: The "Major Test" Under Tightening Regulation is Far From Over The suspension of MIRXES-B occurs within the broader context of a comprehensively tightening audit environment in Hong Kong. Data shows that on April 1 alone, over 20 Hong Kong-listed companies faced simultaneous trading suspensions for failing to publish their annual reports on time, spanning sectors including biotech, real estate, and catering. Influenced by PwC's resignation as auditor for some Hong Kong-listed firms, the "Big Four" audit firms, including KPMG, have generally intensified their scrutiny, shifting from traditional bookkeeping checks towards more rigorous cross-border,穿透式 due diligence and confirmation procedures.
More pressingly, the shadow of delisting associated with another company continues to loom over the early screening sector. That company, once hailed as a leader, saw its peak market cap exceed HK$30 billion before being forcibly delisted in October 2025 after its auditor could not express an opinion on the authenticity of its revenue. While MIRXES-B repeatedly stresses the fundamental difference between "revenue authenticity" issues and its own "procedural review of prepayments," the fact that it faces a trading suspension less than a year after its IPO is sufficient to heighten investor caution.
According to Hong Kong exchange rules, MIRXES-B can only resume trading after completing all necessary audit procedures and publishing its annual report. The company has emphasized that the compliant handling of the relevant funds is progressing orderly and that daily operations remain normal. However, the review by the independent investigation committee is not yet complete, and there is still no definitive timeline for the release of the annual report. For MIRXES-B, the true challenge extends far beyond merely issuing a delayed report. Under multiple pressures—including comprehensively upgraded audit standards, sector-wide valuation reassessments, and falling below the Stock Connect threshold—this biotech firm, which previously captivated the capital market with its innovative story, now faces a critical race against time to restore trust.
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