Amid declining revenue and profits, Shanghai Haohai Biological Technology Co., Ltd. (688366) plans to expand into the biological amniotic membrane market.
According to Haohai Bio's latest announcement, approved by its sixth board meeting, the company and independent third-party Zhong Xiaoyan have signed a share transfer framework agreement with existing shareholders Miao Jiuchang and Miao Chunyun of Jiangxi Ruiji Biological Engineering Technology Co., Ltd. (Ruiji Bio). The deal involves acquiring 8.4661 million and 1.0499 million shares in three phases for RMB 38.3515 million and RMB 4.756 million, respectively. Post-transaction, Haohai Bio will hold a 19.8% stake in Ruiji Bio.
Established in 2002, Ruiji Bio specializes in producing and selling biological amniotic membranes. Its products—concave-convex amniotic membranes, orthopedic amniotic membranes, and wet-state biological amniotic membranes—are Class III medical devices primarily used in orthopedics and ophthalmology for tendon repair, ocular surface trauma treatment, and lacrimal duct obstruction support.
Notably, Ruiji Bio previously listed on the National Equities Exchange and Quotations (NEEQ) but voluntarily delisted in June this year. The transaction price of RMB 4.53 per share was negotiated based on its pre-delisting market price. Its closing price on the last trading day (February 11, 2025) was RMB 4.81 per share.
Haohai Bio, a medical technology firm focused on R&D and sales of medical devices and pharmaceuticals, operates in four segments: medical aesthetics/wound care, ophthalmology, orthopedic joint supplements, and anti-adhesion/hemostatic products.
The company stated that this investment grants it distribution rights for Ruiji Bio's products in China, enabling entry into the high-value biological amniotic membrane sector while expanding its ophthalmology and orthopedic portfolio. Ruiji Bio's human-derived amniotic membrane technology also supports Haohai Bio's regenerative medicine and tissue engineering research, potentially driving future innovation.
However, Ruiji Bio reported net losses in 2024 (RMB -11.7661 million) and the first three quarters of 2025 (RMB -11.2937 million), despite revenues of RMB 46.3567 million and RMB 46.0945 million, respectively.
Haohai Bio warned of risks, noting the absence of performance guarantees or valuation adjustment mechanisms. If Ruiji Bio underperforms, the investment could face losses or non-recovery. Market competition and product acceptance risks may also jeopardize returns and strategic objectives.
Zhang Yue, Chairman of Aoyou International, commented that the deal allows Haohai Bio low-cost entry into the biological amniotic membrane sector but cautioned about ongoing losses requiring sustained investment, potentially leading to impairment risks.
Haohai Bio itself faces performance pressure, with Q1-Q3 2025 revenue down 8.47% YoY to RMB 1.899 billion and net profit falling 10.63% to RMB 305 million.
The transaction reveals pre-existing ties: Haohai Bio's controlling shareholder You Jie (holding 21.69% of Ruiji Bio), non-executive director Tang Minjie (0.77%), and executive director Chen Yiyi's spouse Cai Xiaochuan (0.87%) already held Ruiji Bio shares. Haohai Bio clarified this constitutes a co-investment with affiliates without fund transfers.
Attempts to reach Haohai Bio's board secretary office for comment were unsuccessful.
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