The share price of Beijing Allgens Medical Science and Technology Co., Ltd. (SHSE: 688613) closed up 1.74% at market open on July 14th. The previous evening, the company issued three announcements, signaling a sharp escalation in the internal power struggle within the controlling family.
As a leading manufacturer of artificial bone repair materials, the company announced in June the completion of the inheritance transfer of shares from the original controlling shareholder. This came roughly a year after the passing of founder Cui Fuzhai due to illness. Following the transfer, the stake held by his 83-year-old widow, Huang Wanlan, increased from 2.75% to 5.53%. Their daughter, Cui Han, saw her stake rise from 0% to 1.84%, while the holding of son-in-law Hu Gang remained unchanged at 6.92%.
The power struggle among the three has now moved into the open. The latest announcements reveal that Cui Han's position as a director representing employees was removed following deliberation by the employee representative congress. Concurrently, Cui Han and Hu Gang have publicly begun soliciting proxy votes for a motion to remove Huang Wanlan from her directorship, thereby stripping her of the qualification to serve as board chair. Notably, they are only accepting proxy votes in favor of the motion.
The outcome of this contest will be decided at a shareholder meeting on July 20th. Attempts to contact the company for comment on the morning of July 14th were unsuccessful, with a general line stating communication was inconvenient and the board secretary's office not answering. Representatives for the proxy solicitors confirmed they had already received some authorizations.
Proxy Solicitation Aims Solely at Chairwoman's Removal
In their bid to gather more votes in favor, Cui Han and Hu Gang have presented five key arguments.
They contend that the company's stock price has fallen below its IPO issue price, reflecting insufficient market recognition of the firm's value and harming the interests of all shareholders. They further argue that, considering Huang Wanlan's current age, physical condition, and energy levels, she is no longer capable of comprehensively, independently, and diligently fulfilling the fiduciary and diligent duties of a director, particularly in critical areas such as major operational decision-making and compliance risk prevention in the highly competitive environment of the STAR Market.
These statements suggest the motion to remove Huang Wanlan is not a spur-of-the-moment decision but stems from long-standing grievances. For minority shareholders, however, the outbreak of this internal conflict was sudden.
After market close on June 22nd, the company announced it would convene its first extraordinary shareholders' meeting of 2026 on July 9th, with agenda items covering routine matters such as purchasing liability insurance for directors and executives, confirming director compensation, and the 2025 profit distribution plan.
After market close on June 29th, the company postponed the meeting to July 20th, citing a need to "coordinate work arrangements" and that "some related matters require further implementation," without providing specific details.
Then, after market close on July 7th, four days after the record date for the meeting had passed, the company abruptly announced the addition of a major proposal: the removal of Huang Wanlan from the board, with the proposal submitted by Cui Han and Hu Gang. Concurrently, the pair also sought to add a proposal to elect Hu Gang as a non-independent director at the same meeting, but this was rejected on the grounds that the board had already reached its maximum number of members.
It is important to note that since the chairperson must be selected from among the directors, if the motion to remove her as a director passes, Huang Wanlan would automatically lose her position as chairperson. If Hu Gang were to gain a seat on the board, it would provide him with a stepping stone to potentially compete for the chairmanship.
In fact, around the time of Cui Fuzhai's passing, Hu Gang had already served as the company's chairperson for six years, from November 12, 2019, to November 26, 2025. However, on November 26, 2025, Huang Wanlan was elected as the chairperson of the third board of directors by unanimous vote, and Hu Gang ceased to be a director.
In the same month, the company dissolved its board of supervisors. The chairman of the second board of supervisors, Wu Yongqiang, along with supervisors Xing Yinuo and Han Xiaolei, left their posts. Second-term independent director Xu Jiulong also stepped down from his role as independent director and from all board committee positions. Jin Yujiang likewise ceased to serve as a director.
Plummeting Performance and a Troubled Acquisition
The internal strife has drawn significant attention not only for its dramatic nature but also due to the company's standing in its industry.
The development of China's bone repair materials market started relatively late, with clinicians historically preferring allografts and autografts. Allografts still dominate the orthopedic bone defect repair market, accounting for about two-thirds of the orthopedic bone repair materials segment.
However, allografts face legal and ethical concerns. Following negative incidents in 2024, the market share of artificial bone repair materials is expected to increase further. The company is a leader in this field, holding a market share as high as 13% in 2020. It reached its performance peak in 2021, achieving revenue of 236 million yuan and a net profit attributable to shareholders of 121 million yuan.
From 2022 to 2024, however, the company's performance declined steadily, recording a rare net loss of 12.66 million yuan in 2024. In 2025, with the nationwide implementation of volume-based procurement for orthopedic artificial bone materials and significant progress in the academic promotion of neurosurgical artificial bone materials, sales volumes for both product categories increased notably, leading to higher sales revenue. The company returned to a net profit of 13.84 million yuan, but this remains far below the 2021 peak of 121 million yuan.
In retrospect, the national volume-based procurement for orthopedic artificial bone was a "gray rhino" event that disrupted the company's steady growth. As early as July 2019, a State Council notice outlined a reform plan for managing high-value medical consumables, signaling an intent to reduce inflated prices and control irrational use.
Artificial bone is a typical high-value consumable, and the company's product structure made its revenue vulnerable to procurement policies. Comparing the gross margins of core products in 2021 and 2025 reveals significant declines: Gejin fell from 84.90% to 67.87%, Chibei dropped from 82.13% to 42.90%, and BonGold decreased from 95.15% to 71.14%.
During this period, the company attempted to diversify. In 2023, it agreed to fully acquire German dental implant firm HumanTech Dental GmbH for approximately 3.246 million euros, hoping to develop its business in the dental implant field and create a second growth curve.
However, in January 2022, a State Council executive meeting decided to gradually expand the coverage of volume-based procurement for high-value medical consumables, explicitly including dental implants—a public concern—thereby ending the era of high profits in that sector. Data shows that in 2024, the company's new dental implant product line, with its high costs, along with increased production and sales of artificial bone materials, contributed to a 51.90% year-on-year increase in operating costs. In 2025, the gross margin for dental implants decreased by 39.74 percentage points year-on-year, making it, along with the Chibei product, one of the company's lowest-margin offerings.
This aligns with the accusation by Cui Han and Hu Gang that Huang Wanlan's leadership period involved "a lack of prudent evaluation in major overseas investment decisions." It is worth noting, however, that Hu Gang was serving as the company's chairperson at the time of this transaction, bearing ultimate responsibility as the top executive of the listed company.
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