In just five months since its market debut, Shandong Weigao Blood Purification Products Co., Ltd. (603014.SH) is planning a significant asset restructuring involving its "allied company." Recently, both listed companies under Weigao Group Co., Ltd. — Weigao Blood Purification and Weigao Co., Ltd. (01066.HK) — announced that Weigao Blood Purification is preparing to acquire 100% equity in Shandong Weigao Purui Pharmaceutical Packaging Co., Ltd. (Weigao Purui) through a share issuance. Once the transaction is completed, Weigao Purui will become a wholly-owned subsidiary of Weigao Blood Purification. In the announcement, Weigao Blood Purification stated that this transaction is expected to constitute a significant asset restructuring and qualify as a related party transaction, but it will not result in a change of the company's actual controller. To facilitate this restructuring, Weigao Blood Purification announced a trading suspension starting from October 20.
Reportedly, Weigao Blood Purification's related transactions extend far beyond this asset restructuring, as it has engaged in numerous significant related transactions prior to its listing.
Established in 2004, Weigao Blood Purification is 41.75% owned by Weigao Group and has been publicly traded in the A-share market since May. The company primarily engages in the research, production, and sales of medical products for blood purification, including hemodialyzers, blood dialysis lines, dialysis machines, and peritoneal dialysis solutions, alongside ancillary dialysis products. The acquisition target, Weigao Purui, was founded in September 2018 with a registered capital of approximately 106 million yuan and is also under Weigao Group. Weigao Purui focuses on providing comprehensive drug delivery solutions for global biopharmaceutical companies, with product offerings encompassing the entire range of pre-filled syringes as well as pre-filled ampoules and vials. Its product line extends to advanced products like automatic injection pens and pen-type injectors, tailored to customer needs.
From the perspective of counterparties, Weigao Co., Ltd., Weihai Shengxi Enterprise Management Consulting Center (Limited Partnership), and Weihai Ruiming Enterprise Management Consulting Partnership (Limited Partnership) all belong to the “Weigao system.” Among them, Weigao Co., Ltd. is the majority shareholder of Weigao Purui, holding 94.07% of its shares, while both Weigao Co., Ltd. and Weigao Blood Purification share Weigao Group as their largest shareholder. Additionally, Weigao Co., Ltd. is the second-largest shareholder of Weigao Blood Purification, directly holding 26.55% of its equity. The other two counterparties are similarly closely related to the “Weigao system.” The announcement indicates that the executive partner for Weihai Shengxi is Weihai Weigao Financial Holdings Co., Ltd., and the executive partner for Weihai Ruiming is Weihai Weigao Qiming Enterprise Management Consulting Service Co., Ltd., both incorporating the “Weigao” name. Furthermore, records show that another partner of Weihai Shengxi is Chen Lin, one of the shareholders of Weigao Group, who directly holds 0.81% of its shares; while Weihai Ruiming's ultimate beneficiary is Chen Xueli, the actual controller of Weigao Group, who directly holds 5.80% of the shares and controls 83.70% of Weigao Blood Purification.
Notably, Weihai Ruiming was established on August 21, 2025, merely two months before this planned transaction, and less than ten days after its establishment, it became one of Weigao Purui’s shareholders. Prior to Weihai Ruiming’s investment, Weigao Purui's original shareholder, Weihai Weigao International Medical Investment Holding Co., Ltd., divested its shares about two months earlier.
Turning to performance, Weigao Blood Purification has exhibited steady results. From 2022 to 2024, the company reported revenues of 3.426 billion yuan, 3.532 billion yuan, and 3.604 billion yuan, reflecting year-over-year growth of 17.71%, 3.09%, and 2.03%, respectively; net profits attributable to the parent company were 315 million yuan, 442 million yuan, and 449 million yuan, yielding growth rates of 21.22%, 40.36%, and 1.65%. The first half of 2025 saw revenue reaching 1.765 billion yuan, an increase of 8.52% year over year, with net profit attributable to the parent at 220 million yuan, up 10.11%.
However, it is crucial to note that prior to this related party transaction, Weigao Blood Purification's steady performance had already benefited from numerous related transactions. Weigao Group not only acts as Weigao Blood Purification's controlling shareholder but also its largest customer. Between 2022 and 2024, the sales to Weigao Group amounted to 410 million yuan, 405 million yuan, and 366 million yuan, accounting for 11.96%, 11.47%, and 10.15% of total revenue, respectively. There are also significant related transactions between Weigao Blood Purification and Weigao Co., Ltd., where they function as both customer and supplier. During the same period, Weigao Blood Purification earned revenues of 89.8732 million yuan, 3.6014 million yuan, and 3.4192 million yuan from sales of hemodialysis machines and consumables, representing 2.62%, 0.10%, and 0.09% of total revenue; concurrently, it procured sterilization services and disposable medical supplies from Weigao Co., Ltd. for amounts of 9.3715 million yuan, 10.6869 million yuan, and 5.5011 million yuan.
Moreover, the two companies engaged in many other related transactions involving leasing, utility payments, and more. Notably, Weigao Co., Ltd. and Weigao Purui also have associated lease transactions. Beyond this, in the upstream procurement domain, Weigao Blood Purification's related parties include several “Weigao system” companies, such as Weigao Rijiang, Weigao Taimo, and Weigao Nephrology. According to the IPO prospectus, from 2022 to 2024, Weigao Blood Purification's purchases from related parties reached 783 million yuan, 933 million yuan, and 794 million yuan, comprising 40.03%, 46.96%, and 38.17% of total operating costs, respectively. During the same timeframe, sales to related parties were 496 million yuan, 491 million yuan, and 456 million yuan, accounting for 14.48%, 13.90%, and 12.65% of total revenue.
Besides the upstream and downstream transactions, Weigao Blood Purification also frequently engages in financial dealings regarding related leases and guarantees. This intricate web of related transactions has led to scrutiny from regulators during the listing review phase regarding their procurement methods and their rationality. In response, Weigao Blood Purification has committed to diversifying its procurement channels, assuring that “while maintaining fair transaction pricing, it will no longer expand (related transactions).” Nevertheless, a recent review reveals that in the first half of 2025, the amount Weigao Blood Purification procured from related parties still increased to 434 million yuan, representing a 53.42% increase year over year; while total sales amounted to 191 million yuan, a slight decrease of 5.76% from 203 million yuan in the same period last year.
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