Core Perspective: Weigaoxuejing’s 85 billion yuan consolidation into a company under Weigao Group raises questions about whether the Hong Kong-listed Weigao Group is at risk of being hollowed out. Weigaoxuejing was previously a subsidiary of Weigao Group, and after this restructuring, it is returning under Weigao Group’s umbrella. What is the mystery behind this series of related-party shuffles? On one hand, after Weigaoxuejing was initially “sold off at a low price,” its valuation began a sharp ascent. On the other hand, Weigaoxuejing is now acquiring Weigao Group’s core assets at a high premium, simultaneously inflating the target’s valuation and boosting its own performance—a classic two-for-one maneuver.
Recently, the draft plan for Weigaoxuejing’s major asset restructuring was released.
According to the draft, Weigaoxuejing plans to acquire a 100% equity stake in Shandong Weigao Purui Medical Packaging Co., Ltd. (hereinafter referred to as “Weigao Purui”) from three parties—Weigao Group, Weihai Shengxi, and Weihai Ruiming—through a share issuance, with a transaction value of 8.511 billion yuan. Upon completion of the transaction, Weigao Purui will become a wholly-owned subsidiary of Weigaoxuejing.
This transaction raises two major questions. First, it involves related-party shuffling within the Weigao system, as the acquisition target, Weigao Purui, is a subsidiary of the Hong Kong-listed Weigao Group. After the transaction, Weigao Purui will become a wholly-owned subsidiary of the A-share listed Weigaoxuejing. Is there a risk that Weigao Group is being hollowed out? Second, Weigaoxuejing only went public on the A-share main board in May of last year. Why is it already initiating a major restructuring, and what is the underlying motive behind this move?
Is this a case of related-party shuffling within the Weigao system? Weigao Group’s core assets are frequently being spun off.
It should be noted that the acquisition target, Weigao Purui, is overall profitable, and for the A-share listed Weigaoxuejing, this will significantly enhance its profitability.
Weigao Purui was established in September 2018, with main products including pre-filled drug delivery systems and automated safe drug delivery systems. As a leading domestic producer of pre-filled syringes, Weigao Purui appears to have solid performance and market positioning.
According to a statement on the market situation of Weigao Purui’s pre-filled syringes issued by the China Pharmaceutical Packaging Association, from 2022 to 2024, Weigao Purui’s pre-filled products held over 50% of the domestic market share, ranking first in the domestic industry, while its international sales ranked among the top five globally.
Financial data shows that in 2023, 2024, and the first nine months of 2025, Weigao Purui achieved revenues of 1.430 billion yuan, 1.673 billion yuan, and 1.412 billion yuan, respectively, with net profits of 483 million yuan, 581 million yuan, and 486 million yuan for the same periods. During the same periods, Weigaoxuejing’s revenues were 3.532 billion yuan, 3.602 billion yuan, and 2.736 billion yuan, with net profits of 442 million yuan, 449 million yuan, and 341 million yuan, respectively. Taking 2024 as an example, Weigao Purui’s profit was 1.29 times that of Weigaoxuejing, indicating a significant boost to the latter’s profitability.
However, after the transaction is completed, Weigao Purui will be spun off from the Hong Kong-listed Weigao Group and become a wholly-owned subsidiary of the A-share listed Weigaoxuejing.
This is not the first instance of related-party shuffling within the Weigao system. Notably, Weigaoxuejing was also formerly a subsidiary of the Hong Kong-listed Weigao Group.
According to prospectus data, the predecessor of Weigaoxuejing, Weigaoxuejing Limited, was established in December 2004 by Weigao Group, Xia Liebo, Qiu Dewen, Lin Chuzhong, and Chen Changshun, with a registered capital of 5 million yuan. Among them, Weigao Group contributed 3.5 million yuan in cash, holding a 70.00% stake; Xia Liebo, Qiu Dewen, Lin Chuzhong, and Chen Changshun contributed a total of 1.5 million yuan in cash and physical assets, holding a combined 30.00% stake. At the beginning of the prospectus reporting period, the registered capital of Weigaoxuejing Limited was 193.98 million yuan, with the Hong Kong-listed Weigao Group still holding a significant stake.
In November 2019, the board of Weigaoxuejing Limited agreed to increase its registered capital from 193.98 million yuan to 299.07 million yuan. The新增注册资本 of 105.09 million yuan was entirely subscribed by Weigao Group in cash for 1.3 billion yuan, with 105.09 million yuan allocated to registered capital and the remainder to capital reserve. After this change, the largest shareholder of Weigaoxuejing Limited shifted from Weigao Group to Weigao Group.
By the end of 2020, Weigaoxuejing Limited successfully underwent a joint-stock reform to pave the way for listing, transforming into a joint-stock company named “Shandong Weigao Blood Purification Products Co., Ltd.” At this point, Weigaoxuejing was 57.53% owned by Weigao Group, while Weigao Group’s stake was reduced to only 28.09%.
After the above series of related-party shuffles within the Weigao system, two key points emerge. First, Weigaoxuejing came under the absolute control of Weigao Group, effectively being spun off from the Hong Kong-listed Weigao Group. Second, through this major restructuring, Weigao Group is once again spinning off a core asset, transferring it to Weigaoxuejing. Is Weigao Group’s frequent divestiture of core assets a sign of potential hollowing out? Are the interests of minority shareholders being protected?
The company’s announcement states that this restructuring aims to integrate high-quality assets, strengthen the listed company, further enhance its profitability and investment value, improve its risk resistance, and is in the interests of the listed company and all shareholders.
It is worth noting that after this restructuring, Weigao Group will once again regain control of Weigaoxuejing. Specifically, the controlling shareholder of the listed company will change from Weigao Group to Weigao Group, while the actual controller remains Chen Xueli. This transaction will not result in a change of control of the listed company.
In summary, after the above related-party shuffles, Weigaoxuejing is once again returning under the umbrella of Weigao Group. This leads to the question: what benefits does the Weigao system gain from such maneuvers?
Does “Low-Sell, High-Buy” related-party shuffling inflate valuations?
First, after Weigaoxuejing was initially “sold off at a low price,” its valuation began a sharp ascent.
At the end of 2019, Weigao Group invested 1.3 billion yuan to acquire a 39.92% stake in Weigaoxuejing, implying a post-investment valuation of approximately 3 billion yuan. After this capital increase, Weigao Group (holding 39.92%) replaced Weigao Group (whose stake fell to 28.09%) as the controlling shareholder of Weigaoxuejing.
In April 2022, Weigaoxuejing’s first board of directors meeting approved the transfer of 6.5787 million shares by Weigao Group to Shanghai Jianteng, Zhuji Dongzheng, and Jinan Huishi. At this point, Weigaoxuejing’s valuation surged to 10.6 billion yuan, more than tripling in just about two years.
In May 2025, Weigaoxuejing successfully listed on the main board, with its market capitalization一度 exceeding 20 billion yuan on its debut. As of January 13th, its market capitalization stands at 17.3 billion yuan.
Second, Weigaoxuejing is now acquiring Weigao Group’s core assets at a high premium, simultaneously inflating the target’s valuation and boosting its own performance—a classic two-for-one maneuver.
For the acquisition of Weigao Purui, Weigaoxuejing used the income approach and the asset-based approach for valuation, with the assessment base date being September 30, 2025, and adopting the result of the income approach as the assessed value of Weigao Purui’s total equity. According to the asset appraisal report issued by Zhonglian Assessment, the assessed value of a 100% equity stake in Weigao Purui is 8,510.8138 million yuan. This valuation represents an increase of over 5.6 billion yuan, with a增值率 of 192.9%.
It is noteworthy that the transaction consideration of 8.511 billion yuan, based on Weigao Purui’s 2024 net profit of 581 million yuan, implies a P/E (LYR) of 14.66 times for the target company. In contrast, Weigao Group’s current dynamic P/E ratio is around 11 times.
Furthermore, the acquisition target will significantly boost Weigaoxuejing’s performance. Weigao Purui has signed a performance compensation agreement with Weigaoxuejing. According to the announcement, Weigao Purui’s committed net profits for 2026 to 2028 are 640 million yuan, 720 million yuan, and 784 million yuan, respectively.
Based on the listed company’s pro forma financial data, after the transaction, the listed company Weigaoxuejing’s pro forma basic earnings per share for 2024 and the first nine months of 2025 would be 1.60 yuan/share and 1.25 yuan/share, respectively, representing increases of 32% and 47% compared to the pre-transaction basic EPS. This indicates a substantial improvement in the company’s profitability.
What risks should be警惕? Related-party transactions and the impact of centralized procurement.
Weigaoxuejing’s main products include hemodialyzers, hemodialysis tubing, hemodialysis machines, and peritoneal dialysis solutions. According to Frost & Sullivan data, Weigaoxuejing held a 32.5% market share in the domestic hemodialyzer segment in 2023, ranking first in the industry; its market share in the domestic hemodialysis tubing segment was 31.8%, also ranking first.
However, Weigaoxuejing also faces pressure from centralized procurement, and whether its future performance can sustain growth remains to be seen.
Currently, provinces implementing volume-based procurement for hemodialyzers and hemodialysis tubing at the provincial level include Heilongjiang, Liaoning, Anhui, and Henan, among others. The company’s relevant products have been selected in these regions. Provinces implementing volume-based procurement for peritoneal dialysis solutions at the provincial level include Guangdong, Shanxi, and Henan, among others. The company’s exclusively sold peritoneal dialysis solution product in China was not selected in these regions. After the implementation of volume-based procurement, there is some uncertainty regarding the inclusion of the company’s products in hospital formularies, and入院 prices face downward pressure, which may subsequently affect the company’s ex-factory prices.
The volume-based procurement involving twenty-three provinces (regions, XPCC) including Henan began implementation before August 2024. As of the end of December 2024, according to company management statistics, from July to December 2024, the average ex-factory prices of the company’s hemodialyzers and hemodialysis tubing in the aforementioned procurement-related provinces decreased by approximately 16% and 11%, respectively, compared to the same period in 2023 (i.e., July-December 2023). In terms of gross margin, the company has shown a declining trend in recent years. The gross margin was 43% in 2023 and fell to 40% in the third quarter of 2025.
It should be added that while the company’s ex-factory prices have declined due to centralized procurement, sales volume has also shown growth. Whether this strategy of trading price for volume will be successful in the future remains to be seen. As of the end of the third quarter of this year, the company’s revenue growth rate was only 3.45%, compared to a peak growth rate of 17.71% in 2022.
Besides the impact of centralized procurement, Weigaoxuejing’s related-party transactions also warrant attention.
From 2022 to 2024, the amount of goods purchased/services received from related parties by the company was 783.8775 million yuan, 933.9922 million yuan, and 793.8700 million yuan, respectively. The main content involved purchasing dialysis machines and peritoneal dialysis solutions from its joint ventures, Weigao Nikkiso and Weigao Terumo, accounting for 40.07%, 47.00%, and 38.17% of the operating costs for the respective periods. Meanwhile, Weigaoxuejing also sold goods/provided services to related parties, amounting to 496.7974 million yuan, 491.8271 million yuan, and 455.8763 million yuan, respectively, mainly involving the sale of hemodialysis machines and consumables to related parties, accounting for 14.50%, 13.92%, and 12.65% of the operating revenue for the respective periods.
Given the frequency of these related-party transactions, should concerns be raised regarding the fairness of pricing and the independence of the business? If the company’s internal control measures are not effectively implemented in the future, could this potentially lead to corporate governance issues? The company states that it has an independent and complete business system, can make independent operating decisions, and has established management systems for related-party transactions, strictly defining and executing approval procedures for significant related-party transactions, with pricing being fair.
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