In the context of a deep adjustment in the in vitro diagnostics industry and the company's first annual loss in 2025, this investment project's journey from "optimistic expansion" to "shelved and terminated" is particularly noteworthy.
The "Knowledge City Production Base Construction Project" of Guangzhou Wondfo Biotech Co.,Ltd. (ASX: 300482), four years after its private placement, has suddenly been terminated after going through delays and suspension. From the urgency to expand capacity four years ago when "production bottlenecks had become a constraint" to the current cautious statement that "proceeding with construction would result in a large accumulation of funds," the contradiction in the company's statements inevitably raises questions among investors about the rationality of its fundraising project. The project originally committed to invest 450 million yuan in raised funds, but as of the end of September 2026, the investment progress was only 11.65%, with approximately 415 million yuan still unused.
A Tortuous Journey
An announcement disclosed by Wondfo Biotech on October 13 shows that the company plans to terminate the "Knowledge City Production Base Construction Project." Prior to this, the project had already experienced a tortuous journey. In August 2022, Wondfo Biotech released a private placement plan, intending to raise a total of no more than 1 billion yuan. The company successfully completed the fundraising in March 2024, but the actual total amount raised was ultimately reduced to approximately 700 million yuan. Among them, the largest fundraising project was the "Knowledge City Production Base Construction Project," with the planned investment of raised funds also reduced from 750 million yuan to 450 million yuan, mainly used for the engineering construction of the Knowledge City smart factory and the purchase of new production line equipment. After production, it would mainly be used for the production of immunochromatography and immunofluorescence detection reagents, with a project construction period of 2 years.
However, the progress of the fundraising project subsequently changed. On December 10, 2024, Wondfo Biotech disclosed an announcement stating its intention to delay the Knowledge City Production Base Construction Project. The reasons for the delay were the extension of the land bidding, auction, and listing procedures, adjustments to the project construction plan, and the need to re-perform filing procedures. It is reported that the project was originally planned to reach its intended usable state by March 2026, but was later delayed to June 2027. Nearly a year later, the company changed its stance again. On November 14, 2025, in an announcement disclosing the re-demonstration and suspension of the project, Wondfo Biotech stated that in recent years, the internal and external environment faced by the company's operations had undergone significant changes. To avoid resource waste and duplicate investment, reduce enterprise production and operating costs, and improve the efficiency of raised fund usage, the company decided to suspend the implementation of the fundraising project.
Now, after more than four years, Wondfo Biotech's "Knowledge City Production Base Construction Project" has gone from active promotion during the private placement to a sudden termination. A relevant person from Wondfo Biotech, in an interview with a reporter, stated that the "Knowledge City Production Base Construction Project" originally planned to use 450 million yuan of raised funds. In addition to the 52.4322 million yuan already invested in the early stage, as of September 30, 2026, the remaining amount in the special account for raised funds was approximately 415 million yuan. Subsequently, the company will select new investment projects according to actual production and operation needs and make reasonable and compliant arrangements for the remaining unused portion of the raised funds.
Contradictory Statements
Regarding the reason for the termination of the "Knowledge City Production Base Construction Project," a relevant person from Wondfo Biotech told a reporter that "affected by significant changes in in vitro diagnostics industry policies and the market environment, the industry as a whole has entered a stage of deep adjustment. The company, based on a prudent assessment of its own operating status, believes that proceeding with the construction of this project at this stage would result in a large accumulation of funds, which is not conducive to improving the efficiency of fund usage. To focus on the development of core main business, optimize resource allocation, safeguard the long-term interests of the company and all shareholders, and at the same time assist in revitalizing existing industrial land in the region and prevent the risk of idle land, the company has decided to terminate the Knowledge City project construction."
However, more than four years ago, for the same project, Wondfo Biotech's statement was completely different. In the private placement plan released in August 2022, Wondfo Biotech stated that under the combined influence of national policy support and public health events, the demand for in vitro diagnostics continued to grow, and production bottlenecks had become an important constraint on the company's development. It was necessary to build a new production base to meet the needs of capacity expansion. Wondfo Biotech expected to optimize the production environment through this project, meet the needs of iterative product production, enhance product competitiveness, and improve the company's intelligent operation and management level.
It is worth noting that the progress of this fundraising project has been relatively slow. According to the disclosures in Wondfo Biotech's annual reports and semi-annual reports, in 2024, the "Knowledge City Production Base Construction Project" invested 34.9608 million yuan of raised funds, corresponding to an investment progress of 7.81%; in 2025, the project used 16.7421 million yuan of raised funds, with a cumulative investment of 51.9029 million yuan as of the end of that year, corresponding to an investment progress of 11.53%, little changed from the previous year; in the first half of 2026, the project used 529,400 yuan of raised funds, with a cumulative investment of 52.4322 million yuan, corresponding to an investment progress of 11.65%.
Zhang Yue, Chairman of Aoyou International, believes that from the perspective of that time, the project had its industrial logic when it was established. Subsequent changes in industry demand and product landscape mean that the project's journey from delay to suspension to termination is a rational adjustment by the listed company after re-evaluating the project's feasibility. Investors need to be wary of companies that frequently change fundraising projects, as it at least indicates that the company lacked foresight and prudence in its earlier judgment of market trends. Lin Xianping, Deputy Secretary-General of the China Urban Expert Think Tank Committee and Associate Professor at Zhejiang University City College, stated that the in vitro diagnostics industry has strong cyclical fluctuations, and deviations between project planning predictions and market reality are relatively common. The key is to see whether the company has fully fulfilled its review and information disclosure obligations, whether the use of funds is compliant, and whether there is any misappropriation of funds.
Performance Volatility
It is reported that Wondfo Biotech is an enterprise with business focused on the in vitro diagnostics field. In the first half of 2026, Wondfo Biotech's main businesses included pregnancy and prenatal care testing, infectious disease testing, drug (substance abuse) testing, and chronic disease testing, corresponding to operating revenues of approximately 117 million yuan, 258 million yuan, 130 million yuan, and 496 million yuan, respectively. The year 2022 was a highlight moment for Wondfo Biotech's performance. That year, the company achieved revenue of approximately 5.681 billion yuan and net profit attributable to shareholders of approximately 1.197 billion yuan, representing year-on-year growth of 69.01% and 88.67%, respectively, setting the best revenue and net profit levels since the company's listing in 2015.
However, subsequently, Wondfo Biotech's performance began to enter a period of volatility. In 2023, due to a significant decline in COVID-19 testing demand, Wondfo Biotech experienced a double decline in revenue and net profit, with operating revenue plummeting to approximately 2.765 billion yuan, a year-on-year decrease of 51.33%, and net profit attributable to shareholders of approximately 488 million yuan, a year-on-year decrease of 59.26%. In 2024, Wondfo Biotech's performance showed slight growth, with full-year operating revenue of approximately 3.065 billion yuan, a year-on-year increase of 10.85%, and net profit attributable to shareholders of approximately 562 million yuan, a year-on-year increase of 15.18%. The year 2025 was a turning point for the company's performance. Wondfo Biotech achieved operating revenue of approximately 2.087 billion yuan that year, a year-on-year decrease of 31.91%, and a net loss attributable to shareholders of approximately 63.02 million yuan, which was also the first annual net loss attributable to shareholders since Wondfo Biotech's listing. In the first half of 2026, Wondfo Biotech's performance continued to face pressure, with operating revenue of approximately 1.039 billion yuan during the reporting period, a year-on-year decrease of 16.63%; net profit attributable to shareholders of approximately 123 million yuan, a year-on-year decrease of 35.24%.
Regarding the company's performance volatility, a relevant person from Wondfo Biotech stated that 2025 was an extremely challenging year in the company's more than 30 years of development. In the post-pandemic era, the in vitro diagnostics industry has entered a period of deep adjustment. The deepened implementation of centralized procurement policies, the comprehensive advancement of DRG/DIP payment, and the unbundling of testing packages have all put pressure on the company's performance. Since 2026, the company's operations have shifted from a "scale-oriented" approach to a sustainable growth model of "profitable growth, profit with cash flow," and the quality of operations has improved significantly.
Lin Xianping stated that the landscape of the in vitro diagnostics industry is being reshaped, shifting from short-term explosive growth to relying on technological innovation and deep channel cultivation. Domestic substitution in routine areas such as POCT and chronic disease testing has become a long-term main line. Zhang Yue also believes that domestic substitution in the in vitro diagnostics industry is still ongoing, and overseas market expansion has become a direction for many companies to break through. The industry is shifting from short-term explosive growth to a stage of steady operation relying on routine business.
Additionally, it is worth mentioning that trading market data shows that since 2022, as of October 19, Wondfo Biotech's cumulative decline under the adjusted price statistic was approximately 53.53%, while the broader market declined by 20.46% over the same period. The latest trading data shows that Wondfo Biotech's closing price on October 19 was 15.9 yuan per share, with a daily increase of 0.89%, and a total market value of approximately 7.444 billion yuan.
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