On the evening of March 21, Hotgen Biotechnology (688068) announced that the company recently received the "Notification Letter on Reducing the Company's Shares" issued by shareholder Tongcheng Hotjing. Due to its own capital needs, shareholder Tongcheng Hotjing plans to reduce its holdings of the company's shares by centralized bidding and block trading to no more than 1.8 million shares, accounting for 1.9465% of the company's total share capital.

If the company has any changes in share capital, ex-rights and dividends such as cash dividends, share gifts, conversion of share capital, issuance of new shares or allotment of shares during the implementation of the shareholding reduction plan, the above-mentioned shareholding reduction plan will be adjusted accordingly.

According to the announcement, Tongcheng Hotjing holds 4.2114 million shares of the company, accounting for 4.55% of the company's total shares.

According to the data, Hotgen Biotech, founded in 2005, is a high-tech enterprise focusing on the field of biomedicine, with diagnostic products and research projects in the field of hepatitis and liver cancer diagnosis, early diagnosis and early screening of cancer, Alzheimer's disease (AD) and neurodegenerative diseases.

Shares of Hotgen Biotech have risen sharply recently. On March 7, Hotgen Biotech announced that the company's shares will deviate from the closing price by more than 30% for three consecutive trading days on March 5, 6 and 7, 2025. On March 2, the company's stock closed at 91.33 yuan / share, up nearly 6% from the recent low closing price of 57.32 yuan / share on February 26.

Industry insiders analyzed the reason for the rise in the company's stock, which may be due to the market's increased attention to the biomedical sector and the increase in capital inflows, which drove the stock price up. At the same time, the government's supportive policies for the biomedical industry may bring more development opportunities for the company and enhance investor confidence.

On February 27, Hotgen Biotech released its 2024 performance report, which is expected to achieve an operating income of 511 million yuan, a decrease of 7.62% compared with the same period last year; After deducting the impact of the unconventional testing business in 2023, the company's operating income in 2024 increased by 25.08% compared with the clinical business income in the same period of the previous year. The company's net profit attributable to the owners of the parent company was -179 million yuan (profit of 28.5162 million yuan in the same period of last year), and the net profit attributable to the owners of the parent company after deducting non-recurring gains and losses was -243 million yuan (-58.1966 million yuan in the same period of last year).

For the sharp decline in net profit attributable to the parent company and non-net profit, Hotgen Biotech gave four explanations:

First, the company continues to maintain R&D investment in clinical immunodiagnosis, molecular diagnosis and other technology platforms, increases the R&D exploration of innovative products, and the transformation and registration of conventional clinical products, with a cumulative R&D investment of 113 million yuan in 2024, accounting for 22.07% of operating income.

Second, the company's associates, Shunjing Pharmaceutical, Yaojing Gene, Zhiyuan Biotech and Aorui Biotech, continued to increase R&D investment in the fields of biological innovative drugs and early tumor screening, resulting in the company confirming an investment loss of 47.6316 million yuan in the associated enterprises.

Third, with the continuous advancement of medical centralized procurement and the intensification of competition in the industry, the company calculated in accordance with the consistent impairment policy, and made an impairment loss of 84.7831 million yuan on the related operating assets such as reagents and equipment.

Fourth, due to the loss of the current period, the deferred income tax assets recognized by the loss of the parent company in the previous period increased the income tax expense of 13.6476 million yuan in the current period.