Laimei Pharmaceutical has announced a fixed-increase increase plan, and Zhongheng Group is all-inclusive. Who will rely on whom to get out of trouble?

I think Laimei Pharmaceutical relies on Zhongheng Group to get out of trouble.

Swinging its performance into the red and coming under financial pressure, the company released a firm growth plan to save itself. Recently, the issuance plan of Laimei Pharmaceutical Company shows that this issuance is targeted at three specific investors, Zhongheng Group, Zhongheng Tongde and Guangtou Guohong. Among them, Zhongheng Group plans to subscribe for approximately 950 million yuan. After deducting issuance expenses, 700 million yuan of the raised funds will be used to repay the borrowings, and the remainder will be used to supplement working capital. In this fixed growth plan, Zhongheng Group’s large-scale fundraising has attracted much attention. A reporter from International Finance News noted that as of the date of the announcement of the plan, Zhongheng Group directly held 36.315 million shares of Laimei Pharmaceutical, accounting for 4.47% of the total share capital.

However, according to the "Voting Rights Entrustment Agreement" signed on January 20, 2020, Zhongheng Group will become the largest shareholder of Laimei Pharmaceutical with a single voting right. Data shows that under the pressure of a single product structure, Zhongheng Group has accelerated the pace of transformation in recent years. In addition to acquiring the US pharmaceutical industry, Zhongheng Group has also established a fund in cooperation with Tongde Investment and signed a cooperation agreement with Jingfeng Pharmaceutical. Zhongheng Group believes that if the transaction proceeds smoothly, Zhongheng Group will be able to exercise control over the U.S. pharmaceutical industry, which will help enhance Zhongheng Group's future profitability and position in the biomedical industry. At the same time, Laimei Pharmaceutical plans to introduce the above-mentioned platform technologies or products to Guangxi to promote the comprehensive upgrade of Guangxi’s biopharmaceutical industry.

Currently, Laimi Pharmaceutical is heavily in debt. As of February 15, 188 million shares of the company held by Qiu Yu, the controlling shareholder and actual controller of Laimei Pharmaceutical, have been pledged, accounting for 99.91% of the company's shares and 22.7% of the total share capital. Prior to this, the Shenzhen Stock Exchange also made inquiries about this matter. Based on this, Laimei Pharmaceutical believes that through this non-public issuance, the company will further accelerate the introduction of state-owned assets, establish a comprehensive and in-depth strategic cooperative relationship with Zhongheng Group, optimize the company's asset and liability structure, and improve the company's credit level and financing levels. At the same time, timely replenishment of funds will be beneficial to the company's business development, further improve the company's profitability, and promote the company's long-term healthy and stable development. In addition to debt problems, the performance of companies in 2019 is not optimistic.