Yaben Chemical received a regulatory letter asked whether xinpi was misleading and cooperated with shareholders to reduce their holdings

Source: China Economic Network

China Economic Network Beijing, January 20, 2019 Recently, the Shenzhen Stock Exchange issued a letter of concern about Yaben Chemical Co., Ltd. (GEM Letter of Concern [2022] No. 37). On January 17, Yaben Chemical Co., Ltd. (hereinafter referred to as "Yaben Chemical", 300261.SZ) issued an announcement on the abnormal fluctuation of the company's stock trading and the verification of trading suspension.

On January 13, 2022 and January 14, 2022, Yaben Chemical Co., Ltd. achieved a cumulative deviation of more than 30% in the closing price increase of more than 30%. According to the relevant regulations of the Shenzhen Stock Exchange, it is a situation of abnormal fluctuation in stock trading. The Company will verify the abnormal volatility of stock trading, and the Company's shares (stock abbreviation: Yaben Chemical, stock code: 300261) have been suspended since the opening of the market on January 17, 2022, and trading has resumed after the disclosure and verification announcement.

On October 29, 2021, Yaben Chemical closed at 5.13 yuan; on January 14, 2022, Yaben Chemical closed at 27.32 yuan, an increase of 19.98% on the day. The cumulative increase is 432.55%.

On December 2, 2021, Yaben Chemical issued an announcement on the actual controller's reduction of more than 1% of the company's shares, and Yaben Chemical Co., Ltd. recently received a notice from Wang Xinya, one of the actual controllers, that it learned that it reduced its holding of 19 million shares of the company through a block transaction on November 30, 2021, accounting for about 1.97% of the company's total share capital.

On December 28, 2021, Yaben Chemical issued a reply to the letter of concern of the Shenzhen Stock Exchange.

Yaben Chemical said that according to the company's self-examination and confirmation to senior management and marketing personnel, as of the date of reply to this letter of concern, the company has not signed any cooperation agreement with Pfizer, does not have any cooperative relationship with it, and has not supplied carolongic anhydride and its derivatives to Pfizer. The Company's customers of caronic anhydride and its derivatives are mainly domestic customers and Indian customers, and it is not possible to determine whether the company's caronic anhydride and its derivatives are indirectly supplied to Pfizer. Investors are kindly requested to pay attention to investment risks, make prudent decisions and invest rationally.

As of the date of reply to the letter of concern, the company's carolongic anhydride and its derivative products are mainly used for sales and self-use (for downstream product research and development), of which the sales part accounts for about 99% of the total output, and the self-use research and development part accounts for about 1% of the total output. Since 2012, the company has carried out the synthesis process and industrialization research and development of carolongic anhydride and its derivative products, and as of the date of reply to this letter of concern, the product company has invested a total of 14.6746 million yuan in research and development expenses, including 14.1746 million yuan in research and development expenses and 500,000 yuan in patent purchase costs. The company has a patented production technology of caroline (patent number: ZL.201410364816.2).

At present, the company has a total production capacity of caronic anhydride and its derivatives of about 20 tons / month. As of the date of reply to this letter of concern, the sales volume of the company's carolongic anhydride and its derivatives is 17.29 tons, generating sales revenue of 27.0073 million yuan (excluding tax), accounting for about 1%-2% of the company's total operating income in 2021, accounting for a relatively small proportion, and is not expected to have a significant impact on the company's financial and operating conditions in 2021 and 2022. As of the date of reply to the letter of concern, the company's orders for caronic anhydride and derivative products in hand were 63.5408 million yuan (excluding tax).

The company's main customers of carolongic anhydride and derivative products are domestic customers and Indian customers, of which domestic customer sales account for about 97.88% of the company's total sales of carolong anhydride and derivative products, and Indian customer sales account for about 2.12% of the company's total sales of carolongic anhydride and derivative products.

The Shenzhen Stock Exchange pointed out that on November 4, 2021, Yaben Chemical released a message on the official website that "the commercial mass production of the pharmaceutical intermediate carolongic anhydride developed and produced has been smooth, and the current monthly production scale has reached 20 tons", and the next day, Pfizer announced its interim clinical data on the new crown oral drug. Since November 5, investors have repeatedly inquired about the business related to Caroline anhydride of Aben Chemical and whether it directly or indirectly supplies Pfizer, whether the Company's carolong anhydride products are intermediates for Pfizer's new crown oral drug, and whether they meet the needs of Pfizer products. On November 12, some investors mentioned in Yaben Chemical Interactive that "carolongic anhydride is the main or only API in the upstream of Pfizer anti-new crown oral drug".

Please explain the reasons why Yaben Chemical did not clearly reply to the investors' above-mentioned questions in Interactive Easy, whether the relevant matters replied to the information that has a significant impact on the company's stock price, after the abnormal fluctuations in the company's stock trading on December 22, Yaben Chemical only explained in the announcement of the change that there is no direct cooperative relationship with Pfizer, and still has not made a clear explanation of the reasons for investors' concerns about "whether the company's carlonic anhydride products are Pfizer's new crown oral drug intermediates" and "whether they meet the needs of Pfizer products". And verify whether the relevant interactive easy reply and the content of the announcement are true, accurate and complete, and whether it is suspected of misleading investors.

According to the relevant announcement disclosed by Yaben Chemical in the early stage, Wang Xinya, one of the actual controllers of Yaben Chemical, reduced his holding of 19 million shares of the company through a block transaction on November 30, 2021, with a reduction ratio of 1.97%, an average price of 7.24 yuan, and a reduction amount of 138 million yuan. Yaben Chemical is requested to verify whether the reduction is suspected of insider trading, market manipulation and other violations, and whether Yaben Chemical has used information disclosure to cooperate with the relevant shareholders to reduce their holdings.

Please explain the trading of the company's shares in the past three months by directors, supervisors, senior management, controlling shareholders, shareholders holding more than 5% of the shares of Yaben Chemical, etc., the progress of the reduction plan disclosed in the early stage, whether there is a reduction plan and specific content in the next 3 months, and whether there is a situation of using information disclosure to cooperate with the above-mentioned personnel to reduce their holdings.

The following is the original text:

Letter of Concern to Yaben Chemicals Co., Ltd

GEM Letter of Concern [2022] No. 37

Board of Directors of Yaben Chemical Co., Ltd.:

The cumulative increase of your company's stock price since November 1, 2021 has reached 432.55%, which deviates greatly from the ChiNext Composite Index in the same period, during which the standard of serious abnormal volatility in stock trading was touched on December 28, 2021, and the standard of abnormal volatility in stock trading was touched on January 14, 2022. Our department is concerned about this and asks your company to verify and further explain the following matters:

1. On November 4, 2021, your company released a message on its official website that "the commercial mass production of the pharmaceutical intermediate caromanic anhydride developed and produced has been smooth, and the current monthly production scale has reached 20 tons", and the next day, Pfizer announced the interim clinical data of its new crown oral drug. Since November 5, investors have repeatedly inquired about your company's carlonic anhydride-related business and whether it directly or indirectly supplies Pfizer, whether the company's caronhydride products are Pfizer's new crown oral drug intermediates, and whether they meet the needs of Pfizer products. On November 12, an investor in your company interacted with Yi yi and mentioned that "carolongic anhydride is the main or only API in the upstream of Pfizer anti-new crown oral drug".

(1) Please explain the reasons for publishing the commercial mass production information of caroline on the official website, whether the above information meets the information disclosure standards, whether it is information that has a significant impact on the company's stock price, and whether your company has information disclosure violations. Please explain whether your company is aware of the fact that Pfizer's NEW CROWN oral drug raw materials may involve carolong anhydride when publishing the above information, and if not, please indicate the time when your company learned that Pfizer's new crown oral drug raw materials may involve carolong anhydride. Please explain whether the company's mass production of related products is released through the official website, whether your company's operation of releasing the commercial mass production information of caromanic anhydride through the official website is consistent with the company's usual practices, and whether your company has released information through the official website to rub the hot spots of new crown drugs.

(2) Please explain the reasons why your company did not clearly reply to the investors' above-mentioned questions in Interactive Easy, whether the reply to the relevant matters belongs to the information that has a significant impact on the company's stock price, and after the abnormal fluctuations in the company's stock trading on December 22, your company only explained that there is no direct cooperative relationship with Pfizer in the announcement of the change, and still did not make a clear explanation of the reasons for the investors' concerns about "whether the company's carlonic anhydride products are Pfizer's new crown oral drug intermediates" and "whether they meet the needs of Pfizer products". And verify whether the relevant interactive easy reply and the content of the announcement are true, accurate and complete, and whether it is suspected of misleading investors.

(3) Please combine the specific circumstances of your company's interactive response to investors' relevant questions since November 2021, participate in investor relations activities and accept media interviews, and verify whether your company has disclosed to investors that your company's carlonic anhydride products may be related to Pfizer's new crown oral drugs, whether there is a violation of fair information disclosure and speculation on stock prices through interaction.

(4) Please combine the product market capacity, changes in the market environment and your company's business strategy and business layout, explain whether your company's recent business situation and internal and external operating environment have undergone major changes, and explain the verification process and judgment basis, and do a good job of relevant risk warnings.

2. Your company's previous announcement shows that the company's customers of caronic anhydride and its derivatives are mainly domestic customers and Indian customers, of which domestic customers account for nearly 98% of sales, and the company's sales amount of carolongic anhydride and its derivatives in 2021 is about 27 million yuan, but your company said that it is impossible to determine whether the company's caromanic anhydride and its derivatives are indirectly supplied to Pfizer. Please explain the reasons why your company is unable to verify the end customer in combination with the specific use of carolong anhydride and its derivatives and the relevant market size, and further verify the sales to the end customer, and clearly indicate whether your company's caromanic anhydride and its derivatives are directly or indirectly supplied to Pfizer.

3. On January 5, 2022, your company disclosed the "Reply to the Letter of Concern of the Shenzhen Stock Exchange" (hereinafter referred to as the "Reply Announcement"), according to the report "Attention to Pfizer's New Coronavirus Drug Intermediates - Isoprenol, Amyoic Acid" released by the chemical team of China International Capital Corporation Limited (hereinafter referred to as "CICC") on December 3, 2021, the carolongic anhydride and its derivative products produced by your company can be used to synthesize Pfizer's new coronavirus oral drug Palo verde from the process flow. At the same time, your company quoted the content of CICC's report in the "Reply Announcement", saying that the company has a patent for a synthetic process for the synthesis of carolong anhydride, and the details can be found in the CICC report.

(1) Please add that your company quoted the specific content of the CICC report in the "Reply Announcement", the specific source of the relevant information obtained by your company from the CICC report, whether the relevant report content is objective and authoritative, and whether the CICC report can indicate that your company's carolong anhydride and its derivatives can be used to synthesize Pfizer's new crown oral drug. Whether there is a correspondence between your company's carolongic anhydride products and related synthetic process patents and the synthetic Pfizer drug intermediates and related synthetic process routes mentioned in CICC's report. At the same time, please indicate whether your company has verified the accuracy of the content of CICC's report, whether your company has verified the technical path mentioned in the CICC report, if so, please provide supporting evidence, if not, please explain whether your company's mention in the announcement that carolong anhydride and its derivatives can be used to synthesize Pfizer's oral drug related information disclosure is suspected of misleading statements, and please combine the above-mentioned replies to explain whether your company is prudent to cite CICC's report.

(2) Your company's previous announcement shows that your company paid 500,000 yuan for the purchase of caronic anhydride production patent technology. Please explain the specific circumstances of your company's carolongic anhydride synthesis process patent, including but not limited to the process of obtaining the patent, the time of acquisition and the counterparty, whether the counterparty exclusively transferred the patent to your company, and the specific rights that your company has in the patent. Please explain your company's further research and development process and investment after obtaining the patent, obtain relevant approvals and certifications, patent implementation, whether there is a ownership dispute, whether there is a core technical advantage, whether there is a risk of technical substitution, etc., and fully prompt the relevant risks.

(3) According to your company's previous announcement, the company's caronic anhydride and its derivative product production line was transformed through the existing production equipment, and as of December 31, 2021, the total investment in the transformation of the above production line was RMB 6.3996 million. Please explain the reasons for the company's layout of caromanic anhydride and its derivative products and related technical and economic feasibility analysis, explain the specific time, transformation method and technical realization path of your company's implementation of production line transformation, and whether the relevant transformation has undergone technical acceptance.

(4) Please combine the specific content of your company's carolongic anhydride-related patents, the technical realization path of the company's production line transformation, and the specific technical requirements of Pfizer for the new crown oral drug Palo verde intermediates, etc., clearly state whether the carolongic anhydride and its derivative products produced by your company meet the quality and technical requirements of the intermediates related to the preparation of the new crown oral drug palovesid, whether your company has conducted relevant technical verification, if so, please provide supportive evidence.

(5) Please explain whether your company has used the concept of Pfizer's new crown oral drug epidemic to speculate on stock prices in combination with the above reply, and fully warn of the relevant risks.

4. Your company's "Reply Announcement" shows that the company has a total production capacity of caronic anhydride and its derivatives of 20 tons / month, the recent capacity utilization rate of 70%-80%, the company's existing production line through the existing production equipment transformation, due to production sites, synthesis processes and other reasons, does not have the ability to expand production. Your company is studying and planning the capacity expansion of caroline and its derivatives, and will decide whether to expand production according to market demand and order situation. Please combine the monthly changes in the order volume in hand since the realization of commercial mass production of carolong anhydride, the monthly sales of caromanic anhydride and its derivatives, the changes in the production and operation environment and the response to the above questions, further explain the necessity and feasibility of your company's research on expansion matters under the condition that the capacity utilization rate is not saturated, and whether it is suspected of using the media information about the possible indirect use of caromanic anhydride by Pfizer new crown oral drugs to increase investor expectations and cooperate with the speculation of the company's stock price.

5. Please check whether there is any undisclosed information that should be disclosed, whether there are major events in the planning or other market rumors and hot concepts that may have a greater impact on the trading price of the company's stock. Please combine the macro situation of the market, the industry situation, the stock price trend of listed companies in the same industry, the production and operation of your company, etc., analyze in detail the reasons for the large recent increase in your company's stock price, whether it matches the fundamental situation such as the company's operating performance, and further prompt the risk of the company's recent stock price increase in combination with the reply to the above questions.

6. According to the relevant announcement disclosed by your company in the previous period, Wang Xinya, one of the actual controllers of your company, reduced his holding of 19 million shares of the company through a block transaction on November 30, 2021, with a reduction ratio of 1.97%, the average price of the reduction was 7.24 yuan, and the amount of the reduction reached 138 million yuan. Please verify whether the reduction is suspected of insider trading, market manipulation and other violations, and whether your company has used information disclosure to cooperate with the relevant shareholders to reduce their holdings.

7. Please explain the trading of the company's shares in the past 3 months by your company's directors, supervisors, senior management, controlling shareholders, shareholders holding more than 5% of the shares, etc., the progress of the reduction plan disclosed in the early stage, whether there is a reduction plan and specific content in the next 3 months, and whether there is a situation of using information disclosure to cooperate with the above-mentioned personnel to reduce their holdings.

8． Due to the irregularities in the information disclosure of your company's Dalu Nawei Pharmaceutical Intermediates business during the COVID-19 epidemic period, our firm and the China Securities Regulatory Commission made disciplinary and administrative punishment decisions against your company and related parties in March 2020 and September 2020 respectively, and asked your company to carefully verify the above issues and check whether your company's relevant information disclosure is true, accurate and complete, and whether there are any misleading statements.

9. Other matters that your company believes should be explained.

Please make a written explanation of the above matters, submit the relevant explanatory materials to our ministry and disclose them to the outside world before January 26, 2022, and send a copy to the Listed Company Supervision Department of Jiangsu Securities Regulatory Bureau.

At the same time, remind your company that listed companies must conscientiously and timely fulfill their information disclosure obligations in accordance with national laws and regulations and the Rules for the Listing of Stocks on the Growth Enterprise Market of the Shenzhen Stock Exchange. All members of the board of directors of a listed company must ensure that the information disclosed is true, accurate and complete, that there are no false statements, misleading statements or material omissions, and assume individual and joint liability for its guarantees.

You hereby write to us.

GEM Company Management Department

January 19, 2022