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Heng Ren Partners Demands Sinovac Distribute $8.9 Billion in Cash to its Shareholders and Cause Reinstatement of Trading

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Heng Ren Partners, a Sinovac Biotech (NASDAQ: SVA) shareholder since 2018, has issued an open letter demanding the company distribute $8.9 billion in cash to shareholders and reinstate trading of its shares. The letter highlights Sinovac's dramatic financial transformation, with revenues increasing from $246 million in 2019 to over $19 billion in 2021, largely due to CoronaVac vaccine success.

Despite accumulating over $10 billion in net cash for more than three years, Sinovac has not made any distributions to common shareholders. Meanwhile, Sinovac subsidiaries distributed $2.7 billion to other entities from 2021-2024. Trading has been suspended on NASDAQ for over six years due to litigation, which was resolved on January 16, 2025. A new board was appointed on February 28, 2025, but no concrete timeline for trading resumption has been provided.

Heng Ren Partners, azionista di Sinovac Biotech (NASDAQ: SVA) dal 2018, ha emesso una lettera aperta chiedendo all'azienda di distribuire 8,9 miliardi di dollari in contante agli azionisti e di ripristinare la negoziazione delle sue azioni. La lettera sottolinea la drammatica trasformazione finanziaria di Sinovac, con ricavi che sono aumentati da 246 milioni di dollari nel 2019 a oltre 19 miliardi di dollari nel 2021, principalmente grazie al successo del vaccino CoronaVac.

Nonostante abbia accumulato oltre 10 miliardi di dollari in contante netto per più di tre anni, Sinovac non ha effettuato alcuna distribuzione agli azionisti comuni. Nel frattempo, le filiali di Sinovac hanno distribuito 2,7 miliardi di dollari ad altre entità dal 2021 al 2024. La negoziazione è stata sospesa su NASDAQ per oltre sei anni a causa di contenziosi, risolti il 16 gennaio 2025. Un nuovo consiglio è stato nominato il 28 febbraio 2025, ma non è stata fornita alcuna tempistica concreta per la ripresa delle negoziazioni.

Heng Ren Partners, accionista de Sinovac Biotech (NASDAQ: SVA) desde 2018, ha emitido una carta abierta exigiendo que la empresa distribuya 8.9 mil millones de dólares en efectivo a los accionistas y restablezca la negociación de sus acciones. La carta destaca la dramática transformación financiera de Sinovac, con ingresos que aumentaron de 246 millones de dólares en 2019 a más de 19 mil millones de dólares en 2021, principalmente debido al éxito de la vacuna CoronaVac.

A pesar de acumular más de 10 mil millones de dólares en efectivo neto durante más de tres años, Sinovac no ha realizado distribuciones a los accionistas comunes. Mientras tanto, las filiales de Sinovac distribuyeron 2.7 mil millones de dólares a otras entidades entre 2021 y 2024. La negociación ha estado suspendida en NASDAQ durante más de seis años debido a litigios, que se resolvieron el 16 de enero de 2025. Un nuevo consejo fue nombrado el 28 de febrero de 2025, pero no se ha proporcionado un cronograma concreto para la reanudación de las negociaciones.

헨 렌 파트너스는 2018년부터 Sinovac Biotech (NASDAQ: SVA)의 주주로서 89억 달러의 현금을 주주에게 배당하고 주식 거래를 재개할 것을 요구하는 공개 서한을 발송했습니다. 이 서한은 Sinovac의 극적인 재무 변화를 강조하며, 2019년 2억 4천 6백만 달러에서 2021년 190억 달러 이상으로 매출이 증가한 이유는 주로 CoronaVac 백신의 성공 때문입니다.

Sinovac은 3년 이상 100억 달러 이상의 순현금을 축적했음에도 불구하고 일반 주주에게 배당금을 지급하지 않았습니다. 한편, Sinovac의 자회사는 2021년부터 2024년까지 27억 달러를 다른 기관에 배당했습니다. NASDAQ에서 거래는 소송으로 인해 6년 이상 중단되었으며, 이는 2025년 1월 16일에 해결되었습니다. 2025년 2월 28일에 새로운 이사회가 임명되었으나 거래 재개에 대한 구체적인 일정은 제공되지 않았습니다.

Heng Ren Partners, actionnaire de Sinovac Biotech (NASDAQ: SVA) depuis 2018, a publié une lettre ouverte demandant à l'entreprise de distribuer 8,9 milliards de dollars en espèces aux actionnaires et de rétablir la négociation de ses actions. La lettre souligne la transformation financière spectaculaire de Sinovac, avec des revenus passant de 246 millions de dollars en 2019 à plus de 19 milliards de dollars en 2021, principalement grâce au succès du vaccin CoronaVac.

Malgré l'accumulation de plus de 10 milliards de dollars de liquidités nettes pendant plus de trois ans, Sinovac n'a effectué aucune distribution aux actionnaires ordinaires. Pendant ce temps, les filiales de Sinovac ont distribué 2,7 milliards de dollars à d'autres entités entre 2021 et 2024. La négociation a été suspendue sur NASDAQ pendant plus de six ans en raison de litiges, qui ont été résolus le 16 janvier 2025. Un nouveau conseil d'administration a été nommé le 28 février 2025, mais aucun calendrier concret pour la reprise des négociations n'a été fourni.

Heng Ren Partners, seit 2018 Aktionär von Sinovac Biotech (NASDAQ: SVA), hat einen offenen Brief veröffentlicht, in dem das Unternehmen aufgefordert wird, 8,9 Milliarden Dollar in bar an die Aktionäre auszuschütten und den Handel mit seinen Aktien wieder aufzunehmen. Der Brief hebt die dramatische finanzielle Transformation von Sinovac hervor, wobei die Einnahmen von 246 Millionen Dollar im Jahr 2019 auf über 19 Milliarden Dollar im Jahr 2021 gestiegen sind, hauptsächlich aufgrund des Erfolgs des CoronaVac-Impfstoffs.

Trotz der Ansammlung von über 10 Milliarden Dollar an Nettobarvermögen seit mehr als drei Jahren hat Sinovac keine Ausschüttungen an die Stammaktionäre vorgenommen. In der Zwischenzeit haben Sinovac-Tochtergesellschaften von 2021 bis 2024 2,7 Milliarden Dollar an andere Einrichtungen ausgeschüttet. Der Handel an der NASDAQ wurde aufgrund von Rechtsstreitigkeiten, die am 16. Januar 2025 gelöst wurden, seit über sechs Jahren ausgesetzt. Ein neuer Vorstand wurde am 28. Februar 2025 ernannt, jedoch wurde kein konkreter Zeitrahmen für die Wiederaufnahme des Handels angegeben.

Positive
  • Massive cash reserves of $10.3 billion in net cash and short-term investments
  • Dramatic revenue growth to $19 billion in 2021 from $246 million in 2019
  • Resolution of litigation that caused trading suspension
  • Appointment of new board of directors in February 2025
Negative
  • No distributions to common shareholders despite $10+ billion cash position
  • Subsidiaries distributed $2.7 billion to other entities while shareholders received nothing
  • Shares suspended from trading for over 6 years
  • Lack of transparency regarding subsidiary dividend distributions
  • No concrete timeline provided for trading resumption

Insights

This shareholder activism represents a significant potential catalyst for Sinovac Biotech (SVA). Heng Ren Partners is demanding the distribution of $8.9 billion of the company's approximately $10.3 billion cash hoard to shareholders and the resumption of NASDAQ trading after a 6+ year suspension.

The letter reveals striking financial developments: Sinovac's revenue surged from $246 million in 2019 to over $19 billion in 2021, with profits exploding from $39.8 million to $8.5 billion - primarily from COVID-19 vaccine sales. Despite this windfall, common shareholders received no distributions while subsidiaries reportedly paid $2.7 billion in dividends to minority shareholders between 2021-2024.

The core governance issue centers on capital allocation - specifically whether billions in cash should be returned to shareholders who have been unable to trade shares during the company's most profitable period. Heng Ren's demand comes after litigation resolution and board reconstitution announced in January-February 2025.

The activist letter cites OrbiMed Advisors' SEC filing valuing Sinovac at $122.85 per share versus the $6.47 frozen price from 2019, suggesting substantial unrealized value. While the dividend demand and trading resumption could unlock shareholder value, implementation timing, regulatory approvals, and board receptiveness remain uncertain.

BOSTON, March 20, 2025 /PRNewswire/ -- Sinovac Biotech Ltd. (NASDAQ: SVA) ("Sinovac") shareholder Heng Ren Partners, LLC funds ("Heng Ren") today sent an open letter to Sinovac's shareholders outlining the significant and decisive action that Sinovac's Board of Directors must take to create liquidity and release cash to shareholders. Specifically, Heng Ren demands that Sinovac's Board of Directors announce a distribution of $8.9 billion in cash to its shareholders and cause the resumption of trading of the Company's shares.

The full text of the letter follows:

March 20, 2025

Dear Fellow Sinovac Shareholders:

Like you, we are shareholders in Sinovac Biotech Ltd. ("Sinovac" or the "Company").  Heng Ren Partners, LLC ("Heng Ren") manages funds that have held Sinovac shares since 2018.  Heng Ren has long believed in the Company's business and its potential, and Heng Ren's conviction was borne out by the Company's incredible success with the CoronaVac vaccine.  In 2019, before the COVID-19 pandemic, the Company's revenues were $246 million with income of $39.8 million.  By 2021, revenue soared to more than $19 billion with profits of $8.5 billion.  That incredible increase in profits and value should have been shared with us—Sinovac's shareholders and owners.  It was not.

Unfortunately, the Company did not share its meteoric success with the shareholders.  Despite raking in massive amounts of cash—Sinovac has been sitting on more than $10 billion in net cash and cash equivalents for more than three years—the Company did not make a single distribution to shareholders.  Instead, it appears that Sinovac subsidiaries distributed billions of dollars to other entities while Sinovac common equity shareholders got nothing.  Furthermore, litigation resulted in the suspension of Sinovac trading on NASDAQ for more than six years, preventing shareholders from trading during the Company's massive transformation.  That trading suspension continues through today.  In short, shareholders were handcuffed from selling their shares at the peak of the Company's success and the Company failed to make any distributions.

On January 16, 2025, Sinovac announced that the litigation was resolved and on February 28, Sinovac announced that a new board of directors was appointed.  The Company also announced that the new board was committed to achieving the resumption of trading.  But more than three weeks have passed, and the new board has not communicated to shareholders any concrete steps or timeline.  More importantly, the Board has not told us, the shareholders, when it will distribute the billions of dollars of hoarded cash to us, the shareholders, its rightful owners.

Heng Ren calls for Sinovac's Board to take decisive and immediate action.  Specifically, Heng Ren has identified the following acts that the Board must take:

1.  Distribute Cash.  The Board should distribute $8.9 billion of the Company's approximately $10.3 billion in net cash and short-term investments to all shareholders, with a record date for such distribution that is prior to the resumption of trading.

  • This distribution is long overdue. For more than three years, the Company has been sitting on more than $10 billion in net cash or cash equivalents all while shareholders were prevented from trading. This money should be distributed to the shareholders now—especially given that, from 2021–2024, Sinovac's subsidiaries distributed cash dividends totaling $2.7 billion while common shareholders like us got nothing. If shareholders like us had been paid their share of these dividends, an additional $3.9 billion in dividends would have been distributed to us. Another $5.0 billion in excess cash also should be distributed as long overdue dividends to shareholders. The Company still would be well capitalized. Dividends should have record dates prior to the resumption of any trading.

2.  Reinstate Trading.  After announcing a plan to distribute cash to shareholders, the Company must take all action necessary to cause the resumption of trading of Sinovac's shares on NASDAQ.  The Board must immediately take and disclose all steps that it is taking to make this happen.

  • The Board must inform shareholders of a clear timeline as to when the trading of Sinovac's shares will resume on NASDAQ.

  • The Board must prevent any trading, by Company management or otherwise, of Sinovac's shares until full disclosure is made of the Company's financial condition and other material information.

3.  Provide a Full Accounting.  Shareholders are entitled to all information necessary to determine which additional actions, if any, are warranted.

  • From 2021–2024, Sinovac's subsidiaries paid out $2.7 billion in dividends to minority shareholders. The precise context surrounding the payment of these dividends is unspecified and unknown, but Sinovac's common shareholders received nothing. Sinovac shareholders are entitled to a full and complete accounting of these and any other distributions to entities or parties other than Company shareholders.

  • Shareholders are entitled to information regarding all related party transactions entered into by the Company or any of its subsidiaries, on the one hand, and any member of the prior board or any entity controlled or affiliated with any member of the prior board, on the other hand.

There should be little doubt about the value of Sinovac's shares.  In its most recent holdings filing with the U.S. Securities and Exchange Commission (SEC), OrbiMed Advisors LLC, a large and well-respected biotech and life sciences fund family, which owns 3.8% of Sinovac, reported the value of its Sinovac stake at $333.9 million, or $122.85 per share. Not the price of $6.47 frozen since the trading halt in 2019.

https://www.sec.gov/Archives/edgar/data/1055951/000117266125001136/xslForm13F_X02/infotable.xml

With the resolution of the litigation and the appointment of the new board, the Company must act with transparency and urgency to distribute cash with a record date prior to the resumption of trading, resume trading of Sinovac's shares, and provide an accounting to the Company's shareholders.  We urge our fellow shareholders to demand that the new Board take these actions.

About Heng Ren:

Heng Ren Partners is a Boston-based asset management firm investing in Chinese companies.  Ropes & Gray LLP is serving as its legal counsel.

Any shareholder may obtain additional information or contact Heng Ren
at https://www.hengreninvestment.com and click "Sinovac Fairness."

 

Cision View original content:https://www.prnewswire.com/news-releases/heng-ren-partners-demands-sinovac-distribute-8-9-billion-in-cash-to-its-shareholders-and-cause-reinstatement-of-trading-302407158.html

SOURCE Heng Ren Partners

FAQ

How much cash is Heng Ren Partners demanding Sinovac (SVA) distribute to shareholders?

Heng Ren Partners is demanding Sinovac distribute $8.9 billion of its approximately $10.3 billion in net cash and short-term investments to shareholders.

What was Sinovac's (SVA) revenue growth from 2019 to 2021?

Sinovac's revenue grew from $246 million in 2019 to over $19 billion in 2021, with profits increasing from $39.8 million to $8.5 billion.

How long has Sinovac's (SVA) stock been suspended from trading on NASDAQ?

Sinovac's stock has been suspended from trading on NASDAQ for more than six years due to litigation.

What is the estimated value per share of Sinovac (SVA) according to OrbiMed Advisors?

According to OrbiMed Advisors' SEC filing, they value Sinovac at $122.85 per share, compared to the frozen price of $6.47 from 2019.
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