The listing of the subsidiary on the U.S. unverified list sent shares lower, but Pharmatech said the actual impact was minimal
Beijing News (reporter: Wang Kara) On February 8, trading of Pharming Bio-chemicals was suspended after shares of two subsidiaries were listed on the “unverified list (UVL)” by the US Department of Commerce.On Feb. 9, the company resumed trading at HK $68 per share, but fell back to HK $61.6 per share, down 1.04%.Although wuxi Apptec was not included, it was also affected and its share price fell sharply.The company said it is actively taking interim steps to request the removal of two subsidiaries from UVL.The UVL designation by the BUREAU of Industry and Security of the U.S. Department of Commerce was made by Wuxi Yanming Biotechnology Co., LTD. (Wuxi) and Shanghai Yanming Biotechnology Co., LTD. (Shanghai Yanming Biotechnology Co., LTD.).Why are subsidiaries included in UVL?The two units were listed in UVL because the relevant US government agencies were unable to carry out the necessary verification procedures to export equipment from US suppliers, The company said.During the past decade, the company has received approval from the U.S. Department of Commerce to import some of its regulated disposable bioreactor controllers and hollow fiber filters.However, due to the COVID-19 pandemic, the us Department of Commerce’s routine verification process was not completed in the past two years.How much impact does the inclusion of two subsidiaries in UVL have on Pharming bio?”The company believes that the incident will not have a material adverse impact on the company’s services to its global customers and that all businesses are progressing steadily.”At the same time, considering that there is no need to import related instruments and equipment after the completion of relevant facilities in Shanghai and Wuxi, the incident has relatively little impact on the company’s import.In addition, according to the information of PUDONG Bank International Research Report, There are also suppliers in Europe, Japan and China, and the management expects that domestic manufacturers can replace them in 1-2 years at the earliest.Apptec was affected by the above events. Before the suspension of trading, the share price of AppTec opened at 55 HK dollars per share on February 8. When trading was suspended at 10:51 on that day, the price stopped at 62.25 HK dollars per share, down 22.77%.After The company stated that the incident had little impact on the company, the share price opened slightly higher on February 9 and closed at HK $61.6 / share, down 1.04%.However, the company’s net profit is expected to grow more than 98 percent year-on-year during the reporting period, according to its 2021 earnings preview released on Feb 7.From the research reports of a number of institutions, they are still optimistic about Yao Ming, believing that its performance exceeds expectations. From 2019 to 2021, the compound growth rate of net profit of the parent company is about 113.4%.Affected by the above events of pharmatech, the A-share price of Pharmatech fell by 9.99% to close at 94.06 yuan per share on February 8.Although wuxi Aptec issued A clarification statement on the same day, saying that neither the company nor its subsidiaries were listed in UVL by the US Department of Commerce, and that wuxi ApTEC is an independent listed company and no longer holds any shares of wuxi ApTEC, the a-share price of wuxi ApTEC opened at 89.5 yuan per share on February 9, and closed at 92.73 yuan per share, down 1.41%.The Hong Kong stock price of wuxi Apptec also plunged 16.24% on Feb. 8, closing at HK $96.55 per share, down 4.12%.Link What is the Unverified List (UVL)?UVL, unlike the entity list, does not mean that a U.S. exporter cannot interact with a person on the list or that there is a specific, valuable and explicable national security or foreign policy issue with the person concerned.According to the “regulations on the administration of export regulation, added to the list of reasons not directly illegal UVL, but in the United States department of commerce mode of controlled items related to foreign trade license review before or after shipment follow up the process of verification, because of the host country government, the end user or the consignee not cooperate, cooperate fully, can’t get in touch,As a result, the U.S. Department of Commerce cannot verify the good faith of these foreign entities through end-use verification.Additional due diligence or licensing requirements are required for the export of controlled items to, within, or within the country of entities listed in the UVL, according to the REPORT.Differs from the entity list, however, was placed on the UVL does not mean that the full embargo, enterprises without a special case, generally only need to satisfy some additional procedural requirements is not complicated, have bigger chance to continue business, and the application is removed from the list of applications and requirements is also relatively easy to meet and complete, UVL entities associated entities are not regulated.