Persistent collection difficulties lead Mingde Biotech to face financial delisting circumstances

How Did AI · Mingde Biological Slide from Billions in Revenue to the Brink of Delisting?

By China Economic Journal reporters Yan Guowen and Lu Zhikun, reporting from Beijing

Difficulty collecting accounts receivable is a major operational pain point for many post-pandemic in vitro diagnostic (IVD) listed companies. Recently, Mingde Biological (002932.SZ), an IVD listed company whose operating revenue exceeded 10 billion yuan during the pandemic, disclosed that, due to triggering a financial-type delisting condition, after its 2025 annual report is released, the stock abbreviation may be prefixed with “*ST.”

The latest earnings forecast shows that Mingde Biological expects 2025 net profit attributable to shareholders of the listed company to be a loss of 0.15 billion yuan—0.25 billion yuan, net profit after deducting non-recurring gains and losses to be a loss of 1 billion yuan—1.4 billion yuan, and operating revenue after deduction to be 0.237 billion yuan—0.297 billion yuan.

An earlier disclosed earnings forecast showed that Mingde Biological expected 2025 net profit attributable to shareholders of the listed company to be 0.12 billion yuan—0.18 billion yuan, and net profit after deducting non-recurring gains and losses to be 0.78 billion yuan—0.98 billion yuan.

It can be seen that, for 2025, Mingde Biological’s non-recurring gains and losses are expected to be 0.85 billion yuan—1.15 billion yuan.

The data in Mingde Biological’s performance correction announcement differs significantly from the earnings forecast data, and the nature of its profit and loss has changed, and it has also triggered a financial-type delisting condition.

Mingde Biological said that the main reasons for the major changes in the earnings forecast are: under the principle of prudence, for certain transactions where there is substantial uncertainty regarding the collection of receivables, for reasons of prudence, the corresponding revenue will not be recognized in the 2025 fiscal year, which leads to a corresponding reduction in operating revenue and net profit attributable to shareholders. In addition, under the principle of prudence, adjustments have been made to asset impairment loss amounts for assets such as inventories and fixed assets, resulting in a corresponding reduction in net profit attributable to shareholders.

It is understood that in the A-share market, it is not uncommon for announcements like performance corrections to show major differences from the earnings forecast data and for the nature of profit and loss to change. Every year, some listed companies and their key management personnel receive corresponding disciplinary actions or administrative regulatory measures to issue warning letters due to suspected violations of relevant provisions such as the “Administrative Measures for Information Disclosure of Listed Companies” and the “Rules Governing the Listing of Stocks on the Shenzhen Stock Exchange.”

Regarding issues related to information disclosure and company operations, a reporter from the China Business Journal sent a letter to Mingde Biological for an interview; as of the time of publication, no response has been received.

Before the outbreak of the COVID-19 pandemic, Mingde Biological’s annual operating revenue generally ranged between 100 million yuan—200 million yuan. During the pandemic, Mingde Biological captured the massive demand for COVID testing, and operating revenue and net profit achieved rapid explosive growth.

In Mingde Biological’s 2022 annual report, according to the inter-laboratory quality evaluation report for COVID-19 nucleic acid testing laboratories responsible for sample delivery from centralized isolation points across the country as of December 2022, the percentage of reagent usage for COVID-19 nucleic acid test reagents produced by Mingde Biological across all laboratories was 22.1%.

In 2022, Mingde Biological’s operating revenue reached 10.53 billion yuan, and net profit attributable to shareholders reached 4.208 billion yuan—both hit historical highs.

A surge in operating revenue also led to an increase in accounts receivable, which later became a hidden risk. At the beginning of 2022, Mingde Biological’s accounts receivable was 739 million yuan. By the end of 2022, accounts receivable had soared to 2.56 billion yuan.

With adjustments to COVID-19 control and prevention policies, starting in 2023, demand for COVID testing products dropped sharply, and Mingde Biological’s performance also fell drastically. In 2023 and 2024, Mingde Biological’s operating revenue was 0.75 billion yuan and 0.35 billion yuan, respectively; net profit after deducting non-recurring items was -1.24 billion yuan and -1.4 billion yuan, respectively.

The problem of accounts receivable collection has been dragging down Mingde Biological’s overall performance throughout. In its reports for 2023 and 2024, Mingde Biological repeatedly mentioned, “Due to difficulties in terminal customer payments, credit risk has increased, and bad debt provisions have been made for some high-risk customers.”

To expand its business scale, Mingde Biological initiated two consecutive external acquisitions. In February this year, it completed the acquisition of a 51% equity interest in Blue YI (Hunan) Medical Device Co., Ltd. (hereinafter “Hunan Blue YI”).

The latest disclosed financial data shows that Hunan Blue YI is in a state of negative net assets and has been incurring continuous losses. As of September 30, 2025, Hunan Blue YI’s net assets were -62.42 million yuan. For all of 2024 and the first three quarters of 2025, Hunan Blue YI’s operating revenue was 47.70 million yuan and 30.65 million yuan, respectively, and its net profit was -20.67 million yuan and -23.98 million yuan, respectively.

Regarding the purpose of this acquisition, Mingde Biological stated that its core businesses with Hunan Blue YI respectively cover critical and severe disease treatment and chronic disease management, forming a natural complement and jointly covering the entire process including pre-hospital emergency care, in-hospital diagnosis, post-hospital follow-up, and home management. Through this transaction, Mingde Biological will achieve horizontal expansion of its industrial chain, which is beneficial for the company to build a complete product ecosystem and enhance its comprehensive service capabilities for medical institutions.

Another acquisition target of Mingde Biological is Wuhan Bikaier, the wholly owned subsidiary of Blue Sail Medical (002382.SZ). Wuhan Bikaier mainly engages in the production and sales of emergency kits. On March 30, Mingde Biological disclosed that the work related to this transaction is being actively advanced, and the specific transaction plan is still under discussion and demonstration, and the transaction parties have not yet signed formal agreements.

(Editor: Cao Xueping; Review: Tong Haihua; Proofreading: Liu Jun)