On April 8, Weigao Group Co., Ltd. (hereinafter referred to as "Weigao Group") released an announcement regarding changes in its board of directors, based on the "Resolution of the Shareholders' Meeting of Weigao Group Co., Ltd."The number of members on the WEGO Group's board of directors has been increased from five to seven. Lian Xiaoming has resigned as a director, and Chen Min, Gao Yu, and Cong Rinan have been elected as new directors for a term of three years. The new board of directors consists of seven members: Chen Lin, Tang Zhengpeng, Long Jing, Yan Xia, Chen Min, Gao Yu, and Cong Rinan.

After the announcement, the stock of WEGO Group fluctuated slightly, with stable increases and decreases. The current total market value is 21.436 billion Hong Kong dollars, and the stock price is 4.69 Hong Kong dollars.

This change means that Lian Xiaoming, the former director of Weigao Group, has exited, and three new directors have been added: Cong Rinan, Chen Min, and Gao Yu.

Resumes of Three New Directors

Chen Min: Female, born in July 1968, native of Shanghai, member of the Communist Party of China, with a master's degree. From January 2007 to March 2023, she served as the General Manager of the Orthopaedics Division at Johnson & Johnson Medical Technology China; from March 2023 to present, she has been serving as the Vice President of WEGO Group; from March 2024 to present, she has been serving as a Director of WEGO Group.

Guo Yu: Female, born in May 1973, native of Beijing, with a bachelor's degree. From 1994 to January 1997, served as an engineer at Beijing Internal Combustion Engine Group Co., Ltd.; from January 1997 to February 1998, worked as a software engineer at AsiaInfo Technologies Co., Ltd.; from February 1998 to March 2017, served as a partner at Mercer Consulting (China) Co., Ltd. and was the head of the Northern China consulting business; from March 2017 to April 2020, was the HR leader at Qianhai Reinsurance Company; from September 2020 to October 2021, served as COE at Gome Group; from July 2022 to January 2023, was the HR Director at WEGO Group; from January 2023 to present, has been serving as Vice President of WEGO Group; from March 2024 to present, has been serving as a director of WEGO Group.

Cong RinanMale, Han nationality, born in January 1981, Han nationality, from Weihai City, Shandong Province, with a master's degree, and a member of the Communist Party of China. Joined the company in September 2003. From June 2006 to December 2012, he successively served as workshop director, deputy manager, and manager of the Syringe Branch of the Stock Company. From January 2014 to December 2014, he served as the General Manager Assistant of the Medical Products Company. From January 2015 to December 2018, he served as the Deputy General Manager of the Medical Products Company. From January 2019 to December 2019, he was appointed as the General Manager of the Medical Products Company. From January 2020 to December 2023, he served as the General Manager of WEGO Medical Products Industry Group. Since January 2024, he has been serving as the Vice President of WEGO Group. Since March 2024, he has also been serving as a Director of WEGO Group.

Public information shows that WEGO Group was established in 1988. It is currently committed to developing its main businesses in medical devices and pharmaceuticals, while also promoting the coordinated development of construction, finance, and other industries. The group oversees several industrial groups, including medical products, orthopedics, blood purification, Prismedical, medical commerce, pharmaceuticals, and surgery.

According to the financial data provided by Qichacha, during the 2020-2022 fiscal years, WEGO Group achieved operating revenues of 22.781 billion yuan, 25.891 billion yuan, and 28.567 billion yuan respectively; total profits reached 3.028 billion yuan, 2.794 billion yuan, and 2.827 billion yuan respectively. In the first three quarters of 2023, WEGO Group reported operating revenue of 21.597 billion yuan and a total profit of 1.937 billion yuan. By the end of the third quarter of 2023, WEGO Group's total assets amounted to 77.75 billion yuan.

It is reported that WEGO currently has investments in 89 enterprises, of which 72 are active or operational, 15 are dissolved, and 2 have relocated. Under WEGO Group, there are three listed companies: WEGO Orthopedics (688161.SH), WEGO Holdings, and Huadong CNC. As of the closing on March 15, the total market value of these three listed companies was approximately 37.255 billion yuan.

Recently, there have been significant personnel changes at WEGO Orthopedics. On the evening of March 8, WEGO Orthopedics announced three major personnel changes involving positions such as the company's chairman and board directors.

The announcement stated that, due to personal reasons, Mr. Gong Jianbo has submitted his resignation from the positions of director and chairman of the third board of directors of the company, as well as member of relevant special committees under the board. After his resignation, Mr. Gong Jianbo will no longer hold any position in the company or its subsidiaries. However, Mr. Gong Jianbo will continue to provide valuable opinions and suggestions for the future development of the company as an advisor and shareholder.

Due to work adjustments, Ms. Yan Xia has applied to resign from her position as a director of the company's third board of directors. After her resignation, Ms. Yan Xia will no longer hold any position in the company or its subsidiaries, but she will continue to serve in enterprises controlled by the company's controlling shareholder and actual controller.

Due to work adjustments, Mr. Qiu Guoping has applied to resign from his positions as a director of the company's third board of directors and as the company's vice general manager. After his resignation, Mr. Qiu Guoping will continue to hold other positions in the company and be responsible for the operation and management of subsidiary-related affairs.

WEGO Orthopedics is currently facing significant performance pressure, which may have a certain impact on personnel changes. The announcement shows,Net profit decline was mainly due to pressure on revenue and gross margin.February 29,WEGO Orthopedics Discloses 2023 Annual Earnings Report: Revenue Totals 1.284 Billion Yuan, Down 37.61% Year-on-YearNet profit attributable to owners of the parent company was 112 million yuan, a decrease of 81.29% compared to the same period last year. After deducting non-recurring gains and losses, the net profit was 104 million yuan, representing a year-on-year decrease of 82.28%. Basic earnings per share were 0.28 yuan.

As China and its provinces and municipalities routinely carry out bulk procurement of high-value medical consumables, the three major fields of orthopedic joints, trauma, and spine have been included in the scope of centralized procurement of orthopedic medical consumables and are being gradually implemented, which has had a significant short-term impact on orthopedic consumable companies.

WEGO Orthopedics stated that last year, with the implementation of China's national policy for the volume-based procurement of high-value orthopedic consumables, the sales prices of the company’s products significantly declined. This change directly impacted the company’s main business revenue and gross profit margin, resulting in a substantial decline in operating performance. Additionally, the decrease in product ex-factory prices and price concessions due to channel inventory adjustments further contributed to the decline in sales revenue and gross profit margin, ultimately affecting overall profitability.

Recent Anti-Corruption Efforts in the Pharmaceutical Industry Lead to Major Personnel Changes at Several Medical Device Giants, Triggering a New Wave of Turmoil; National Volume-Based Procurement Impacts Earnings Reports of Leading Chinese Companies. This Also Accelerates Industry Restructuring and Forces Corporate Transformation. Under the leadership of the new board, how will WEGO address these industry changes? How will it lead WEGO to break through? Medical Device Community will continue to monitor the situation.

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