Weigao Blood Purification to Acquire Weigao Purui for RMB 8.51 Billion, Shares Surge for Two Consecutive Days

On June 12, WEGO Blood Purification (603014.SH) opened higher and continued to rise, hitting the daily limit up during trading. By the midday close, its share price stood at RMB 36.53, with a total market capitalization of RMB 15.261 billion. The stock has hit the daily limit up for two consecutive trading days.

Market Enthusiasm for WEGO Blood Purification: A Major Capital Operation Concerning the Future Fate of the “WEGO Group” Is Underway

On the evening of June 9, WEGO Blood Purification released the “Reply (Revised Draft) to the Inquiry Letter Regarding the Application for Issuance of Shares to Purchase Assets and Related-Party Transactions,” providing detailed responses to 14 issues raised by the Shanghai Stock Exchange concerning the transaction’s purpose, transaction structure, and the target company’s business operations.

In October 2025, merely six months after its listing on the Main Board of the Shanghai Stock Exchange, WEGO Blood Purification swiftly initiated a major asset consolidation, proposing to acquire 100% equity interest in Shandong WEGO Prefills Pharmaceutical Packaging Co., Ltd. (hereinafter referred to as “WEGO Prefills”), also part of the “WEGO Group,” through share issuance at a valuation of RMB 8.511 billion.

Relevant announcements indicate that WEGO Prefills is a subsidiary controlled by the listed company Weigao Co., Ltd. (01066.HK). Prior to this transaction, Weigao Co., Ltd. held 23.53% of the shares in WEGO Blood Purification and 94.07% of the shares in WEGO Prefills. Upon completion of the transaction, WEGO Prefills will become a wholly-owned subsidiary of WEGO Blood Purification, and Weigao Co., Ltd. will directly hold 51.35% of the shares in WEGO Blood Purification, with its controlling shareholder changing from Weigao Group to Weigao Co., Ltd.

The announcement stated that the actual controller of Weigao Group, Weigao Shares, Weigao Blood Purification, and Weigao Prefills is Chen Xueli. This transaction constitutes a major asset restructuring and related-party transaction.

Upon completion of the transaction, this will mark a pivotal restructuring of the capital portfolio controlled by the Chen Xueli family, the actual controllers of the “WEGO Group” and the wealthiest family in Weihai. According to the announcement, following the transaction, WEGO Blood Purification’s core business will expand beyond blood purification medical products to include pharmaceutical packaging materials such as pre-filled syringe drug delivery systems and automatic safety drug delivery systems. Furthermore, both parties will jointly explore the business of biopharmaceutical filters.

However, the announcement emphasized that the transaction is subject to approval by the Shanghai Stock Exchange and registration consent from the China Securities Regulatory Commission before it can be implemented.

Why Is the Hemodialysis Leader Eyeing the Packaging Champion?

WEGO Blood Purification, established in 2004 and specializing in hemodialysis and peritoneal dialysis, is one of China’s most comprehensive manufacturers of blood purification medical products, earning it the title “King of Domestic Dialysis.” The acquiree, WEGO Prefills, is an “invisible champion” in China’s pharmaceutical packaging sector, focusing on pharmaceutical packaging solutions such as pre-filled syringe delivery systems and automatic safety delivery systems.

According to data from the China Pharmaceutical Packaging Association, from 2022 to 2024, its pre-filled syringe products accounted for over 50% of the domestic market share, ranking first in the domestic industry and placing among the top five globally in sales volume. Its major clients include well-known enterprises such as Hepalink (002399.SZ), Hengrui Medicine (600276.SH, 01276.HK), Harbin Pharmaceutical Group, Kangtai Biological (300601.SZ), and Wantai Bio-pharm (603392.SH).

One is the leader in hemodialysis, and the other is the champion in packaging materials. Why are they integrating at this time? The Shanghai Stock Exchange raised a similar question: why was the integration not completed at the time of listing? In response, WEGO Blood Purification stated that at the time of listing, there was no direct upstream-downstream industrial relationship between the listed company and the target company’s core business, which is why the integration was not carried out concurrently with the listing.

Image source: Tuchong.com

Regarding the decision to acquire WEGO Prefills at this juncture, Weigao Hemodialysis summarized the reasons in its response to the Shanghai Stock Exchange’s inquiry into three aspects: first, aligning with national industrial policy guidelines to facilitate domestic substitution; second, the gradual maturation of its own technological R&D capabilities; and third, expanding new growth drivers. Weigao Hemodialysis aims to leverage the synergy between its hollow fiber filtration technology and WEGO Prefills’ customer resources to develop the biopharmaceutical filter business.

Biopharmaceutical filters are core consumables in the research, development, and production of biopharmaceuticals, widely used in critical processes such as cell culture, product purification, sterilizing filtration, and virus removal. In its response, WEGO Blood Purification pointed out that the domestic biopharmaceutical filter market is currently dominated by foreign manufacturers. According to Frost & Sullivan data, the localization rate of China's biopharmaceutical filter market was 29.6% in 2024, leaving more than 70% room for substitution with domestically produced alternatives.

The acquisition was by no means a whim. According to WEGO Blood Purification, the company has currently mastered key processes such as precise pore formation in hollow fiber membranes, optimization of production equipment, and pore size detection. Among these, its virus removal filters, tangential flow filtration products, and sterilizing-grade filters are expected to meet market launch requirements by 2027. Furthermore, the company plans to designate Shandong WEGO Lejing Biotechnology Co., Ltd. (hereinafter referred to as “WEGO Lejing”) as the entity responsible for the research and development and manufacturing of biopharmaceutical filters, with WEGO Leijing tasked to coordinate product R&D, capacity building, and production organization.

Based on the financial data, this transaction is also expected to boost the performance of the listed company.

Financial report data shows that from 2023 to 2025 and in the first quarter of 2026, WEGO Blood Purification achieved revenues of RMB 3.532 billion, RMB 3.604 billion, RMB 3.769 billion, and RMB 904 million respectively, representing year-on-year growth rates of 3.09%, 2.03%, 4.57%, and 0.92% respectively; net profits attributable to shareholders were RMB 442 million, RMB 449 million, RMB 482 million, and RMB 118 million respectively, with corresponding year-on-year increases of 40.36%, 1.65%, 7.33%, and 5.29%.

Although performance has grown steadily, the growth rate is modest. Relying solely on its hemodialysis business, WEGO Blood Purification’s growth momentum is clearly weak. On one hand, affected by centralized procurement, prices for hemodialysis consumables and equipment have declined, compressing profit margins. On the other hand, according to disclosures from WEGO Blood Purification, the majority of the company’s revenue comes from public hospitals, where payment settlement cycles have generally been prolonged in recent years.

In contrast, the target company, WEGO Prefills, demonstrates remarkable self-sustaining profitability. Financial data show that in 2025, the company achieved annual operating revenue of RMB 1.884 billion and net profit of RMB 601 million, with its profit volume even surpassing the full-year 2025 net profit of the acquirer, WEGO Blood Purification.

Times Finance noted that in this transaction, WEGO Blood Purification and WEGO Prefills also signed a performance compensation agreement. If the transaction is completed within 2026, the counterparties (WEGO Co., Ltd., Weihai Shengxi, and Weihai Ruiming) committed to net profits of RMB 640 million, RMB 720 million, and RMB 784 million for 2026–2028, respectively, with a cumulative committed net profit of RMB 2.143 billion over the three years; if the transaction is delayed until completion in 2027, the counterparties committed to net profits of RMB 720 million, RMB 784 million, and RMB 845 million for 2027–2029, respectively, with a cumulative committed net profit of RMB 2.348 billion over the three years.

However, against the backdrop of an overall slowdown in the growth rate of the pharmaceutical industry and intensifying competition in the pre-filled syringe market, whether the performance commitments can be fulfilled as scheduled remains to be seen.

The Capital Chess Game of Weihai's Richest Person

Behind this transaction stands the family of Chen Xueli, the wealthiest individual in Weihai. Chen Xueli’s life journey is nothing short of legendary; market rumors recount how he borrowed 25,000 yuan and, over nearly 40 years, built the “WEGO” medical empire, with total assets amounting to approximately 78 billion yuan.

Public reports indicate that Chen Xueli was born in 1951 in a rural area of Weihai, Shandong Province. In 1974, at the age of 23, he became the Party Branch Secretary of Wangjiaqin Village. After serving as the village Party secretary for 14 years, Chen was transferred in 1988 to serve as the director of the Tiancun Welfare Institute. During his tenure, he inadvertently discovered a business opportunity in disposable infusion sets. He then borrowed 25,000 yuan to establish the predecessor of WEGO Group—the Weihai General Factory of Medical Polymer Products—in the backyard of the welfare institute. By 1993, the factory had achieved annual sales revenue exceeding 100 million yuan.

However, Chen Xueli was not content with remaining in the low-end medical consumables sector. He subsequently pursued a strategy of independent R&D combined with acquisitions to continuously transition toward high-end medical devices, with business coverage spanning orthopedics, hemodialysis, interventional medicine, and other fields.

Moreover, Chen Xueli has been hailed by the market as a master of capital operations. To date, the “WEGO Group” capital portfolio comprises four listed companies. Among them, WEGO Co., Ltd. was listed on the Hong Kong Stock Exchange in 2004, becoming the first medical device enterprise in China to go public. In 2017–2018, Chen Xueli acquired control of the listed company Huadong CNC (002248.SZ) through judicial auctions and secondary market share acquisitions. In 2021, WEGO Orthopedics (688161.SH) was spun off and listed on the STAR Market, and in 2025, WEGO Blood Purification was also spun off for listing.

Times Finance noted that although Chen Xueli stepped down as chairman of WEGO Group in 2018 and handed the reins to his son, Chen Lin, in 2021, Chen Xueli remains the actual controller of the aforementioned four listed companies as of now.

However, in recent years, influenced by factors such as centralized volume-based procurement and liquidity in the Hong Kong stock market, the total market capitalization of the aforementioned four listed companies has declined from a peak of nearly RMB 60 billion to approximately RMB 42 billion at present. Among them, WEGO Orthopedics saw its market capitalization exceed RMB 40 billion on its first day of listing, but it now stands at only about RMB 8.7 billion. Meanwhile, WEGO Blood Purification’s market capitalization has dropped from over RMB 20 billion on its debut day to around RMB 15.2 billion, although it has rebounded significantly due to consecutive daily limit-ups over the past two days.

Meanwhile, the Chen Xueli family’s net worth has also shrunk. According to the Hurun Rich List, the Chen Xueli family repeatedly topped the list of the wealthiest individuals in Weihai, Shandong Province, from 2020 to 2025. The 2025 Hurun Rich List shows that the combined net worth of Chen Xueli and his son, Chen Lin, reached RMB 13 billion, a significant decrease from RMB 20.5 billion in 2020, with their ranking dropping from 261st to 528th place.

Against this backdrop, WEGO Blood Purification’s acquisition of WEGO Prefills has been interpreted by the market as a key move in the internal consolidation of the “WEGO Group.” Upon completion of the transaction, WEGO Co., Ltd.’s direct shareholding in WEGO Blood Purification will increase from 23.53% to 51.35%, with the controlling shareholder changing from Weigao Group to WEGO Co., Ltd. According to the pro forma review report issued by Ernst & Young, WEGO Blood Purification’s earnings per share (EPS) for 2025 are projected to rise from RMB 1.22 per share to RMB 1.62 per share post-transaction, representing a growth rate of 32.79%.

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