Chongqing Pharmaceutical Reports New Lawsuits of RMB1.289 Billion, Receivables RMB36.054 Billion, Gets Warning
Chongqing Pharmaceutical Holding disclosed on August 5 that new lawsuits and arbitrations over the past 12 months totaled RMB1.289 billion, equal to 11.17% of its latest audited net assets. The company, mainly as plaintiff, saw accounts receivable reach RMB36.054 billion by end-2025, representing 43.73% of annual revenue. Receivables-to-revenue ratio has stayed between 41% and 44% for four years. Long-aged receivables rose, with 1-2 year receivables up 50.24% to RMB3.994 billion. The company also recorded RMB786 million in credit impairment losses and received a warning letter for inaccurate financial information. The impact on profit remains uncertain.
On the evening of August 5, Chongqing Pharmaceutical Holding issued an announcement regarding newly added cumulative litigation and arbitration cases. The announcement showed that within 12 consecutive months, the company's new litigation and arbitration cases involved a total amount of RMB1.289 billion, accounting for 11.17% of its most recently audited net assets.
According to the announcement, Chongqing Pharmaceutical Holding and its controlled subsidiaries acted mainly as plaintiffs in this wave of litigation, with the amount involved approximately RMB1.193 billion, representing more than 90% of the total. The largest single case is a sales contract dispute filed by a subsidiary against Shaanxi Kaiya Pharmaceutical Co. , Ltd. and other defendants, involving RMB365 million, which is currently pending first-instance trial.
As of the end of 2025, Chongqing Pharmaceutical Holding's accounts receivable reached RMB36.054 billion, equivalent to 43.73% of its full-year revenue. Over the past four years, the ratio of accounts receivable to revenue has remained in the range of 41% to 44%. In 2025, the proportion of long-aged receivables over one year increased, with receivables aged one to two years growing 50.24% to RMB3.994 billion.
The company had previously recorded credit impairment losses of RMB786 million and, due to inaccurate financial information, received a warning letter from regulatory authorities. The announcement stated that, as some cases have not yet been heard or have not produced judgments, the impact on current or future profits remains uncertain.