Actually participating in military bids with false materials, Chongyao Holdings' Xinjiang company has been suspended from military procurement eligibility!

Participation in military bidding has led to the provision of false information.

On March 23, the Army Procurement Management Department issued a handling announcement stating that Chongqing Pharmaceutical (Group) Xinjiang Co., Ltd. is suspected of violations of trust in its participation in military procurement activities, and its qualification to participate in procurement activities for military material engineering services for the entire army is suspended starting from March 23, 2026.

According to the announcement titled “Notice on the Suspension of Chongqing Pharmaceutical (Group) Xinjiang Co., Ltd.”, an investigation revealed that Chongqing Pharmaceutical (Group) Xinjiang Co., Ltd. is suspected of violations of trust in its participation in the procurement activity for project number: 2025-JL02-W1098.

In accordance with the relevant regulations on military supplier management, its qualification to participate in procurement activities for military material engineering services for the entire army is suspended starting from March 23, 2026.

During the suspension period, the legal representative, Luo Haiping, and the natural person controlling shareholder are prohibited from participating in military procurement activities within the aforementioned scope, while the authorized representative, Hao Ying, is suspended from representing other suppliers in military procurement activities within the aforementioned scope.

The summary of the handling announcement indicates that the reason for the suspension is providing false materials in the bid, and the scope of the suspension (units) applies to the entire army.

According to Tianyancha, Chongqing Pharmaceutical (Group) Xinjiang Co., Ltd. was established in 2005, with Chongqing Pharmaceutical (Group) Co., Ltd. holding 90% of the shares and Li Weidong holding 10%.

Chongqing Pharmaceutical Xinjiang Co. is a holding subsidiary of Chongqing Pharmaceutical Holdings (000950).

Haina Jun reviewed the annual report of Chongqing Pharmaceutical Holdings and found that the specific revenue situation of the Xinjiang company was not disclosed.

From the current penalties, it seems that the suspension of the Xinjiang company should not involve the entire Chongqing Pharmaceutical Holdings group.

However, recently, Chongqing Pharmaceutical Holdings has indeed faced continuous issues.

At the end of January, it disclosed problems with tax payments.

Subsidiaries of Chongqing Pharmaceutical Holdings, including Qinghai Pharmaceutical Co., Ltd., Zhelimu League Pharmaceutical (Inner Mongolia) Co., Ltd., Guizhou Pharmaceutical (Group) Co., Ltd., Guizhou Pharmaceutical (Group) Heping Pharmaceutical Co., Ltd., Shaanxi Huashi Pharmaceutical Co., Ltd., Chongqing Pharmaceutical Holdings Shaanxi Pharmaceutical Co., Ltd., and Chongqing Pharmaceutical Group (Gansu) Co., Ltd., totaling seven companies, according to notifications from their respective tax authorities, found that they need to repay a total of 32.21 million yuan in income tax benefits and late fees enjoyed in prior periods due to the Western Development tax incentives, with a repayment amount of 7.458 million yuan for 2025 and 24.7523 million yuan for 2026.

As a well-known state-owned pharmaceutical enterprise with a long history in Chongqing, Chongqing Pharmaceutical Holdings traces its origins back to the establishment of the Southwest Regional Company of China Pharmaceutical Company in 1950. Its main business covers the pharmaceutical commercial sector, including pure sales to hospitals, commercial wholesale, retail chains, terminal distribution, warehousing logistics, and value-added services in the supply chain, with a marketing network covering the entire country. Its nationally recognized brands, “Heping Pharmacy” and “New Health Pharmacy,” have nearly 1,300 retail stores in 22 provinces, municipalities, and autonomous regions, and engage in online shopping, self-paid pharmacies in hospitals, DTP specialty drug deliveries, and hospital infusion centers.

The annual report of Chongqing Pharmaceutical Holdings shows that in recent years, while its revenue has increased, profit has not, with net profit continuously declining despite an increase in operating income.

Against this backdrop, Chongqing Pharmaceutical Holdings achieved a splendid transformation under the leadership of Chongqing City.

It transitioned from a local state-owned enterprise to a central state-owned enterprise operating in Chongqing.

In February 2024, announcements from Chongqing Pharmaceutical Holdings (000950.SZ) and China Pharmaceutical (600056.SH) indicated that the Chongqing Municipal Government planned to introduce the central state-owned enterprise China General Technology Group to engage in strategic integration with Chongqing Chemical Industry Holdings (Group) Co., Ltd., a subsidiary of the Chongqing State-owned Assets Supervision and Administration Commission. This integration would lead to a change in the actual controller of Chongqing Pharmaceutical Holdings to General Technology Group.

In February 2025, China General Technology Group published an article announcing that Chongqing Pharmaceutical Holdings officially became its subsidiary.

The latest annual report for 2025 from Chongqing Pharmaceutical Holdings has not been disclosed, but the data from the third quarter of 2025 already reflects the changes brought about by the merger with the central state-owned enterprise.

In the first three quarters, the company achieved total operating revenue of 62.211 billion yuan, a year-on-year increase of 4.22%; net profit attributable to shareholders was 384 million yuan, a year-on-year increase of 31.41%; non-recurring net profit was 379 million yuan, a year-on-year increase of 36.83%; and the net cash flow from operating activities was -2.33 billion yuan, compared to -3.15 billion yuan in the same period last year.