Heng Ren Partners Pushes Sinovac to Allocate $8.9 Billion to Shareholders and Restart Trading

Heng Ren Partners Calls for Action from Sinovac

Heng Ren Partners, LLC, a prominent shareholder in Sinovac Biotech Ltd., has taken decisive steps to demand action from the company's Board of Directors. In an open letter addressed to fellow shareholders, Heng Ren outlined a clear demand for the distribution of $8.9 billion to shareholders, an amount believed to be crucial for creating liquidity and restoring confidence among investors.

Since 2018, Heng Ren has consistently supported Sinovac, particularly during its remarkable success with the CoronaVac vaccine. The firm’s belief in the company was validated when Sinovac’s revenues surged from $246 million in 2019 to over $19 billion in 2021, resulting in profits soaring to $8.5 billion. Despite such achievements, the shareholders have seen no return on their investment, leading to mounting frustration.

Heng Ren's letter criticizes Sinovac for its handling of finances, highlighting that the company holds an excess of $10 billion in net cash and equivalents yet has not distributed any funds to its common shareholders for over three years. Instead, subsidiaries of Sinovac have reportedly allocated billions to other parties, while the shareholders remain empty-handed. Moreover, the suspension of trading on NASDAQ, lasting over six years due to litigation, has further hindered shareholders from realizing gains at what should have been a peak for the stock.

On January 16, 2025, Sinovac announced that the litigation was resolved, coinciding with the appointment of a new Board of Directors, which vowed to work towards reinstating trading. However, Heng Ren expresses disappointment at the lack of communication or timeline regarding the distribution of cash or resumption of trading since the board's appointment.

Heng Ren has outlined specific actions it believes the Board must undertake immediately:

1. Cash Distribution: The Board must distribute $8.9 billion to shareholders, utilizing funds that are currently sitting unused. This move is framed as both necessary and overdue, especially considering that dividends totaling $2.7 billion were paid to minority shareholders from 2021 to 2024 without any similar distribution to common shareholders.

2. Reinstate Trading: Once the cash distribution is planned, the Board must take vigorous steps to ensure Sinovac’s shares are traded again on NASDAQ. Transparency regarding the timeline for resuming trading is essential to regain shareholder trust.

3. Full Accounting: Heng Ren emphasizes the necessity for a comprehensive accounting of all dividends and related party transactions that have occurred during the period. Shareholders need clarity on how past dividends were allocated to ensure fair treatment for all investors.

The letter references the significant current valuation of Sinovac shares, which are reportedly valued at $122.85 as per recent filings, contrasting sharply with the frozen trading price of $6.47 since trading halted.

As Heng Ren awaits actions from the new Board, they encourage fellow shareholders to rally for a resolution that prioritizes transparency and fair returns. With litigation resolved and new leadership in place, the spotlight now rests on Sinovac to act decisively and responsibly. Heng Ren Partners is represented legally by Ropes & Gray LLP, with efforts directed towards achieving fairness for investors in Sinovac.

About Heng Ren:
Heng Ren Partners is an asset management firm based in Boston, focusing on investments in Chinese companies. For more information, individuals can visit their website or contact them directly through the provided channels.