Heng Ren Partners Demands Sinovac Distribute $8.9 Billion in Cash to its Shareholders and Cause Reinstatement of Trading

BOSTON, March 20, 2025 /PRNewswire/ -- Sinovac Biotech Ltd. (NASDAQ: SVA) ("Sinovac") shareholder Heng Ren Partners, LLC funds ("Heng Ren") today sent an open letter to Sinovac's shareholders outlining the significant and decisive action that Sinovac's Board of Directors must take to create liquidity and release cash to shareholders. Specifically, Heng Ren demands that Sinovac's Board of Directors announce a distribution of $8.9 billion in cash to its shareholders and cause the resumption of trading of the Company's shares.

The full text of the letter follows:

March 20, 2025

Dear Fellow Sinovac Shareholders:

Like you, we are shareholders in Sinovac Biotech Ltd. ("Sinovac" or the "Company").  Heng Ren Partners, LLC ("Heng Ren") manages funds that have held Sinovac shares since 2018.  Heng Ren has long believed in the Company's business and its potential, and Heng Ren's conviction was borne out by the Company's incredible success with the CoronaVac vaccine.  In 2019, before the COVID-19 pandemic, the Company's revenues were $246 million with income of $39.8 million.  By 2021, revenue soared to more than $19 billion with profits of $8.5 billion.  That incredible increase in profits and value should have been shared with us—Sinovac's shareholders and owners.  It was not.

Unfortunately, the Company did not share its meteoric success with the shareholders.  Despite raking in massive amounts of cash—Sinovac has been sitting on more than $10 billion in net cash and cash equivalents for more than three years—the Company did not make a single distribution to shareholders.  Instead, it appears that Sinovac subsidiaries distributed billions of dollars to other entities while Sinovac common equity shareholders got nothing.  Furthermore, litigation resulted in the suspension of Sinovac trading on NASDAQ for more than six years, preventing shareholders from trading during the Company's massive transformation.  That trading suspension continues through today.  In short, shareholders were handcuffed from selling their shares at the peak of the Company's success and the Company failed to make any distributions.

On January 16, 2025, Sinovac announced that the litigation was resolved and on February 28, Sinovac announced that a new board of directors was appointed.  The Company also announced that the new board was committed to achieving the resumption of trading.  But more than three weeks have passed, and the new board has not communicated to shareholders any concrete steps or timeline.  More importantly, the Board has not told us, the shareholders, when it will distribute the billions of dollars of hoarded cash to us, the shareholders, its rightful owners.

Heng Ren calls for Sinovac's Board to take decisive and immediate action.  Specifically, Heng Ren has identified the following acts that the Board must take:

1.  Distribute Cash.  The Board should distribute $8.9 billion of the Company's approximately $10.3 billion in net cash and short-term investments to all shareholders, with a record date for such distribution that is prior to the resumption of trading.

• This distribution is long overdue. For more than three years, the Company has been sitting on more than $10 billion in net cash or cash equivalents all while shareholders were prevented from trading. This money should be distributed to the shareholders now—especially given that, from 2021–2024, Sinovac's subsidiaries distributed cash dividends totaling $2.7 billion while common shareholders like us got nothing. If shareholders like us had been paid their share of these dividends, an additional $3.9 billion in dividends would have been distributed to us. Another $5.0 billion in excess cash also should be distributed as long overdue dividends to shareholders. The Company still would be well capitalized. Dividends should have record dates prior to the resumption of any trading.

2.  Reinstate Trading.  After announcing a plan to distribute cash to shareholders, the Company must take all action necessary to cause the resumption of trading of Sinovac's shares on NASDAQ.  The Board must immediately take and disclose all steps that it is taking to make this happen.

• The Board must inform shareholders of a clear timeline as to when the trading of Sinovac's shares will resume on NASDAQ.
  
  
• The Board must prevent any trading, by Company management or otherwise, of Sinovac's shares until full disclosure is made of the Company's financial condition and other material information.

3.  Provide a Full Accounting.  Shareholders are entitled to all information necessary to determine which additional actions, if any, are warranted.

• From 2021–2024, Sinovac's subsidiaries paid out $2.7 billion in dividends to minority shareholders. The precise context surrounding the payment of these dividends is unspecified and unknown, but Sinovac's common shareholders received nothing. Sinovac shareholders are entitled to a full and complete accounting of these and any other distributions to entities or parties other than Company shareholders.
  
  
• Shareholders are entitled to information regarding all related party transactions entered into by the Company or any of its subsidiaries, on the one hand, and any member of the prior board or any entity controlled or affiliated with any member of the prior board, on the other hand.

There should be little doubt about the value of Sinovac's shares.  In its most recent holdings filing with the U.S. Securities and Exchange Commission (SEC), OrbiMed Advisors LLC, a large and well-respected biotech and life sciences fund family, which owns 3.8% of Sinovac, reported the value of its Sinovac stake at $333.9 million, or $122.85 per share. Not the price of $6.47 frozen since the trading halt in 2019.

https://www.sec.gov/Archives/edgar/data/1055951/000117266125001136/xslForm13F_X02/infotable.xml

With the resolution of the litigation and the appointment of the new board, the Company must act with transparency and urgency to distribute cash with a record date prior to the resumption of trading, resume trading of Sinovac's shares, and provide an accounting to the Company's shareholders.  We urge our fellow shareholders to demand that the new Board take these actions.

About Heng Ren:

Heng Ren Partners is a Boston-based asset management firm investing in Chinese companies.  Ropes & Gray LLP is serving as its legal counsel.