Analysis Report on the Impact of Share Reduction by SAIF Partners, Shareholder of Huaren Health (301408.SZ)

Based on the above research and analysis, I will provide you with a systematic research report on the share reduction event by SAIF Partners, a shareholder of Huaren Health:

On January 14, 2026, Huaren Health released the “Pre-disclosure Announcement on Share Reduction by Shareholders Holding 5% or More of the Company’s Shares” [1]. SAIF Partners, a shareholder holding 5% or more of the company’s total shares, and its affiliated parties plan to reduce their shareholding by no more than 2% within the next three months. The specific information is as follows:

Historical data shows that the short-term impact of shareholder share reduction on stock prices depends on multiple factors [2]:

1. Reduction Scale
   : The 2% reduction ratio is of medium scale, and the short-term impact on the stock price is expected to be relatively controllable. Data shows that when the reduction ratio is in the 1%-3% range, short-term fluctuations are usually triggered, but the degree of impact depends on market conditions.

2. Market Absorption Capacity
   : The reduction period (February-April 2026) falls in the active trading period at the beginning of the year, with relatively sufficient market liquidity. Block trading can effectively ease the pressure of call auction trading.

3. Information Digestion Period
   : There is usually a 5-10 trading day sentiment digestion period after the announcement is released, during which increased trading volume and stock price fluctuations may occur.

1. Nature of Financial Investor Exit
   : As a private equity (PE) financial investor, SAIF Partners’ share reduction is more likely to reflect fund maturity exit or asset allocation needs, rather than a negative judgment on the company’s fundamentals.

2. No Impact on Company Operations
   : After the reduction, the shareholding ratio will drop to approximately 3.03%, which does not involve a change in controlling rights and has no substantive impact on the company’s operation and management.

Long-term stock price performance will ultimately return to the company’s performance fundamentals. Huaren Health delivered good performance in the first half of 2025 [3]:

• Operating Revenue
  : RMB 2.5 billion, a year-on-year increase of 15.5%
• Net Profit Attributable to Shareholders of the Parent Company
  : RMB 104 million, a year-on-year increase of 42.2%
• Non-recurring Net Profit Attributable to Shareholders of the Parent Company
  : RMB 101 million, a year-on-year increase of 43.3%
• Cash Flow from Operating Activities
  : RMB 532 million, a year-on-year increase of 33.3%

1. Whether other shareholders reduce their shareholdings subsequently
   : If multiple shareholders reduce their shareholdings consecutively, it may reflect a change in institutional investors’ collective judgment on the company’s prospects.

2. Sustainability of Company Performance
   : The net profit growth rate reached 42.2% in H1 2025; attention should be paid to whether the growth momentum can be maintained in subsequent quarters.

3. Industry Policy Changes
   : The pharmaceutical retail industry is greatly affected by policies such as medical insurance policies and centralized drug procurement [4]; policy risks need to be monitored.

4. Store Expansion Progress
   : The company added 529 stores during the period; the balance between expansion costs and benefits needs to be evaluated.

1. Market Systemic Risk
   : The current overall market valuation level and liquidity conditions may amplify the impact of the share reduction.

2. Intensified Industry Competition
   : The pharmaceutical retail industry is highly competitive; attention should be paid to industry integration trends.

3. Policy Risk
   : Policies such as medical insurance payment reforms and centralized drug procurement may affect the company’s profitability.

4. Valuation Risk
   : The margin of safety needs to be judged based on the company’s current valuation level.

From the perspective of investment signals, the share reduction by SAIF Partners, a shareholder of Huaren Health, can be analyzed as follows:

• Short-term
  : Certain pressure on the stock price is expected, but the magnitude is limited. This is mainly because the reducing entity is a financial investor, the reduction ratio is moderate, and the impact can be effectively controlled through block trading.

• Mid-term
  : The impact is limited, and the stock price is expected to gradually recover supported by performance. The company’s performance grew by 42.2% in the first half of 2025, with sound fundamentals.

• Long-term
  : Investment value depends on whether the company can maintain its performance growth momentum. The pharmaceutical retail industry benefits from the aging population trend and health consumption upgrading, and the company, as a regional leader, has certain competitive advantages.

[1] Sina Finance - “Huaren Health: Shareholder SAIF Partners Plans to Reduce Shareholding by No More Than 2% in Total” (https://finance.sina.com.cn/jjxw/2026-01-14/doc-inhhhtem8223727.shtml)

[2] 91cs.net - “Share Reduction by Listed Company Shareholders: Reasons and Impacts Behind It, How Should Investors Respond?” (https://91cs.net/anlidel/id/75.html)

[3] RCCaijing - “Huaren Health 2025 Half-Year Report: Net Profit Attributable to Parent Increases 42.2% Year-on-Year to RMB 104 Million” (https://m.rccaijing.com/news-7369602795290949011.html)

[4] Securities Times - “Pharmaceutical Industry Leader Hits a New Performance High! A Major Shareholder Reduced Its Shareholdings…” (https://stcn.com/article/detail/3214155.html)