On July 17th, Gelonhui announced that ST Medicine (600671.SH), a subsidiary, Hangzhou Sanshentai Traditional Chinese Medicine Clinic Co., Ltd. (referred to as "Sanshentai TCM clinic"), recently received a "Agreement Processing Decision" issued by the Hangzhou Medical Security Management Service Center. The Hangzhou Medical Security Management Service Center conducted an on-site inspection of the Sanshentai TCM clinic and found problems such as medical projects not recorded as required, physicians not signing in as required, and some patients not corresponding to actual treatment. As the above behaviors violated the relevant provisions of the "Hangzhou Medical Security Designated Medical Institutions Service Agreement" (version 2023), according to Article 68, Articles 72 (3), (6), and (10), and Article 73 (4), (7), and (8) of the "Agreement", the Hangzhou Medical Security Management Service Center imposed a penalty of 12 points on the Sanshentai TCM clinic in 2024, lifted the agreement, and decided not to accept designated applications within one year; at the same time, it recovered the illegal fee of 190,260.31 yuan from the Sanshentai TCM clinic (already returned) and paid a breach of contract penalty of 45,413.11 yuan, which is 30% of the original amount.
Sanshentai TCM Clinic is a subsidiary of the company. In 2023, the operating revenue of Sanshentai TCM clinic was 33.2336 million yuan, of which medical insurance revenue was 17.9672 million yuan, accounting for 14.75% of the audited operating revenue of the company in the most recent fiscal year. Therefore, this matter is expected to have a certain impact on the company's operating performance in 2024, and the final actual impact amount shall be subject to the annual audit results of the accounting firm. At present, the Sanshentai TCM clinic has actively implemented the rectification plan as required by the Hangzhou Medical Security Management Service Center, and after completing the rectification, it will reapply for the medical insurance designated institution according to relevant regulations.
