2B yuan financing can't buy an annual report: The suspension suspense behind Mirui's $14.8 million prepayment | Financial report anomaly insight

Chinatimes.net.cn reporter Wenjuan Zhao, Ona Yu, Beijing

On April 2, 2026, Miereui (02629.HK) issued an announcement disclosing the core details behind the suspension: when auditing the company’s 2025 annual report, the audit firm KPMG found 14 prepayment items with a total amount of approximately US$14.8 million. Of this, about US$9.5 million had already been refunded by the relevant service providers, and the remaining approximately US$5.3 million were prepayments related to work that had been completed or was in progress. The company also announced the establishment of an independent investigation committee and appointed a law firm and professional institutions to assist with the review.

Just one day earlier, at 9:00 a.m. on April 1, this listed biotech company, which had been listed for less than a year, was formally suspended by the Hong Kong Stock Exchange for failing to publish its audited annual report on time. The “US$14.8 million audit question” quickly became the market focus. This 18A newcomer that had only just listed on the main board of the Hong Kong Stock Exchange on May 23, 2025—after less than a year since its listing—stepped over the suspension red line due to an “annual report delay,” mirroring Noevir Healthcare, again bringing front and center the financial compliance concerns in the early tumor screening liquid biopsy track.

This is not an isolated case. On the same day, more than 20 Hong Kong-listed companies paused trading for the same reason. With audit conditions being tightened across the board, Miereui’s suspension looks more like a snapshot of a systemic compliance stress test.

Inside the Review of US$14.8 Million

Starting from 9:00 a.m. on April 1, 2026, Miereui shares were suspended from trading on the HKEX. The company’s announcement states that the auditors needed more time to assess certain prepayment amounts paid by the company to service providers and suppliers, so the company was unable to publish its 2025 annual results before the March 31 deadline. Under the HKEX Listing Rules, failure to publish an audited annual report by the deadline results in an automatic suspension. If the suspension lasts more than 18 months, the company will face delisting risk.

The next day, Miereui’s announcement disclosed further details: during the audit process, KPMG found 14 prepayment items involving amounts paid by the company to service providers and suppliers, most of which occurred in the second half of 2025, with a total value of approximately US$14.8 million. As of the date of the announcement, about US$9.5 million had been refunded by the relevant service providers and suppliers, while the remaining approximately US$5.3 million were prepayments related to work that had been completed or was in progress. At the same time, Miereui’s board of directors approved the establishment of an independent investigation committee, led by two independent non-executive directors, Lin Qianli and Fang Xia, and appointed a law firm and professional investigation institutions to assist with the review. The company emphasized that the transactions requiring additional audit this time have no direct relationship with the company’s R&D, commercial operations, or related technical platforms. Meanwhile, the company said its day-to-day operations are progressing normally and have not been affected.

(The screenshot is from the company’s latest announcement.)

It is worth noting that Miereui is not the only company that “hit a snag” during the annual report season. Data show that on April 1, more than 20 Hong Kong-listed companies collectively suspended trading due to their failure to publish 2025 annual results on time. The list includes Sinoway Bio-B, Contemporary Real Estate, Shanghai Golden Dynasty, Shenghe Bio-B, United Development Group, and others across multiple industries. Behind this phenomenon is a notable tightening of the audit environment for Hong Kong stocks. Influenced by events such as PwC’s resignation from auditing some Hong Kong-listed companies, the “Big Four” audit firms—including KPMG—have generally increased audit compliance requirements. Their scrutiny of key financial line items such as prepayments and related-party transactions has clearly intensified. Industry insiders point out that audit firms no longer limit themselves to matching contract paperwork and bank flow records; instead, they are turning to more stringent cross-border, penetration-style confirmation requests. Prepayment reviews have become one of the common reasons causing annual report delays.

Miereui’s suspension inevitably triggers market comparisons with Noevir Healthcare. Noevir Healthcare, the former “No. 1 early screening stock” with a market value once exceeding HK$30 billion, was challenged by a short-seller in 2023 over alleged sales fraud. Subsequently, the auditor Deloitte refused to issue an annual report opinion, directly pointing to whether the revenue was genuine. It was eventually forcibly delisted in October 2025. However, multiple market participants noted that the two cases have fundamental differences: Noevir Healthcare’s core problem lies in “revenue authenticity,” which is malignant financial fraud involving fabricated performance. By contrast, Miereui’s current review focuses on the “prepayments” expense-side line item. This is an operational prepayment by the company, and the delay is caused only because—under a context of tightening regulation—the audit firm needs more time to verify documents. The nature is entirely different.

One detail worth further questioning is this: why did Miereui have project cancellations of nearly US$1.09B and receive prepayment refunds? The explanation the company gave is “some projects were cancelled.” This raises a deeper question: Miereui listed in May 2025 and raised HK$1.09B. After listing, the project rollout pace accelerated sharply. Why were multiple new projects cancelled within just half a year? Was it because the project initiation approvals were too hasty, or because major external business conditions changed in a way that was not disclosed? This may be the core set of疑点 indicated by the 14 transactions that the independent investigation committee needs to review in particular.

A Gap Between HK$2 Billion in Financing and HK$3.7 Billion in Market Value

Before the suspension controversy, Miereui’s 2025 interim performance had plenty of highlights. In the first half of the year, revenue reached US$10.47 million, up 9.4% year over year; gross profit was US$7.10 million, up 51.1% year over year; and loss attributable to equity shareholders was US$28.35 million, narrowing significantly from US$44.45 million in the same period last year. Gross margin increased from 49% to 67.6%. The performance growth was mainly driven by the early detection and precise multi-omics businesses. Its core products, GASTROClear™ and LUNGClear™, performed strongly in sales in Asia’s cancer diagnostics market.

However, when looking over a longer horizon, Miereui’s financial position shows clear fluctuations. In 2021, thanks to a sales peak of its COVID-19 testing product Fortitude, full-year revenue reached US$60.6498 million; afterward, as the pandemic improved, 2022 revenue plunged to US$17.7590 million. Revenue rebounded to US$24.1850 million in 2023, and fell again to US$20.2827 million in 2024. At the same time, losses continued to widen: losses were US$56.2027 million, US$69.5693 million, and US$92.2147 million from 2022 to 2024 respectively, resulting in total losses of about US$218 million over three years. Although the loss in the first half of 2025 narrowed, it was still at a level close to US$30 million.

What is intriguing is that three months before the suspension, Miereui was still putting on a “high point moment” in the capital markets. On January 29, 2026, the company completed a new share placement, raising approximately HK$711 million. The placing price was HK$32.5 per share, representing a premium of nearly 40% compared with the IPO issue price of HK$23.30 per share in May 2025. Adding the IPO proceeds of HK$1.086 billion, Miereui had accumulated total financing of nearly HK$2 billion in just eight months after listing—quite eye-catching among Hong Kong-listed biotech companies in recent years. However, the attractive financing performance did not support the stock price. As of the trading day prior to the suspension (March 31), Miereui’s share price closed at HK$12.41, with a total market capitalization of approximately HK$3.7 billion—nearly halving compared with the market cap of more than HK$8 billion at the beginning of the listing. More severely, this market capitalization has already fallen well below the daily market value minimum of HK$5 billion for Hang Seng Composite SmallCap stocks via the Stock Connect program, meaning the company is now completely out of the scope for Mainland funds to allocate via Stock Connect, and future financing and trading liquidity will face further pressure.

From the perspective of the product pipeline, Miereui has indeed built differentiated technology barriers in the miRNA liquid biopsy field. As of June 30, 2025, the company had its core product, GASTROClear™ (the world’s first approved molecular diagnostic IVD product for gastric cancer screening), two other commercialized products, LUNGClear™ and Fortitude™, and six candidate products in preclinical stages. GASTROClear™ was approved and listed in Singapore in May 2019. In October 2025, it received China’s NMPA approval registration certificate for Class III medical devices, becoming the first non-invasive detection product in China for gastric cancer early screening indications. In March 2026, the company successfully won a bid for the gastric cancer screening and early intervention project in Lianxi District, Jiujiang City, Jiangxi Province, marking the entry of its core product into the implementation stage in China. However, technological barriers are not the same as commercial success. Under the current environment of strict regulation for Hong Kong stocks, financial authenticity and internal control compliance have become the bottom line for corporate survival, even more than pipeline stories and commercialization growth rates.

KPMG’s Conclusion Is the Real Variable

The biggest uncertainty about Miereui’s resumption of trading lies in the final conclusion of the auditors’ “additional assessment.” Zeng Sijiao, a lawyer at Hunan Kuangzhen Law Firm and an expert in securities litigation, said, “For certain key financial data, there must be some differences between the audit positions of the auditors and the company, which may in turn affect the true reliability of Miereui’s full-year performance data.” Bai Wenxi, deputy director of the China Enterprise Capital Alliance, analyzed that the biggest uncertainty upon resumption lies in whether the auditors’ conclusion is merely accounting treatment adjustments, or whether it finds more serious internal control failures or fraud indicators. “If it turns out to be the latter, it may trigger disciplinary investigations by the HKEX and even referral to the CSRC. The path to resumption would then be far off. In addition, whether the company can maintain operating funds during the suspension period (especially now that it has just completed placement and should be well-funded) is also a key factor.”

As of the time of writing, Miereui’s independent investigation is still ongoing, and KPMG’s audit work has not been completed. On the positive side, after the incident, Miereui proactively established an independent investigation committee. This is not a mandatory requirement under HKEX regulatory rules, showing the company’s determination to push for an early resumption of trading. However, neither the independent investigation nor the audit has yet been finalized, and the suspension status continues, while investors’ patience is limited. Under HKEX rules, if the suspension lasts more than 18 months, the company will be delisted. “The prerequisite for resumption is that Miereui must publish the audited annual report, and the auditors must no longer issue qualified opinions or cannot express opinions on the prepayment matters. It must demonstrate that the prepayment items have commercial substance, are recoverable, and that the internal control rectification has been completed. If there is any fund occupation or related-party transaction, recovery and disclosure of rectification must be completed.” Bai Wenxi emphasized that whether these conditions are met will become the core variable determining whether Miereui can resume trading in the short term.

Regarding the issues above, the reporter of 华夏时报 tried to contact Miereui for an interview, but as of the time of publication, no response has been received.

责任编辑：姜雨晴 主编：陈岩鹏