Heng Ren Partners, LLC, a significant shareholder in Sinovac Biotech Ltd. (NASDAQ: SVA), has issued an open letter to Sinovac's board and shareholders, demanding immediate action to unlock value for shareholders. In the letter, Heng Ren calls for a distribution of $8.9 billion in cash to shareholders and the swift resumption of Sinovac's trading on NASDAQ, which has been halted for over six years.

The letter, dated March 20, 2025, highlights the massive accumulation of cash by Sinovac, which has been sitting on more than $10 billion in net cash and equivalents for over three years. Despite the company's substantial growth during the COVID-19 pandemic, particularly due to the success of its CoronaVac vaccine, Heng Ren asserts that shareholders have not been adequately compensated. The letter emphasizes that subsidiaries of Sinovac distributed billions of dollars to other entities, while common equity shareholders saw no benefit.

Heng Ren, which has held shares in Sinovac since 2018, expressed frustration over the lack of shareholder distributions and the suspension of the company's stock. The trading halt, which has lasted since 2019 due to ongoing litigation, prevented shareholders from capitalizing on the company's peak performance. Despite the resolution of the litigation in January 2025 and the appointment of a new board in February, Heng Ren asserts that the new leadership has not taken concrete steps to restore shareholder value or provide clarity on future actions.

Heng Ren outlined three key demands in the letter. First, the firm insists that Sinovac's board immediately announce a distribution of $8.9 billion, representing a significant portion of the company's cash reserves. This distribution, Heng Ren argues, should be made before the resumption of trading, which would allow shareholders to receive their rightful share of the company's wealth. Additionally, Heng Ren is calling for a full accounting of the company's financial dealings, particularly regarding the $2.7 billion in dividends paid to minority shareholders from 2021 to 2024, which were not shared with common equity holders.

The second demand calls for the resumption of trading on NASDAQ, with Heng Ren urging the board to disclose a clear timeline for this process. Heng Ren stresses that no trading should take place until full transparency is provided regarding Sinovac's financial health and any related-party transactions.

Lastly, Heng Ren seeks a complete and transparent accounting of the company’s financial activities, particularly regarding any distributions to subsidiaries or entities outside of common shareholders. Heng Ren emphasizes the need for full disclosure of related-party transactions involving the company’s prior board members.

Sinovac's shares have been suspended from trading at a price of $6.47 since 2019, a stark contrast to recent valuations reported by institutional investors. For instance, OrbiMed Advisors LLC, which holds a 3.8% stake in Sinovac, valued its shares at $122.85 each in its latest SEC filing. Heng Ren argues that the company’s shares are undervalued and that shareholders deserve to see the value of their investments realized through immediate action from the board.

As Sinovac begins a new chapter under its recently appointed leadership, Heng Ren calls for swift action to restore trust and deliver financial rewards to its shareholders. The firm urges fellow shareholders to join in demanding these critical changes to unlock the company's potential and ensure accountability.