Fujian Haixi Pharmaceuticals Co., Ltd. (Haixi Pharma, 02637) issued a supplemental announcement clarifying the sequence of events and assessments that led to the appointment of RSM China CPA LLP (RSM) as external auditor for the financial year ending 31 December 2026, replacing Deloitte Touche Tohmatsu (Deloitte).
Key drivers for the switch • Between 22 April 2026 and 2 June 2026, the company received three separate requests—from the Fuzhou Cangshan District Bureau of Industry and Information Technology, China Merchants Bank and Industrial Bank—demanding audit reports prepared under Chinese Accounting Standards for Business Enterprises (CASBE). • Management projected that similar requirements would recur for future government subsidy applications and bank financings, prompting a recommendation on 5 June 2026 to change the primary reporting framework from IFRS to CASBE. • Maintaining dual IFRS and CASBE audits would generate duplicated work and higher fees; adopting CASBE and appointing an auditor qualified for mainland-listed issuers would eliminate this redundancy.
Auditor selection process • Invitation-to-bid notices were issued to four audit firms between 17 June 2026 and 22 June 2026; all firms, including Deloitte and RSM, submitted proposals. • On 25 June 2026 the Audit Committee interviewed candidates, confirmed no outstanding issues with Deloitte, and evaluated audit quality, independence and fee proposals. • On 9 July 2026 the Audit Committee resolved to adopt CASBE, dismiss Deloitte and nominate RSM. The Board approved the recommendation on 15 July 2026 and formally notified Deloitte.
Audit Committee evaluation of RSM • Governance & leadership: Two engagement partners with 24 and 20 years of experience, respectively, will lead the assignment, supported by an engagement quality control partner. • Independence: RSM confirmed compliance with PRC ethical standards and absence of relationships that could impair objectivity. • Industry expertise: RSM audits approximately 560 A-share companies and has current mandates with peer pharmaceutical issuers such as Shanghai Junshi Biosciences and Wantai Biological Pharmacy. • Resources: The engagement team totals 12 professionals, committing 4,640 working hours. • Quality controls, communication protocols and monitoring processes were assessed as consistent with AFRC guidelines.
Audit and review timetable • Interim review for the six months ended 30 June 2026 began on 5 August 2026, with the formal review report scheduled for 28 August 2026. • Year-end audit milestones include preliminary fieldwork from 1 December 2026 to 19 December 2026, on-site procedures through 28 February 2027, draft reporting in early March 2027 and final issuance by late March 2027.
Management confirmed there are no disagreements with Deloitte and no unresolved audit matters. The Board and Audit Committee believe the transition to RSM and CASBE is in the best interest of the company and shareholders, ensuring regulatory compliance while improving efficiency and audit quality.