FAST NEWS: New Horizon Health CFO, auditor resign

The Latest: Cancer-screening device maker New Horizon Health Ltd. (6606.HK) announced Monday that Deloitte has resigned as its auditor, effective Sept. 9. Separately, the company said its CFO Gao Yu also announced his resignation, effective Sept. 30th.

Looking Up: The company is in the process of identifying a new auditor to fill the vacancy so it can complete its overdue 2023 audit as soon as possible.

Take Note: The company’s financial data was previously questioned by a short seller, suggesting that the auditor’s and CFO’s resignation may be related to accounting irregularities discovered after an investigation into the allegations.

Digging Deeper: New Horizon Health was China’s first cancer-screening device company to go public, and was once the envy of the industry as its revenue surged more than 20 times in the three years through 2023 and its gross margin jumped from 52% to 90%. But those strong results were challenged last year by short seller CapitalWatch. In March this year, New Horizon’s auditor, Deloitte, said an independent investigation into the company’s financial data was needed. The company was subsequently unable to publish its annual report for 2023 and trading in its shares has been suspended since then.

Market Reaction: New Horizon Health’s shares have been suspended since March 28. They last traded at HK$14.14, near the lower end of their 52-week range.

Translation by A. Au

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