Kang Zhe is short! The largest CSO quietly controls the whole industrial chain

Short company Blue Orca Capital didn't expect it It was helping kangzhe pharmaceutical industry to see a typical confrontation event, which made investors and the whole Chinese pharmaceutical industry see a silent transformation of the largest CSO in the past close to the end, and realized the control of the whole industrial chain from marketing market to production quality, and the two emerging empires with huge leaps from the domestic market to the global R & D and innovation resources E-medicine manager according to blue Orca Capital (hereinafter referred to as "killer whale") seems to have studied several reports deeply and kangzhe company's response in February 7 by resigning Jane Libo, and paying a visit to Lin Gang, chairman of kangzhe company's board of directors, trying to recover the core product upgrading process of kangzhe pharmaceutical industry, especially the global market and R & D resource operation ability of Pangda overseas company group disclosed to the public for the first time Looking at the development in the past decade, kangzhe pharmaceutical industry, with the concept of CSO leader, has been changing its life since the day when it went public Its way to de CSO and control the whole industry chain is soul stirring and full of vicissitudes On the morning of February 6, killer whales released a 41 page short report, directly targeting kangzhe pharmaceutical In the report, killer whale mainly points out that the profitability of kangzhe pharmaceutical is a false image, and the total net profit is 49% lower than the disclosure level of the report, questioning the private transaction and corruption of kangzhe pharmaceutical At 11:17 that day, kangzhe pharmaceutical was suspended However, the stock price fell sharply in a flash, down 12.7% in just nine minutes, but then rose again, rebounding nearly 9% in 14 minutes At the time of suspension, the closing price was only 1.9% lower than that of the previous day Although the stock price takes a roller coaster, the overall stock price is still relatively stable in the case of being short There has been no lack of short selling institutions in Hong Kong stock companies, but since 2019, there have been many killer whales in Hong Kong stock market, Anta sports, Carson international, etc in recent one year, however, the stock prices of these enterprises have risen sharply after the resumption of trading, especially Anta's share prices hit a historical high after multiple rounds of short selling, making short selling institutions defeated Generally speaking, the enterprises questioned by short selling institutions have the characteristics of much higher profit margin, much lower cost, sustained high growth or money burning mode In the pharmaceutical industry, the short companies first have Nanjing legend's parent company Kingsley, and then have Baiji Shenzhou, both of which have the characteristics of high R & D investment and high risk Kangzhe pharmaceutical, which was short this time, is also in the critical period of transformation, layout and innovation, and has been operating steadily and has a good profit margin On the evening of February 7, kangzhe pharmaceutical issued a clarification notice, saying that the charges of killing whales were "groundless and seriously misleading", and responded to them one by one E pharmaceutical manager contacted Lin Gang, chairman of kangzhe pharmaceutical for an exclusive interview at the first time Unexpectedly, Kang Zhe, who has always been low-key, put it all out in an all-out way The scale of response is unprecedented, and a lot of information has been made public for the first time The abundance of logic and materials is not only the crushing of the doubts about the shorting mechanism, but also the feeling that kangzhe has persisted in the strategic transformation for several years and finally made the world known A new kangzhe pharmaceutical industry is full of vitality For a long time, kangzhe pharmaceutical industry has been known as the "CSO leading enterprise" in China What is CSO? Relying on the strong ability of drug promotion and the coverage of marketing network to carry out pharmaceutical marketing promotion activities Lin Gang seldom explained this, but the positioning given to Kang zhe by "CSO" clearly obscured the development logic of Kang zhe pharmaceutical in the past ten years For the first time, Lin Gang made public the innovation and development logic of kangzhe pharmaceutical industry, revealing the global competitiveness of kangzhe under the "iceberg" of pharmaceutical marketing services Killer whale pointed out that kangzhe pharmaceutical has seriously overstated its financial performance, falsely increasing its profit by 49% In response to this, kangzhe replied in the clarification announcement that the company has maintained a dividend ratio of 40% under the condition of continuous investment and low debt since listing If the company inflates the profit by 49%, the company will not be able to realize the above-mentioned high dividend Kangzhe pharmaceutical entered the Hong Kong capital market in 2010 According to the financial report data, from 2010 to 2018, the annual profit of kangzhe pharmaceutical increased from 206 million yuan to 1844 million yuan in 2018, with a compound growth rate of 32.9% In the past ten years, the company continued to pay dividends at 40% of its net profit, with a total cumulative dividend of 3.08 billion yuan "It's like I made 100 yuan You say I've increased by 49%, that is to say, I only make 51 yuan, and then I'll give 40 yuan to shareholders for dividend I want to ask, isn't Kang zhe stupid? How can the remaining 11 yuan support the company's operation and foreign investment? What am I for? " Lin Gang said In fact, kangzhe's cash flow and debt ratio have been kept at a good level According to the financial report data over the years, except for 2016 and 2017, the debt ratio reached 16.5% and 20.7% respectively, and the rest years were all below 15% Kangzhe Pharmaceutical Co., Ltd has been purchasing products abroad, especially in 2016, it spent $310 million to purchase the commercial rights of the exclusive AstraZeneca product Boying in China, which is a classic case in the industry "A lot of dividends, low debt and a lot of overseas cash cooperation are enough to prove the profitability of kangzhe pharmaceutical." Lin Gang said According to the shorting report, the main reason why killer whale accused kangzhe pharmaceutical of falsely increasing profits is: "in 2018, China launched the centralized volume purchase of drugs, which directly lowered the price and weakened the value of the marketing network through volume purchase Profits of other distributors and promotions declined Kangzhe pharmaceutical disclosed a very bright and growing profitability, which is puzzling." Such a "guilty inference" is ironic According to the observation of e-medicine managers on the industry, the Chinese pharmaceutical industry is undergoing a sharp differentiation Although the policies of attacking drug prices, such as centralized drug purchase, have squeezed the profits of relevant mature original research drugs and generic drugs, the policies of encouraging innovation and medical insurance have also stimulated the growth of the industry In the past year, the multinational pharmaceutical enterprises with innovative drugs, such as MSD, Roche, AstraZeneca, etc., have achieved unprecedented growth, and the varieties that have not been included in the scope of centralized purchase are still in a rapid rise period Kangzhe is obviously closer to the model of multinational pharmaceutical enterprises in terms of variety advantages At present, the varieties that contribute major profits to kangzhe pharmaceutical industry have not been affected by centralized mining According to the new policy of centralized purchase, only one original research + two or more evaluated varieties can participate Only one competitive product enterprise of delixin in kangzhe pharmaceutical industry obtains the consistency evaluation, and other varieties are not affected It can be seen that kangzhe pharmaceutical's originality and foresight in selecting varieties are precious It can be expected that in the next 1-2 years, kangzhe pharmaceutical will not participate in large-scale procurement Killer whale also believes that in 2017, China launched the two vote system, directly targeting kangzhe pharmaceutical industry, which is between pharmaceutical factories and distributors, and kangzhe's value chain position is in jeopardy " In fact, the two vote policy stipulates that the national general agent of overseas imported drugs shall be regarded as the manufacturer, and the overseas imported drugs, self-produced products and the products of holding subsidiaries in kangzhe's self operated products will not be affected Some non self-produced products will be changed from low opening to high opening, which will only affect the way of financial recording, basically will not affect the profits The allegations of killer whales are not only general, but also reflect a lack of knowledge of the pharmaceutical industry With the report of killer whale coming out, the three overseas innovative drug investment cases that Lin Gang had seldom been concerned about before also emerged Then, the outside world can see the model of kangzhe's introduced varieties and the iterative logic of product upgrading Lin Gang called kangzhe pharmaceutical an "alternative" way to develop innovative drugs The difference in the definition of "alternative" lies in that R & D (Research & Development) is the common R & D path of pharmaceutical enterprises, while kangzhe's path is S & D (Search & Development search and development) Through the global search for high-quality innovative drug projects and early R & D participation, gradually enrich the innovative drug product line In fact, in the past two years, this mode has been adopted by more and more innovative drug upstarts, and kangzhe pharmaceutical industry has actually gone a long way on this road Three of the "corruption deals" questioned by killer whales were Lin Gang's variety deals with three start-ups, helius, Faron and neurelis, all of which ended in product failure Kangzhe responded that the company's requirement for listed products is a global perspective to meet clinical needs As we all know, the early high R & D risk of such products, listed companies will invest cautiously in order to operate stably At this time, as a major shareholder of kangzhe, Lin Gang bears the initial cost of purchasing products with his own financial resources, and also bears the risk of investment failure When the products make substantial progress, he will transfer the product rights (including intellectual property rights and sales rights) to kangzhe pharmaceutical Lin Gang laughs about where to find a good shareholder who is loyal to serve the listed company He gives himself risks and benefits to the listed company Secondly, these investment cases are not like the "disastrous investment" in the short report In 2015, when Lin Gang invested in Neurelis, the relevant varieties had not yet entered the clinical stage and had high uncertainty In January 13, 2020, the Kang Zhe pharmaceutical bulletin, the US FDA has approved Neurelis to treat diazepam nasal spray with frequent intermittent seizures in 6 year old and above epileptic patients The agent is on sale in the United States The product has also recently obtained the notice of clinical trial from China drug administration In five years, Lin Gang's overseas investment has been successful for the first time So far, it can be seen that in 2015, while Lin Gang was still focusing on the marketing business of listed drugs, he was already trying to introduce innovative products under research from overseas, and his vision and strategic rhythm were ahead of the pace of industry development According to Lin Gang, the transformation of kangzhe pharmaceutical industry actually started earlier, as early as 2013 In February 2013, kangzhe Pharmaceutical Co., Ltd has the agency and distribution rights of at least 9 products, such as Deanxit, Yusuf, Ganfule, Stulln and Xinhuosu Lin Gang noticed that the market development of Ganfule, a product for the treatment of liver cancer, was restricted by the upstream production enterprises In order to carry out a comprehensive and systematic market planning for Ganfule, kangzhe pharmaceutical purchased Lengshuijiang pharmaceutical, the production factory of Ganfule, with RMB 81.1 million, and thus obtained the full control right of the product Since then, we have embarked on the road of purchasing product rights, including lanmeishu, bromocriptine, mervyko, kangpishen, Xiliaotuo, Stulln, tanshinone, and launched the war of controlling rights of Tibet pharmaceutical industry, which has had a flesh and blood relationship with novobin Since then, kangzhe has gradually developed into a product introduction mode combining exclusive agency, buyout rights, equity cooperation, independent production, etc., and constantly increased the control of products, which is called "kangzhe mode" in the industry This model culminated in Boyi's purchase of AstraZeneca in 2016, proving that kangzhe pharmaceutical has established in-depth cooperation with large multinational pharmaceutical enterprises Since 2015, Lin Gang has seen the innovation trend of China's pharmaceutical market, started to introduce innovative drug varieties and started the second stage of transformation This process is carried out in the form of individual and shareholder contributions, such as the above-mentioned neurelis project In 2017, with the experience of overseas BD team becoming more mature, considering the high risk of varieties under research, Lin Gang and kangzhe Pharmaceutical Co., Ltd invested half of their investment funds respectively in the form of equity investment, and once kangzhe Pharmaceutical Co., Ltd succeeds, they can obtain 100% of the variety rights and take over the global R & D resources and talent layout According to the annual report, only 2018