Kangmei was exposed to bankruptcy and reorganization!

On the evening of May 11, Kangmei Pharmaceutical issued 6 announcements in a row, disclosing related information such as related parties' plan to change non-operating capital occupation and repayment arrangements, and resolutions of the interim board of directors
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As a pharmaceutical white horse stock with a value of 100 billion yuan, Kangmei Pharmaceutical was punished by the China Securities Regulatory Commission for nearly 30 billion yuan of "financial fraud" and is still facing a huge debt crisis

In fact, the news of Kangmei's bankruptcy and reorganization is not groundless
.

On April 28, Kangmei Pharmaceutical clearly stated in the "Announcement on the Delisting Risk Warning and Temporary Suspension of the Company’s Stocks" that the company’s creditors have applied to the court for bankruptcy and reorganization.

In addition to Kangmei Pharmaceutical, Yunnan Baiyao, Guizhou Bailing, Shanghai RAAS, Hisun Pharmaceutical, Sihuan Biological and many other pharmaceutical white horse stocks have seen different degrees of market value diving
.

Standing at a brand new starting point in the first year of the "14th Five-Year Plan", how China's pharmaceutical industry can achieve high-quality and sustainable development is clearly a realistic proposition before various pharmaceutical companies

Expansion of Traditional Chinese Medicine Market

Focusing on the main business is what it should be

The market value has gone from the highest point of 139 billion yuan in May 2018 to less than 11 billion yuan today.
Kangmei Pharmaceutical's 100 billion Chinese medicine "empire" collapsed
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The industry generally believes that with the support of favorable policies and the advancement of health concepts, the volume of the TCM health market continues to expand, and TCM will undoubtedly become an industry with great development potential, and the future growth rate may be significantly higher than the overall health industry
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According to statistics from Bohai Securities, in the Shenwan Traditional Chinese Medicine sector, after excluding Kangmei Pharmaceutical, despite the impact of the epidemic, the overall revenue in 2020 will be 300.

  

  However, in such a good situation, there are still some Chinese medicine companies not focusing on their main business, cross-border investment failure, and lack of profit growth.
Yunnan Baiyao, which has recently encountered investors with their feet, has attracted the attention of the industry
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In the first quarter, Yunnan Baiyao’s revenue reached 10.

  

  Success or failure is determined by "stock speculation".
Obviously it is not what a Chinese medicine giant should have.
Looking at the annual reports of other leading Chinese medicine companies, their core growth points are particularly conspicuous: Buchang Pharmaceutical's new equipment revenue exceeds the one billion mark, Yiling The pharmaceutical industry relied on the surge in demand for Lianhua Qingwen and its eye-catching performance.
Pien Tze Huang's core liver disease drugs continued to increase in volume.
Dong'e Ejiao's Ejiao series developed a diversified business strategy and began to step out of the bottom range
.

  

  Obviously, Yunnan Baiyao has realized the lack of performance growth and is actively seeking transformation and upgrading, but it still focuses on investment channels
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On the evening of May 11, Shanghai Pharmaceuticals issued an announcement stating that in order to support the company's long-term business development, improve the industrial layout, and further enhance the company's overall strength, the company plans to introduce Yunnan Baiyao as a strategic investor through this non-public issuance of A shares

    

High investment and wide mergers and acquisitions have performance risks

Understanding the core competitive elements is the key

  

  Shanghai RAAS, a leading domestic blood product company, has also received wide attention from the industry because of its enthusiasm for investment income
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On the evening of April 22, Shanghai RAAS released its 2020 annual report and 2021 quarterly report

  

  The reason why profit growth can be much higher than revenue growth is simply because more than one-third of Shanghai RAAS’s operating profit comes from investment income
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According to the annual report, in 2020, Shanghai RAAS's investment income will reach 555 million yuan, of which 545 million yuan is the net profit and loss of the associated company Grifols Diagnostic Solutions Inc.

  

  Although Shanghai RAAS is called the “stock god” of medicine by the industry, it lost nearly 1.
4 billion yuan in “stock speculation” in the first half of 2018, resulting in a loss of 855 million yuan in net profit attributable to shareholders of listed companies in the first half of 2018.
Make the industry memorable
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However, with the gradual focus on the main business, Shanghai RAAS's performance began to make a big comeback in 2019
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Now that it is back on the old track, how long Shanghai RAAS’s investment strategy can last is still questionable
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  In addition to cross-industry investments, large-scale acquisitions are also a major drawback of pulling the former white horse stocks off the altar
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Hisun Pharmaceuticals, an API company whose market value reached its peak in 2015, embarked on a frantic merger and acquisition journey.
According to public information, 14 of the 18 holding companies owned by Hisun Pharmaceuticals are currently at a loss, with a cumulative loss of nearly 670 million.
Yuan, and selling assets has become a way for them to save themselves
.
In December 2019, Hisun Pharmaceutical issued an announcement stating that it had recently submitted an application for listing 5 apartments in Junyue Building, Jiaojiang District, Taizhou City
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Prior to this, in May and November of the same year, Hisun Pharmaceuticals disposed of 22 apartments in Jiaojiang Junyue Building through auctions twice, with a total transaction amount of 8,170,800 yuan
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  Some industry insiders pointed out that some pharmaceutical companies have insufficient management level, combined with too frequent mergers and acquisitions, and weak integration capabilities, which are far beyond their own capabilities and the pace of obtaining resources, and problems such as operations and capital chains are inevitable
.
At the same time, many M&A takeover pharmaceutical companies always expect to achieve good performance through gambling agreements when their own operating capabilities and management and control capabilities are insufficient.
In fact, such agreements can only mobilize the enthusiasm of the operators and give full play to their effectiveness.
The effect of conditions, gambling has obviously become a double-edged sword
.

  

  From the perspective of the industry, under the high-quality top-level design of the pharmaceutical industry, it is very important to explore ways that conform to the company's own development laws.
Pharmaceutical companies must deeply understand the importance of core competitive factors
.
Affected by factors such as the epidemic situation and fluctuations in the pharmaceutical market environment, Kangmei Pharmaceutical's sales revenue fell sharply last year.
At the same time, large amounts of goodwill, accounts receivable, fixed assets, construction in progress, inventory, etc.
, within the scope of the 2020 consolidated statement were accrued The impairment caused the net profit to plummet
.
Kangmei said that in 2021, the company will adopt the business strategy of “focusing on advantageous industries, strengthening large-scale businesses, revitalizing potential industries, and clearing marginal sideline businesses” for the overall business, and continue to optimize the business structure.
For non-main business, on the one hand, it will reduce resource input.
Maintain business steadily; on the other hand, on the basis of consolidating and developing the core business of traditional Chinese medicine, Slimming and Fitness will divest non-core businesses, accelerate the adoption of market practices in debt restructuring to reduce debt pressure, and strive to achieve the company's withdrawal of delisting risk warnings Goal
.

  

  It is worth noting that after the delisting risk warning was implemented, the daily rise and fall of Kangmei Pharmaceutical's stock price was limited to 5%.
However, today's rare daily limit is ushered in.
It is the return of the general trend and the confidence of investors.
Back to temperature, time will prove everything
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