Performance comparison of Chinese medicine giants: Donge Ejiao, Yunnan Baiyao, Pien Tze Huang...

01

Performance comparison

Recently, it is time for listed companies to publish semi-annual reports

Data source: company announcement

Judging from the revenue of the four giants, from high to low, they are Yunnan Baiyao, Tongrentang, Pien Tze Huang, and Dong E Jiao

However, although the level of revenue of each company is different, it has risen in general

In terms of sales expenses, with the exception of Donge Ejiao, all companies have not changed much, with a growth rate of about 10%

In terms of R&D expenses, the R&D expenses of each company are lower than the sales expenses, but the growth rate is significantly larger

02

Yunnan Baiyao

On August 27, Yunnan Baiyao released its 2021 semi-annual report.

Regarding the increase in operating income, the company said it was mainly due to the increase in income from the commercial sector

The semi-annual report shows that Yunnan Baiyao's main business mainly includes two major sectors: self-made industrial products and pharmaceutical wholesale and retail business

In the first half of the year, Yunnan Baiyao Panax Notoginseng Oral Liquid realized the formal formation from project establishment to product operation, and the new channel operation center has realized the full line of new channel business and external superior resources

In the pharmaceutical business sector, in the first half of the year, Yunnan Pharmaceutical Co.

In addition, in the first half of the year, Yunnan Baiyao established a cooperative relationship with Shanghai Pharmaceuticals

Yunnan Baiyao intends to use its own funds to subscribe for 666 million non-publicly issued A shares of Shanghai Pharmaceuticals as a strategic investor, and the total subscription funds will not exceed 11.

03

Tongrentang

On August 25, Tongrentang announced its 2021 interim performance report.

Tongrentang is mainly engaged in the production and sale of traditional Chinese patent medicines.

Regarding the increase in profits during the business period, the industry’s general view is that this was achieved on the basis of the sharp decline in various performance indicators in the first half of last year.

The announcement shows that Tongrentang mainly relies on traditional distributor channels to sell its products to the market, and partly sells its products to terminals through its own retail pharmacies

In the first half of 2020, due to the impact of the epidemic, Tongrentang's revenue fell by 16.
11%, and its net profit after deduction of non-parenting fell by 27.
36%
.
In the first half of 2021, the company's revenue increased by only 2.
9% compared to the first half of 2019, and the net profit deducted from the parent company fell 5.
88% compared to the same period in 2019
.

In the first half of this year, the domestic epidemic situation was controlled in a better manner, and Tongrentang business recovered.
As of the end of the reporting period, there were 900 stores under Tongrentang, achieving operating income of 4,360,441,200 yuan, a year-on-year increase of 29.
03%, and operating profit of 253,956,900 yuan, a year-on-year increase.
86.
63%
.

Judging from the semi-annual report, Tongrentang particularly emphasized the company's large-variety strategy
.

Tongrentang stated that in the first half of the year, the sales team of Tongrentang closely focused on the large-variety strategy, explored multi-channel collaboration by strengthening the linkage of business units, shortened the sales chain, optimized dealer management, enriched advertising, created a multi-dimensional promotion system, and continued to deepen marketing reforms
.
For potential and sleep varieties, explore to select pilot stores in the pilot area for small-scale distribution, and maintain a good level of operation as a whole
.

In addition to the marketing model, the large variety strategy is also reflected in the scientific research sector
.
The semi-annual report shows that in order to implement the overall layout of the large-variety strategy, Tongrentang focuses on product raw material-production-marketing full cycle implementation of secondary cultivation, with resource inspection, process improvement, quality improvement, pharmacodynamics, toxicology and clinical evaluation as the research direction.
In addition, It also cooperated with industry experts and specialist hospitals inside and outside the department to carry out safety, effectiveness, and clinical research on related varieties, and simultaneously initiated the secondary research and development of key varieties and indications
.

It is worth noting that in February this year, Gao Zhenkun, the chairman of Tongrentang, accepted disciplinary review and supervision for suspected serious violations of discipline and law.
Today, Tongrentang's semi-annual report shows that Di Shubing is still the chairman of the company
.
This means that Tong Ren Tang still has not officially identified the company's next helm
.

04

Dong Ejiao

On August 22, Donge Ejiao announced its semi-annual report.
During the reporting period, it achieved revenue of 1.
687 billion yuan, a year-on-year increase of 54.
01%, and realized a year-on-year turnaround from loss to profit, from last year's net loss of 84.
02 million yuan to a profit of 150 million yuan
.

Regarding revenue, Dong'e E-Jiao said that sales of E-Jiao and its series of products have resumed growth, which has led to a year-on-year increase in revenue
.
From the perspective of revenue composition, donkey breeding sales and other products achieved revenue of 1.
453 billion yuan, an increase of 87.
03% year-on-year, accounting for 86.
14% of revenue; donkey breeding sales have fallen sharply.
The revenue was only 80.
91 million yuan, a decrease of 56.
54% year-on-year
.

The main products of Donge Ejiao include: Ejiao products, medicines and health products, donkey breeding and sales, and other products.
Ejiao products still account for the largest proportion and were once known as "Moutai in Medicine"
.
Previously, Dong-E-E-Jiao's net profit had maintained 12 consecutive years of growth with a compound annual growth rate of 20%.
However, in 2018, it experienced official doubts in the efficacy of E-Jiao, high pressure on destocking in 2019, and intensified industry competition.
For the first loss, the stock price fell all the way to a half-half level
.

In fact, Donge Ejiao has been destocking for the past two years
.
As of June 30 this year, Donge Ejiao’s inventory was 2.
029 billion yuan, a decrease of about 400 million yuan from the 2.
478 billion yuan at the end of 2020
.

However, outsiders believe that Donge Ejiao's performance is mainly driven by marketing
.
The semi-annual report shows that Dong Ejiao’s sales expenses in the first half of the year were 545 million yuan, an increase of 74.
72% year-on-year, far exceeding the 54% growth rate of revenue; sales expenses accounted for 32% of total revenue
.
Among them, marketing expenses were 337 million yuan, compared with 126 million yuan in the same period last year, an increase of 167% year-on-year; advertising expenses soared from 12.
09 million yuan in the first half of last year to 30.
89 million yuan, an increase of 200% year-on-year
.

In this regard, Dong'e Ejiao said that this is due to the increase in terminal costs and brand communication investment to promote the recovery of the market
.

05

Pien Tze Huang

On August 20, Pien Tze Huang released its financial report for the first half of 2021.
During the reporting period, it achieved operating income of 3.
849 billion yuan, a year-on-year increase of 18.
56%; net profit was 1.
115 billion yuan, a year-on-year increase of 28.
96%
.

Pien Tze Huang said that the year-on-year increase in operating income was mainly due to the increase in the pharmaceutical industry, of which the pharmaceutical manufacturing industry increased by RMB 436,596,100, and the pharmaceutical circulation industry increased by RMB 171,559,900.
The year-on-year increase in operating costs was mainly due to the increase in sales revenue and the corresponding increase in costs
.

Pien Tze Huang stated in the semi-annual report that in the long run, the prices of main raw materials of the company's products, musk, bezoar and snake bile, are on an upward trend, which will put upward pressure on the cost of Pien Tze Huang and its series of products in the future
.

It is understood that the most precious of Pien Tze Huang’s core raw materials is musk.
According to the Pien Tze Huang financial report, this ingredient alone accounts for 55% of the total cost
.
In addition, the company said that in the first half of the year, the price of bezoar, a raw material for "Pien Tze Huang," also continued to rise
.

In order to solve this problem, Pien Tze Huang established a standardized forest musk breeding base.
Currently, two musk breeding companies have been invested in Shaanxi and Sichuan.
They also strategically reserve raw materials such as bezoar and snake bile that are prone to major changes in prices
.

Judging from the semi-annual report, the relevant measures have been effective.
In recent years, the growth rate of the cost of drugs for Pien Tze Huang liver disease has declined year by year
.
Under effective cost control, the gross profit margin of Pien Tze Huang's liver disease medication was maintained at 80%, a high level
.

Some time ago, there was a hype phenomenon in the market of Pien Tze Huang tablets.
The price of Pien Tze Huang doubled to 1,000 yuan per pill and it was hard to find a medicine.
The company was pushed to the forefront of public opinion
.
In response to this issue, Pien Tze Huang responded that it will increase the supply of its own retail stores, and at the same time establish new online channels such as Tmall, JD.
com, and strengthen market management through various methods such as video spot checks, store locations, and on-site visits.
Terminal market price
.

In addition to Pien Tze Huang tablets and capsules, Pien Tze Huang's products also include Yindan Pinggan Capsules, Xinshubao Tablets, Zeng Cream, Chuanbei Qingfei Syrup, Qingrezhike Granules series products, covering liver disease medications, cold medications, Dermatology medication and many other fields
.
In the first half of the year, the Pien Tze Huang brand "Angong Niuhuang Pills" has been successfully launched on the market, and sales in the second quarter have increased significantly.
Pien Tze Huang's expectations for this product are quite high
.

In terms of new drug research and development, Pien Tze Huang Huang is currently promoting as many as 11 new drug projects.
Among them, the innovative drugs PZH2111, PZH2108, LDS (PZH2107) and new Chinese medicine drugs PZH1204, PZH1201, PZH1203 have entered the clinical research stage
.