Pharmaceutical companies with a market value of hundreds of billions are obsessed with "side business"?

，2020，2020303.

01

Throughout 2020, Fosun Pharma has made major adjustments to its product line.

Figure 1 Fosun Pharma's operating income in the past five years (by project)

02

Executives leave frequently

In 2020, the most noteworthy thing is Fosun Pharma’s frequent resignation of senior executives.

Table 1 Changes in Fosun Pharma's senior management in 2020

Relevant media have expressed opinions that the gap between market value, performance and leading companies has been widening, or one of the factors that caused the current round of high-level shocks.

03

Behind high leverage and high goodwill

When it comes to Hengrui Medicine, the difference between the profit models of the two pharmaceutical companies cannot be avoided.

The second hidden danger brought about by mergers and acquisitions is excessive goodwill.

Some media claim that Fosun Pharma is an equity investment company (PE), which is not unreasonable.

04

The investment road of PE in the pharmaceutical industry

The parent company of Fosun Pharma is playing the role of an investment bank.

Through numerous mergers and acquisitions, Fosun Pharma’s current business sectors involve: the pharmaceutical circulation sector, the medical service sector and the medical device sector.

In the pharmaceutical circulation sector, on February 5, 2004, Fosun and China National Pharmaceutical Group jointly established Sinopharm Holdings.

In the medical service sector, on October 10, 2013, Fosun Pharma acquired a 60% stake in Foshan Chancheng Central Hospital Co.

In the medical device sector, Fosun Pharma established a subsidiary of Sisram in Israel in 2013.

05

Conclusion

Throughout the history of Fosun Pharma’s development, we can regard it as an equity investment company that has continuously expanded through mergers and acquisitions.