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Original title: Stepping on Lei Xiaomi,Yunnan BaiyaoThe stock god becomes “leek”
In the past year, Yunnan Baiyao has frequently “stepped on thunder” in the A-share market, and its investments include Xiaomi, Tencent, Yili,Hengrui MedicineMany stocks, including China Antibody, etc., have experienced losses to varying degrees. For Xiaomi alone, the investment loss amounted to 1.404 billion yuan.
Articles produced by Radar Finance | Edited by Zhang Kaijing | Deep Sea
The investment loss is nearly 2 billion, and the net profit is nearly halved. This is the answer sheet handed over by the “century-old brand” Yunnan Baiyao in 2021.
On the evening of March 25, the annual report released by Yunnan Baiyao showed that the company’s revenue in 2021 was 36.374 billion yuan, a year-on-year increase of 11.09%; but the net profit attributable to the parent was only 2.803 billion yuan, a year-on-year decrease of 49.17%. Net profit showed negative growth for the first time.
In the past year, Yunnan Baiyao has frequently “stepped on thunder” in the A-share market, and many stocks it invested in, including Xiaomi, Tencent, Yili, Hengrui Medicine, China Antibody, etc., have experienced losses to varying degrees. For Xiaomi alone, the investment loss amounted to 1.404 billion yuan.
In terms of main business, the growth of Yunnan Baiyao is also in a dilemma. In 2021, the net profit of the health products division with toothpaste as the core will be 2.261 billion yuan, accounting for more than 80% of the company’s total net profit, but toothpaste is a new product launched by the company nearly 20 years ago, and the market capacity is relatively limited. After toothpaste, other health products launched by the company did not contribute significantly to the performance.
In August 2020, Yunnan Baiyao, which has been sitting firmly on the top of traditional Chinese medicine stocks, was listed for the first time in market value.Pien Tze Huangovertake. As of March 28, 2022, the market value of Yunnan Baiyao still lags behind Pien Tze Huang by 82.6 billion.
In the past, the big white horse might not escape “chasing up and down”
The ever-changing A-share market always has to experience the ups and downs of the broader market, and Yunnan Baiyao has become a “cut leek” just between the ups and downs.
It is worth mentioning that Yunnan Baiyao has made a lot of money from “stock speculation” before.
Combing the financial report shows that as of the end of 2019, Yunnan Baiyao is holdingKyushu-doriJacobson Research Pharmaceuticals,Hongta SecuritiesAlong with the four stocks of China Antibody, it also holds as many as 6 bond funds. Among them, the book value of bond funds at the end of the period was 3.646 billion yuan, accounting for regarding 47% of the total book value of securities fund investments.
This year, Hongta Securities alone brought a book value gain of 416 million yuan to Yunnan Baiyao.
In the first half of 2020, Yunnan Baiyao’s investment was relatively conservative. In addition to spending 290 million to buy Xiaomi Group’s shares, it did not make large purchases in other major funds and stocks, but also sold 1.95 billion yuan of financial assets. In the second half of 2020, Yunnan Baiyao began to make efforts, not only spent 868 million yuan to buy Tencent, but also spent 1.34 billion yuan to increase its position in Xiaomi, and bought Hengrui, Yili, and China Biopharmaceuticals.
This once had a huge boost to the performance of Yunnan Baiyao. In 2020, Yunnan Baiyao achieved a net profit of 5.511 billion yuan, of which investment income was as high as 2.618 billion yuan, accounting for 47.5%. Among them, the book value income brought by the purchase of a Xiaomi company to Yunnan Baiyao reached 1.516 billion yuan.
In fact, 2020 has also been a profitable year for many investors.straight flushiFind data shows that in 2020, Yunnan Baiyao ranked 11th among 2,612 companies with data on A-shares in the column of “revenue from changes in fair value”, and 1,806 of these companies had positive returns, accounting for regarding 70% of the total. .
Although the stock market fell to the bottom at the beginning of the year due to the impact of the epidemic, it soon ushered in a rebound. From March 24, 2020 to the end of the year, the Shanghai Composite Index rose by more than 31%, and the Hang Seng Technology Index rose by more than 109%.
But in 2021, things will change dramatically. After the Spring Festival, whether it is the market index or a number of value stocks, the market has turned sharply down. The Shanghai Composite Index rose only 4.80% in the whole year, and the Hang Seng Technology Index fell by more than 32%.
It is also the data of “income from changes in fair value”. As of the third quarter of 2021, Yunnan Baiyao ranked fifth from the bottom of the 2,413 A-share companies with data.
Although the company is liquidated at the end of 2020Kweichow Moutai, Jointown and Hongta Securities, and have slowed down the pace of investment since the first half of 2021, but still failed to prevent huge floating losses on their investments. In the three months of the third quarter alone, Yunnan Baiyao lost regarding 700 million yuan in financial assets such as stocks and funds. At the end of October 2021, the topic #yunnanbaiyao lost 1.5 billion in stock trading# once rushed to the hot search on Weibo.
Throughout 2021, the company’s gains and losses from changes in fair value due to changes in the net value of securities and fund units held by the company will be -1.929 billion yuan.
Specifically, the company lost 1.404 billion yuan on the investment of Xiaomi Group alone. In addition, Tencent Holdings, Hengrui Medicine,Yili Shares, Jacobson Scientific Research Pharmaceutical, and China Antibody also brought losses of 134 million yuan, 220 million yuan, 127 million yuan, 66 million yuan and 79 million yuan to Yunnan Baiyao’s investment respectively.only atTongwei sharesChina Biopharmaceuticals and GF Juli bonds, Yunnan Baiyao made a profit.
Radar Finance noticed that if the deadline is extended from the end of 2021 to the present, the loss of Yunnan Baiyao will be even more serious. Since 2022, affected by the Russian-Ukrainian crisis and changes in the global financial environment, the global stock market has experienced many turbulences. During this period, the stock prices of Tencent, Hengrui, Yili, Tongwei and Xiaomi fell by 17%, 29.21%, 13.10%, 3.91% and 23.28% respectively.
However, judging from the reduction data disclosed in the annual report, Yunnan Baiyao may have cleared positions in many targets including Tencent and Hengrui.
“The company will strictly control the scale of investment in the secondary market on the basis of the original risk control measures. In 2022, within the limit approved by the board of directors, the company will gradually reduce its positions and will not continue to increase its holdings.” In response to the question of “how to plan future securities investment”.
“The whole investment market is in a downturn now. Many companies used to invest in wealth management to make money, but this year’s situation is not very good. It is not a long-term solution to run a business through wealth management and investment.” Shi Lichen, a pharmaceutical management consulting analyst, told Radar Finance.
Why fall in love with stocks?
In the view of many industry insiders, Yunnan Baiyao’s efforts in the capital market are related to the sluggishness of the company’s main business.
According to public information, the history of Yunnan Baiyao can be traced back to 1902. The famous doctor Qu Huanzhang founded the “Baibaodan”, a miracle drug for the treatment of bruises and visceral bleeding. During the Anti-Japanese War, Baibaodan also made extraordinary contributions as military supplies . After the founding of the People’s Republic of China, Mrs. Qu Huanzhang presented Baibaodan to the Yunnan Provincial Government, and the country later listed its formula as a national “top secret”.
In 1993, Yunnan Baiyao became the first A-share listed company in Yunnan Province, but almost at the same time, Johnson & Johnson entered the Chinese market and brought a revolutionary product like Bondi Band-Aid, which made Yunnan Baiyao Sales of powders have plummeted.
There is only one prescription, and the lack of research and development capabilities makes Yunnan Baiyao’s products unable to get rid of the old framework. By the first half of 1999, Yunnan Baiyao’s revenue and net profit both dropped.
At this time, Wang Minghui, the then vice president of Kunming Pharmaceuticals and in charge of sales, was ordered to serve as the general manager of Yunnan Baiyao. In the follow-up, Wang Minghui said in an interview that Baiyao did encounter some difficulties at that time.
“At that time, the company’s production and operation entered a bottleneck period, and sales appeared to be weak. At its peak, Baiyao powder sold tens of millions of bottles at one time, but in 1999, the sales volume was only a few million bottles, and the market shrank sharply. We selected 3 bottles at that time. After conducting market research on the product, the final result was that 22 people chose Band-Aid, and only 1 chose Yunnan Baiyao.”
After taking office, Wang Minghui quickly carried out reforms in the four major areas of management, marketing, research and development, and branding. Under his leadership, Yunnan Baiyao focused on transdermal products and health products. The former focuses on ointments and band-aids, while the latter The focus is on toothpaste. This has become the starting point of 10 times the stock price of Yunnan Baiyao in 10 years.
Among them, the active ingredients of Yunnan Baiyao can effectively relieve gum problems (bleeding, pain), and the toothpaste for repairing oral mucosal damage was quickly recognized by the market following its launch. In 2009, the revenue of toothpaste for Yunnan Baiyao has exceeded 700 million yuan, and in 2020, it will exceed 5 billion yuan.
By 2021, the market share of Yunnan Baiyao toothpaste will exceed 23%, ranking first in the industry. And Yunnan Baiyao Group Health Products Co., Ltd., which mainly produces and sells toothpaste, although the revenue is only 5.909 billion yuan, less than a quarter of that of another subsidiary of Yunnan Baiyao whose main business is pharmaceutical wholesale and retail; The profit was as high as 2.261 billion yuan, regarding four times that of the above-mentioned subsidiary.
However, with only a few fist products, Yunnan Baiyao cannot be done once and for all. Since 2011, the company’s revenue growth rate has gradually slipped from 20% or 30% to 10%-20%. After 2016, the company’s revenue and net profit growth rate has dropped to single digits. .
In this context, Wang Minghui thought of mixed reform. “Although the development of Yunnan Baiyao is very stable, it has also encountered obvious bottlenecks. Our growth curve does not match the background of the great development of the entire biopharmaceutical industry and must be activated through reforms.”
In short, the major shareholder of Yunnan Baiyao has always been Yunnan Baiyao Holding Co., Ltd. (hereinfollowing referred to as “Baiyao Holding”), which holds 41.52% of the shares, which is 100% held by Yunnan State-owned Assets Supervision and Administration Commission. The mixed-ownership reform is to use the method of increasing capital and expanding shares to allow private capital to settle in Baiyao Holdings without losing state-owned assets.
This is just the first step. The more important purpose of the mixed-ownership reform is to promote the listed subsidiaries to absorb and merge with the parent company. Specifically, it is to let Yunnan Baiyao issue A shares to the new shareholders of Baiyao Holdings in the form of private placement to purchase A shares. The controlling stake in Baiyao in their hands. In the end, Baiyao Holdings was incorporated into the listed company at a valuation of 51 billion yuan, and the market value of Yunnan Baiyao also exceeded 100 billion.
And the private capital involved in it – Chen Fashu and hisXinhuaduis considered to be another important reason for Yunnan Baiyao’s generous entry into the secondary market in recent years.
Chen Fashu is the former richest man in Fujian and the founder of Xinhuadu Group.Zijin Mining、CDFG、LONGiThe investment of other companies is well-known in the capital market. According to reports, as early as 2007 during his studies at Cheung Kong Graduate School of Business, he met Wang Minghui and developed a strong interest in Yunnan Baiyao. In the following 10 years, Chen Fashu has repeatedly tried to become a shareholder of Yunnan Baiyao.
This opportunity is a godsend for Chen Fashu. Not only did he express to Yunnan Baiyao that he was willing to lock up the equity for 6 years, but he also said that he would regard Yunnan Baiyao as his second venture, with the goal of benchmarking once morest Johnson & Johnson in the United States.
But the reality is that following the mixed-ownership reform, Yunnan Baiyao not only continued the previous slow growth in performance, but also invested the company’s previous capital into the investment.
Weak research and development, invite former Huawei executives as CEO
“Yunnan Baiyao’s current corporate governance structure has serious problems, the product structure (drugs, non-drugs) is aging, the growth of the pharmaceutical business is weak, and the proportion of the toothpaste business continues to rise. Yunnan Baiyao has been very low in R&D investment for many years, and lacks a clear product strategy, so There is always a shortage of competitive products,” said Shi Lichen.
Radar Finance noticed that from 2018 to 2020, Yunnan Baiyao’s research and development expenses were 110 million yuan, 174 million yuan, and 181 million yuan respectively, and the annual investment accounted for less than 1% of the total revenue.
This data, whether in the pharmaceutical industry that emphasizes R&D innovation, or in the field of subdivided Chinese medicine companies, is not outstanding, or even at a backward level.
Flush iFind shows that among the 300 A-share pharmaceutical manufacturing companies with data in 2020, Yunnan Baiyao’s R&D expense rate of 0.55% can only be ranked sixth from the bottom.TongrentangIt is regarding twice as much, and Pien Tze Huang is regarding three times as much.
In 2021, Yunnan Baiyao consciously increased its R&D efforts. The company’s R&D expenses increased by 82.99% year-on-year, but the R&D rate was still less than 1%.
Industry insiders believe that Yunnan Baiyao’s thinking is not difficult to understand. The company hopes to have the next single product like “toothpaste”. If shampoo, body wash, and facial mask are not good, let’s try medical beauty and tea…
According to the financial report, the company’s new research and development expenses are mainly used for the research and development registration of special medical food and the research and development of Caizhiji biomedical skin care products. At the end of 2021, Yunnan Baiyao also announced that it plans to increase the capital of 500 million yuan in Yunzhen Company, a subsidiary of the company, to promote the layout of the medical beauty industry chain, and plans to open 8 medical outpatient departments in Beijing and Shanghai by December 2022. .
At the same time, Yunnan Baiyao chose to solve the problem of its own lack of independent innovation ability in medicine through acquisition.Not long ago, Yunnan Baiyao disclosed its subscriptionShanghai PharmaceuticalsProgress, the latter is an innovative pharmaceutical company that has invested in research and development for many years and urgently needs “blood transfusion”. In this transaction, Yunnan Baiyao will spend 11.23 billion yuan to acquire an 18.02% stake in Shanghai Pharmaceuticals.
The data shows that Shanghai Pharmaceuticals’ innovative drug pipeline has grown from 11 products in 2018 to 25, of which 15 have entered the clinic or are on the market. The self-developed I001 (“SPH3127 tablet”) for the treatment of essential hypertension Phase III clinical trials have been initiated. In the annual report, Shanghai Pharmaceuticals also revealed that it is expected that by the end of this year, the number of pipelines will enter the era of 3 prefixes, and many projects will enter clinical phase III.
In addition to diversifying efforts, the company is also actively looking for excellent management.
In 2019, Yunnan Baiyao announced that the board of directors is looking for a CEO globally. In March 2021, Dong Ming was elected.
Dong Ming does not have a medical background. He joined Huawei following graduating from university. He has served as technical engineer of Huawei Technologies Co., Ltd., director of fixed-line product marketing of the Eastern Europe Department, director of the VIP system department, general manager of Beijing Branch, and Huawei Technologies Co., Ltd. China District Vice President, etc. Yunnan Baiyao said that it values Dong Ming’s rich experience in enterprise technology empowerment and digital transformation.
Huawei’s R&D is indeed the industry leader, but is Dong Minghui the right person to lead Yunnan Baiyao out of the quagmire?
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Responsible editor: Feng Tiwei
