"There are risks in investing in stocks, and investment needs to be cautious", not only for ordinary shareholders, but also for listed companies.
Not long ago, Yunnan Baiyao Group Co., Ltd. (hereinafter referred to as "Yunnan Baiyao") lost nearly 2 billion yuan in investment and attracted widespread attention.
Many netizens questioned Yunnan Baiyao's "doesn't work properly", and ridiculed "Yunnan Baiyao can't save Yunnan Baiyao's injury", "The loss is nearly 2 billion yuan, how much toothpaste does Yunnan Baiyao have to sell to earn it back"... Behind the huge investment loss, a century-old medicine What happened to Yunnan Baiyao?
Returning to the main business, how is the real performance?
Investment loss of nearly 2 billion
Recently, Yunnan Baiyao released its 2021 performance report.
The annual report shows that in 2021, the company will achieve operating income of 36.374 billion yuan, an increase of 11.09% year-on-year, and a net profit attributable to listed companies of 2.804 billion yuan, a year-on-year decrease of 49.17%.
Why is Yunnan Baiyao's net profit "halved" compared to the same period last year despite the year-on-year increase in revenue?
Regarding the reasons for the decline in net profit attributable to listed companies, Yunnan Baiyao stated in its annual report that due to the impact of investment income from financial assets and gains from changes in fair value, the net profit was lower than the net cash flow from operating activities.
According to the financial report, during the reporting period, the gains and losses from changes in the fair value of Yunnan Baiyao’s stock and bond investments were -1.981 billion yuan.
Specifically, Yunnan Baiyao has invested in Tencent Holdings, Xiaomi Group, Hengrui Medicine, Tongwei and other stocks. During the reporting period, the investment in Xiaomi Group alone lost over 1.4 billion yuan, and the investment in Hengrui Medicine lost over 1.4 billion yuan. 200 million yuan...
As a century-old pharmaceutical company, why is Yunnan Baiyao keen to invest?
According to public information, Yunnan Baiyao has been involved in securities investment for many years.
According to its annual report, from 2019 to 2021, the amount it used to purchase domestic and overseas stocks, bonds and funds was 7.21 billion yuan, 13.834 billion yuan and 10.687 billion yuan, respectively, and the profit and loss in the same period were 277 million yuan and 2.201 billion yuan respectively. , -1.981 billion yuan.
Obviously, Yunnan Baiyao has also tasted a lot of "sweetness" in securities investment before.
However, Bai Wenxi, chief economist of IPG China and vice chairman of China Enterprise Capital Alliance, pointed out that financial investment by listed companies is a short-term behavior to improve the efficiency and income of idle funds, but it cannot be regarded as an investment direction. one.
According to normal logic, listed companies only need funds for development to raise funds in the capital market. If a large amount of idle funds are used for long-term wealth management, it means that listed companies have failed to efficiently use the funds obtained from financing, and the motives of listed companies for financing are questionable.
In addition, in his view, the amount of financial investment in listed companies should be within a reasonable category that does not affect the normal operation of the company, because financial investment is to improve the use efficiency and income of temporarily idle funds, not as a long-term investment. direction.
After experiencing this "big investment loss" storm, Yunnan Baiyao disclosed the minutes of the investor research meeting. In 2022, the company will invest in stocks, stock funds, and equity funds. 15% (inclusive) of assets down to 8% (inclusive).
Within the limit approved by the board of directors, gradually reduce positions and do not continue to increase holdings. While improving the use efficiency of idle funds, strengthen the support of capital resources for the development of the main business.
A few days ago, this magazine sent an interview outline to the Yunnan Baiyao Board Secretary Office on issues such as "investment team and risk control standards", but no reply has been received as of the time of publication.
Market competition intensifies
Yunnan Baiyao, founded in 1902, has gone through two "Jiazi" so far, and is a veritable century-old brand.
In 1993, this well-known Chinese time-honored brand became the first company in Yunnan to be listed on the Shenzhen Stock Exchange.
Aside from the failure of investment and investment, and focus on the main business, how is its performance?
If the time line is lengthened, it can be found that the development of Yunnan Baiyao has entered a "bottleneck period" in recent years.
According to Flush iFinD, from 2015 to 2021, Yunnan Baiyao's total operating income is divided into 20.74 billion yuan, 22.41 billion yuan, 24.31 billion yuan, 26.71 billion yuan, 29.66 billion yuan, 32.74 billion yuan, and 36.34 billion yuan. Compared with 1995-2014 (12.28%-242.79%), the growth rate has stabilized.
According to industry analysts, the reason for the slowdown in the development of Yunnan Baiyao is that its pharmaceutical and health sectors are encountering increasingly fierce market competition.
An industry insider who did not want to be named told reporters that in the pharmaceutical retail market, Yunnan Baiyao's pharmaceutical sector still generates revenue mainly from Yunnan Baiyao aerosols, powders, capsules, and band-aids, which are orthopedic and topical products with low gross profit margins and low prices. In recent years, although many varieties with high unit price and high gross profit margin, such as Qixuekang oral liquid and colds, have been launched, their sales are not outstanding.
According to the "IQVIA China Retail Pharmacy Statistical Report", the top 20 groups in the retail OTC drug + health care products market in 2021, although Yunnan Baiyao Group ranks eighth, but in terms of best-selling products, the 2021 retail OTC drug + health care products market Among the top 20 products in terms of sales, Yunnan Baiyao has no products listed. Similarly, in the top 20 products in the prescription drug market in 2021, there is no Yunnan Baiyao. Tongrentang, Guangyao, and Yiling Pharmaceutical Co., Ltd. The products of other traditional Chinese medicine companies are impressively listed.
Another pillar of Yunnan Baiyao, toothpaste, is also facing the encirclement and suppression of many brands.
In recent years, in the field of toothpaste and daily chemicals, foreign brands such as Colgate, Crest, Oral-B, Lion King, and domestic brands such as Negro, Zhonghua, and Shuke have fierce competition in the market.
Behind these brands are many highly competitive daily chemical groups such as Procter & Gamble and Unilever, and GlaxoSmithKline, which is also a pharmaceutical group, has also launched Sensodyne brand toothpaste, focusing on the concept of anti-sensitivity, and wants to continue in this market segment. Maintaining or even increasing share is not easy.
Look for the "second curve"
Perhaps aware of the above problems, Yunnan Baiyao has been seeking transformation in recent years, creating a "second curve" in addition to the inherent core products such as Baiyao and toothpaste. , daily skin care products, tea and other fields.
Yunnan Baiyao also stated in the financial report that during the reporting period, the company continued to take the business division system as the core base for production and operation, and on the product level, on the basis of stabilizing the traditional advantageous stock businesses such as Yunnan Baiyao’s central products, general medicines, and toothpaste, it actively explored Sanqi series oral liquid, household medical equipment, personalized skin care product group, scalp health management product group, health care food, new resource food and other incremental businesses.
It is worth noting that, according to the 2021 financial report, Yunnan Baiyao’s main R&D expenses increased by 82.99% year-on-year to 331 million yuan. As for the reasons for the increase in R&D expenses, Yunnan Baiyao stated in the annual report that it was mainly due to the newly added special medical food R&D registration and mining. Ji Biomedical skin care products research and development projects.
The layout of Yunnan Baiyao’s medical beauty business has always attracted attention. On December 30 last year, Yunnan Baiyao announced that the company’s second-level wholly-owned subsidiary plans to transfer the company’s third-level wholly-owned subsidiary Shanghai Yunzhen Medical Technology Co., Ltd. (Yunzhen Company) 100% equity is transferred to the group company free of charge at a net book value of 625,800 yuan.
After the transfer is completed, the company directly holds 100% equity of Yunzhen Company, and plans to increase the capital of Yunzhen Company by 500 million yuan.
As the setting unit of Yunnan Baiyao Skin Comprehensive Solution Medical Center, Yunzhen will actively promote the ecological layout of the medical beauty industry chain, explore the upstream and downstream business growth models, and quickly open up the business track and layout. The whole ecological chain cycle of the big health industry.
However, according to the financial report data, the net profit of Shanghai Yunzhen Medical Technology Co., Ltd. from the merger date to the end of the year was -1.445 million yuan.
Zhao Chenxi, a member of the Professional Circulation Professional Committee of the Beijing Pharmaceutical Association, believes that Yunnan Baiyao's attempts to diversify are relatively successful. In 2021, the net profit created by its star single product Yunnan Baiyao toothpaste will account for more than 80% of the company's net profit.
But its oral care derivatives, such as mouthwash, dental irrigator, and other diversified products such as sanitary pads, are not easy to replicate its successful model.
It is recommended to further focus on the advantages of "main business" in the future, extend the original advantages of the "Yunnan Baiyao" brand, strengthen research and development and innovation, and strive for re-innovative flagship products.
In the future, whether the new business can bring new growth to Yunnan Baiyao, you may wish to continue to pay attention.
In-depth reporting team of this journal