CSPC: sitting on three major billion varieties | health products subsidiary to be listed on the fund-raising 1.2 billion

Pharmaceutical Network January 30 hearing as of January 29, 2018 closing in the morning, the total market capitalization of Shijiazhuang Pharmaceutical Group reached 104.7 billion Hong Kong dollars Recently, CSPC announced that the subsidiary of the new Novo Wei has submitted to the China Securities Regulatory Commission Shenzhen Stock Exchange Entrepreneurship Board application, currently the application has been accepted.It is reported that the subsidiary's main business is the development, production and sales of functional foods, the main products of vitamin C tablets and caffeine.If the subsidiary successfully listed, What kind of new opportunities can be brought to CSPC?

According to the annual report data, in 2016, Shijiazhuang Group's total revenue was 12.369 billion Hong Kong dollars, an increase of 8.6%, the main business of medicine and APIs remained at 73% and 27%.

Table 1: Sales of 3 Billion Billion in Shijiazhuang in 2016

(Source: Rice network of national database amplification)

CICC Oxiracetam Capsules and Oxiracetam for Injection (Cloverine) are mainly used for neurological deficits caused by light and moderate vascular dementia, Alzheimer's disease and traumatic brain injury, and their memory And mental retardation.According to the statistics from Mynetworks, the total sales of terminals in China's municipal public hospitals, county-level public hospitals, urban community centers, township hospitals (referred to as China's public medical institutions) and retail stores in cities in China in 2016 Close to 3.683 billion yuan, of which, powder for the exclusive domestic dosage form.

Butylphthalide Soft Capsules and Butylphthalide Sodium Chloride Injection (Enbipu), is a national category 1 new drug, is also the exclusive product of Shijiazhuang Pharmaceutical Group, mainly used for the treatment of acute ischemic stroke. According to According to statistics from Intranet, the total sales of terminals in China's public medical institutions and retail pharmacies in urban China reached nearly RMB2,926 million in 2016. Both of these products have entered the 2017 version of the National Medicare catalog, with injection as a new addition.

Shiguang L-amilodipine maleate tablets and dispersible tablets two formulations (known as Xuan ning), mainly for the treatment of hypertension and angina.According to the intranet data show that in 2016 in China public medical The total sales of institutional terminals and retail outlets in urban areas in China amounted to nearly 1.122 billion yuan.

In addition to the above three big billion varieties, Shijiazhuang Pharmaceutical Group sales of more than 100 million varieties of doxorubicin hydrochloride liposome injection (more than the United States), pegylated recombinant human granulocyte-stimulating factor injection (Trade name: Jinyouli), elemene injection (sold as Infineon), etc. These products will continue to drive the performance of enterprises in 2017.

In the first three quarters of 2017, the total revenue of Shijiazhuang Pharmaceutical Group was 11.220 billion Hong Kong dollars, a growth rate of 21.2% .Income medicine, the growth rate of innovative drugs over 32%, generic growth rate of 12.6%; raw materials, by the 'environmental protection However, the growth rate of antibiotics continued to be negative, but the rise in vitamin C prices led to soaring growth rate of 30.7%. In addition, caffeine and other growth rates were 35.7%.

To enhance the business of healthcare products and increase the flexibility of financing, Shijiazhuang Pharmaceutical Group has started to consider the spin-off of Sinovi and its subsidiaries and application for independent listing in April 2017. At present, the application has been accepted. , The spin-off and the successful listing will increase the financing flexibility of both the Parent Group and NWS. The net proceeds from the Share Offer will be mainly used for the development of healthcare products business.

Figure 1: Shijiazhuang Pharmaceutical Group and the relationship between the new Nuowei

(Source: IPO prospectus)

According to the prospectus submission manuscript data shows that Shijiazhuang Pharmaceutical Group directly holds a 45.06% stake in Enshi Pharmacy, and through Kangri Holdings, Jiaxi Holding indirectly holds 45.94% of Enshi Pharmacy shares, the total control of Enshi Pupu Industry 100.00% stake.

Nipu Pharmaceutical directly holds 98.69% shares of New Norwich and indirectly holds 1.31% shares of New Norwich through European-Italian Pharmaceuticals. Nuptep Pharmaceutical controls 100.00% shares of New Norwich in aggregate.

Hebei fruit Weikang and its subsidiaries Taizhou fruit Weikang, Connaught Taizhou and Sunwell together belong to the functional food business segment, in order to eliminate competition in the same industry, expand the scale of operation, improve product mix, and business development to obtain the required land, Plant, equipment and other elements of resources, Sunwell acquired 100% equity interests in Hebei Guowei Kang and 100% equity interests in Zhongnuotai State under the same control in 2016.

Hebei fruit Weikang was established in October 2015, the former Connaught Pharmaceutical Holdings, pharmaceutical companies engaged in Enshi Pu engaged in health food research and development, production and sales company, the main products of vitamin C tablets.

Conversely, Taizhou Guoweikang is a wholly-owned subsidiary of Hebei Weigang Pharmaceutical Co., Ltd., which is principally engaged in the sales, marketing, channel maintenance and brand building of health food products.

Zhongnuo Taizhou was originally a pharmaceutical company controlled by Zhongnuo Pharmaceutical Co., Ltd., a subsidiary of Zhongnuo Pharmaceutical Holding Co., Ltd., with a business located in Taizhou, Jiangsu Province, to build a functional food research and development and production base and to expand its scale of functional food business. In 2012, Taizhou medicine An industrial land for urban use of land, an area of ​​115,537.00 square meters of industrial land, the current plant and a power plant, warehouses and other infrastructure has been completed and put into use.

CSPC said the company Healthy food The business started in 2004 and was undertaken by Zhongnuo Pharmaceutical Co., Ltd. After the establishment of Hebei Weigang Pharmaceutical Co., Ltd., Zhongnuo Pharmaceutical Company changed the approval certificate of many health food products to the name of Hebei Weikang Culture Co., Ltd. To avoid peer competition, Property rights of food product technology, Hebei Weweikang, Zhongnuo Taizhou and the Group's multiple reporting units signed a "technology transfer contract", agreed to declare the unit to hold health food approval certificate and related production technology, is applying for a certificate of approval Health food product technology and other information all transferred to Hebei fruit Weikang, Connaught Taizhou, and is responsible for supporting the acquisition of a new health food approval certificate or filing system for the management of health food record vouchers.

Table 2: The composition of the main business of Nuowei Wei in recent years (10,000 yuan)

(Source: IPO prospectus)

New Nuowei mainly engaged in functional food research and development, production and sales, the main products include caffeine products, vitamin products, etc. According to the prospectus draft report data show that in the recent three years, the company accounted for caffeine products revenue year after year Decline, while the proportion of the revenue of vitamin products is rising year by year.

Table 3: Sales of the Company's Vitamin Products in Different Sales Models in Recent Years (10,000 yuan)

(Source: IPO prospectus)

The company's sales model is mainly divided into three types: direct supply terminal model, traders and pharmacies chain pharmacy marketing model.Coffee products with direct supply terminals and traders combined mode, the main use of vitamin products 'Chain pharmacies and traders with the combination of' sales model. Produced mainly caffeine export-oriented, the company produced vitamin C tablets all in the territory of sales.

Data show that the new Norwich vitamin products in the chain pharmacies cooperation model, the last three years of sales accounted for more than 12% remained relatively stable, while in the trader model, the proportion of sales increased year by year .

Table 4: 2015-2016 China City Retail Drugstore Health products Pure vitamin supplements (single) brand TOP20

(Source: My Intranet China retail pharmacy terminal competition pattern)

According to the statistics from Inner Mongolia Net, Zhongdian Zhongnuo Pharmaceutical ranked second in terms of pure vitamin supplements (single) applicants for terminal health products of urban retail pharmacies in China in 2016, and ranked tenth in Hebei Connaught Weicheng Health Products Company In the TOP20 brand, three products in the Govconc series have entered the top 10 and the market share of four products has increased from 10.55% in 2015 to 13.26% in 2016.

Table 5: Proposed investment after deducting issuance expenses of raised funds (Unit: ten thousand yuan)

(Source: IPO prospectus)

Nuowei Wei said that the fund-raising will invest in five major projects including 'health products and special medical food production' and plans to invest over 1.2 billion yuan to raise funds. After the project is completed, it will add 1.5 billion tablets , 500 million capsules of health foods, 500 million capsules of health foods, 500 million bags of health food powders and granules, 50 million bags of powder for special medical purposes and 50 million bottles of special nutritional liquid for formulary , The total annual sales revenue and total new profits will increase substantially.Such a masterpiece, if the successful completion of fundraising, CSPC health products business in the future will be more strength.

Cai Dongchen, chairman of CSPC, once mentioned, 'Do enterprise In particular, to be a hundred-year-old enterprise, we must take a long-term view.A pharmaceutical company rely on APIs, which will certainly survive the thriving period of several years and must innovate and develop new drugs. "At the beginning of the listing of pharmaceuticalstars, Since the completion of the reorganization of Shijiazhuang Pharmaceutical Co., Ltd. in 2012, Sinopharm Pharmaceutical has been integrated into the arm of the company, and the company has gradually moved toward the high-end innovative drug manufacturers. In recent years, with the sluggish growth of APIs and generic drugs, innovative drugs rapidly became the major growth of Shijiazhuang's performance Point, is the company's current rapid growth in profits of the engine.

The brilliant achievements of the stone medicine nowadays have become a typical case of the state-owned enterprise restructuring. The original divestment of assets and the transfer of core assets to the association and the realization of a purely state-owned transition camp have indeed contributed to the future development of the stone medicine. Midea "to accelerate the integration of the drug, with the rapid development of the strength of the capital market, after Lenovo, gradually into a listed subsidiary of China Pharmaceutical Group, China Pharmaceutical listed company in Hong Kong in 2012 changed its name to China Pharmaceutical Group, Indirect realization of the group as a whole market.For Lenovo, in the trough of the pharmaceutical industry continue to invest in the layout, after the acquisition of Shijiazhuang through reorganization and listing, both to recover the investment cost but also received a high yield .This win-win move, it is classic .

Source: IPO prospectus draft report, MilneNet database, annual report of listed companies, Xingzheng medicine, China Economic Weekly