Consolidate the status of science and technology reform demonstration enterprises, and product clusters contribute stable income
From the perspective of the reform of large state-owned enterprises on the policy side, the "Twelfth Five-Year Plan" stage of the policy encourages the listing of state-owned enterprises, share reform and company system reform; In the "13th Five-Year Plan" stage, the modern enterprise system and the corporate structure of the company were supplemented and improved, the professional manager system was established, and the social functions and historical problems of the enterprise were stripped away; By the "14th Five-Year Plan" stage, we will improve modern enterprises with Chinese characteristics, promote the unity of strengthening the party's leadership and improving corporate governance, strengthen the construction of the board of directors, promote mixed reform, improve market-oriented salary distribution and incentive policies, and improve the R&D assessment mechanism. The state has gradually promoted the implementation of the reform of state-owned enterprises from the outside to the inside, from the shallow to the deep, from the form of the company to the internal structure to the personnel system.
A number of departments have introduced policies to promote the reform of state-owned enterprises, which is conducive to the steady development of state-owned enterprises. As of November 30, 2023, the Zhiben Consulting Data Center tracked a total of 614 policies related to the reform of state-owned enterprises. The implementation of a number of policies shows that the state supports state-owned enterprises to build a new development pattern and optimize the layout of the state-owned economy, while promoting the integration and reorganization of state-owned enterprises in a market-oriented manner. actively promote the construction of world-class enterprises; Promote the long-term operation of the modern corporate governance mechanism of state-owned enterprises with Chinese characteristics, and improve the scientific and technological innovation mechanism of state-owned enterprises. In 2022, the company seized the opportunity of being selected as a "Science and Technology Reform Demonstration Enterprise" by the State-owned Assets Supervision and Administration Commission of the State Council, focusing on the three major project objectives and tasks of "Party Building Quality Project, Value Management Quality Project, and Risk Control Quality Project", and achieved good economic and social benefits, and the pace of high-quality development was firmer and more powerful.
In 2022, the company will be among the "Science and Technology Reform Demonstration Enterprises". In accordance with the requirements of high-quality development, we will further promote the deepening of market-oriented reform, focusing on exploring and innovating and making breakthroughs in improving corporate governance, market-oriented selection and employment, and strengthening incentives and constraints, aiming to create a number of state-owned science and technology enterprise reform models and independent innovation pioneers. In 2022, in accordance with the overall arrangement of Tianjin SASAC, Tianjin Lisheng Pharmaceutical Co., Ltd. actively applied for and was successfully selected into the list of "Science and Technology Reform Demonstration Enterprises" for the reform of state-owned enterprises by the State-owned Assets Supervision and Administration Commission of the State Council, becoming one of the two selected enterprises in Tianjin. At present, Lik Sang Pharmaceutical takes the opportunity of being selected as a "Science and Technology Reform Demonstration Enterprise", focuses on the innovation and reform of state-owned enterprises, focuses on the overall planning, aims to improve the quality of development and economic benefits, and ensures the preservation and appreciation of state-owned assets, with the "three major projects" of party building quality engineering, value management quality engineering, and risk management and control quality engineering as the main line, and makes full use of the "Science and Technology Reform Demonstration Enterprise" policy to promote business transformation and upgrading in an all-round way and achieve high-quality development of the enterprise.
Expand the scale of assets and optimize the structure of its own assets. In order to optimize the industrial layout and broaden the company's main business, the company will acquire assets related to the main business, and more effectively explore high-quality projects that match the company's strategic development, so that the company's overall asset operation level will be improved. By integrating the product and resource advantages of both parties, the company's product line can be further enriched, the industrial chain layout can be expanded, and good synergies can be achieved. In December 2023, in order to promote the high-quality development of the listed company, the company acquired a 65% stake in Jiangxi Qingchun Kangyuan Pharmaceutical Co., Ltd. for RMB137 million in cash with its own funds. Through the acquisition of 65% equity of Qingchun Kangyuan, Lisheng Pharmaceutical has further enriched its Chinese medicine product line, and will also expand its competitiveness in the e-commerce field through the B2B business platform, so as to achieve a win-win situation with Qingchun Kangyuan in terms of employee income, shareholder income, government taxation, and consumers with good products.
Cultivate incremental assets and broaden capital operation. In 2023, the company will invest in and incubate high-quality innovative projects with the industrial fund as a platform, and participate in the Yuanxi Haihe (Tianjin) Biomedical Industry Fund; Jointly initiated the establishment of a pharmaceutical industry fund with Bozheng Capital and Hedong District Government. Completed the construction of the investment project database, collected more than 100 target projects, and conducted in-depth exchanges and field visits with 23 projects. Carry out substantive promotion work on 5 projects, and complete the shareholders' meeting deliberation procedures for the acquisition of a controlling stake in Jiangxi Qingchun Kangyuan Pharmaceutical Co., Ltd. Aim at strategic goals and accelerate the pace of investment and mergers and acquisitions. In 2024, the company will continue to give full play to the advantages and resources of the listed company's platform, carry out the analysis of the capital operation of the pharmaceutical industry, and regularly form industry research and analysis reports. Improve the investment system and strengthen the construction of investment professional teams. Establish and improve the management system of the whole life cycle of investment projects, strengthen project management and execution capabilities, and do a good job in pre-investment, investment and post-investment management. Build an external expert think tank to provide professional advice for project decision-making and improve the quality of the company's investment decision-making. Intensify mergers and acquisitions and expand the market share of listed companies. Expand the channels for obtaining projects in the fields of raw materials, chemicals, traditional Chinese medicines, and biological drugs, and achieve more than 200 projects in the library by the end of 2024. Through the merger and acquisition incubation of industrial funds, we will enhance the ability of industrial integration and comprehensive competitiveness. Participate in the investment management of Bosheng Fund, and promote project sourcing and investment decision-making.
We will continue to optimize the shareholding structure and strengthen the governance structure through mixed reform. In October 2019, the company received a notice from the indirect controlling shareholder Pharmaceutical Group that the pharmaceutical group intends to transfer 100% of the equity held by it to Bohai State-owned Assets free of charge; At the same time, the 33% equity of Longteng Co., Ltd. held by Tsinlian Group through its wholly-owned subsidiary, Jinding Holdings, was transferred to Tianjin Pharmaceutical Group International Holdings Co., Ltd., a wholly-owned overseas subsidiary of the Pharmaceutical Group. Improve the management and control mode and improve the management efficiency. In 2023, Lisheng Pharmaceutical's "Three Determinations" plan will be implemented, and the number of departments will be reduced from 20 to 17. The company established the Lik Sang Research Institute, formulated the "Lik Sang Scientist Evaluation and Recruitment Implementation Plan", established the "Technician-Lik Sang Scientist-Chief Scientist" technical career channel, and the person in charge of the marketing area was eliminated at the end. Innovate incentive methods and build a medium and long-term incentive system. In 2023, the company will complete the second batch of restricted stock grants, granting 284,000 shares to 17 qualified core backbone personnel. The "Project Co-investment Management Measures" were formulated, and the virtual co-investment project of Biochemical Pharmaceutical's "Co-investment Implementation Plan for Roxatidine Hydrochloride Acetate Project for Injection" became the first co-investment project implemented in Tianjin State-owned Assets System, with the co-investment ratio reaching 18% of the total R&D investment of the project. The company continues to explore the reform of the mechanism and system to form a "multi-dimensional integration" incentive matrix. All-round expansion of multi-business areas Project implementation and co-investment, screening Lik Sang Pharmaceutical contract manufacturing (CMO/CDMO) service projects to carry out co-investment; Actively explore project dividend incentives; Improve the exit mechanism and draw the "vitality curve" of the activation organization; Cooperate with the School of Commerce of Nankai University to carry out the "Personnel Mobility Mechanism" integration practice project; Deepen the reform of the "three systems" and realize the mobility mechanism of those who have both ability and political integrity to "go up" and those who are incompetent to "eliminate them." The company stimulates the vitality of the company through the adjustment of management personnel and the reform of the mechanism and system. Since 2022, the business direction of the company's introduced personnel has diversified and enriched from pharmaceutical professional subdivisions to economic accounting or other related businesses. By adjusting and replacing the management personnel, it will help to improve the management level and ability of the management team, improve the company's management level and competitiveness, and achieve high performance.
Asset clearance, loss management, the company disposes of non-main business assets to optimize the asset structure. In recent years, the company has focused on its main business through equity transfer transactions, disposed of assets unrelated to its main business, optimized its asset structure, optimized its industrial layout, transferred some of its subsidiaries or holding companies' shares, reduced the holding ratio or did not hold shares, so as to obtain more funds and resources to focus on the company's core business, develop its core business, and continue to enhance the company's value, while reducing the company's financial pressure and financing costs.
Deepen the reform of the marketing system, accelerate market development and channel expansion. The marketing team of Central Pharmaceutical Co., Ltd. uses the "self-operated + agent" model to deeply cultivate the regional market, take back the general agency right of cefdinir, and the company conducts independent marketing. Biochemical Pharmaceutical's marketing team actively explored the market and achieved profitability to reverse years of losses. In 2023, the sales revenue of Lisheng Pharmaceutical's cultivated product population and general drug population will have a good growth, and the market share of indapamide tablets, folic acid tablets, sodium bicarbonate tablets, and aminophen and capirin tablets will be in the forefront; Promote the upgrading of traditional manufacturing industries and move towards large-scale manufacturing; Continue to carry out technological research and technological transformation, carry out technical transformation and equipment upgrading of the "Three Fish" packaging line, solve the packaging bottleneck problem, and improve the production efficiency of the tablet packaging process; Actively carry out capacity marketing, undertake CMO and CDMO projects, and introduce 4 commissioned production varieties, so far a total of 12 projects have settled in Lik Sang, and the entrusted production of drugs will reach 1.5 billion tablets in 2023. Build a diversified product cluster and contribute to the company's stable income. The company has a wide range of varieties covering a wide range of diseases. According to the PDB database, indapamide tablets and nadroparin calcium injection are the products that account for the majority of the company in the past five years. Among them, the sales of indapamide tablets in 2022 will reach 230 million yuan, an increase of 360.7% year-on-year, and the sales volume in 2023Q1-3 will be 100 million yuan; The sales of nadroparin calcium injection reached 180 million yuan in 2022, a year-on-year decrease of 8.9%, and the sales volume reached 120 million yuan in 2023. In addition, the sales of heparin calcium injection have also increased significantly, from 40 million yuan in 2022 to 160 million yuan in 2023Q1-3. The company has laid out drugs in various disease fields and built a rich product cluster to contribute stable income to the company.
Some products have grown rapidly, contributing to the company's performance increment. In the company's product cluster, products such as prednisone acetate tablets, albuterol sulfate tablets, calcium gluconate tablets and heparin calcium injection have grown rapidly. Among them, the fastest is heparin calcium injection, with a year-on-year revenue growth rate of 2968.5% in 2022 and 596.8% in 2023, corresponding to sales of 430 million yuan. The year-on-year growth rate of calcium gluconate tablets in 2023 will also reach 332.4%, corresponding to a sales volume of 13.246 million yuan in the current year. The accelerated revenue growth rate of products is expected to contribute to the company's incremental performance.
Consistency evaluation items and new varieties are gradually enriched, contributing stable income to the company. In 2023, the company will accelerate the research and development of generic drugs and quality improvement research guided by market and clinical needs. We will continue to accelerate the transformation efficiency of R&D results, focusing on the research and development of laser perforated membrane controlled-release technology and skeleton sustained-release technology compound preparations. "Green Shoubishan" valsartan amlodipine tablets were officially put on sale, enriching the drug pipeline for hypertension. Two products, atenolol tablets and propranolol hydrochloride tablets, passed the consistency evaluation of generic drugs. In addition, the company continues to maintain a high-intensity investment of more than 9% in scientific research, focusing on the treatment of elderly and chronic diseases, and has established 8 new R&D projects to cultivate and build a high-end generic drug product group. As of the 2023 annual report, the company has a total of 54 product specifications for the number of indapamide tablets, folic acid tablets, sodium bicarbonate tablets, and aminophen capirin tablets, gradually forming a product series and reserve product echelon.
At present, a total of 3 products of the company have been included in the centralized procurement, and all of them have been included in the "2018 Edition of the Basic Drug Catalog". Compound sulfonamide A? In April 2023, azole tablets were included in the eighth batch of centralized procurement, mainly for the treatment of bacterial infections, etc., and the company sold 2.59 million yuan in 2023Q1-3; The company's promethazine hydrochloride tablets won the bid for the fifth batch of centralized procurement catalogs in June 2021, with the main indications for hematoedema, etc., and the company's sales in 2023Q1-3 were 4.06 million yuan; Sodium bicarbonate tablets were included in the third batch of centralized procurement in August 2020, mainly for the treatment of acidemia, hyperacidity, etc., and the company's sales in 2023Q1-3 were 46 million yuan. The products included in the national centralized procurement contribute to the company's stable income and are one of the guarantees for the company's stable development.
Selected as "China Time-honored Brand", the brand builds strong competitiveness. China's time-honored brand is a high-quality asset of the country, and the brand creates a strong competitive advantage. The title of "China Time-honored Brand" owned by state-owned Chinese medicine enterprises is an extremely high-quality asset, with strong technology, resources and brand accumulation, with a long history and tradition, and has rich experience and technology in Chinese medicine research and development, a solid business foundation, many years of accumulated industry experience and excellent quality have won the trust and reputation of many consumers, and the state-owned background of China's time-honored Chinese medicine enterprises fully have the potential for rapid development. The existing Chinese medicine enterprises with state-owned background of Chinese time-honored brands in mainland China include Tong Ren Tang, Pien Tze Huang, Baiyun Mountain (with a number of Chinese time-honored brands: Pan Gaoshou, Baiyunshan, Chen Liji, Jing Xiutang, Zhongyi, He Jigong, Qixing, Mingxing, Hesui), Foci Pharmaceutical, Darentang, Yunnan Baiyao, Kunming Pharmaceutical Group (with Kunzhong Medicine, Yunkun brand), Taiji Group, Dong'e Ejiao, Guangyuyuan, Ma Yinglong, among which Tongrentang and Guangyuyuan are century-old brands.
Multi-dimensional digging into the connotation of the brand to stimulate the new vitality of the time-honored brand. Lik Sang Pharmaceutical was selected as the "Most Popular Brand Enterprise in Retail Pharmacies", "Shoubishan" brand indapamide tablets won the "2023 Star Club • Most Popular Star Single Product in Retail Pharmacies", and Central Pharmaceutical Maren Soft Capsules were selected as representative projects of district-level intangible cultural heritage. In February 2024, the Ministry of Commerce of the People's Republic of China and other five ministries and commissions announced the third batch of Chinese time-honored brand lists, and Lik Sang Pharmaceutical's "Sanyu" brand trademark was successfully selected, becoming the only enterprise selected with a graphic trademark in the third batch of China's time-honored brand list in Tianjin. The "Three Fish" brand was founded in 1930 and has a history of 94 years. Lisheng Pharmaceutical has always adhered to integrity and innovation, deeply cultivated the field of old and chronic diseases, carried forward and expanded the brand influence of "Three Fish", and gradually expanded from 10 products to 70 products. In particular, the "Sanyu" brand aminophen coffee tablets are called "conscience medicine and reassuring medicine" by the people. Today, "Lik San" takes "Three Fish" as the corporate logo, carrying the spirit of inheritance and innovation, strengthening the brand value, producing more affordable drugs for the people, and meeting the drug needs of the Chinese people.
Source: Think Tank for the Future