Lisheng Pharmaceutical's deduction of non-150 million is less than 120 million 10 years ago, and then the transfer of equity optimizes resource allocation

Yangtze River Business Daily News ● Yangtze River Business Daily reporter Shen Yourong

Lisheng Pharmaceutical, a well-known pharmaceutical company, (002393. SZ) sold its assets again.

On the evening of June 30, Lisheng Pharmaceutical issued an announcement on the progress of the public listing and transfer of assets, and the company publicly listed and transferred 24.65% of the equity of Tianjin Tianbian Pharmaceutical Co., Ltd. (hereinafter referred to as "Tanabe Pharmaceutical") through the Tianjin Property Rights Exchange Center, and Grand Pharmaceutical (China) Co., Ltd. took over at a reserve price of about 120 million yuan.

For the above-mentioned assets sold, Lik Sang Pharmaceutical said that it can optimize the allocation of resources.

A reporter from the Yangtze River Business Daily found through the Wind system that since 2017, Lisheng Pharmaceutical has sold assets three times, with a total recovery of about 660 million yuan.

Lisheng Pharmaceutical is mainly engaged in the research and development, production and sales of pharmaceutical products, and landed on the A-share market in April 2010. From 2010 to 2013, the company's net profit after deducting non-recurring gains and losses (hereinafter referred to as "deducting non-net profit") exceeded 200 million yuan, and in 2023, the net profit after deducting non-recurring gains and losses will be 150 million yuan, which is less than in 2010. In 2023, Lik Sang Pharmaceutical's R&D investment will be 105 million yuan, standing still for three consecutive years.

Lik Sang Pharmaceutical's financial position is relatively good. As of the end of 2023, the company's debt-to-asset ratio is only 15.17%.

Profitability needs to be improved, how will Lik Sang Pharma make efforts in the future?

The deduction of non-three consecutive increases was only flat before listing

The brilliance of Lisheng Pharmaceutical is no more.

It is not an exaggeration to describe Lisheng Pharmaceutical as having a long history. According to publicly disclosed information, Lik Sang Pharmaceutical was founded in 1951 and has a history of 73 years. In 2001, the company carried out shareholding restructuring and was listed on the Shenzhen Stock Exchange in 2010.

According to the official website, Lisheng Pharmaceutical is a leading enterprise in the field of medicine and health owned by TEDA Holdings. The company has been selected as one of the top 100 chemical and pharmaceutical enterprises for many years, and is a national high-tech enterprise, a national enterprise technology center, and a national green factory, and was selected into the list of "Science and Technology Reform Demonstration Enterprises" by the State-owned Assets Supervision and Administration Commission of the State Council in 2022, and was selected into the third batch of Chinese time-honored brands in February 2024. The company focuses on the two-wheel drive strategy of "industrial operation + capital operation", and has built an industrial pattern of integration of research, production and marketing, and integration of raw materials and preparations.

In terms of operating performance, in the early stage of listing, Lisheng Pharmaceutical's performance was not bad, but it has not been satisfactory in recent years.

In 2009, before Lisheng Pharmaceutical went public, the company's operating income and net profit attributable to shareholders of the parent company (hereinafter referred to as "net profit") were 596 million yuan and 155 million yuan respectively, and the non-net profit was 149 million yuan.

From 2010 to 2013 after listing, the company's operating income was 738 million yuan, 764 million yuan, 1.117 billion yuan and 1.044 billion yuan respectively. In the same period, the company's net profit was 203 million yuan, 325 million yuan, 297 million yuan and 298 million yuan respectively, which also fluctuated; The net profit after deduction was 201 million yuan, 234 million yuan, 277 million yuan and 294 million yuan respectively, increasing for four consecutive years.

In 2014, the company's performance changed dramatically, and the operating income and net profit achieved that year were 774 million yuan and 93 million yuan respectively, a year-on-year decrease of 25.92% and 68.30%. The net profit after deduction was 85.9 million yuan, a year-on-year decrease of 69.08%.

From 2015 to 2019, the company's operating income more than doubled from 775 million yuan to 1.615 billion yuan, and its net profit increased from 114 million yuan to 188 million yuan, which also increased significantly.

In 2020, Lisheng Pharmaceutical's performance will decline sharply again. the operating income of the year was 1.141 billion yuan, a year-on-year decrease of 29.37%; The net profit and non-net profit were 90 million yuan and 02 million yuan respectively, a year-on-year decrease of 95.42% and 98.66%.

From 2021 to 2023, the company's operating income fluctuated around 1.1 billion yuan, and the net profit was 122 million yuan, 94 million yuan, and 362 million yuan, fluctuating significantly, and the non-net profit was 117 million yuan, 124 million yuan, and 150 million yuan respectively, growing for three consecutive years, with an increase of 4752.37%, 6.65%, and 1.50%.

Judging from the net profit data since 2014, the company's net profit has been in a state of recovery after three sharp declines.

In 2023, the company's non-net profit will only be 150 million yuan after three consecutive years of growth, which is not only less than 10 years ago, but also the same as in 2009 before listing.

How to exert force after continuous disposal of assets

The profitability of Lik Sang Pharmaceutical, a veteran pharmaceutical manufacturer, has returned to before it went public, why is it exactly?

In 2020, Lik Sang Pharmaceutical's net profit and non-net profit will "drop to the bottom", which is not only affected by the epidemic, but also related to the impact of "4+7" volume procurement and the decline in drug prices. In addition, the company terminated the 23-valent pneumococcal polysaccharide vaccine project, and made an impairment provision of about 60 million yuan for related assets, which had an impact of about 60 million yuan on the net profit of the year.

What is the reason for the sharp decline in net profit in 2014? The company explained that in that year, the company's key varieties in various regions were not ideal, which seriously hindered the sales of key varieties in the community and primary medical markets, and increased social inventory. To this end, the company has transformed its marketing model and adjusted its marketing policies and strategies, resulting in a decline in sales of key varieties in the short term.

Judging from the explanation of the decline in the performance of the above two years, the decline in performance is related to the competitiveness of the company's products and other factors.

In terms of R&D, Lik Sang Pharmaceutical's investment is not outstanding. In 2017, the company's operating income was 1.029 billion yuan, and R&D investment was 102 million yuan. In 2019, R&D investment increased to 123 million yuan. From 2021 to 2023, R&D investment will be 104 million yuan, 106 million yuan, and 105 million yuan respectively, with no significant growth.

Since 2017, Lik Sang Pharmaceutical has disposed of assets one after another.

Wind data shows that in December 2017, Lisheng Pharmaceutical transferred 100% of the equity of New Crown Pharmaceutical through a public listing on the Tianjin Equity Exchange, with a transaction price of 530 million yuan. According to the company, this move is to revitalize assets, improve operational efficiency, reduce operating costs, and optimize the company's asset structure.

In 2019, the company sold 30% of the equity of Tianjin New Uchida Pharmaceutical at a price of 10.1807 million yuan, and in 2023, it sold the real estate and some equipment at No. 9 Huanhe South Road, Tianjin Airport Economic Zone, at a price of 120 million yuan.

The total transaction price of the above disposals is $660 million.

According to the latest announcement, Lisheng Pharmaceutical sold 24.65% of the equity of Tanabe Pharmaceutical, a shareholding company, at a transaction price of 120 million yuan.

In 2023 and the first quarter of 2024, Tanabe Pharmaceutical's operating income will be 382 million yuan and 93 million yuan respectively, and the corresponding net profit will be 43.5481 million yuan and 15.1366 million yuan.

Why did Lik Sang Pharma sell its profitable assets? According to the company, based on the company's overall plan, the company chose to sell Tanabe Pharmaceutical's production and operation status and the fierce market competition faced by its existing product varieties, and in order to optimize the allocation of resources.

Lik Sang Pharmaceutical is well funded. As of the end of 2023, the company's debt-to-asset ratio is only 15.17%. At the end of the period, the company's monetary funds were 1.989 billion yuan, and the corresponding long-term and short-term debts were about 30 million yuan. In that year, the company's financial expenses were -60 million yuan.

With sufficient funds and Lik Sang Pharmaceutical still frequently selling assets, how will the company seek changes to improve the company's profitability?