China Net Finance and Economics on November 1 (reporter Du Ding trainee reporter An Di) a century-old brand - Yunnan Baiyao Group Co., Ltd. ("Yunnan Baiyao", 000538.SZ) recently released the third quarter of 2021 report shows that the company's revenue in the first three quarters of 28.363 billion yuan, an increase of 18.52%; net profit attributable to the mother of 2.451 billion yuan, down 42.38% year-on-year.
Among them, the fair value change profit and loss during the holding period of trading financial assets was -1.55 billion yuan, which means that Yunnan Baiyao stock trading lost 1.5 billion yuan.
The blood loss of stock speculation is 1.5 billion
Yunnan Baiyao continued the downward trend of net profit in the first half of the year, the company achieved revenue of 19.083 billion yuan in the first half of the year, an increase of 23.17% year-on-year; net profit attributable to the mother was 1.802 billion yuan, down 26.57% year-on-year, and the performance in the first half of the year did not increase profits.
This is the only time since Yunnan Baiyao was listed 28 years ago that the net profit of the half year fell by more than 20%. It also broke the record of the company's net profit decline for the first time in the first three quarters of nearly 21 years.
Not only that, in the first half of the year, Yunnan Baiyao has begun to show stock speculation losses. According to the semi-annual report, the share expenses paid during the reporting period were 866 million yuan, and the fair value change profit and loss during the holding period of trading financial assets was -862 million yuan, accounting for -38.81% of the total profit.
According to the semi-annual report, the book value of the stocks, funds and other securities invested by the company at the beginning of the period was 10.868 billion yuan, the book value at the end of the period was 9.759 billion yuan, the floating loss was 854 million yuan, and the fair value change profit and loss for the current period was -888 million yuan.
According to the details of securities assets, among the 10 securities assets held by Yunnan Baiyao, 4 of them, including Xiaomi Group, Yili Shares, Hengrui Pharmaceutical and China Antibody, are in a state of floating loss, resulting in fair value changes of -610 million yuan, -192 million yuan, -185 million yuan and -0.50 billion yuan, respectively. Until the third quarter report broke out the blood loss of 1.5 billion yuan.
In terms of expanding the time interval, as early as 2019, the company's performance has grown in single digits for three consecutive years, and Yunnan Baiyao has "tied" net profit to non-recurring gains and losses, especially fair value change gains and losses.
At first, the investment was still relatively cautious, only subscribing to the initial issuance of shares of Hong Kong stock China Antibody, and most of the securities investment quota was invested in bond funds. However, since the second half of 2019, after the company began to loosen its securities investment, Yunnan Baiyao stock trading has become more frequent.
In 2020, in the A-share market, Yunnan Baiyao liquidated Hongta Securities and Jointown with a total income of 368 million yuan; bought 4.2483 million shares of Hengrui Pharmaceutical for 426 million yuan; and bought 25.5186 million shares of Yili shares for 887 million yuan. During the period, the company also bought Guizhou Moutai for 632 million yuan and sold it for 717 million yuan, making a profit of 86.74 million yuan.
In terms of the Hong Kong stock market, Yunnan Baiyao bought 1.8106 million shares of Tencent Holdings for 869 million yuan, 37.2445 million shares of China Biopharmaceuticals for 342 million yuan, and 112.9436 million shares of Xiaomi Group for 1.632 billion yuan. Among them, the floating profit created by Xiaomi Group for Yunnan Baiyao reached 1.517 billion yuan, and the yield was as high as 92.93%.
Through "stock trading", in 2019 and 2020, the company's investor net income was 1.470 billion yuan and 392 million yuan, and the net income from fair value changes was 227 million yuan and 2.240 billion yuan, totaling 1.697 billion yuan and 2.632 billion yuan, accounting for 35.91% and 38.71% of the company's total profit for that year.
At the same time, the volatility of the company's net profit has also increased significantly. In 2019 and 2020, the company achieved revenue of 29.665 billion yuan and 32.743 billion yuan respectively, with a year-on-year growth rate of 9.80% and 10.38% respectively; the net profit attributable to the mother was 4.184 billion yuan and 5.516 billion yuan, an increase of 19.75% and 31.85% year-on-year.
It can be seen that Yunnan Baiyao has boosted the company's net profit at a high speed due to the floating profit of securities assets. But investment is a double-edged sword, and there are profits and losses. In the first half of this year, the company folded on securities assets and recorded a floating loss of 854 million yuan, resulting in a sharp decline of 26.57% in the company's net profit.
For investors, the "amplified" fluctuations in net profit naturally make it more difficult for them to predict the future free cash flow of Yunnan Baiyao, because it depends not only on the operational ability of the company's management, but also on their ability to speculate.
However, Yunnan Baiyao does not seem to have given up "stock speculation", but the amount of resources used for stock speculation is quite large. According to the financial report data, from 2019 to the first half of 2021, Yunnan Baiyao invested 8.821 billion yuan, 11.23 billion yuan and 10.488 billion yuan in trading financial assets, accounting for about 20% of the company's current assets in the current period, while in the same period, the proportion of Chinese medicine peers such as Katazai and Tongrentang in this value was less than 1%.
Even if the management of Yunnan Baiyao is "confused and confident" in its ability to speculate in stocks, do not forget what is the company's most core asset. The media questioned.
The core plate gradually shows "decline"
Compared with the "big throw" of foreign investment, Yunnan Baiyao is slightly "stingy" about its own investment.
According to the financial report data, from 2018 to the first half of 2021, the company's research and development expenses were 110 million yuan, 174 million yuan, 181 million yuan and 106 million yuan, accounting for 0.41%, 0.59%, 0.55% and 0.56% of the revenue, respectively. From the perspective of R& D expense rate, Yunnan Baiyao is even less than 1/3 of its peer tablets.
The lower R&D investment is also reflected in the performance of the company's "pharmaceuticals" and "Chinese medicine resources" sectors.
At present, Yunnan Baiyao divides its business into five major sectors, namely "Pharmaceutical Plate", "Health Products Plate", "Chinese Medicine Resource Plate", "Pharmaceutical Business Plate", "Tea Business Plate" and "Industrial Hemp Business Plate".
As we all know, the key to Yunnan Baiyao's success is the national top-secret nature of the company's Baiyao product formula and the rich Chinese medicine resources in the Yunnan area. Since then, daily chemical products such as toothpaste and cosmetics have also been established on this basis.
However, from the annual report data, the two core sectors of "drugs" and "traditional Chinese medicine resources" have gradually shown a "decline", and the overall performance of Yunnan Baiyao is driven by the growth of pharmaceutical commercial revenue with low gross profit margin.
In terms of sub-industries, from 2017 to 2020, the sales revenue of Yunnan Baiyao Industry was 9.962 billion yuan, 10.727 billion yuan, 11.024 billion yuan and 11.716 billion yuan, an increase of about 17.61% in four years; the proportion of revenue was 40.97%, 40.16%, 37.16% and 35.78% respectively; the gross profit margin was 65.61%, 63.79%, 60.98% and 61.18%, respectively.
The commercial sales revenue was 14.284 billion yuan, 15.937 billion yuan, 18.551 billion yuan and 20.974 billion yuan respectively, an increase of 46.84% in four years, accounting for 58.74%, 59.67%, 62.53% and 64.06% of the revenue, and the gross profit margin was 7.29%, 8.17%, 9.17% and 9.09% respectively.
It can be seen that the growth rate of commercial sales revenue with lower gross profit margin is much higher than that of industrial sales with higher gross profit margins in the same period, and the proportion of this business is more than 50% and is increasing year by year.
In addition, it is worth mentioning that the net profit of Yunnan Baiyao toothpaste is relatively high. According to the semi-annual report of 2021, the revenue of Baiyao Health, a subsidiary with Yunnan Baiyao toothpaste as the core, was 3.388 billion yuan, an increase of 22.53% year-on-year; the net profit was 1.51 billion yuan, an increase of 54.34% year-on-year, accounting for 80.11% of the non-net profit.
The performance of the core sector has slowed down, causing Yunnan Baiyao to aim a new growth point at the current hot track - medical beauty. According to the company's investment institution research meeting on September 1, the layout of the medical beauty track is a strategic judgment and positioning made by the company's management layer in combination with the company's business characteristics and industry development trends. The company has opened "Yunnan Baiyao Precision Customized Skin Management Center" and "Caizhiji AI Private Skin Management Center" star selection stores in Kunming, building a platform for consumers to experience the company's precise customized products and services at zero distance. In addition, Yunnan Baiyao said that the company's current nationwide testing points, partners cover large business circles, hotels, beauty nail shops, gyms, health care halls, yoga shops, university entrepreneurship incubation centers and other areas, focusing on customer groups for the precise management of skin has a personalized appeal to the population, the purpose is to let customers experience Caizhiji "dermatology-level" AI skin detection, big data generation of skin reports and other private experience services.
Dong Ming, CEO of Yunnan Baiyao, has publicly stated that in the future, Yunnan Baiyao will provide all-round health services within reach in the field of prevention, detection, treatment and rehabilitation, focusing on traditional Chinese medicine, orthopedics, oral care, medical skin care, women's care and other business tracks.
(Editor-in-charge: Li Wei)