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Enwei, Tai'an Tang and other stock prices have fallen, triggering changes in investment logic?

 Last Update: 2022-10-14
 Source: Internet
 Author: User

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In the killing market of "a white horse stock a day", the Chinese medicine sector has not been able to get rid of the embarrassing trend
of ups and downs.

On September 28, the Chinese medicine sector fell by 1.
03%
again.
Tai'antang, which just put on the "ST hat", fell by more than 5%, and Jingjing Pharmaceutical and Dali Pharmaceutical both fell by more than 4%.

However, just the previous trading day, the Chinese medicine sector pulled up intraday out of the "big Yang line"
.
As of the close of trading on September 27, the top 5 listed companies with the largest increase in the Chinese medicine sector had similar trends: C Enwei rose 16.
20%; Zixin Pharmaceutical rose 10.
09%; Longjin Pharmaceutical rose 9.
97%; Katazai rose 7%; Yiling Pharmaceutical rose 6.
90%.

Prior to this, the stock prices of Wohua Pharmaceutical, Foci Pharmaceutical, Zixin Pharmaceutical, Huashen Technology, Tailong Pharmaceutical and other enterprises had just suffered a decline
.

"Follow the old Chinese medicine to get home remedies, in addition to investors, is a listed company!" The sentiment issued by a senior investor also reflects to a certain extent the capital market's thinking on
the core value of traditional Chinese medicine.

In fact, the value of TCM often depends on "IP" or "secret recipe"
.
For a long time, the ranking of the top 10 enterprises with market capitalization listed in traditional Chinese medicine has been constantly changing, however, the four enterprises with brands of traditional Chinese medicine, such as Beijing Tongrentang, Yunnan Baiyao, Panzai Zhen and Dong'e Ejiao, have been firmly ranked in the top 10
.

This status quo is indeed worth pondering: is the long-term investment dividend of the Chinese medicine industry always exclusive varieties (long-term increments) + medical insurance (or base drug release) + monopoly price increase (scarce brands)?

01, the break and the big rise The concept of innovative drugs is lost to the secret recipe of traditional Chinese medicine?

On September 21, the star innovative pharmaceutical company Nuocheng Jianhua and the veteran pharmaceutical company Enwei Pharmaceutical were listed
on the same day.

Nuocheng Jianhua, which has high hopes and is regarded as the "fifth A+H listed company in the country", is still unable to escape the fate of breaking the fate, and has fallen all the way, as of press time, the decline has reached 16.
54%, and the total market value is less than 16.
5 billion yuan
.

In contrast, the revenue depends on a single variety of "Jieer Yin Lotion", and Enwei Pharmaceutical, which has only 13 R&D personnel, has risen against the trend with the secret recipe of traditional Chinese medicine, with a maximum increase of nearly 70%.

The same beginning, but different endings, although the main reasons for the above differences, perhaps there are two factors in their respective pricing, but in the macro environment of continuous emphasis on pharmaceutical innovation, such results have also triggered many capital market discussions:

"The reality is that today's innovative drug concept has never done the secret recipe
of traditional Chinese medicine.
"

"Enwei Medicine relies on 'a paper secret recipe' to fight the world?"

"There are only 13 R&D personnel, how does Enwei Pharmaceutical reflect the value of innovation?"

Market view is that compared with the peer of listed companies in traditional Chinese medicine, Enwei Pharmaceutical's research and development innovation progress is indeed lackluster, nearly 20 years since its establishment, R & D expenses, the number of R & D personnel and peers are pitifully less, since September 2014 "Yumei effervescent tablets" clinical application was not approved, Enwei Pharmaceutical for seven consecutive years without new drug declaration records
.

According to the contents of the prospectus, the R&D expenses of Enwei Pharmaceutical from 2019 to 2021 were only 4.
4026 million yuan, 4.
8423 million yuan and 4.
3248 million yuan respectively, and the annual revenue of pharmaceutical enterprises with annual revenue of 600-700 million yuan in a reporting period accounted for only 0.
71%, 0.
76% and 0.
64%
of the operating income.
It is not difficult to feel that the R&D expense rate of Enwei Pharmaceutical is indeed much lower than that of peer listed companies
.

In addition, the number of R&D personnel in the company is also much lower than that of its peers
.
By the end of 2021, the company has only 13 full-time R&D personnel, accounting for only 0.
79%
of the total number of employees.

In addition to the lag in research and development, Enwei Pharmaceutical has not completely got rid of its dependence on
a single variety of Jieer Yin lotion.
From 2019 to 2021, the sales revenue of Jieer Yin Lotion was 314 million yuan, 321 million yuan and 323 million yuan respectively, accounting for 50.
64%, 50.
66% and 47.
56% of the total revenue of Enwei Pharmaceutical
.
In other words, at present, nearly half of Enwei Pharmaceutical's revenue still relies on a product
that was born 30 years ago.

02, fall stop and "wear a hat" century-old brand lack of IP is not fragrant?

The ups and downs of the capital market, the rise and fall of the Chinese medicine sector have attracted the attention of
investors.
The stock price trend of some long-established pharmaceutical companies is also really worrying, and the most affected is still the lack of IP support of traditional Chinese medicine companies
.

On the evening of September 26, Tai'an Tang issued an announcement that due to the failure of the controlling shareholder's capital occupation to be repaid within the specified period, the company's stock will be suspended for one day from the opening of the market on September 27, and trading will resume at the opening of the market on September 28, after the resumption of trading, the company's stock will be subject to other risk warnings, and the stock abbreviation will be changed from "Tai'an Tang" to "ST Tai'an"
.

On September 26, Tai'an Tang fell shortly after the opening of the market, closing at 3.
38 yuan / share, September 28 morning, Tai'an Tang once again fell to a stop, as of the close, the price was 3.
28 / share
.
It hit a new low since February 2021, down more than 50%
from the all-time high of 8.
09 yuan per share on September 15, 2021.

In fact, since the beginning of this year, there have been many problems
in Tai'an Tang.
In addition to the illegal occupation of capital by the controlling shareholder, Tai'an Tang has not been able to disclose the 2021 annual report within the statutory time limit and has been investigated
by the CSRC.

In the annual report of Tai'an Tang's deferred disclosure, the operating income in 2021 decreased by 36.
79% compared with that in 2020; Net profit attributable to the parent company in 2021 was -803 million yuan, a year-on-year decline of -3714.
24%.

This is the first time that Taian Tang has experienced an annual loss since its listing in 2010
.

Tai An Tang explained that it was mainly due to the impairment of goodwill and the loss
generated by the divestiture of heavy assets.
The Company's acquisition of Hongxing Group in 2011 and Kangaiduo in 2014 formed goodwill of RMB130 million and RMB315 million respectively, resulting in a decrease of RMB445 million
in net profit attributable to the parent in 2021.

It is understood that Hongxing Group has been engaged in the production, sales and scientific research of traditional Chinese medicine for many years, and has a production base of proprietary Chinese medicines and health care products; Kangaiduo is one of the first batch of pharmaceutical e-commerce enterprises established in China, which can integrate the resources of Internet medical treatment, hospitals, doctors, pharmacies, patients and other resources in the pharmaceutical industry, help Tai'antang form a new "medicine + Internet" ecosystem, carry out value-added service business such as chronic disease management, and form a unique competitive advantage
in the field of chronic diseases.

Through this acquisition road, Tai'antang, which carries the traditional Chinese medicine gene, has transformed into a transformation "polyhedron"
integrating traditional skin traditional Chinese medicine, reproductive health, cardiovascular and cerebrovascular treatment, pharmaceutical e-commerce and other fields.

However, the development did not go as expected, in the first half of 2022, Tai'antang's revenue was 510 million yuan, down 58.
87% year-on-year, and the net profit attributable to the mother was -113 million yuan, down 121.
81%
year-on-year.
In response to the sharp decline in revenue, Tai'an Tang explained that the retail sales of pharmaceutical e-commerce in its subsidiary Kangaiduo decreased significantly during the reporting period
.

The decline in performance brought about by the "polyhedron" has also made investors question.

Some investors have raised concerns to Tai'antang: good companies have a fist product, such as Katazai Zhen, Tongrentang's Angong Niuhuang Pills, Jiangzhong Stomach Digestion Tablets, etc.
At present, Tai'an Tang lacks this "IP" heavy product
.

Industry insiders said that the structural opportunities of traditional Chinese medicine exist in some segments, such as oral preparations, and the market space for oral traditional Chinese medicine varieties with evidence-based medical evidence and guidelines is still large, and there is a certain opportunity to gradually replace the individual stocks of traditional Chinese medicine injections with the exact efficacy; At the same time, considering the "IP" attribute of classic Chinese medicine, the capital market is still willing to give a higher premium to Chinese medicine companies with classic secret recipes, which undoubtedly aggravates the "Matthew effect"
of the capital market.

The industry view generally believes that Chinese medicine companies have an "exclusive secret recipe" and that "IP" of products or brands is indeed a mature development path; At the same time, continuing to invest in innovative products, focusing on unmet clinical needs, and accelerating the launch of innovative Chinese medicine drugs are the key factors
for the steady development of more Chinese medicine enterprises and the long-term recognition of the capital market.

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