In 2022, "10,000 pharmacies" will appear in batches, and chain giants will do this!

In the modern economy and society, the pervasive capital is indeed like a big net, which covers every enterprise, and the chain pharmacy is no exception; the blood, power and will of capital have already penetrated into the ecology of the chain pharmacy, controlling the pharmacy.
Long-term planning and standardized operations also spur the chain pharmacies to develop better and faster with their profit-seeking nature
.
If the capital is completely stripped from every pharmacy in the pharmaceutical retail industry, the rest may be a piece of chicken feathers
.
The network of capital mergers and acquisitions has a more profound and in-depth impact on listed chains
.
The capital market provides an endless source of funds for the development of listed chains, and capital mergers and acquisitions have long been the most direct and effective way for listed chains to become bigger and stronger
.
If it is said that Yixintang won the "first stock of listed chain drugstores" in July 2014, it only made the industry feel envious and yearn for the "myth of making wealth" in the stock market, then seven years later, the competition situation of the entire industry has become more and more severe, and the listed chain The formation of the sector and the expansion of the country with the benefits of capital, and the rapid growth of the former brothers and sisters into the head chain through capital mergers and acquisitions, etc.
, make the chain drugstores outside the capital market feel the huge development pressure and the chill that the competition is approaching step by step, landing capital Market, leveraging capital mergers and acquisitions to seek development has become a major issue related to the survival of the pharmacy industry
.
The development history of listed chains is, to some extent, the evolutionary history of continuous mergers and acquisitions and continuous expansion
.
In 2021, the power and stamina of capital mergers and acquisitions will be particularly evident in the pharmaceutical retail industry
.
The past of capital mergers and acquisitions The pharmacy mergers and acquisitions in 2021 have the following characteristics: First, the stars of pharmacy mergers and acquisitions in 2021 are the common people
.
Almost all major projects during the year were promoted by ordinary people: 680 million yuan was spent to acquire 100% equity of Chifeng Renchuan, Inner Mongolia, and 287 stores were acquired in one bite; the acquisition of 51% equity of Hebei Huatuo Pharmacy cost 1.
428 billion yuan.
The amount is still the number of 715 stores, which are among the top major mergers and acquisitions in the industry; the acquisition of the remaining shares of Lanzhou Huirentang and "Jiangsu's top three" Huakang Pharmacy, Jiangsu Baijiahui, and Taizhou Longtaiyuan shows that the common people's previous mergers and acquisitions met expectations
.
On the evening of December 10, the end of the year, the common people added another fire: it is planned to transfer 46%-72% of the equity of Huairen Great Health held by some shareholders of Hunan Huairen Great Health in cash, and the Huairen Great Health will be transferred to Huairen Great Health.
Health has more than 650 self-operated pharmacies in Hunan and Guizhou, and the number of ordinary people's stores in Hunan is expected to reach 2,700, becoming the leading pharmacy in Hunan Province
.
Second, the listed chain is almost the same strategy, the same goal, the same pace of mergers and acquisitions at the same time
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At the beginning of the year and before, several major chains, such as Common People, Dashenlin, and Yifeng, successively shouted the goal of "expanding 2,000 stores per year in the next three years".
The industry is actually skeptical about this.
Ferocious and unstoppable
.
In the first three quarters, ordinary people added 1,866 new stores, plus 650 Huairen Great Health, not counting other expansion stores in the fourth quarter, there were already more than 2,500 stores, of which 1,185 were acquired
.
In the first three quarters of Dashenlin, there were 29 mergers and acquisitions involving 839 stores, of which 20 were newly signed mergers and acquisitions involving 685 stores
.
Even the newly listed upstart Jianzhijia has focused on deployment in Yunnan and Guangxi provinces in the first three quarters, and 8 mergers and acquisitions have occurred, involving 172 stores
.
Third, the strategic intentions of the listed chains in the mergers and acquisitions in 2021 are very obvious
.
Inner Mongolia Chifeng Renchuan and Hebei Huatuo Pharmacy acquired by the common people during the year are the leading regional leaders in the local area.
After the acquisition of Chifeng Renchuan and Tongliao Zeqiang, which has been acquired before, they have a strong synergy and echoes, which further strengthens the leading edge of the Inner Mongolia market and is conducive to Integrate regional mining resources, improve bargaining power and market influence; after the acquisition of Hebei Huatuo, ordinary people will have strategic support, and in the future, they can steadily build strongholds and gradually expand their sphere of influence
.
The single acquisition of Dashenlin is not large, but there are 7 layouts in Heilongjiang, involving 184 stores, obviously adopting the strategy of "cleaning and cleaning again"
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Fourth, the dust has not yet settled, and the market structure of my country's pharmacy industry will undergo major changes with major mergers and acquisitions.

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In recent years, Yixintang has been the listed chain with the largest number of stores by taking advantage of the earliest IPO listing.
As of the third quarter of 2021, the total number of stores is 8,356, followed by 8,163 stores.
, the number of stores will exceed Yixintang in one fell swoop
.
Over the years, Yixintang has always insisted on developing directly-operated stores and not involved in franchise business, and the new stores have also turned to self-built new stores.
Yixintang only has a target of more than 1,000 stores, and the crown of the chain with the most listed stores may change hands soon
.
In terms of regional layout, Jianzhijia’s “roadmap” of gradually expanding to Guangxi, Sichuan and Chongqing with Yunnan as its base area is highly overlapping with Yixintang, and a rivalry between the top two is inevitable; in the Northeast region, Dashenlin has already entered the market first.
And through mergers and acquisitions to speed up the layout, Shuyu civilian has successively established wholly-owned subsidiaries in Harbin and Shenyang for the purpose of expansion in other provinces, making it clear that it will be prosperous to "break through the East"; in North China, Yifeng Pharmacy has been early In July 2018, a huge investment of 1.
38 billion yuan was spent on the acquisition of Hebei Xinxing Pharmacy.
This time, the common people spent 1.
428 billion yuan to acquire Hebei Huatuo, which will surely shake the market pattern in North China
.
Hope of Capital M&A Once the "chariot" of M&A is started, it will not stop in the short term, nor will it stop
.
It is certain: under the combined action of internal and external factors such as industry policies, competition needs, market value drivers, etc.
, the intensity and depth of capital mergers and acquisitions in China's pharmaceutical retail industry in 2022 will be more fierce, and the momentum of a new round of large-scale mergers and acquisitions of pharmacies is expected to continue to the "Tenth".
Four or five" at the end
.
The national competent department encourages and supports the head chain to become bigger and stronger, so as to drive the pharmacy chain rate to 70%
.
On October 28, 2021, the Ministry of Commerce issued the "Guiding Opinions on Promoting the High-Quality Development of the Drug Circulation Industry during the "14th Five-Year Plan" Period", proposing that "by 2025, 5-10 professional and diversified companies with over 50 billion yuan will be cultivated.
The annual sales of the top 100 pharmaceutical retail companies account for more than 65% of the total pharmaceutical retail market; the drug retail chain rate is close to 70%
.
"This policy guiding document has laid the main tone for the development of China's pharmaceutical retail industry in the next five years: increasing scale, improving level, specialization, diversification, and high-quality development
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In 2020, Yixintang, Yifeng Pharmacy, ordinary people, large Shenlin achieved operating income of 12.
656 billion yuan, 13.
145 billion yuan, 13.
967 billion yuan, and 14.
583 billion yuan respectively; according to the calculation of Pacific Securities, the operating income of the above four listed chains in 2021 is expected to complete 15.
250 billion yuan, 15.
248 billion yuan, and 15.
782 billion yuan respectively.
, 17.
353 billion yuan, based on the forecast value in 2021, to complete 50 billion yuan in revenue by 2025, with an average annual growth rate of 34.
56%, 34.
57%, 33.
41%, and 30.
28%, which is much higher than the average annual growth rate of listed chains in recent years.

Obviously, accelerating the expansion of mergers and acquisitions is the only way
.
The annual limit of 2,000 stores for head chains will definitely be broken again and again
.
Under the guidance of the "Opinions" of the Ministry of Commerce, the industry encourages and supports mergers and acquisitions.
The policy environment can be expected
.
In 2020, we will shout "" The listed chains with the slogan of adding 2,000 stores have exceeded their goals, while others still have a certain gap.
Among them, ordinary people have added at least 2,516 stores, which can be called "leaders in mergers and acquisitions"
.
Under the effect of "herd effect" , other chains will accelerate the pace of follow-up mergers and acquisitions to maintain a new balance of the total number of stores
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With the help of capital mergers and acquisitions, "Wanjia Pharmacies" will soon appear in batches.
Dashenlin, Yixintang and Guoda Pharmacy will join the “Millions Club” smoothly
.
Scale has always been one of the largest core competitiveness of China's pharmacy industry, and pharmacy sales, single product purchase price, upstream resources and academic support are all equal It is positively related to the scale of pharmacies and the number of stores.
"Wanjia Pharmacy" has always been the heart and dream of China's pharmacy industry
.
In the past few years, many enterprise groups have successively called for the establishment of "10,000 pharmacies" and "50,000 pharmacies".
”, but it was all lost and even the corporate deity did not exist.

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This time, the "Wanjia Pharmacy" is close at hand, especially the total number of stores for ordinary people is close to 9,000.
It can be said that the total number of stores in 2022 will exceed 10,000.
It is a certainty; by the end of the third quarter of 2021, there will be 8,356 Yixintang stores and more than 8,600 Guoda Pharmacies.
Yifeng Pharmacy and Dashenlin, which have 7,000-8,000 stores and stores, will also join the battle
.
Capital mergers and acquisitions are not the patent of listed chains.
In fact, many chains to be listed have been active practitioners and promoters of store mergers and acquisitions
.
Compared with the M&A driving force of the listed chain, the chain to be listed is even worse.
On the one hand, it is the urgent need of the pharmacy founder and entrepreneurial team to increase the assets and wealth, and on the other hand, the PE/VC added in the process of entrepreneurial development.
Other institutions also urgently need to complete the realization or exit through IPO listing.
The chain itself needs to enhance its competitiveness and become stronger and bigger, and it is inseparable from the blessing of the capital market
.
Up to now, a number of leading pharmacies are planning or promoting listing matters, including Quanyuantang, Anhui Chinese Health, Yangtianhe, Guizhou Yishu, Gansu Deshengtang, Zhejiang Ruirentang,
etc.
Under the background of the reform of the issuance registration system, the process of listing chain pharmacies will be accelerated, but relying on mergers and acquisitions to expand and strengthen themselves will undoubtedly help the IPO of the proposed listing chain dream
.
In 2022, the M&A expansion of listed chains has a lot to watch
.
First, after handing over the excellent transcripts of more than 2,500 new stores in one fiscal year, what big moves will ordinary people release in the new year, and which M&A target will be the lucky winner of the 10,000th store? Second, Yixintang, which has always adhered to the direct sales model for many years, has not had any decent mergers and acquisitions in the past year.
How will it be vigorous in the new year, and will it change its strategy to accelerate expansion through joining? Third, when did overseas M&A expansion take the first step, and who was the first to “eat crabs”? On October 8, 2019, Yixintang and Oushi Pharmaceuticals of the United States opened the first American store on the famous Fifth Avenue in Manhattan, New York.
Although its sales revenue was not large, it caught up with the epidemic after opening.
The performance has grown significantly, greatly enhancing the brand recognition of Yixintang in the US market
.
Fourth, after Alibaba Health, JD Health and other e-commerce companies complete their online layout, will they turn around and start M&A of offline brick-and-mortar stores? How to quickly connect the weaving network to realize the integration of offline and online in the modes of "pick up at online order" and "delivery at online order" that have been recognized by high-level executives? What role will capital mergers and acquisitions play in this process, etc.
, are also of concern to the industry
.
The confusion of capital mergers and acquisitions Capital mergers and acquisitions have brought expected benefits to chain pharmacies
.
Take the common people as an example
.
As of the end of September 2021, its marketing network has covered 22 provincial markets across the country and more than 140 cities above the prefecture level, with 8,163 stores, including 6,055 directly-operated stores and 2,108 franchised stores; the proportion of directly-operated stores in TCM insurance 87.
37%, 10% of the hospital side stores, 425 special outpatient clinics, 145 DTP pharmacies, including 93 dual-channel qualified DTP pharmacies
.
Relying on the strong store layout and capital strength, the common people vigorously promoted digital transformation, new retail and other businesses.
In the first nine months of 2021, the online channel achieved sales of 500 million yuan, a year-on-year increase of 160%
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But what cannot be ignored is the "merger syndrome" that accompanies mergers and acquisitions and the "big business disease" that must be prevented
.
After frequent large-scale mergers and acquisitions, and after the company has passed the "M&A bonus period", there may be situations such as a substantial increase in revenue but a decline in profits instead of an increase, excessive dependence on external forces of mergers and acquisitions, endogenous chain forces and lack of innovation spirit, resulting in sluggish operations.
In serious cases, the acquirer and the original entity are even dragged down by mutual constraints
.
As for the disease of large enterprises, it is more common in large enterprises and groups in China.
When the number of subordinate stores in the chain reaches tens of thousands and the revenue scale is tens of billions of yuan, the management, control and overall efficiency of the headquarters may be seriously weakened.
This is also the author.
The reason for questioning "where is the 'ceiling' for the expansion of the total number of chain drugstore stores in China"
? Large-scale, high-intensity, and continuous expansion of capital mergers and acquisitions also brings potential risks to chain pharmacies, such as potential operation, decline in efficiency, and tight capital chain, especially merger integration risks and high goodwill risks.

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As of the end of the third quarter of 2021, the balance of cash and cash equivalents of ordinary people was 416 million yuan, a decrease of 35.
5% from the 645 million yuan in the same period of 2020.
If large sums of money continue to be invested in mergers and acquisitions, there will inevitably be problems such as a surge in debt ratio and liquidity; even if Having sufficient bank credit lines will also significantly increase management, financial and other expenses and reduce the profitability of pharmacies
.
Many acquisitions at a high premium have resulted in high goodwill.
As of the end of the third quarter of 2021, the goodwill of ordinary people reached 3.
638 billion yuan.
After the acquisition of Hunan Huairen Health at a premium, the goodwill will further increase; if the benefits of the acquisition target are not as good as expected, it is very easy There is a "goodwill thunder" risk
.
There are also many variables in the capital mergers and acquisitions in the pharmacy circle in 2022
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The biggest variable comes from whether the withdrawal of non-industry capital such as PE/VC will trigger the "butterfly effect"
.
China's pharmaceutical retail industry ushered in a boom in non-industry capital in 2016.
The initiators were PE/VC represented by Hillhouse Capital and Cornerstone Capital, who established Gaoji Medical and Quanyi Health through rapid and continuous mergers and acquisitions; after that, Sinopharm Holdings, the four major privately-owned listed chains, industrial companies, and Internet companies have joined the M&A battle and pushed up store valuations.
It took more than two years for the market to digest the subsequent impact until a new round of mergers and acquisitions was restarted in 2021
.
In May 2021, Cornerstone Capital announced that it will transfer all the shares of 100 million health shares it holds to a large well-known private equity investment institution, setting the largest merger and acquisition in the pharmaceutical retail field in recent years
.
According to media verification, the buyer of Quanyi Health is KKR, an international PE giant known as the "King of Wall Street Acquisitions"
.
In order to build a health of 100 million yuan, Cornerstone Capital has invested more than 3 billion yuan successively, and it has spent a lot of human, financial and material resources in terms of operation, management, resources, etc.
This time, the decision to withdraw from the whole body is arousing imagination
.
Non-industry capital with deep pockets and high stakes has brought development opportunities to China's pharmacy industry, but it also brings great uncertainty.
For example, the "butterfly effect" caused by the exit of individual capital will have an adverse impact on the future development of the industry
.