The wave of mergers and acquisitions of chain pharmacies will continue, and these problems need to be solved urgently

Recently, the common people announced that the company has received a total of 285 million yuan in total paid by the company from the seller, Hebei Huatuo Pharmacy Pharmaceutical Chain Co.
, Ltd.
(hereinafter referred to as "Huatuo Pharmacy") on March 15, 2022
.
It is reported that on March 7, the common people disclosed the announcement to terminate the acquisition of Huatuo Pharmacy's equity
.
In addition to terminating the acquisition, on March 3, the common people also transferred 100% of the equity of Yifeng Xinxing Pharmacy Chain Hebei Co.
, Ltd.
, which was taken over by Shijiazhuang Xinxing Pharmacy Chain Co.
,
Ltd.
It is worth noting that the common people issued a new acquisition announcement during the same period of terminating the acquisition and transfer
.
On March 7, the common people announced that they planned to acquire Hunan Huairen Great Health Industry Development Co.
, Ltd.
(hereinafter referred to as "Huairen Health Industry Development Co.
, Ltd.
") held by 14 counterparties including Lin Chengxiong and Chen Yuping with its own funds of RMB 1.
637 billion (including loans).
Renta Health”) 71.
9643% stake
.
In this regard, the industry believes that this reflects the current development trend of the chain pharmacy industry, and the "big deal" mergers and acquisitions of leading chains are still going on
.
It is reported that in recent years, the pace of acquisitions of the common people has not stopped
.
Data shows that the pace of expansion of ordinary people's stores is steadily accelerating
.
As of September 30, 2021, the common people had 8,163 stores, including 6,055 directly-operated stores and 2,108 franchise stores
.
In addition to ordinary people, in fact, the drama of large and small chain mergers and acquisitions has been staged in the industry
.
Whether it is Yixintang, Yifeng, which were listed earlier, or Dashenlin, Jianzhijia, and Shuyuping, who have entered the capital market, M&A is now an important strategy for the company to expand its territory
.
For example, on February 28 this year, Yunnan Jianzhijia issued an announcement on planning a major asset reorganization and signing an agreement of intent for equity acquisition
.
The announcement stated that it intends to acquire 80%-100% of the shares of Tangren Pharmaceutical held by the shareholders of Hebei Tangren Pharmaceutical after the reorganization through cash payment.

.
It is understood that Hebei Tangren Pharmaceutical involves about 660 stores, of which the stores in Hebei Province are mainly located in Tangshan and Qinhuangdao, which are the largest chain pharmacies in the two regions
.
Through this acquisition, the common people will realize the acquisition of Tangren Pharmaceutical chain pharmacy brand and directly-operated stores, various operating assets, operating resources and operating rights and interests, and promote the company's business expansion in the Bohai Rim region with Beijing-Tianjin-Hebei as the core
.
In addition, many chain pharmacies have launched the "10,000-store plan" in the past few years to accelerate their expansion
.
For example, Sinopharm Holding Guoda Pharmacy disclosed earlier that by 2025, Guoda Pharmacy will achieve sales of 60 billion and more than 20,000 stores
.
The People's Pharmacy revealed at the 2020 shareholders' meeting that in the next two years, the people will still maintain the rhythm of fast store opening, in order to drive the company's future performance to grow steadily
.
According to the 3-year plan proposed by the common people in 2019, 2,000 new stores will be added every year until 2022.
.
.
In this context, the industry expects that with the continuous expansion of chain drugstore giants, the industry concentration will continue to be steady in the future.
With the increase, the outflow of prescriptions is expected to accelerate under the resonance of multiple factors, the long-term development space of the industry will be very broad, and a large number of chain pharmacies are expected to continue to further expand their development advantages and enhance their competitiveness
.
However, it should be noted that since the market chain rate of China's pharmaceutical retail industry is still low, there is still a competition pattern of many, small and scattered; therefore, with the continuous expansion of chain drugstore giants, some small single drugstores or small chain enterprises The exit from the market will be accelerated, and industry competition will be further intensified
.
In addition, for many drugstore chain giants, although they are expanding through continuous mergers and acquisitions; however, the asset-liability ratio of many pharmaceutical chain giants is above 50%; this will also lead to how to control the risk of goodwill impairment.
, become a problem that these chain pharmacies must face
.
Disclaimer: Under no circumstances does the information or opinions expressed in this article constitute investment advice to anyone
.