The hidden concerns behind the largest merger and acquisition case of domestic pharmacies: 2.74 billion whales swallowed Tang people, but the revenue of a single store declined

China Times (chinatimes.net.cn) reporter Yu Na Beijing reported

The fierce domestic chain pharmacy circles ushered in the highlight.

The listing retail chain Pharmacy Kenjia recently released a report on the purchase of major assets (draft), which plans to acquire 100%equity of Tang people medicine for 2.074 billion yuan, setting the largest amount of domestic pharmacy mergers and acquisitions. At the same time, this means that Jianzhijia will incorporate the 659 direct -operated stores of Tang Pharmaceuticals into His Majesty, and the business territory expands from the southwest to Hebei and Liaoning Province from the southwest.

Jianzhijia landed in the capital market in December 2020. In less than two years, under the blessing of capital, the expansion speed later lived up. From the base of the southwest region, it sounded the horn of expanding to the national market.

However, some people in the industry pointed out that as of the end of the first quarter of this year, Jianzhijia's asset -liability ratio reached 68.43%, and the book currency funds were 625 million yuan. In addition, Jianzhijia bought 659 direct -operated chain pharmacies in Tangren Pharmaceuticals for 2.274 billion yuan, and the acquisition price of single -room pharmacies reached 3.1472 million yuan.

Jianzhijia annual report shows that from 2019 to 2021, due to rapid expansion, the average revenue of pharmaceutical retail chain stores has declined year by year. Profit has also declined compared to the same period.

Jianjia's highly leveraged and high -priced acquisition of Tang Pharmaceuticals will cause a lot of pressure on the company's cash flow, goodwill and other financial indicators? In this regard, Jianzhijia said in an interview with the reporter of Huaxia Times, "If the project has important progress, the company will disclose relevant information to investors in a timely manner."

"The pressure of funds exists, but after all, there are so many stores business, so that the cash flow problem has caused the fund chain to break." Recently, Qian Lizheng, the founder of the Chinese Medical Man Club, told the reporter of the Huaxia Times, " Chain pharmacies are most likely to smash the funds on the expansion. How many stores should be made and how much turnover should be reached to increase net profit. However, if the expansion is too fast and internal collaborative management cannot keep up, it will put pressure on performance.

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Jianzhijia and Tang people were originally divided into north and south on the territory of the chain pharmacy. Established in 2003, Tangren Medicine was renamed Hebei Tangren Pharmaceutical Co., Ltd. in 2016. It is the first pharmaceutical retail company in Hebei Province that has passed the national GSP (drug business quality management specifications).

In 2020 and 2021, Tang Pharmaceutical's revenue realized revenue of 1.484 billion yuan and 1.469 billion yuan, respectively; net profit of home mother was 103 million yuan and 85.555 million yuan, respectively; the asset -liability ratio was 52.97%and 52.32%, respectively. Affected by the repeated new crown epidemic, some stores in the Tang Dynasty pharmaceuticals implemented a temporary closing store, "one retreat and two anti -anti" drugs, and other epidemic prevention and control requirements in accordance with the requirements of the epidemic control. Essence Although the business has returned to normal after the epidemic is stable, the cumulative number of performance has declined.

Jianzhijia, who started southwest, is the second chain pharmacy listed in Yunnan. It was listed on the main board of the Shanghai Stock Exchange on December 1, 2020. The business territory covers Yunnan, Chongqing, Sichuan, Guangxi and other regions. With the support of the funds raised by listing, Jianzhijia's circle of land expansion has shown an unstoppable trend.

One year before the acquisition of the Tang Dynasty medicine, Jian Jiajia included hundreds of stores of the opponent into Majesty through the continuous equity and asset acquisition operations. Among them, the largest acquisition amount was 100%equity of Pu'er Shipyard Pharmaceutical Co., Ltd. in November 2021, with a acquisition amount of 96.33 million yuan, involving 81 stores.

As of the end of the first quarter of this year, the total number of Jianjia stores reached 3,134. Compared with the end of the first quarter of 2021, the total number of stores increased by 928, ranking among the top five in the number of stores on the market chain, but there is still a certain gap compared to the volume of 7,000 stores in the four major chain pharmacies.

Since then, Jianjia has sounded the horn of expanding from the north, and determined the strategic goal of "based on Yunnan, deep cultivation of southwest, and expanding the country".

In the first stage of acquiring Tang people medicine, Jianzhijia will first acquire 80%of the equity of Tang Jingzhi partnership, Mingzhao Yuanzhi partnership, and a total of 80%of the Tang people held by the diligence partnership. After the transaction is completed, Tang people will become the holding subsidiary of Jianzhijia.

In the second stage, after the expiration of the performance commitment period, Jianjia will purchase the remaining 20%equity in accordance with the completion of the Tang people's pharmaceutical performance or in accordance with the conditions agreed in the agreement.

In this regard, Jianzhijia said that this move can retain a minority equity of Tang people's original shareholders, helping Tang people's medicine to successfully complete the business smooth transition, which will help to bind the interests of the original shareholders of the Tang Dynasty medicine with the interests of the target company to ensure that it The original shareholders play their role and advantages and fulfill their commitments.

"At present, the overall gross profit margin of the retail pharmacy is not too high, the cost of rent, personnel salary is very high, and the impact of the epidemic is greatly affected." Qian Lizheng believes that listed companies must look at performance. For speaking, if you want to see beautiful data, you still have to use mergers and acquisitions and expansion. These practices can increase profits faster, and it is unlikely to achieve greater performance growth through the adjustment of internal operation structure and management level. Quick expansion leads to performance pressure

The accelerated circle expansion allows chain pharmacy companies to make the plates larger, while challenging its financial and management level.

Affected by the changes in consumption habits under the influence of the epidemic, the upgrade of health demand driven by population aging, and multiple factors such as policies and drive hospital prescriptions. In recent years, the overall market size of China's retail pharmacy has grown rapidly, and it has undertaken a large number of consumer transfer needs. The market's attention is increasing.

According to the data of Fhstrilin, from 2016-2020, the domestic omni-channel retail pharmacy market quickly reached 122.2 billion yuan with a compound annual growth rate of 69.2%. It reached 619.7 billion yuan.

Among them, driven by prescription outflow, the proportion of prescription drugs in the market share of retail pharmacies increased, and the proportion of prescription drugs in 2020 was about 40%. It is expected that this data will rise to 56%by 2025.

At the same time, the market expansion, industry concentration and chain rate of retail pharmacies still need to be improved. In October 2021, the "Guiding Opinions on Promoting the High -quality Development of the Pharmaceutical Distribution Industry during the" Fourteenth Five -Year Plan "period released by the Ministry of Commerce proposed that by 2025, the annual sales of the top 100 pharmaceutical retail companies will account for more than 65%of the total drug retail market. , The overall target of the pharmaceutical retail chain is close to 70%.

At present, a group of domestic and regional market -leading pharmaceutical retail companies have a market share of about 3%, the industry concentration is still low, and there is still much room for development.

Since 2000, major listing chain pharmacies have successively opened mergers and acquisitions, and the competition in the industry has become increasingly fierce. In this year alone, there were several major cases of mergers and acquisitions of retail pharmacy. For example, in April, Yifeng Pharmacy announced that it was planned to contribute 204 million yuan, and acquired 51 % of the equity of Hunan Jiuzhitang Pharmaceutical Co., Ltd., a subsidiary of Jiuzhitang, and added more than 500 stores in Hunan in one fell swoop.

The old retail chain pharmacy "ordinary people" also disclosed new progress in expansion a few days ago. Its 10,000 stores opened in Taojiang County, Hunan.

At the same time, Jianjia also proposed that the company has determined the mid -term and long -term target market as the Beijing -Tianjin -Hebei, the Yangtze River Economic Belt, the Guangdong -Hong Kong -Macao Greater Bay Area, the Yangtze River Delta, Chengdu -Chongqing, and Chengdu -Chongqing. In other key areas, they will gradually change from regional chain retail companies to national chain retail companies. This means that there will be a package of expansion plans for implementation.

However, Jianjia also admits that due to the different economic development of various places, medical insurance policies and the regional competition in retail pharmacies, this will be tested on the integration and synergy after the acquisition. understand deeper.

In this regard, Jianzhijia mentioned in the report of major asset purchase reports (draft) that after crossing the original area to the northern region, the management radius expanded, and The talent team, marketing strategy, brand promotion, etc. have also put forward higher requirements. On the basis of maintaining the independent operation of Tang people, Jianzhijia will send the management team with the original operating management team of the Tang Dynasty pharmaceutical operation and management team to ensure a stable transition to the greatest extent. Affected by factors such as the regulatory environment, market environment, industry policy, corporate culture, management model, customer habits, and business management capabilities of listed companies, it can be maintained and improved on the basis of effective control and control of Tang people and their subordinates. Its operating efficiency and efficiency, and then achieve effective integration, still have certain uncertainty.

The Jianzhijia annual report shows that the company's revenue of pharmaceutical retail chain in recent years has declined. From 2019 to 2021, the revenue of single stores is 2.07 million yuan, 2.05 million yuan and 1.63 million yuan, respectively.

In the 2021 report, Jianzhijia mentioned the risk of rapid expansion that affects short -term performance and insufficient support for the human resources system. As of the end of the reporting period, the proportion of new stores and new stores accounted for 33.05%. Single -store output and ping effects have declined, which will put pressure on the company's short -term performance in the cultivation period. The gradual maturity of the stores will lay the foundation for the company's subsequent performance growth.

According to the first quarter report of Jianzhijia, the company's pharmaceutical retail operating income increased by 27.17%in January to March, driving the overall operating income by 24.28%. At the same time, the rapid expansion of the store's self -built scale has led to an increase in short -term performance pressure in the cultivation period of new stores and new stores. %,

Qian Lizheng believes that the expansion of mergers and acquisitions is the development path of retail chain pharmacies, but also facing challenges. Based on the base area, chain pharmacy companies focus on the core market, and then steadily expand.In the end, performance may be difficult to meet expectations.Xuexue Editor: Editor of Yan Yuan: Chen Yanpeng

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