Cairolu City is the first?Xiaofang Pharmaceutical IPO: Weak profit, rising raw material costs

More than half of Xiaofang Pharmaceutical's operating income comes from two products: Kaiseru and glycerin enema agents, but during the reporting period, the price of raw materials of the two products continued to rise, and the market share of Kaiseru was declining.

"Investment Times" researcher Li Muyang

With the rapid economic development and the improvement of the domestic medical system, people's awareness of health has continued to increase, and the strategic value of the biomedical industry has continued to increase.

Recently, Shanghai Xiaofang Pharmaceutical Co., Ltd. (hereinafter referred to as Xiaofang Pharmaceutical) submitted a prospectus to the Shanghai Stock Exchange and applied to the main board of the Shanghai Stock Exchange.

In this IPO, Xiaofang Pharmaceutical plans to publicize the issuance of RMB ordinary shares (A shares) of no more than 40 million shares, and it is planned to raise 1.343 billion yuan. "" Marketing System Construction and Brand Promotion Project "and supplementary mobile funds.

Looking for the prospectus of Xiaofang Pharmaceutical, the researcher of the Investment Times noticed that in 2019, 2020, and 2021 (hereinafter referred to as the reporting period), Xiaofang Pharmaceutical's profitability has declined, and the revenue relies on two main products. At the same time, the company's mobile ratio and rapid rate ratio decreased year by year, asset -liability ratio increased, and debt repayment capacity decreased.

Revenue is dependent on Cairolu and glycerin enema

Xiaofang Pharmaceutical was established in 1993 and founded the "Xinlong" trademark in 2002. The company mainly conducts the research and development, production and sales of external drugs. A variety of external drug products under the brand are common medicines in people's daily life, such as Kaisu, glycerin enema, stovenium washing agent, zinc oxide ointment, water Yang Yang Sour ointment and so on.

The main business income of Xiaofang Pharmaceutical is mainly for sales of external drugs such as Kaisalu. During the reporting period, the company's main business revenue was 339 million yuan, 361 million yuan, and 401 million yuan, respectively, and the proportion of operating income was 99.78%and 99.82, respectively. %And 99.88%, the main business income is outstanding. From the perspective of product classification, the main drugs sold by Xiaofang Pharmaceuticals are digestive and skin. The total income of the two accounts for 92.85%, 95.09%, and 95.44%of the main business income. The product structure is relatively single.

In terms of further subdivision, the company's digestive drugs are mainly Kaisalu and glycerin enema agents. During the reporting period, the total operating income of the two drugs was 201 million yuan, 211 million yuan and 222 million yuan, respectively, accounting for digestive drug income The proportion has always been 100%, accounting for 59.28%, 58.65%, and 55.30%of the main business income, respectively. In other words, the company's income of more than 50 yuan per 100 yuan is brought by Kaiseru or glycerin enema.

Single product structures also easily lead to unstable operating performance. If the company's market competition pattern, production raw materials, and sales conditions rely on the product, it will have a great impact on the company's production and operation.

It is worth noting that Xiaofang Pharmaceutical's operating income relies on Kaiseru, but the company's market share of Cairo products has declined year after year and faster. According to the data of Mine.com, the market share of Xiaofang Pharmaceutical production during the reporting period was 19.93%, 17.57%, and 16.06%, respectively, while Yikang Pharmaceutical and Suichang Huikang and other industries were comparable to the Cairo Institute produced by the company. The market share has continued to rise. Although the Kaisuyu market share of Xiaofang Pharmaceuticals is still leading, in the long run, the first place is difficult to support.

Xiaofang Pharmaceutical and Alma company Kaiseru's market share proportion

Data source: company prospectus instructions

Raw material prices continue to rise

Looking at the Xiaofang Pharmaceutical Prospectus, the researcher of the Investment Times noticed that the company's profitability needs to be improved. During the reporting period, the net profit of Xiaofang Pharmaceutical's mother was 142 million yuan, 160 million yuan, and 126 million yuan, respectively, showing a trend of volatility.

On the whole, the decline in the company's profits may be related to rising costs. Kaiseru is a product that is more dependent on Xiaofang Pharmaceutical, and glycerin is an important raw material for Kaisu. During the reporting period, the cost of glycerin accounted for about 30%of the production cost, which directly affected the cost of the company's products. However, due to the impact of the new crown pneumonia's epidemic, glycerin raw material palm oil production has decreased, and the international shipping cycle lengthened, resulting in the continuous rise in the prices of glycerin.

In December 2021, the average purchase price (excluding tax) of the company's glycerin in the month was 12.69 yuan/kg, an increase of 80.51%from the average procurement price in January 2019, a large increase. In addition, glycerin procurement price still shows a trend. In May 2022, the average purchase price of glycerin of Xiaofang Pharmaceutical had exceeded 13 yuan/kg. If the price of raw materials such as glycerin and other raw materials continued to rise in the future, the company's production cost will be greatly increased, which directly affects the company's net profit.

In addition, stove Ganshi powder is the main raw material of the company's products of Ganshi, which is chemical synthetic raw materials, and the price has been rising. During the reporting period, the prices of furnaces were 50.99 yuan/kg, 51.33 yuan/kg, and 52.80 yuan/kg, respectively, with an increase of 0.66%and 2.88%, respectively.

It is worth noting that Xiaofang Pharmaceutical's debt repayment capacity is not as good as the company.According to the prospectus data, at the end of each period of the reporting period, Xiaofang Pharmaceutical's flow ratio was 4.10, 3.35, and 2.10, respectively, and the speed ratio was 3.36, 2.77, and 1.76, respectively, and the asset -liability ratio of the parent company was 23.07%, 24.24%, and 40.65%, respectively.It can be seen that the company's mobile ratio and speed ratio have declined year by year, and the asset -liability ratio has increased year by year.During the same period, the average of the comparison of the company's comparison companies such as Fuyuan Pharmaceutical, Ma Yinglong, and Renhe Pharmaceuticals was 2.88, 2.70, and 2.76, respectively, with the average speed ratio of 2.40, 2.24 and 2.35, and the average asset -liability ratio was 29.88%, 30.58%and 30.58%and 30.58%.30.49%.It can be seen that the industry's flow ratio, speed ratio and asset -liability ratio are relatively stable, while the debt repayment indicators of Xiaofang Pharmaceutical gradually deteriorate, and the debt repayment capacity continues to decline.

The comparison of the debt repayment capacity of Xiaofang Pharmaceutical and the same industry company

Data source: company prospectus instructions

- END -