Recently, the leading pharmaceutical platform Guobang Pharmaceutical (605507. SH) disclosed its 2023 annual report, the company achieved revenue of 5.349 billion yuan last year, a year-on-year decrease of 6.49%, and a net profit attributable to the parent company of 612 million yuan, a year-on-year decrease of 33.49%.
The decline in revenue and net profit was mainly due to the decline in the price of some products of Guobang Pharmaceutical and the decrease in the gross profit margin of major products. It is even more regrettable that Guobang Pharmaceutical's two main businesses, pharmaceutical and animal protection sectors, have declined, and how to get back on the right track of growth as soon as possible has become a top priority.
Post-IPO performance fluctuated
According to the official website, Guobang Pharmaceutical, founded in 1996, is a pharmaceutical manufacturing company facing the global market, with multiple varieties and self-production capabilities of a variety of key intermediates, and is also one of the top 100 enterprises in China's pharmaceutical industry.
After nearly 30 years of development, Guobang Pharmaceutical has formed the advantages of "one system and two platforms", that is, an effective management and innovation system, an advanced and complete large-scale manufacturing platform, and a wide and effective global market channel platform.
Guobang Pharmaceutical started with animal protection preparations and feed additives, and gradually expanded to the fields of animal protection APIs, pharmaceutical intermediates, pharmaceutical raw materials and preparations, and the company's business can be divided into pharmaceutical sector and animal health products sector. Among them, the pharmaceutical sector covers pharmaceutical raw materials, key pharmaceutical intermediates and preparations, and the animal health products sector covers animal protection APIs, animal protection additives and preparations.
Before the listing, Guobang Pharmaceutical's revenue and net profit still maintained a good trend of stable growth, but after successfully landing in the capital market, the company's performance has fluctuated greatly.
According to the disclosure, from 2018 to 2020, Guobang Pharmaceutical's main business income increased from 3.279 billion yuan to 4.206 billion yuan, and its net profit also increased from 483 million yuan to 810 million yuan. However, after going public in 2021, the company's performance has fluctuated greatly.
From 2021 to 2023, Guobang Pharmaceutical's revenue will be 4.505 billion yuan, 5.721 billion yuan, and 5.349 billion yuan, respectively, and the net profit attributable to the parent company will be 706 million yuan, 921 million yuan, and 612 million yuan respectively. On the whole, its performance fluctuates greatly, and its net profit in 2023 will drop by more than 30% compared with the same period in 2022.
Regarding the decline in performance in 2023, Guobang Pharmaceutical explained that the decline in revenue was mainly due to the significant decrease in the prices of some major products compared with the same period last year, while the decline in net profit was due to the significant decrease in the prices of the company's main products compared with the previous year, and the gross profit margin decreased.
Both major businesses declined
With the rapid development of the domestic pharmaceutical industry, the concentration has gradually increased. According to the forecast of Mordor Intelligence, the global API market size will reach 236.7 billion yuan in 2024, and the market size is expected to reach 245.9 billion US dollars by 2026, with a compound annual growth rate of 5.84% from 2021 to 2026. At the same time, the global API market is gradually fragmenting and has begun to shift to the Asia-Pacific region.
In recent years, Guobang Pharmaceutical has continuously shifted its business focus to the field of pharmaceutical APIs. From 2017 to 2019, Guobang Pharmaceutical's exports of azithromycin APIs, clarithromycin APIs and (hydrochloric acid, lactic acid) ciprofloxacin APIs all ranked first in mainland China, and the company's market influence continued to rise. In addition, the company also has more than 20 mature products involving antibiotics, cardiovascular system, respiratory system, urinary system, anti-tumor and other fields.
Taking advantage of the momentum, Guobang Pharmaceutical has gradually become a leading domestic pharmaceutical platform enterprise, and the pharmaceutical business has gradually become the sector that contributes the most to the company's performance. According to the 2023 annual report, the operating income of Guobang Pharmaceutical's pharmaceutical sector is 3.485 billion yuan, accounting for 65.15% of the revenue.
However, as domestic enterprises continue to enter the field of APIs, the competition in the API market has intensified, and Guobang Pharmaceutical has also suffered a lot of pressure. In the company's 2023 annual report, the company pointed out that the common overcapacity problem in the domestic industry will inevitably bring great challenges to the operation of some of the company's main products.
According to the disclosure, the gross profit margin of Guobang Pharmaceutical's pharmaceutical sector in 2023 will be 25.37%, a decrease of 6.69 percentage points from the same period last year. In terms of products, the gross profit margin of pharmaceutical raw materials was 21.68%, a decrease of 3.83 percentage points compared with the same period of last year, and the gross profit margin of key pharmaceutical intermediates was 34.05%, a decrease of 9.12 percentage points compared with the same period of last year.
The pharmaceutical sector has suffered setbacks, and Guobang Pharmaceutical's animal protection business has also encountered a lot of trouble.
It should be noted that the animal protection industry is one of the upstream industries of livestock and poultry breeding industry, and it is an important link to reflect the economic benefits of breeding. In 2023, the prosperity of the downstream aquaculture industry will be low, the production capacity of large and medium-sized veterinary drug API enterprises will continue to expand, the supply will be relatively excessive, and the price competition in the industry will be fierce, which will make it difficult for some small and medium-sized enterprises to maintain their operations in the competition, and the pressure on industry integration and elimination will increase.
Guobang Pharmaceutical has been deeply engaged in the operation and production of animal protection products since its establishment, and although it has a certain first-mover advantage, the revenue of this business has also declined in the past two years.
According to the disclosure, the operating income of Guobang Pharmaceutical's animal health products segment decreased from 2.089 billion yuan in 2022 to 1.835 billion yuan in 2023, a decrease of 12.19%. The gross profit margin remained relatively stable, with a gross profit margin of 19.54% in 2023, an increase of 0.04 percentage points compared with 2022.
Next, how to promote the two main businesses to return to growth as soon as possible is a problem that Guobang Pharmaceutical needs to think about.
The stock price has been weakly adjusted for a long time
At the same time as announcing the 2023 performance report, Guobang Pharmaceutical also disclosed the results for the first quarter of 2024. In the first quarter of this year, the company achieved revenue of about 1.339 billion yuan, a year-on-year decrease of 5.07%, and net profit attributable to the parent company of about 199 million yuan, a year-on-year increase of 2.11%.
Judging from the data changes alone, Guobang Pharmaceutical's net profit increased year-on-year, but the increase was relatively small. However, after disclosing its performance report, Guobang Pharmaceutical gained a long-lost price limit.
On April 16, when nearly 95% of the stocks in the A-share market closed in the green, Guobang Pharmaceutical bucked the trend and reaped the daily limit. In the case of relatively average performance, it is not easy for Guobang Pharmaceutical to have such performance in the capital market.
The after-hours list of the day showed that institutions bought a net of 3.6732 million yuan, and the Shanghai-Hong Kong Stock Connect net bought 9.2799 million yuan. A total of three institutional seats appeared, namely buy two, buy four, and sell two, with a total purchase amount of 20.9351 million yuan, a sell amount of 17.2619 million yuan, and a total net purchase of 3.6732 million yuan. On April 17, Guobang Pharmaceutical's share price did not continue to be strong, and opened sharply lower in early trading. As of press time, Guobang Pharmaceutical fell 1.26% to 16.52 yuan per share.
Lanfu Financial Network noticed that Guobang Pharmaceutical created a record high of 46.60 yuan per share on the second trading day after listing, and since then, the stock has been in a volatile downward trend for a long time, with a cumulative decline of 63.84%. Although the short-term limit has been gained, the long-term downward trend may still not satisfy investors.