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"Investor's Network" Xie Yingjie
An announcement unveiled the announcement of Humanwell Pharmaceutical Group Co., Ltd. (hereinafter referred to as "Humanwell Pharmaceutical", 600079. SH) is the tip of the iceberg of pressure.
According to public information, on April 3 and April 7, the People's Court of Wuhan East Lake High-tech Development Zone issued two enforcement judgments, due to contract dispute cases, the court took restrictive consumption measures against the actual controller Ai Luming, requiring him not to implement high consumption and consumption behaviors that are not necessary for life and work.
This pharmaceutical company, which was born with a golden key, has gradually grown into a leading domestic anesthesia enterprise after listing, and its business scope has covered many fields such as medicine, health care products, medical devices, preparation exports, and medical services, with a market value of nearly 40 billion yuan. On the other hand, it continues to invest in long-term industries, and the stagnation of traditional businesses has caused tensions in the capital chain, and its development has fallen behind.
In 2023, Humanwell Pharmaceutical's total operating income will be 24.525 billion yuan, a year-on-year increase of 9.79%, and the net profit attributable to the parent company will be 2.134 billion yuan, a year-on-year decrease of 14.07%.
Fundamental worries remain
As the "first brother of anesthesia", Humanwell Pharmaceutical is mainly engaged in the production of drugs for the nervous system, steroid hormones, Uygur ethnic medicines and other drugs, and has gradually expanded the generic drug business in the United States in recent years. Narcotic drugs belong to the domestic strongly regulated industry, some anesthetics are controlled drugs, manufacturers and distributors have very strict requirements, and the industry presents an oligopoly competition situation.
From 2020 to 2023, Humanwell Pharmaceutical's revenue will be 20.68 billion yuan, 20.55 billion yuan, 22.338 billion yuan and 24.525 billion yuan, with relatively stable growth, and the net profit attributable to the parent company will be 1.006 billion yuan, 1.317 billion yuan, 2.484 billion yuan and 2.124 billion yuan.
The high investment and long-term characteristics of the biopharmaceutical industry mean that the biopharmaceutical industry has extremely high requirements for capital levels, but the company's situation is not optimistic.
As of the end of 2023, Humanwell Pharma had monetary funds of 4.1 billion yuan, short-term borrowings of up to 6.712 billion yuan, non-current liabilities due within one year of 900 million yuan, and net cash flow from operating activities of 1.967 billion yuan, a year-on-year decrease of 19.41%.
On the other hand, the capital turnover rate of Humanwell Pharmaceutical is also on a downward trend. The data shows that from 2021 to 2023, the inventory turnover ratio decreased from 4.07 to 3.78, and the accounts receivable turnover ratio decreased from 3.25 to 3.14.
In the secondary market, Humanwell Pharmaceutical's share price has declined in fluctuations for more than three years, and it hit a new low of 17.85 yuan/share at the beginning of this year, which is significantly lower than the high of 39 yuan/share in mid-2020. Recently, the stock price has rebounded, closing at 19.93 yuan per share as of April 22, with a market value of 32.468 billion yuan.
The controlling shareholder is under heavy debt pressure
Compared with Hengrui Pharmaceutical, which also started with anesthetics, the development of Humanwell Pharmaceutical has gradually fallen behind. The market generally believes that this is related to the high expansion of the contemporary group under the leadership of Ai Luming.
Since the 90s of the last century, Contemporary Group has only one listed company, Humanwell Pharmaceutical, and since then, it has successively participated in the holding of ST Mingcheng (600136.SH), Sante Cableway (002159. SZ), Koyo Co., Ltd. (002708. SZ) and Huamao shares (indirect holdings) (000850.SZ) and many other listed companies.
Tianyan check shows that there are as many as 451 enterprises with actual control at the peak of Ailuming, including 45 contemporary groups and holding companies. There is also an equity price difference between the participating holding companies, multi-level shareholding, and complex transactions between systems.
In recent years, the modern group has frequently defaulted on its debts. During this period, Humanwell Medicine became the sustenance of creditors. According to the disciplinary announcement previously issued by Humanwell Pharmaceutical, from 2019 to 2022, the controlling shareholder Contemporary Group occupied Humanwell Pharmaceutical's funds through a third-party enterprise by borrowing at the beginning of the period and repaying at the end of the period, with a cumulative amount of about 12.909 billion yuan, and the principal and interest of the occupied funds have been fully recovered.
In 2023, Humanwell Pharma announced that the actual controller was placed on file for investigation. The Shanghai Stock Exchange publicly reprimanded Humanwell Pharmaceutical, Ai Luming, the controlling shareholder and actual controller, Wang Xuehai, the then chairman, Deng Xiafei, the then director and president, and Wu Yajun, the then vice president and chief financial officer, and publicly determined that Ai Luming was not suitable to serve as a director, supervisor and senior executive officer of a listed company for three years.
The announcement recorded a number of violations by the above-mentioned personnel, including the occupation of non-operating funds by the controlling shareholder and its related parties, the large-scale illegal reduction of shares by the controlling shareholder, the failure to perform the review procedures and information disclosure obligations of the board of directors in major transactions, and the inaccurate disclosure of financial data in regular reports.
Since the beginning of this year, the debt crisis of controlling shareholders is still fermenting. According to the enterprise investigation, by the end of 2023, Modern Technology was ruled by the court to repay a debt of about 8.9 billion.
On January 31, Humanwell Pharmaceutical issued a regulatory warning announcement on the controlling shareholder. The Shanghai Stock Exchange said that the shares held by Modern Technology were auctioned by the judiciary, and the cumulative changes in the shares held exceeded 5%, but it failed to notify the company in time and fulfill the obligation to disclose changes in equity, which damaged investors' right to know.
On April 8, the company announced that some of the company's shares held by Modern Technology were frozen by the court, and the frozen ratio accounted for 1.03% of the total share capital. All 387 million shares of the company held by Modern Technology have been judicially marked and frozen, accounting for 100% of the total shares of the company and 23.69% of the total share capital.
The outlook for the future is mixed
In order to solve the above problems, Humanwell Pharma has put forward a "core strategy" in recent years, and has successively disposed of part of the equity of non-core assets. In 2023, it will sell the shares of Yichang Women and Children and Huatai Insurance.
Some research institutions believe that the company has basically completed the sale of medical service assets and significantly reduced the total amount of financial assets, and the asset-liability ratio has dropped from 50% at the beginning of 2023 to about 44%, achieving a certain degree of cost reduction and efficiency increase. However, there are also views that the time cycle of medical investment is often relatively long, and most pharmaceutical companies face the problem of lack of transformation funds. The combination of factors such as the occupation of funds by major shareholders and the tightening of approvals makes it difficult for Humanwell Pharmaceutical to obtain "new blood", and it can only obtain cash flow by surviving with broken arms.
It is worth noting that Humanwell Pharmaceutical's investment territory is still broad. According to incomplete statistics, as of the end of 2023, the balance of shares held by the company in Wuhan Rural Commercial Bank still reached about 500 million yuan, the closing balance of shares of Tianfeng Securities was about 400 million yuan, and the total holdings of other small and medium-sized banks were about 90 million yuan. In terms of entertainment, the company has invested in Shanghai Jikai, Wuhan Ruijian and so on.
As of the end of 2023, the fair value measurement of items at the end of the period was $1.5 billion, and the income was approximately $140 million.
Due to the diversification and expansion in the early stage, Humanwell Pharma has not established effective market barriers, and with the continuous rise of new competitors, its position as a leading anesthesia in China has been threatened. For example, the company's core product, cyclopofol, has commercialized similar products, and Hengrui Pharmaceutical's similar competing products have also been approved one after another.
However, the improved new drug isoflurane, which has been developed by Humanwell Pharmaceutical for nearly ten years, withdrew its registration application when it was only "one step away" from being put on the market. Isoflurane is an anesthetic currently approved as an inhaler that is commonly used for preoperative anesthesia and intraoperative anesthesia maintenance. The drug is the first improved new drug developed by Humanwell Pharma in the past ten years and reported for production, with a cumulative R&D investment of about 57 million yuan.
In 2023, the company's net profit attributable to the parent company will decline by 14% year-on-year to 2.134 billion yuan. The main reasons for the analysis of research institutions are: there is a high base of net income from investment in the disposal of assets in 2022, which will be 629 million yuan less in 2023 than in 2022, and new R&D expenses.
Despite this, some research institutions still have expectations for the company's prospects, believing that with the advancement of the aging population and the implementation of the "Healthy China" strategy, Humanwell still has considerable room for growth.
Hua Chuang Securities pointed out in the latest research report that the company is a leading anesthesia and analgesia in China, with an excellent product competition pattern and stable growth in future performance. Due to the company's non-core subsidiaries and cost pressure, the profit forecast has been lowered, and the company's net profit attributable to the parent company in 2024-2026 is expected to be 2.44 billion yuan, 2.79 billion yuan and 3.19 billion yuan (the original forecast value for 2024-2025 is 2.67 billion yuan and 3.12 billion yuan), a year-on-year increase of 14.3%, 14.2% and 14.6% respectively. (Produced by Thinking Finance)■