On April 26, Liu Pharmaceutical Group released its 2023 annual report and 2024 first quarter report.
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01
In 2023, the revenue will be 20.812 billion yuan,
The net profit was 850 million yuan
According to the annual report, in 2023, Liu Pharmaceutical Group will achieve operating income of 20.812 billion yuan, a year-on-year increase of 9.23%, and net profit attributable to shareholders of listed companies of 850 million yuan, a year-on-year increase of 21.11%.
At present, the main business of Liu Pharmaceutical Group is mainly pharmaceutical wholesale, pharmaceutical retail and pharmaceutical industry. In terms of breakdown, the revenue of pharmaceutical wholesale business accounted for 80%, with a revenue of 16.788 billion yuan in 2023, the revenue of the pharmaceutical retail segment was 2.822 billion yuan, accounting for 13.60%, and the revenue of the pharmaceutical industry segment was 1.113 billion yuan, a year-on-year increase of 39.65%.
Source: Liu Pharmaceutical Group's 2023 annual report
In response to the changes in revenue data, Liu Pharmaceutical Group said in the announcement that the operating income of the wholesale business in 2023 will increase by 9.61% year-on-year, and the gross profit margin will increase by 0.15 percentage points year-on-year, mainly due to the company's channel advantages and variety advantages, as well as the development of supply chain value-added services such as hospital pharmaceutical and medical equipment consumables SPD projects, which will continue to promote the company's market share of pharmaceutical and medical devices in hospitals. The growth of the sales scale of equipment consumables and the improvement of the company's agency level drove the growth of gross profit margin.
The operating income of retail business decreased by 1.79% year-on-year, and the gross profit margin increased by 0.89 percentage points, and the operating income of the retail end decreased slightly year-on-year, mainly due to the decrease in the sales of prescription injection varieties in stores affected by the policy.
The operating income of industrial business increased by 39.65% year-on-year, and the gross profit margin decreased by 3.48 percentage points, mainly due to the company's advantages in commercial channels to accelerate the market expansion of self-produced industrial products, and the development of markets outside the province through distribution agents, the sales scale of industrial products increased, and the revenue increased. Due to the increase in the price of raw materials for traditional Chinese medicine and the relatively low gross profit margin of traditional Chinese medicine decoction pieces, the comprehensive gross profit margin of the industry decreased slightly, while the operating income of other industries decreased by 6.38% year-on-year, mainly due to the decrease in third-party logistics business during the year.
On the same day, Liu Pharmaceutical Group also released the first quarter report of 2024, according to the financial report, Liu Pharmaceutical Group achieved operating income of 5.775 billion yuan from January to March 2024, a year-on-year increase of 8.25%, and net profit attributable to shareholders of listed companies of 300 million yuan, a year-on-year increase of 15.04%.
Source: Liu Pharmaceutical Group's 2024 first quarter report
02
There are 814 pharmacy stores in Guizhongda
Revenue was 2.822 billion yuan
Focusing on the retail business, Guizhong Pharmacy, a wholly-owned subsidiary of Liu Pharmaceutical Group, is one of the top 100 pharmaceutical retail enterprises in China and one of the earliest chain pharmacy brands in Guangxi.
During the reporting period, Guizhong Pharmacy accelerated the layout of pharmacies in blank areas through self-construction and franchise, and gradually formed a half-hour service circle with characteristic pharmacies as the core, covering the core urban area, the surrounding areas and the crowded communities, relying on the advantages of varieties and professional services to improve the customer flow and consumer experience of the stores. As of the end of the reporting period, there were a total of 814 pharmacies in Guizhong Pharmacy, with 105 new stores opened and 27 stores closed during the period. Among them, there are 676 medical insurance pharmacies and 76 medical insurance dual-channel pharmacies, an increase of 9 and 10 respectively from last year. The number of DTP pharmacies (including hospital-side stores) of the company reached 174. In 2023, the company will adjust the variety structure on the retail side, strengthen the sales of the company's own varieties and strategic core products, strictly control the cost of the retail side, and further improve the operation and management capabilities and profitability of stores.
In addition, Guizhong Pharmacy drives continuous consumption through professional health services. In 2023, the chronic disease membership system of Guizhong University Pharmacy will be classified according to more than 20 diseases such as diabetes, hypertension, gastrointestinal diseases, cardiovascular and cerebrovascular diseases, and tumors. During the reporting period, the company served nearly 100,000 new patients with chronic diseases, and jointly carried out 1,500 doctor-patient education, discipline patient education, public welfare diagnosis and treatment, and member home visits with 26 medical institutions. In 2023, Guizhong University Pharmacy will also launch a diabetes project, work with relevant drug manufacturers to build 40 benchmark diabetes specialty pharmacies, and set up a "sugar pharmacist" team. Through resource sharing and training replication, store staff are equipped to provide in-depth services to customers with diabetes and complications. By the end of 2023, Guizhong Pharmacy has added more than 10,000 members with diabetes and chronic diseases, and carried out more than 50,000 services such as testing and return visits for diabetic patients.
In terms of new retail, during the reporting period, the company continued to promote the empowerment of retail business with Internet information technology. On the one hand, through the implementation of the prescription extension project, the prescription information docking and circulation between retail pharmacies and physical public hospitals will be established, and on the other hand, the self-built physical Internet hospitals will provide online diagnosis and treatment and prescription issuance services for pharmacy customers. Effectively integrate medical resources, variety resources, retail pharmacy service advantages and the health needs of end consumers, create a one-stop "medical + medicine + health management" service closed loop, and build a "new retail" format.
03
2024 Business Plan
In its 2023 annual report, Liu Pharmaceutical Group stated that according to the current market competition environment, the actual development of the industry and the trend of medical reform policies, the company will give full play to the advantages of batch-zero synergy and pharmaceutical and medical device synergy in 2024, seize high-quality varieties, promote supply chain value-added services, innovative drug promotion projects, prescription extension projects, and retail professional health services. Information technologies such as artificial intelligence and mobile Internet empower the digital transformation of traditional wholesale and retail businesses, promote the implementation of collection and distribution with the SPD project of hospital equipment consumables as the starting point, and realize the rapid increase of the market share of equipment consumables; at the same time, accelerate the development of the Liuyao industry around the big health industry of traditional Chinese medicine, continue to improve the R&D quality control capacity and production capacity scale of the industrial sector, integrate commercial channel resources and marketing teams, promote the market expansion of self-produced industrial products, and continue to improve the profitability of the industrial sector.
In addition, we will accelerate the implementation of the Group's informatization construction projects, promote cost reduction and efficiency increase through informatization, refined management and resource recycling, and industrial linkage, strengthen compliance risk management and control, implement the financial budget system, strictly control costs and risks, optimize the talent training mechanism, implement personnel optimization, improve personnel efficiency, and promote the high-quality development of the enterprise.
Focusing on the retail sector, on the one hand, it is to improve the store layout, optimize the management of varieties, and improve the level of gross profit In 2024, Guizhong Pharmacy will accelerate the layout of pharmacies in the blank area market through self-construction and franchise, optimize the location of stores, plan to add about 100 new stores throughout the year, and gradually improve the coverage of medical insurance, dual channels, medical insurance co-ordination and other qualifications; In addition, the sales proportion of core strategic varieties, self-produced Chinese medicine decoction pieces, and Chinese patent medicine varieties in stores will be increased, and the variety structure will be optimized to help improve the gross profit level.
On the other hand, while continuing to carry out professional health services for chronic diseases, digital health services such as smart testing, smart patient education, and AI consultation will be implemented as soon as possible, so as to form differentiated service advantages and enhance the core competitiveness of stores. In addition, it will accelerate the construction of a closed-loop service of "medicine + medicine + health management", implement the "new retail" battle, and give full play to the advantages of self-built Internet hospitals in 2024, as well as cooperate with prescription extension projects of various medical institutions in the region, to provide online consultation, prescription, chronic disease prescription renewal and other services for pharmacy customers, and realize the docking of online and offline diagnosis and treatment services with professional drug purchase services and health services of retail pharmacies.