On the evening of April 29, the People's Pharmacy released its 2023 annual report and 2024 first quarter report.
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01
In 2023, the revenue will be 22.437 billion yuan,
Year-on-year increase of 11.21%
In 2023, the operating income of the People's Pharmacy will be 22.437 billion yuan, a year-on-year increase of 11.21%, the net profit attributable to the parent company will be 929 million yuan, a year-on-year increase of 18.35%, and the net profit after deducting non-attributable to the parent will be 844 million yuan, a year-on-year increase of 14.68%. In the case of a high base in the same period last year, the performance maintained double-digit positive growth, showing the resilience of its steady development.
The main accounting data and financial indicators of the People's Pharmacy in the past 3 years
Data source: 2023 annual report of the People's Pharmacy
The operating income of the People's Pharmacy mainly comes from the pharmaceutical retail business, franchise, alliance and distribution business. Among them, the retail business was the main business, accounting for more than 86% of the total revenue during the reporting period, and the retail gross profit margin was 37.18% after excluding the DTP pharmacy business. The franchise, alliance and distribution business is the distribution of franchisees and small and medium-sized chains, which grew rapidly during the reporting period, accounting for more than 13% of the total revenue.
In terms of main business categories, in 2023, Chinese and Western patent medicines will achieve revenue of 17.627 billion yuan, and traditional Chinese medicine and non-drugs will achieve revenue of 1.660 billion yuan and 3.150 billion yuan respectively. The sales of Chinese and Western patent medicines accounted for about 79%, which is the company's most important commodity category, and its operating income increased by 12.59% over the same period last year. The sales of traditional Chinese medicine accounted for about 7%, and the operating income increased by 18.19% over the same period last year.
In terms of main business by region, in 2023, the revenue of the People's Pharmacy in Central China will account for more than 42%, which is an important source of the company's business income, and has a sudden leading advantage in the region.
The main business operation of the people's pharmacy in 2023
Data source: 2023 annual report of the People's Pharmacy
On the same day, the first quarter report of 2024 released by Laobaimin Pharmacy showed that in the first quarter of 2024, the revenue was 5.539 billion yuan, a year-on-year increase of 1.81%, the net profit attributable to the parent company was 321 million yuan, a year-on-year increase of 10.27%, and the net profit attributable to the parent company was 311 million yuan, a year-on-year increase of 10.35%.
According to the financial report, the company's comprehensive gross profit margin in the first quarter reached 35.2%, an increase of 2.2 percentage points year-on-year, and the results were remarkable.
02
The number of stores in 2024Q1 exceeded 14,000,
Stores in the sinking market accounted for 76%
During the reporting period, the People's Pharmacy continued to expand, focus on advantageous markets, and consolidate its scale advantages.
As of the end of the first quarter of 2024, the total number of Lao Baimin Pharmacy stores was 14,109, including 9,470 directly operated stores and 4,639 franchised stores. In 2023, 3,388 new stores will be added, and 642 new stores will be added in the first quarter of 2024. In addition, the alliance business involves more than 13,500 stores (not included in the total number of stores of the company), and the total retail scale of the alliance enterprises reaches 160+ billion yuan.
Distribution of directly operated stores of common people's pharmacies as of 2024Q1
Data source: People's Pharmacy 2024 first quarter report
The 2023 annual report shows that on the basis of the wide coverage of the national market, the people will focus on expanding 11 advantageous provinces, intensively distributing in key markets, rapidly increasing regional market share, and enhancing comprehensive competitiveness. As of the end of 2023, the People's Pharmacy has 11 provinces with the top three market shares, including 4 provinces with the first market share. Among the new stores in 2023, advantageous provinces and key cities account for 86%.
The people's pharmacy said that it continues to be optimistic about the new rural sinking market, the sinking market has a high degree of aging, and the medical resources are relatively scarce, and the people's pharmacy focuses on the development of the sinking market through direct sales and franchises, and the current proportion of stores in the sinking market of prefecture-level cities and below is 76%.
Under the empowerment of digital intelligence, the preparation efficiency of new stores in people's pharmacies has been significantly improved, and the average preparation period for directly operated new stores in 2023 will be 40 days, which is 9 days shorter than that in 2022. Under the laying of "focus" and "efficiency", the people's pharmacy continues to consolidate the scale advantage of key markets, and builds a huge store network in the sinking market.
03
Outpatient co-ordination accelerates the landing,
Professional enhancement to undertake prescription outflow
In 2023, the outpatient co-ordination medical insurance policy will be liberalized to retail pharmacies, substantially promoting the division of pharmaceutical industries and the circulation of prescriptions. Judging from the current situation announced by the national and local medical insurance bureaus, the overall fund has achieved a reasonable balance and sustainable policies, and at the same time, the overall planning standards have been improved and the supervision has become stricter, which is more conducive to the leading chain of compliance.
On the basis of consolidating the scale advantage, the people's pharmacy moves with the times and enhances the ability to study and respond to policies in order to undertake policy dividends. At the beginning of 2023, the People's Pharmacy will set the outpatient co-ordination project as a key strategic project, and promote the overall implementation by upgrading the operation standards of co-ordinated stores, strengthening the compliance construction of medical insurance business, optimizing the overall settlement scenario and efficiency, and promoting the construction of the prescription system of Internet hospitals to ensure the supply of prescriptions.
As of the end of the first quarter of 2024, a total of 4,673 stores have completed the outpatient co-ordination qualifications, of which 39.78% are directly operated stores, and 3,338 stores are mutually swipeable (included in the outpatient co-ordination medical insurance management and can use Internet prescriptions), of which 30.67% are directly operated stores.
"The number of stores that can be brushed has increased significantly in terms of customer flow and sales", said the People's Pharmacy, "The state has higher requirements for the inclusion of outpatient co-ordinated pharmacies, and we have also continuously improved our ability to co-ordinate and continue to operate, so as to undertake more outpatient co-ordinated medical insurance traffic and improve the overall customer experience." ”
In addition, the people's pharmacy continues to focus on the value of pharmacies, builds professional pharmacies with unified high standards across the country, and actively connects with the prescription circulation platforms that have been launched in various regions one after another, so as to undertake more outflow prescriptions. As of the end of the first quarter of 2024, there were 1,595 door-to-door slow stores, 325 dual-channel stores, and 176 DTP pharmacies.
04
deepening of digital intelligence transformation,
Advanced refined operation management
In 2023, the People's Pharmacy will continue to promote the "comprehensive digitalization of people, goods, and places strategy", accelerate digital and intelligent transformation, and consolidate its competitive advantage. It is reported that the annual R&D investment of the people's pharmacy is 133 million yuan, accounting for about 0.6% of the operating income, and the ROI (return on investment) of digital projects continues to increase.
In 2023 and the first quarter of 2024, the digital transformation of people's pharmacies will focus on data governance and deepening supply chain empowerment. By optimizing the product structure, upgrading the distribution logic, and deepening the linkage between stores and warehouses, the people's pharmacy has carried out data governance in key and difficult business domains in a special mode, improved data quality, and strengthened data security control. In terms of specific application, the intelligent business district planning has completed the first stage of modeling, and some of the research results have been promoted nationwide, and the intelligent requisition system has been further iterated to refine the requisition strategy to reduce the out-of-stock rate and increase the transaction volume.
In addition to offline face-to-face services, the iteration of digital intelligence has also helped the new retail performance of people's pharmacies to break through. In 2023, the total sales of online channels of people's pharmacies will be about 2 billion yuan, a year-on-year increase of 38%. As of the end of the first quarter, there were 11,263 O2O takeaway service stores and 629 24-hour stores.
In recent years, with the implementation of the "Healthy China" strategy and the deepening of the reform of the medical and health system, the continuous outflow of prescription drugs in hospitals has been continuously promoted. According to Soochow Securities' calculations based on Japan's experience, it is estimated that the scale of retail terminal expansion caused by prescription outflow will reach 360 billion yuan from 2022 to 2032. In 2023, the inclusion of designated pharmacies in the overall management of outpatient clinics will have a far-reaching impact on the pharmaceutical retail industry, and with the steady advancement of the policy, retail pharmacies will further usher in the prescription outflow dividend and play an important role in the national medical and health security system.
Brokerage analysts said that the pharmacy industry track is booming, and the people are expected to take the lead in enjoying the outpatient co-ordination dividend by improving their refined management capabilities, strengthening their pharmaceutical service capabilities, and actively undertaking the outflow of prescriptions by taking advantage of the outpatient co-ordination of the east wind.
Xie Zilong, chairman of the People's Pharmacy, said that the company will focus on the general strategy of "building a technology-driven health service platform" and six sub-strategies, build a stronger talent echelon, consolidate refined operation and management, continuously improve the company's profitability, and promote the company's long-term positive development.