Source of this article: Times Finance Author: Li Yao
On the occasion of the 25th anniversary of its establishment, Sunflower Pharmaceutical (002737.SZ), a leading OTC company, handed over a report card of high-quality development to the market.
On the evening of April 25, Sunflower Pharmaceutical disclosed its 2023 annual report. According to the financial report data, during the reporting period, the company achieved operating income of 5.700 billion yuan, an increase of 11.89% over 2022, and net profit attributable to the parent company of 1.119 billion yuan, an increase of 29.05% over 2022.
Under the explosion of performance, Sunflower Pharmaceutical, which has always focused on shareholder returns, has also launched a generous dividend plan this year: it is planned to distribute 10 distributions of 15 yuan (including tax), and the total amount of cash distribution is expected to be 876 million yuan, and the proportion of cash distribution to net profit is 78.27%. According to the 2023 annual report, since its listing in 2014, Sunflower Pharmaceutical's cumulative cash dividends have exceeded 2.8 billion yuan, which has exceeded twice the total amount of funds raised by the company's listing.
At present, Sunflower Pharmaceutical Co., Ltd. is dominated by the production of Chinese patent medicines, with "chemical drugs, biological drugs" and "health care products" as the two wings of the business structure, focusing on the use of "one small, one old, and one woman". In the past year, the company's three major businesses have maintained steady growth.
Among them, the Chinese patent medicine sector, as the company's pillar business, has the most outstanding performance, achieving revenue of 4.145 billion yuan in 2023, a year-on-year increase of 15.33%, accounting for 72.71% of the company's total revenue. In the same period, the revenue of chemical drugs was 1.360 billion yuan, a year-on-year increase of 2.80%, and the revenue of nutritional and health products was 181 million yuan, a year-on-year increase of 8.54%.
The wide range of products and excellent sales figures also confirm the growth of Sunflower Pharmaceutical. It is understood that as early as 2022, Sunflower Pharmaceutical has achieved sales of 94 varieties exceeding 10 million, 24 varieties of sales exceeding 50 million, and 14 varieties of sales exceeding 100 million, all of which make Sunflower Pharmaceutical a well-deserved "king of OTC".
Integrity and innovation, liver protection tablets have become a hit
In the report card of Sunflower Pharmaceutical, liver protection tablets are undoubtedly the major items with the highest attention. The annual report shows that in 2023, the annual shipment amount of Sunflower brand liver protection tablets will exceed 1 billion yuan for the first time in history, ranking among the first echelon of gold products in the industry.
It is understood that Sunflower Liver Protection Tablets is a pure Chinese medicine preparation, the prescription is derived from the compatibility principle of Xiaochai Hu Tang and Yin Chen Hao Tang in the famous book of Chinese medicine "Treatise on Typhoid Fever", through the selection of authentic medicinal materials, the use of advanced ethanol reflux extraction technology and crawler low-temperature decompression drying technology, and combined with modern pharmaceutical research refined.
In 1976, Sunflower Pharmaceutical Co., Ltd. exclusively developed and produced the first Sunflower brand liver protection tablets, and since then, Sunflower liver protection tablets have been widely used in clinical practice for the prevention and treatment of fatty liver, alcoholic liver, drug-induced liver injury, chronic hepatitis and early liver cirrhosis. According to the CMH monitoring data of Zhongkang, there are currently more than 300 companies in retail pharmacies in the liver protection category, of which the top 10 largest companies contribute about 80% of the overall market share.
The rise of Sunflower Liver Protection Tablets was not achieved overnight. It is understood that Sunflower Liver Protection Tablets has established a leading quality control system, and has now completed the quality control of the fingerprint, which can achieve the "consistent point, section and batch" of the active ingredients in the whole production process, so that the similarity between each batch of finished products and the standard atlas is more than 95%, achieving ultra-high quality control.
In terms of channels, Sunflower Pharmaceutical has also achieved coverage as early as possible, and has maintained its absolute leading position among similar competing products through the four lines of grade hospitals, primary medical care, retail pharmacies and e-commerce.
At present, the national awareness of liver health still needs to be improved, in this context, Sunflower Pharmaceutical launched a national public welfare activity "Building the Great Wall of Liver Protection", through various forms of online and offline public welfare science popularization activities, to strengthen the concept of "often take medicine, to protect the liver" and the awareness of early intervention in liver health for middle-aged and elderly chronic disease groups, and consolidate and improve the liver health education system.
According to reports, in 2024, the public welfare action of "Building the Great Wall of Liver Protection" will enter 22 provinces and cities across the country, with "three actions and one platform" (i.e., Sunflower Liver Protection Lecture Hall, National Free Clinic Public Welfare Activities, Douyin National Task "Sunflower Building the Great Wall of Liver Protection" and Sunflower Liver Protection Lecture Hall We-Media Science Matrix Platform) as the main line, build a scientific journey of liver protection science popularization for the people, and link thousands of chain pharmacies across the country to participate in it, and effectively reach people who really need to protect the liver.
In 2020 alone, there were more than 447 million people with chronic liver diseases in China, including chronic hepatitis, fatty liver and cirrhosis, according to data cited by China News Network. In addition, there are many patients with drug-induced liver injury caused by long-term medication. According to the relevant data released by the Fifth Medical Center of the PLA General Hospital, the number of hospitalized patients with drug-induced liver injury is increasing year by year, and 8%-25% of patients progress to chronic drug-induced liver injury.
In the long run, the market for sunflower liver protection tablets has broad prospects. Sunflower Pharmaceutical also emphasized in an institutional survey in August 2023 that with the increase in demand for liver protection products and the company's favorable competitive position in the liver protection market, there is still room for further improvement after the sales of liver protection tablets exceeded 1 billion for the first time. In the same year, the company's liver protection tablets completed the registration application in Hong Kong, which means that Sunflower liver protection tablets have successfully opened the overseas market.
Make efforts to develop pediatric medicine to increase children's health
For a long time, children's medicine has been one of the main tracks of Sunflower Pharmaceutical, and it is also its first core strategy. Its pediatric medicine brand "Little Sunflower" is even more well-known, and the sentence "Little Sunflower Mother Class has started" has created the common memories of countless families.
According to the 2023 annual report, at present, there are more than 60 products on the market of "Little Sunflower" children's medicine, including nearly 30 varieties with sales of more than 10 million, and the product layout basically covers the fields of common diseases and commonly used drugs such as children's respiratory system, gastrointestinal digestive system, and immune tonic system. Among them, the company's main products are Pediatric Pulmonary Fever Cough and Asthma Oral Liquid/Granules, Pediatric Chai Gui Antipyretic Granules, Qi Hu Hawthorn Granules, Little Sunflower Dew, Pediatric Aminophen Xanthamine Granules/Tablets, Pediatric Aminophenamine Granules and other flow products are star products among children and mothers.
It can be seen that Sunflower Pharmaceutical has been increasing in the field of pediatric medicine in recent years. In 2021, Sunflower Pharmaceutical acquired 6 pediatric drug varieties under the MAH (Marketing Authorizer) model, and obtained the domestic agency rights of two children's rare disease drugs of Reddy's in India, namely Hexaenoic Acid Oral Solution and Trientine Capsule, through the business expansion model. In 2022, Sunflower Pharmaceutical announced that it plans to invest 54 million yuan to establish a wholly-owned subsidiary, Beijing Sunflower Pharmaceutical Research Co., Ltd., which is committed to the introduction of high-quality children's preparation technology at home and abroad, the research and development of children's generic preparations, and the upgrading of the company's existing varieties and technologies in the field of children's medicine.
From another point of view, Sunflower Pharmaceutical's choice is also a trend. As we all know, compared with adult drugs, children's drugs have higher research and development costs, greater research and development difficulties, and higher clinical risks, and domestic children's drugs have long been in the dilemma of "lack of medical treatment and less medicine". To this end, relevant departments have issued a number of policies related to children's drugs in recent years, vigorously promoting the development of children's drugs from review and approval, market access to clinical use.
The research report released by Huatong Securities International pointed out that as the country and society pay more and more attention to children's drugs, and a series of favorable policies continue to promote, the children's drug market will maintain a good development trend in the future. According to the data of Yaozhi.com, from 2015 to 2020, the size of the mainland children's drug market increased from 59.1 billion yuan to 94.8 billion yuan, with an average annual compound growth rate of 9.9%, and it was mainly concentrated in the OTC retail market (antibiotics, cold and fever, gastrointestinal tract and nutrition).
In addition, according to the latest data released by Minenet, in the first half of 2023, the market size of pediatric drugs of Chinese patent medicine will exceed 5.2 billion yuan in China's urban public hospitals, county-level public hospitals, urban community centers and township health center terminals, which is the highest value in the same period in the past decade. In the first half of 2023, its growth rate will reach 10.36%, and the market potential of pediatric Chinese patent medicine will continue to explode.
Product brand synergy helps open a new chapter
OTC (over-the-counter) drugs have similar characteristics to "consumer goods", such as a wide audience and easy to purchase. As a veteran OTC company, Sunflower Pharmaceutical has a deep insight into the core of achieving effective access to end customers.
Brand power is one of Sunflower Pharmaceutical's strengths to achieve this. "Although new OTC brands emerge one after another, they often cannot occupy the minds of consumers for a long time, while established OTC brand companies continue to show a solid market advantage by relying on their stable quality and long-term accumulated brand trust. Sunflower Pharmaceutical pointed out in its annual report.
At present, the two main brands of Sunflower Pharmaceutical include "Sunflower" and "Little Sunflower", which correspond to adult and children's medicine respectively. Based on the brand value evaluated by the latest Asiabrand brand evaluation method, the brand value of "Sunflower" has reached 18.432 billion yuan, and the brand value of "Little Sunflower" has reached 14.484 billion yuan.
To a certain extent, the two major brands of "Sunflower" and "Little Sunflower" were already at the peak when they debuted, but Sunflower Pharmaceutical did not stop there. In recent years, Sunflower Pharmaceutical has made all-round innovations from business strategy to marketing model and sales channels, and the company's brand has also entered a new round of growth.
The 2023 annual report shows that Sunflower Pharmaceutical has changed from "marketing-driven" to "marketing and product-driven" with strategy first and model to win. Specifically, over the years, Sunflower Pharmaceutical has continued to improve its product structure, optimize its product pipeline, and enrich its variety resource reserves through mergers and acquisitions, independent research and development, and cooperative introduction.
In terms of marketing, Sunflower Pharmaceutical is also trying some more novel and effective methods. In 2022, Sunflower Pharmaceutical will carry out the main brand communication of "Little Sunflower" and "Sunflower" with the help of core projects such as "Hard Advertising", "Satellite TV Sponsorship", "Core IP Operation One by One Little Sunflower Mother Classroom", "Key Disease Day Publicity and Science Popularization", and "Word-of-mouth Communication", and realize the value of multiple gold products.
In 2023, Sunflower Pharmaceutical will strengthen the creation of corporate IP such as the Liver Protection Lecture Hall and the Little Sunflower Mother Classroom, build a self-media matrix through knowledge and content dissemination, increase the number of end customers and users, improve the stickiness of customers and brands, and carry out academic science popularization. In addition, the company has explored and implemented multiple marketing forms such as live broadcast and e-commerce to improve the marketing path of various products.
In addition, the 2023 annual report also pointed out that at present, the company has established a large and competitive marketing team and established a marketing network with deep coverage across the country. Specifically, Sunflower Pharmaceutical has nearly 30 division-level sales units and has established nearly 400 provincial-level sales teams across the country. "Relying on the self-controlled marketing network, the company has the ability to quickly achieve nationwide coverage of products. Sunflower Pharmaceutical emphasized.
It was also mentioned in the report "2023 Brand Chinese Medicine Industry Development Policy, Industrial Chain Panorama, Competition Pattern and Future Prospect Analysis" released by Zhiyan Consulting that with the upgrading of consumption and the improvement of health awareness, people's consumption attributes of branded Chinese medicine will be stronger, their acceptance will be higher, and the self-motivation of patients will be stronger, and the competitiveness of branded Chinese medicine in the Chinese medicine industry market will be further revealed.
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