"Yamao" Tongce Medical plummeted by 90%, and 80,000 shares were numb

The package is different

2024-07-05 23:54Posted in Beijing Finance and Economics Creators

All kinds of "Mao", entering the twilight moment.

1

Plummeted by 90%

With the double collapse of Moutai's liquor price and stock price, those "XX Maotai" also ushered in a dream break.

At a glance, medicine grass, brokerage grass, milk powder grass, medical beauty grass, waterproof grass, soy sauce grass...... They all fell miserably. Today's protagonist is one of them: "Yamao" Tongce Medical (600763).

Back at the end of 2017, the share price of Tongce Medical was still hovering around 30 yuan. But in mid-2021, its share price soared to 320 yuan, and later rose above the 400 yuan mark.

In other words, in just three years, Tongce Medical has increased by more than 10 times!

The miracle of "Moutai in the teeth" has not been able to continue. As of the close of trading on July 5, 2024, the share price of Tongce Medical is 39.37 yuan per share. This figure is down from the high point of the year:

90%。

This kind of fall can no longer be described as a waist chop or knee chop, but a chop from the foot and neck up.

In terms of total market capitalization, according to the data of Yiniu.com, the historical market value of Tongce Medical was once as high as 134 billion. Compared with today's total market value of 17.61 billion, more than 110 billion has evaporated.

In three years, a Nanjing Bank (the latest market value of 102.9 billion) has fallen.

Faced with this situation, a number of institutions retreated in a hurry. According to data from Oriental Wealth Network, at the end of 2021, a total of 471 institutions held positions in Tongce Medical. By the end of 2023, that number has become 269, a decrease of 42% from the beginning.

It's even worse for those retail investors. According to the data, at the end of 2020, the number of shareholders of Tongce Medical was only 25,900, and by the end of 2021, this number had increased to 104,000, an increase of 300%. As of March 2024, there are still 82,000 households.

I thought I could come in and copy the bottom, but I didn't expect it to be copied halfway up the mountain. Tongce Medical has been stumbling endlessly, and their hearts have sunk to the bottom little by little.

What did "Yamao" go through?

2

Fall off the altar

The intuitive reason comes from the decline in valuations.

Looking back on the past, in just three or four years, the share price of Tongce Medical has risen more than 10 times, but in the same period, its performance has only increased by 1 time.

According to the data of Yiniu.com, around 2021, the price-to-earnings ratio (TTM) of Tongce Medical was as high as 270 times!

What is this concept? Let's make a comparison, the price-to-earnings ratio (TTM) of Kweichow Moutai in the same period is only about 70 times, which is only 1/4 of Tongce Medical. Thinking about the bull market in 2015, the price-earnings ratio of the GEM is called the "market dream rate" when it reaches 100 times.

Today, Tongce Medical's P/E ratio is about 35 times, although it has fallen by more than 80% from the high point of the year, it still exceeds Moutai (the latest P/E ratio is 23 times).

Behind this thrilling roller coaster ride is a journey back in valuation. To put it bluntly, Tongce Medical has risen too much before. When the valuation of a listed company overdraws the profit expectation for a long time in the future, it is easy to usher in a round of "killing valuation". If it rises more, it will fall, which is the law of the capital market for a long time.

Of course, the more critical reason has to be found from within.

According to the financial report, in 2023, Tongce Medical's revenue will be 2.847 billion yuan, a slight increase of 4.7%. The net profit attributable to the parent company was 500 million yuan, a year-on-year decrease of 8.7%.

Looking further ahead, in 2022, Tongce Medical's revenue will be 2.7 billion yuan, a year-on-year decrease of 2.2%. The net profit attributable to the parent company was 548 million yuan, a year-on-year decrease of 22%.

In the long run, from 2018 to 2023, the year-on-year growth rate of Tongce Medical's revenue will be 32.96%, 23.11%, 8.12%, 33.19%, -2.23%, and 4.7% respectively. Looking at the change in net profit growth, it is even more obvious.

Compared with the previous high growth, this performance is obviously a bit stretched.

Behind the stall is the slowdown in business. In terms of specific businesses, Tongce Medical's five major businesses (implantology, orthodontics, pediatrics, prosthetics and general integration) have shown signs of slowing down. Taking 2022 as an example, the revenue of orthodontics and pediatrics, which account for a high proportion, declined, by 3.6% and 8.3%, respectively; The remaining three businesses also saw single-digit year-on-year growth.

In terms of compliance, Tongce Medical also faced some doubts.

More than a month ago, due to the failure to disclose the occupation of non-operating funds in a timely manner, Lv Jianming, the actual controller of Tongce Medical, Wang Yi, chairman and general manager, and others were issued a warning letter by the Zhejiang Securities Regulatory Bureau and recorded in the integrity file of the securities and futures market. Before that, Lu Jianming had been punished many times.

Is this the bursting of the bubble, or the trough of the white horse?

3

"Profiteering" folded?

Tongce Medical can be praised on the altar with the support of the industry.

A few years ago, dentistry ranked first in the "Top 10 Industries More Profitable Than Drug Trafficking" on the Internet. Behind this, there is a huge demand in the market.

1.4 billion Chinese, the average mouth has 22 teeth, the total is 30 billion teeth. However, according to the data of the "2019 White Paper on Eating Habits and Oral Health", the number of people with oral problems in mainland China is as high as 93%.

Those who are afflicted by dental disease are willing to spend money in order to have a good tooth. For example, in 2017, 52-year-old Ms. Zhou went to Wuhan University Stomatological Hospital for dental implants, got 14 implant nails, fixed 28 teeth, and spent nearly 200,000 yuan. Professor Lin Ye, deputy dean of Peking University School of Stomatology, was even more emotional:

Enough to buy a BMW!

This is a "profiteering river". According to industry data, as early as 2020, the number of dental implants in mainland China reached about 4.06 million, making it one of the fastest-growing dental implant markets in the world, with a market size of nearly 160 billion yuan.

The demand is huge, but the supply is small. On the one hand, imported teeth are expensive. 90% of domestic dental implants are monopolized by Swiss, German and Korean brands, and the price is basically between 5,000 and 20,000 yuan.

Dentists, on the other hand, are more expensive. According to the China Health and Family Planning Statistical Yearbook, there are 16.7 dentists per 100,000 people in China, far lower than the 45 in South Korea, 54 in the United Kingdom, 63 in the United States, and 83 in Germany.

You know, a professional dentist has been trained for up to 13 years or more. The high cost and scarcity of dental talent makes their fees high.

Tongce Medical's financial report has shown that its operating costs have been around 55% for a long time, and the salaries of medical personnel are the majority, which can account for 70% of the operating costs.

At the same time, Tongce Medical is the leader of such a "profiteering" track. According to the data, by the end of 2023, the company has a total of 84 medical institutions and 2,133 doctors.

This can't help but make people curious, with a good hand of cards, why did Tongce Medical stall?

An important reason is centralized procurement. The news that the oral implant project will be included in the centralized procurement will start to blow in 2021 and will be basically settled in 2023. Specifically, the medical service price of a single conventional dental implant in a tertiary public medical institution is 4,500 yuan, and the average price of centralized procurement of implant systems is reduced by 55%. As a result, the profit margin of Tongce Medical has been greatly compressed.

In addition, the vast majority of Tongce Medical's revenue comes from Zhejiang Province, which once accounted for about 90%. The base camp was breached, which made it even worse for Tongce Medical.

Objectively speaking, as a leading oral medical care in China, the advantages of Tongce Medical are also quite obvious. On the one hand, the market demand has existed for a long time, and it is difficult to fill the gap of dentists in a short period of time.

On the other hand, Tongce Medical has not given up its external expansion, and if it can acquire more high-quality dental hospitals on the basis of its own hospitals in the future, or take the franchise model, the prospects are still very impressive.

Can "Yazhong Moutai" make a comeback? We'll see.

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