Mr. Li has always had a high-profile profile that is not common among leaders of state-owned enterprises
Text | Zhao Tianyu Xin Ying
Edited by Wang Xiao
With only one year left before retirement, 59-year-old Baiyunshan (600332. SH； 00874.HK) Chairman Li Chuyuan suddenly resigned.
On July 22, 2024, Baiyunshan, a listed company, disclosed that the company's board of directors received a written resignation report submitted by Li Chuyuan on the same day, stating that he would resign as chairman, executive director and director of the strategic development and investment committee of the board of directors "due to personal reasons", and would no longer hold any position in the company after his resignation. Li Chuyuan and Baiyunshan's board of directors do not have any differences of opinion.
At present, the position of chairman of Baiyunshan is performed by Yang Jun, vice chairman.
According to Yicai, Li Chuyuan has been taken away by relevant departments for investigation. Caijing asked the relevant person in charge of Guangzhou Pharmaceutical Group for confirmation on whether the above news is true and the subsequent impact on the company's operation and performance, but has not received a reply as of press time. Baiyunshan is a listed company under the Guangzhou Pharmaceutical Group, and according to public information, Li Chuyuan is currently the chairman and secretary of the Party Committee of the Guangzhou Pharmaceutical Group.
As of the close of trading on July 23, Baiyunshan A-shares fell 3.2%, and Hong Kong stocks fell 3.56%.
Regarding the shock caused by Li Chuyuan's resignation, a staff member of a subsidiary of Guangzhou Pharmaceutical Group said, "The details have to wait for the announcement from the group, and our work is still very stable and unaffected." ”
No.1 Soul man resigns
Half a month ago, on July 10, 2024, Li Chuyuan also attended the warning education meeting for leading cadres of Guangzhou Pharmaceutical Group and the education and training course on party constitution, party rules and party discipline.
This is the 36th year that Li Chuyuan has participated in the work and the 11th year that he has been promoted to the chairman of the Guangzhou Pharmaceutical Group.
Since joining the work in July 1988, Li Chuyuan's professional resume has been marked with a distinct brand of "Guangzhou Medicine", and he has worked in many companies within the Guangzhou Pharmaceutical Group system such as Baiyunshan Pharmaceutical General Factory and Baiyunshan Traditional Chinese Medicine Factory.
Li Chuyuan has always had a high profile that is not common in state-owned enterprises. A former employee of Guangzhou Pharmaceutical Group feels that whenever Li Chuyuan makes some high-profile remarks, which cause heated discussions and even be scolded, he will be silent for a while.
At the 2017 Fortune Global Forum, Li Chuyuan said: "The results of the National 863 Program show that drinking Wanglaoji can prolong life by about 10%. Later, Wang Laoji responded that this conclusion was reached through a two-year safety experiment on 576 rat samples. At the Boao Forum in 2018, Li Chuyuan said that "Jinge has changed from a medicine to a sex toy needed by the people", "I am afraid of getting angry, and drink Wang Laoji; I'm afraid it's useless, eat Jinge".
At the Boao Forum in April 2021, Li Chuyuan said when he took the stage: "As soon as you drink the banlan root of Baiyun Mountain, you don't need to wear a mask, so I didn't wear a mask today." Traditional Chinese medicine does play a big role. ”
Although Li Chuyuan's high-profile remarks have aroused heated discussions from time to time, a person in the pharmaceutical industry has left the impression that "Li Chuyuan is bold and righteous" in his work contacts with several of Li Chuyuan's subordinates.
After graduating from university in 1988, Li Chuyuan joined Guangzhou Baiyunshan Pharmaceutical General Factory, starting from a grassroots technician, and gradually came up as a section chief, minister, assistant general manager, and vice president. By 1999, Li Chuyuan, who was only 33 years old, served as the director of the Guangzhou Baiyunshan Traditional Chinese Medicine Factory, which was losing money year after year and was on the verge of bankruptcy.
"Children who have no way out can only choose to run desperately." This is Li Chuyuan's description of those difficult days in a media interview.
By 2002, Li Chuyuan had led Baiyun Mountain to build the country's largest Banlangen GAP (Chinese Herbal Medicine Production Quality Management Practice) base, taking advantage of the SARS epidemic in that year, Baiyun Mountain's Banlangen sales surged, and achieved a profit of more than 50 million yuan that year.
In 2013, Li Chuyuan was promoted to chairman and secretary of the party committee of Guangzhou Pharmaceutical Group, in addition to successfully recovering and innovating to create "Wang Laoji" herbal tea, the sales revenue of Guangzhou Pharmaceutical Group also rose, from 54.5 billion yuan in 2013 to more than 100 billion yuan in 2017, doubling its performance in four years.
By 2017, Li Chuyuan set the goal of sprinting to the world's top 500. Four years later, in 2021, GPC became the first company in the world to enter the Fortune Global 500 with traditional Chinese medicine as its main business, and has remained on the list for three consecutive years.
In 2023, Li Chuyuan will become a representative of the National People's Congress for the first time and win the second prize of the annual National Science and Technology Progress Award.
Regarding the resignation of this soul deeply rooted in the development of Baiyunshan, Baiyunshan made it clear in the announcement that his resignation will not adversely affect the normal operation and performance development of the company's board of directors.
No.2 in the world
Baiyunshan, the main enterprise of Guangzhou Pharmaceutical Group, was listed on February 6, 2001 and has been listed in the capital market for more than 20 years. After the asset restructuring of Guangzhou Pharmaceutical Group, Baiyunshan currently has 12 time-honored Chinese pharmaceutical companies, including Zhongyi Pharmaceutical, Chen Liji Pharmaceutical Factory, Qixing Pharmaceutical, Jingxiutang Pharmaceutical, Pan Gaoshou Pharmaceutical, etc., known as "Nanpai Traditional Chinese Medicine", as well as pharmaceutical, health, commercial, medical and many other sectors.
The asset restructuring was in 2012, when Li Chuyuan was the general manager of Guangzhou Pharmaceutical Group. According to what he said at the time, the division of assets of the Guangzhou Pharmaceutical Group was unclear due to historical reasons, resulting in the competition between the two listed companies in the same industry for many years, and the group and the two listed companies were also unable to share resources due to related party transactions. Therefore, even if the operation is quite difficult, restructuring has become the only way for GPC to go.
Li Chuyuan has served as the chairman of Baiyunshan since August 8, 2013. When disclosing Li Chuyuan's professional resume, Bai Yunshan mentioned that "Mr. Li has extensive experience in the overall operation and management of enterprises". In the past 11 years, Baiyunshan's performance has indeed risen, with annual revenue rising from 17.608 billion yuan to 75.515 billion yuan in 2023, and net profit also rising from 1 billion yuan to 4.259 billion yuan.
At present, Baiyunshan's business focus is still concentrated in South China, and in 2023, Baiyunshan's revenue in South China will reach 55.867 billion yuan, accounting for 74% of the total revenue.
From the perspective of revenue structure, by 2023, the revenue contribution of the Baiyunshan health sector has exceeded that of traditional Chinese medicine. Chinese medicinal products include thirst-quenching pills, Xiaochaihu granules, kidney nourishing pills, Banlangen granules series, etc., and the big health sector is mainly Wanglaoji.
During the 11 years that Li Chuyuan was at the helm of Baiyun Mountain, Wang Laoji continued to fight with JDB while trying to expand the category.
In the past ten years, Guangzhou Pharmaceutical Group, Guangzhou Wanglaoji Health Industry Co., Ltd., Guangdong JDB Beverage and Food Co., Ltd., and JDB (China) Beverage Co., Ltd. have faced off dozens of times in court, involving false publicity disputes, commercial bribery, unfair competition disputes, trademark infringement disputes, etc.
In addition to Wanglaoji herbal tea, Baiyun Mountain's big health sector is also developing new products, such as Tingling Ji series, Lixiaoji series, throat lozenges, turtle jelly, etc.
In terms of performance, in the Baiyun Mountain health sector where Wang Laoji is located, the main business income will be 10.851 billion yuan in 2021, 10.473 billion yuan in 2022, and 11.117 billion yuan in 2023. In other words, the grappling momentum over the years has grown, but the increment of performance is relatively limited.
On the other hand, Baiyun Mountain's consumer goods are also seeking breakthroughs. Regarded as an attempt at a new business format, in 2023, Baiyunshan and Meichen Group will jointly establish Guangyao Baiyun Toothpaste Company and launch "Baiyun Toothpaste".
In March 2024, Li Chuyuan talked about promoting the inheritance and innovation of traditional Chinese medicine in a public speech, and took out a "Baiyun toothpaste" on the spot to introduce, saying, "This is our first 'fashionable Chinese medicine' toothpaste, highlighting the characteristics of traditional Chinese medicine to regulate bacteria and clear fire." At that time, Li Chuyuan said that Guangzhou Pharmaceutical Group accelerated the development of China's time-honored brands, created more than 30 varieties of over 100 million yuan, and promoted the transformation and upgrading of the traditional Chinese medicine industry.
However, when operating this 10 billion market value listed company, commercial compliance cannot be ignored.
Three pharmaceutical companies under Baiyunshan were under special investigation by the National Health Insurance Administration and relevant departments for inflated drug pricing and arbitrage of funds, and they were also during Li Chuyuan's tenure at that time.
In August 2022, the National Health Insurance Administration announced that Guangzhou Baiyunshan Tianxin Pharmaceutical Co., Ltd., Guangzhou Baiyunshan Pharmaceutical Group Co., Ltd. Baiyunshan Pharmaceutical General Factory, and Guangzhou Baiyunshan Jingxiutang Pharmaceutical Co., Ltd., from 2017 to May 2021, in order to circumvent the "two-invoice system" policy and supervision, colluded with more than 50 downstream drug agents to cash out 87 drugs such as ceftiamidine for injection by purchasing APIs at inflated prices, and transferred funds to downstream drug agents. The amount involved is huge, and some of the funds are used to bribe medical personnel or specific related parties to carry out illegal drug promotions.
Subsequently, Tianxin Pharmaceutical and other three companies carried out price rectification nationwide on 87 kinds of drugs involved in the case, such as ceftiamidine for injection, as required, and excluded the inflated part of the price that was used to implement bribery, with an average reduction of more than 50%, and some product specifications were stopped from procurement.
Baiyunshan said at that time that it would comprehensively rectify the marketing model, reduce the price of relevant products or withdraw the network nationwide, and resolutely deal with the illegal operations, and have dismissed and suspended the relevant responsible persons of the three companies involved.
By 2023, Baiyunshan is still further establishing and improving the compliance management and compliance review system.