The latest performance of the four major pharmaceutical companies was announced: the semi-annual reports of the four major pharmaceutical companies of State Control, China Resources, Shanghai Pharmaceutical and Jointown were released and actively undertook the collection and procurement work to force the retail market

Source | Cyber blue

Author | Koharu

Overall performance rose more than 20%.

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<h1 class="pgc-h-arrow-right" data-track="9" > the semi-annual reports of the four major drug manufacturers were released</h1>

Up to now, the four major pharmaceutical companies of Sinopharm Holdings, China Resources Pharmaceutical, Shanghai Pharmaceutical and Jointown have issued semi-annual reports for 2021, and their revenue has increased.

Sinopharm Holdings

According to the semi-annual report, during the reporting period, State Holdings achieved operating income of 22.075 billion yuan, an increase of 25.92% year-on-year; net profit attributable to the mother was 766 million yuan, an increase of 23.56% year-on-year. Judging from the performance situation, it recovered and surpassed the same period in 2019, basically getting rid of multiple unfavorable factors such as the epidemic and policies.

CR Pharmaceutical

CR Pharmaceutical's business covers three major sectors: pharmaceutical industry, pharmaceutical distribution and pharmaceutical retail. During the Reporting Period, CR's total revenue increased by 28.1% year-on-year to HK$114.49 billion, and net profit increased by HK$4.09 billion, an increase of 12.2% year-on-year. Among them, the distribution segment achieved a segment revenue of HK$96.3 billion, an increase of 27.2% year-on-year, and the retail business achieved segment revenue of HK$3.6 billion, an increase of 20.1% year-on-year.

Shanghai Medicine

The main business of Shanghai Pharmaceutical covers pharmaceutical industry and pharmaceutical business. In the first half of 2021, Shanghai Pharmaceutical achieved operating income of 105.237 billion yuan, an increase of 20.73% year-on-year, and net profit attributable to the mother of 3.568 billion yuan, up 46.05% year-on-year. Among them, the pharmaceutical business achieved revenue of 92.635 billion yuan, an increase of 22.71% year-on-year, and the net profit contributed 1.333 billion yuan, an increase of 23.86% year-on-year;

Kyushu-dori

During the reporting period, Jointown achieved operating income of 61.981 billion yuan, an increase of 20.70% over the same period of the previous year, and net profit of 2.292 billion yuan increased by 43.05% over the same period of the previous year (of which the net profit attributable to shareholders of listed companies was 2.172 billion yuan, an increase of 72.55% over the same period of the previous year).

Overall, with the recovery of the pharmaceutical market in 2021, the revenue of each company has risen by 20%-30%. In addition, with the normalization of procurement with volume, each company has adopted a certain transformation strategy to strengthen external cooperation; and the accelerated promotion of prescription outflow and graded diagnosis and treatment policies has also made the four major pharmaceutical companies pay more attention to the out-of-hospital retail market, and they have also been laid out in the first half of this year.

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<h1 class="pgc-h-arrow-right" data-track="33" > actively undertake collection and mining work</h1>

According to the 2021 semi-annual report released by the company, Sinopharm Holdings has obvious scale advantages in the pharmaceutical business in Beijing, and has achieved 100% coverage of second- and third-level hospitals in Beijing, and covered more than 5,000 primary medical institutions. With the deepening of medical reform, the rigid demand of the market continues to increase, and Sinopharm's medical direct sales business in Beijing has developed steadily.

The company's semi-annual report said that the direct sales of second- and third-level hospitals are greatly affected by the price reduction of the national negotiation and the price reduction of the purchase of the quantity, and the state control mainly strives for the work by doing a good job in the procurement of the volume and the distribution of the national products to seize the market opportunity of the variety sales. The semi-annual report shows that the sales of state-controlled related business segments during the reporting period show rapid growth compared with the same period in 2020, an increase of 41.32% year-on-year.

In addition to actively striving for the opportunity of collective procurement and distribution, State Control began to start a more profitable innovative drug business. According to the semi-annual report, Sinopharm is actively exploring the innovation and transformation of marketing service models, and continues to pay attention to the access of innovative drugs and special drugs of key manufacturers. During the reporting period, the company's holding subsidiary, State Holdings Huahong, reached a strategic cooperation with a new supplier and successfully introduced innovative anti-tumor varieties.

In addition, Sinopharm Holdings has a clear advantage in the market of anesthetic drugs and blood products. Sinopharm Pharmaceutical Co., Ltd. still maintains a leading position in the anesthetic drug channel, with a stable market share of more than 70%, and its business covers 31 provinces, municipalities and autonomous regions across the country, with sales increasing by 25.79% year-on-year during the reporting period.

According to the semi-annual report, although pharmaceutical distribution accounts for more than 95% of Sinopharm Holdings, the company has begun to pay attention to the layout of the whole industry chain, and in May this year, the new Industrial Development Department was established, and the sales of related businesses increased by 16.12% year-on-year during the reporting period, and the net profit increased by 6.04% year-on-year.

According to the semi-annual report, as of the end of the reporting period, CR Pharmaceutical's distribution network has covered 28 provinces, municipalities directly under the central government and autonomous regions across the country, with nearly 110,000 customers, including 8,771 second- and third-level hospitals and nearly 60,000 customers in primary medical institutions.

At present, CR Pharmaceutical has 171 distribution business logistics centers, logistics warehouses in Beijing and Shanghai, with the national temperature-controlled drug storage and distribution capabilities, with the help of self-developed intelligent logistics platform ILP, integration of WMS, TMS, cold chain system, etc., to achieve business data feedback and order transmission, can meet the vaccine commodities, blood products and special requirements of temperature control products throughout the management. At the same time, CR Pharma has launched a special project in the digital construction of the logistics platform, integrating logistics resources through digital and intelligent means, and providing digital and visualized three-party logistics services for manufacturers and entrusting parties.

In the face of volume procurement, China Resources also actively participates in the distribution of drugs with volume procurement, and the semi-annual report shows that China Resources has reached cooperation with a number of pharmaceutical companies whose products have passed the consistency evaluation.

In terms of foreign cooperation, China Resources Group is also strengthening the introduction of imported varieties, and during the reporting period, it has established strategic cooperation with a number of multinational pharmaceutical companies such as Roche, and obtained the national total distribution rights, strategic distribution rights and import agents for a number of heavy products. In addition, the Group has also carried out cross-border e-commerce cooperation with Dapeng and Mitsui to continuously promote the development of international business.

According to the semi-annual report of Shanghai Pharmaceutical, Shanghai Pharmaceutical has a modern drug circulation system with a direct network covering 24 provinces and cities across the country, with a high degree of intensification and informatization, and at the same time, it serves the promotion of its own pharmaceutical business through the sharing and reciprocal mode of industrial and commercial integration.

Similar to State Control and China Resources, Shanghai Pharmaceutical is also actively seeking cooperation opportunities in innovative drugs. During the reporting period, Shanghai Pharmaceutical successfully obtained the import general agent qualification of a number of blockbuster varieties from suppliers such as Takeda, Novo Nordisk and Other Suppliers. In addition, Shanghai Pharmaceutical Holdings, as the only importer of The new approved and listed immuno-oncology drug "Yiwo" by Bristol-Myers Squibb in China, has carried out in-depth cooperation with manufacturers in the field of immuno-oncology, in addition, Shanghai Pharmaceutical has also reached a cooperation with Deqi Pharmaceutical to provide clinical trial support, bonded import, national distribution, supply chain optimization and innovative value-added services to accelerate the commercialization process of Deqi Pharmaceutical's new products.

It is worth noting that in the first half of the year, Shanghai Pharmaceutical also entered the vaccine production field through joint venture cooperation, and the relevant business segments achieved sales revenue of 2.284 billion yuan during the reporting period, an increase of 4.93% year-on-year. Shanghai Pharmaceutical believes that the current sales volume of class II vaccines is mainly affected by the prevention and control of the epidemic, but there is still a good space for development in the future, and the company will further extend the industrial chain from import distribution to production and research and development in the next step, and seize the opportunity to strategically lay out the vaccine field. In addition, Chengdu Wesco Biomedical Co., Ltd., an innovative vaccine research and development company in which Shanghai Pharmaceutical is the lead investor, has launched a phase III clinical trial in a global multi-center.

With the launch of the national collection, Jointown is also actively involved. In the fourth batch of collection and mining, the company obtained 315 distribution rights in 29 provinces, including 14 provincial-independent distribution rights, and the fifth batch of collection and mining obtained 315 distribution rights in 28 provinces, including 7 provincial-independent distribution rights.

In addition, the report shows that in September 2016, Jointown participated in the investment of Aimek, and in September 2020, Aimek successfully completed its listing on the Growth Enterprise Market of the Shenzhen Stock Exchange, and the market performed well after listing. In the first half of 2021, Jointown Medical Device Group Co., Ltd., a subsidiary of Jointown, reached a strategic cooperation with Bloomage Biotechnology Co., Ltd., and the main bloomage biomedical aesthetic business landed. "Aimeike" and "Bloomage Bio" have jointly become Jointown partners to promote the development of the company's medical aesthetic business.

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<h1 class="pgc-h-arrow-right" data-track="73" > the retail market</h1>

In addition to actively responding to volume procurement, under the promotion of prescription outflow and graded diagnosis and treatment, the four major drug manufacturers have also strengthened the layout of the out-of-hospital retail market and invested in DTP pharmacies and digital pharmacies.

In the retail sector, Sinopharm has a deep foundation, and the semi-annual report shows that the company's retail direct sales business has covered the top 500 chains and many single pharmacies in the country, with direct channels covering more than 30,000 stores, channel extension covering more than 80,000 stores, and sales in related fields during the reporting period increased by 8.26% year-on-year.

The policy is good for the retail market, Sinopharm is actively promoting the development and coverage of retail terminals, while increasing the expansion of the sales network, and seeking to expand retail cooperation projects according to market conditions. In order to promote the strategic layout of the retail market, Sinopharm actively promotes the opening of specialized pharmacies, which is expected to be officially operated within the year.

In the first half of 2021, CR Pharmaceutical's retail business achieved segment revenue of HK$3.6 billion, an increase of 20.1% year-on-year. The main reason for the rapid growth of the retail segment business is the rapid growth of revenue from the high-value direct drug delivery business, and the DTP business of Cr Pharma achieved revenue of about RMB2,096 million in the first half of 2021, an increase of about 21.3% year-on-year.

During the reporting period, CR Pharmaceutical built dtp back-end integrated operation and pharmacy service platform, improved the construction template of the infusion center, and at the same time, continued to strengthen business planning and standardized control of retail stores, improved the ERP system coverage of retail business, and actively expanded and optimized the layout of professional pharmacies such as DTP. During the reporting period, CR Pharmaceutical also landed in Jiangsu to provide health management services such as traditional Chinese medicine health care. As of June 30, 2021, CR Pharmaceutical had a total of 846 self-operated retail pharmacies, of which the total number of DTP professional pharmacies had reached 203, covering 89 cities in China.

In addition to promoting the business of specialized pharmacies, another development focus of CR is to give full play to the advantages of the combination of industrial product specifications + commercial regionalization, and to use the advantages of CR Pharmaceutical Industry in the OTC field to help expand the terminal market. In addition, in order to expand the retail business scenario, CR Pharmaceutical is also actively opening an Internet business. During the reporting period, the transaction volume of the B2B online platform "Runyao Mall" reached RMB13.8 billion, an increase of 24% over the same period. At the same time, CR Pharmaceutical is also providing B2C, O2O operation, supply chain finance, virtual joint library and other services for end customers, and nearly 1,000 social pharmacies have tried CHINA RESOURCES agency operation services by the end of this period.

Shanghai Pharmaceutical also has long accumulated in the retail sector, and the report shows that Shanghai Pharmaceutical has a leading online and offline integrated pharmaceutical retail business in China, covering more than 2,000 brand retail chain pharmacies in 16 provinces, autonomous regions and municipalities across the country.

Shangyao Cloud Health is an "Internet +" pharmaceutical business technology platform incubated by Shanghai Pharmaceutical, which mainly provides services for the development of innovative drugs and general slow drugs based on "DTP professional pharmacies" and "Internet + services". In January this year, Shangyao Cloud Health completed a B round of financing of 1.033 billion yuan, and plans to seize the policy opportunity in the second half of the year to strive for the "dual channel" qualification for its national "Yiyao Pharmacy".

Jointown announced that the company's current retail business accounts for a relatively small proportion, but the company will use the existing supply chain advantages in the future to empower the company's retail business and expand the company's digital retail through the combination of batch and zero integration mode and online and offline.

In the retail sector, Jointown launched the Wandian Alliance plan in January this year, relying on the advantages of supply chain and customer resources, and integrating resources such as group terminals, procurement, and e-commerce to empower terminal pharmacies through the franchise model of brand authorization. The announcement said that this plan is expected to achieve more than 30,000 alliance pharmacies to join within 3 years. Up to now, the number of signed stores in the "Ten Thousand Stores Alliance" project has reached 3237, and more than 5,000 have been striven by the end of this year. In addition, Jointown has also vigorously expanded the business of DTP pharmacies, hospital pharmacies and other professional pharmacies. By the end of the period, 2 DTP pharmacies, 2 critical chronic disease medical insurance stores, 9 hospital pharmacies, and 11 hospital side stores had been put into operation.

In the pharmaceutical e-commerce sector, Jointown independently developed and launched the Zhi Yao Tong App, and the effective suppliers of the Zhi Yao Tong platform during the reporting period were 2328, effectively covering 144,300 downstream end customers. In the first half of 2021, the sales scale of Jointown's B2B e-commerce business reached 8.178 billion yuan, accounting for 13.20% of the company's main business income.