Author: Xiao Wan
On August 29, Shanghai Pharmaceutical released its 2018 semi-annual report, as of this moment, Sinopharm Holdings, China Resources Pharmaceutical, Shanghai Pharmaceutical, and Jointown have all released their 2018 semi-annual reports, which means that in the first half of 2018, the basic layout of China's pharmaceutical circulation field has been outlined.
Overall performance: State Control is still the leader, and there is not much difference between China Resources and Shangyao
Sinopharm Holdings, China Resources Pharmaceutical, Shanghai Pharmaceutical and Jointown are china's industrial, commercial distribution and retail integrated pharmaceutical enterprises, and are the four giants in the field of pharmaceutical circulation in China. All four maintained a high revenue growth rate, but the gross profit growth rate was quite different.
The operating income of state-controlled enterprises is still riding the dust and maintaining an absolute volume, reaching 147.486 billion yuan, with a revenue growth rate of 7.05.
Revenues of China Resources Pharmaceutical, Shanghai Pharmaceutical and Jointown were RMB81.3 billion, RMB75.8 billion and RMB42.4 billion, respectively, with double-digit growth rates.
It is worth saying that the gross profit growth rate of State Control and Jointown is larger than that of China Resources and Shanghai Pharmaceutical, because: the gross profit of the pharmaceutical industry is higher, and the data shows that the gross profit margin of the pharmaceutical business is generally only more than 6 points, the gross profit margin of the retail industry is relatively high, 10 to 20 points, while the gross profit of industrial enterprises has always been 50 to 60 points.
Taking the above drugs as an example, the announcement shows that during the reporting period, the company's pharmaceutical industry sales revenue was 9.627 billion yuan, the gross profit margin was 57.66%, and its pharmaceutical distribution revenue was 66.2 billion yuan, and the gross profit margin was only 6.68%.
Since Sinopharm Group divested the industrial sector from Sinopharm Holdings through capital operations, Sinopharm Holdings itself has no industrial income, which also causes its gross profit margin to be relatively low and low.
Pharmaceutical distribution: Expanding marketing networks and actively developing end markets is the overall trend
In June 2018, the Ministry of Commerce issued the Statistical Analysis Report on the Operation of the Drug Circulation Industry (2017). The report shows that as of the end of 2017, there were 13,146 pharmaceutical wholesale enterprises in the country; 5,409 pharmaceutical retail chain enterprises, 22,924 subordinate stores, 22,514 retail single pharmacies, and 453738 total retail pharmacies.
In particular, since the implementation of the two-invoice system policy, the terminal distribution enterprises have been forced to purchase directly from pharmaceutical production enterprises in the short term, resulting in a decline in sales of Daxing distribution enterprises to small and medium-sized distribution enterprises; the implementation of policies such as medical insurance control fees and drug proportion restrictions has promoted the decline in drug bidding prices and dosage, resulting in a decline in the sales of distribution enterprises to medical terminals - in this context, large pharmaceutical wholesale enterprises also need to continuously enhance their distribution business capabilities by actively developing the endogenous growth mode of the terminal market.
State control - maintain contraction optimization, expand the terminal market
Sinopharm's distribution revenue was 131.7 billion yuan, an increase of 6.25% year-on-year. Its position as a distribution leader remains solid, with the Group's distribution network covering 31 provinces, municipalities and autonomous regions in the PRC as at 3 June 2018.
The Group's direct customers include 15,118 hospitals (including 2,307 of the largest and highest-level tertiary hospitals only), an increase of 839 year-on-year, 130,893 small-scale end customers (including primary medical institutions, etc.), an increase of 18,852 year-on-year, and 95,971 retail pharmacies, an increase of 21,863.
The terminal market of state-controlled enterprises, from hierarchical hospitals to primary medical institutions, and then to the retail market has grown relatively rapidly, which indicates the intention of state-controlled to actively develop the terminal market.
Among them, Sinopharm's national pharmaceutical distribution logistics network includes 5 hub logistics centers, 33 provincial logistics centers, 242 prefecture-level and municipal logistics outlets, 26 retail logistics outlets, and a total of 306 outlets.
Compared with 2017, this data has not changed much, of which the number of provincial-level outlets has decreased by 5, and the number of prefectural and municipal outlets has increased more.
This shows that state control continues to continue the strategy of marketing network contraction and optimization in 2017, reducing the provincial logistics center, deepening cultivation, increasing unit output and improving profitability. At the same time, it will steadily expand downstream resources and terminal markets, and enrich logistics outlets and retail logistics outlets in prefecture-level cities.
CR Pharmaceutical: Expanding and penetrating the grassroots market
Cr pharma's distribution business achieved revenue of 67.542 billion yuan, an increase of 10.2% year-on-year. According to the report, CR Pharmaceutical has accelerated its network layout in the blank western provinces, and by the end of the reporting period, its medical expense distribution network has covered 27 provinces, municipalities directly under the central government and autonomous regions across the country.
At the same time, CR Pharma's downstream end market is expanding rapidly, with customers including 5,857 secondary and tertiary hospitals, 38,954 primary medical institutions, and 28,916 retail pharmacies. Compared with the relevant data in 2017, the number of second- and third-level hospitals of China Resources Medicine increased by 772, and the number of primary medical institutions was 6790, an increase of nearly 2500.
It can be seen from the data that CR Pharmaceutical has expanded its terminal resources rapidly, but there is still a big gap with state control.
Shanghai Pharmaceutical: Rapid layout of marketing network, exploring business development
According to the report, Shanghai's pharmaceutical distribution business achieved sales revenue of 66.252 billion yuan, an increase of 13.21% year-on-year. During this period, it has completed the acquisition of distribution business in Jiangsu, Shanghai, Liaoning, Guizhou, Sichuan, Anhui, Hainan and other provinces, deepening the coverage of key prefectures and municipalities in these provinces.
Compared with last year's data, in 2018, Shanghai's pharmaceutical distribution network covered 31 provinces, municipalities directly under the central government and autonomous regions across the country, an increase of 9 provinces year-on-year, of which 24 provinces, municipalities directly under the central government and autonomous regions directly covered through holding subsidiaries, covering more than 20,000 medical institutions of various types. The addition of marketing networks in 9 provinces shows that the layout of Shanghai pharmaceutical marketing network is rapid, in order to achieve full coverage of the distribution business nationwide.
At the same time, Shanghai Pharmaceutical is still exploring new business development: the integration of Shanghai Pharmaceutical Cardara is still progressing as scheduled, dtp pharmacy and contract sales business are initially integrated, and breakthroughs in hospital supply chain business have been achieved in Chongqing, Sichuan and other regions.
Jointown: Upward invasion of public hospitals, rapid expansion of primary medical care
Jointown achieved sales of 13.529 billion yuan in medical institutions during the reporting period, an increase of 30.57% over the same period of the previous year.
As we all know, Jointown has always distributed drugs mainly to hospitals, clinics and chain pharmacies below the second level. Unconsciously, Kyushu Quickly invaded the public hospital. The report shows that the company's hospital net sales (secondary and above hospitals) maintained a relatively rapid growth, achieving sales of 8.692 billion yuan during the period, a positive increase of 23.01% over the same period last year. The company's second-level and above hospitals have more than 4470 effective customers.
According to the data, Jointown is different from the country, Shanghai and China that control public hospitals, it relies on the characteristics of "fast approval", the main sales objects are wholesalers below the scale, pharmacies, private hospitals, clinics, etc., fast in and out, thin profits but fast turnover. With the expansion of medical insurance, the sales of drugs in public hospitals have grown rapidly, and Jointown has begun to open up the secondary and above hospital market.
At the same time, benefiting from the promotion of hierarchical diagnosis and treatment policies and the positive impact of the sinking of drug sales channels, the sales growth rate of the company's primary medical institutions below the second level accelerated, achieving sales of 4.838 billion yuan during the period, and at the end of the reporting period, the effective customers of the company's grass-roots medical institutions below the second level reached more than 75,100, an increase of 23,000 year-on-year, and the expansion speed was rapid.
In the overall semi-annual report comparison, the leading position of state control can not be shaken, with the deepening of policies such as the two-invoice system, the concentration of the industry continues to increase, and the other three companies have almost the same trajectory: rapid expansion of marketing networks, occupation of grass-roots markets - this also represents the change of the industry to a certain extent
Source: Cyberblue