On April 15, Pien Tze Huang (600436, SH) released its 2021 annual report. In 2021, Pien Tze Huang will achieve an operating income of about 8.02 billion yuan, a year-on-year increase of 23.2%; the net profit attributable to shareholders of listed companies is about 2.43 billion yuan, a year-on-year increase of 45.46%.
The “Daily Economic News” reporter noticed that Pien Tze Huang’s core product, liver disease drugs, still contributed the bulk of its gross profit. In 2021, liver disease drugs contributed about 3.027 billion gross profit to Pien Tze Huang, accounting for about 74.5% of its overall gross profit.
The gross profit margin of liver disease drugs in 2021 will be about 81.79%, a slight decline of 0.16 percentage points year-on-year. The cosmetics and daily chemical industry will achieve operating income of about 840 million yuan in 2021, a year-on-year decrease of 7.05%.
In addition, Pien Tze Huang’s R&D investment is increasing, and Pien Tze Huang’s R&D expenses will double in 2021. According to the drug clinical trial registration and information publicity platform, a phase II clinical trial of Pien Tze Huang for the second-line treatment of unresectable primary liver cancer is in progress.
In terms of industries, in 2021, the pharmaceutical industry contributed about 7.1 billion yuan in operating income to Pien Tze Huang, a year-on-year increase of 27.65%; the cosmetics and daily chemical industries contributed about 840 million yuan in operating income to Pien Tze Huang, a year-on-year decrease of 7.05%.
Image source: Screenshot of Pien Tze Huang’s 2021 Annual Report
The “Daily Economic News” reporter noticed that Pien Tze Huang did not mention the keyword “one core and two wings” in its 2021 annual report. According to the explanation given in Pien Tze Huang’s 2021 semi-annual report, “one core and two wings” refers to strengthening the two wings of cosmetics, daily chemical products, health care products, and health food on the basis of consolidating the pharmaceutical manufacturing industry, and at the same time expanding the pharmaceutical circulation industry as a supplement .
In terms of gross profit contribution, the pharmaceutical manufacturing industry contributed about 3.1 billion gross profit to Pien Tze Huang, a year-on-year increase of about 47%; the pharmaceutical distribution industry contributed about 380 million yuan, a year-on-year increase of about 50%; the cosmetics and daily chemical industry contributed about 560 million gross profit Yuan, an increase of about 2.9% year-on-year.
Obviously, the contribution growth rate of Pien Tze Huang’s “two wings” to gross profit in 2021 is low, while the contribution of Pien Tze Huang’s “one core” to gross profit is still in an absolute dominant position. Whether measured from the two dimensions of income or gross profit, liver disease medication is the core of Pien Tze Huang’s “one core”.
In 2021, the market demand for Pien Tze Huang is strong, and it once set off a lot of discussion. Pien Tze Huang said that the company considered the situation and solved the problem of “hard to find one medicine” by opening its own online channels and increasing the amount of online and offline markets.
“First, in the aspect of special retail, the special retail business of Chinese Medicine Hall was launched, and special retail supply support for capsule dosage forms was added to Pien Tze Huang Hongren Health Center and its retail stores; the second aspect of online retail, the construction of an online sales platform was launched, and Pien Tze Huang Pharmacy was launched successively. Tmall flagship store, Pien Tze Huang Pharmacy Jingdong flagship store and guaranteed supply, to hedge against malicious speculation in the market. On the day of ‘Double Eleven’, Pien Tze Huang tablet sales ranked first in Tmall Health and JD Health’s hepatobiliary drugs.” Pien Tze Huang said.
Data source: Wind, reporter mapping
However, the gross profit margin of liver disease drugs in 2021 has declined slightly, decreasing by about 0.16 percentage points year-on-year.
“During the reporting period, the price fluctuations of important medicinal materials had a certain impact on the cost of Pien Tze Huang series products. In the long run, the prices of musk, bezoar and snake gallbladder showed an upward trend, which will bring upward pressure on the cost of Pien Tze Huang series products in the future.” Pien Tze Huang express.
Start the clinical study of Pien Tze Huang in the treatment of liver cancer
In 2021, Pien Tze Huang experienced the resignation of two chairmen.
In April last year, Liu Jianshun, the then chairman of Pien Tze Huang, applied to the board of directors for early retirement due to personal health reasons, resigning from the company’s director, chairman and special committee members of the board of directors. In December last year, Pan Jie, the former chairman of Pien Tze Huang, resigned from the board of directors from the board of directors, chairman and members of special committees under the board of directors due to work adjustment. Pan Jie no longer holds any positions in the company.
On December 9, 2021, Lin Weiqi began to serve as the new chairman of Pien Tze Huang.
In the 2021 annual report, Pien Tze Huang did not mention “one core and two wings”, but instead implemented a new strategic blueprint of “multi-core drive, two-way development”. Pien Tze Huang said that the board of directors of the company optimized the development strategy in a timely manner.
Regarding the “multi-core drive” strategy, Pien Tze Huang explained: “that is, to make excellent Pien Tze Huang, to make Angong Niuhuang Pills a large brand of Pien Tze Huang, and to strengthen Pien Tze Huang’s cosmetics; to tap the potential inward, improve quality and efficiency, and achieve high-quality development of Pien Tze Huang; external use Pien Tze Huang’s brand advantages, capital advantages and resource advantages, actively search for suitable targets, and steadily promote extension mergers and acquisitions, in order to achieve high-quality leap-forward development of the company.”
Overall, Pien Tze Huang’s costs and expenses in 2021 are well controlled, which is why its net profit growth rate exceeds that of operating income by about 22 percentage points. In 2021, Pien Tze Huang’s operating costs will increase by about 10.7%, management expenses will increase by about 12%, selling expenses will only increase by about 0.6%, and financial expenses have always been negative.
In contrast, the company’s R&D expenses increased significantly. In 2021, Pien Tze Huang’s research and development expenses will be about 200 million yuan, a year-on-year increase of 104.52%.
Image source: Screenshot of Pien Tze Huang’s 2021 Annual Report
According to Pien Tze Huang, its main R&D project is innovative research on the combination of Pien Tze Huang disease and syndrome based on modern disease spectrum.
Pien Tze Huang said that it insisted on using modern science to interpret traditional Chinese medicine, and made every effort to promote the national first-class protected traditional Chinese medicine, Pien Tze Huang, to carry out drug efficacy and clinical research on anti-tumor and other directions, and has officially launched Pien Tze Huang’s clinical research on increasing the function of treating liver cancer.
In March 2020, Pien Tze Huang announced that its supplementary application for drug registration for the addition of Pien Tze Huang lozenges for the treatment of advanced primary liver cancer was reviewed and accepted by the State Food and Drug Administration.
On December 29 last year, Pien Tze Huang announced for the first time on the drug clinical trial registration and information publicity platform, “Multi-center, randomized, double-blind, double-blind, multi-center, randomized, double-blind, double-blind, multi-center, randomized, double-blind, double-blind, multi-center, randomized, double-blind, double-blind, multi-center, randomized, double-blind, double-blind, multi-center, randomized, double-blind, double-blind, and double-blind study of Pien Tze Huang’s second-line treatment of unresectable primary liver cancer (toxin accumulation syndrome) by Pien Tze Huang for the first time on December 29 last year. Phase II clinical trial of parallel control of simulated and active drugs”, the current status of the trial is “in progress”.
“The company has officially launched the clinical research on Pien Tze Huang to increase the function of treating liver cancer, and at the same time, it has carried out more than 40 items of pharmacology and toxicology, quality standard research and clinical research topics of Pien Tze Huang and its dominant varieties. The scope of application will lay a solid foundation for expanding the market demand. In addition, drawing on Pien Tze Huang’s secondary development experience, speed up the efficacy mining of a series of advantageous varieties such as Pien Tze Huang Angong Niuhuang Pills and Yindan Pinggan Capsules, and promote post-marketing clinical re-evaluation, pharmacodynamic mechanism Research and other secondary development research.” Pien Tze Huang said.
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