The house leaked but it rained all night. Tongce Medical , which had been suffering from bad news before, once again encountered a "black swan".
According to multiple media reports, the National Medical Insurance Administration recently issued a relevant notice titled "Notice on Carrying out Investigation and Registration of Oral Implant Charges and Medical Service Prices", which also heralded the long-rumored "Dental Implant Collection" in the market. ", it may really come to fruition.
Affected by the news, after opened on August 15, Tonce Medical's stock price also plummeted, approaching the limit during the session, and finally closed down 9.03%; in recent trading days, Tonce Medical's stock price The stock price continued to fall, but in just 5 days, Tongce Medical's stock price fell by a total of 16.27%, and its market value evaporated by nearly 8 billion in 5 days.
As the "number one dental stock" of A shares , Tongce Medical was previously known as "Yamao". It has been sought after by many funds with its stable growth performance and super high gross profit margin. The stock price was once in 3 It has surged more than 12 times in 2016, with a market value as high as 135.29 billion at its peak. However, with the frequent occurrence of bad news in the past two years, Tongce Medical's latest stock price has dropped by more than 70%, and its market value has also evaporated by more than 95 billion.
Nowadays, there are signs that centralized procurement, which has been called a "big bad thing" for pharmaceutical companies, is about to be launched. Will Tongce Medical, which has already made a sharp correction before, take this to the next level? More importantly, will the profit-making myth of "Yamao" come to an end because of this?
The magnificent transformation from real estate company to dental faucet
As the saying goes, "golden eyes, silver teeth, and copper bones", in the A-share market, dentistry has always been regarded by investors as a golden track with long slopes and thick snow.
However, although the dental track has long slopes and thick snow, in the A-share market, the only company related to dentistry is Tongce Medical. Because of this, Tongce Medical has been receiving much attention since its backdoor listing. The pursuit of funds is regarded as "Yamao" by investors.
The history of Tongce Medical can be traced back to 1995, 27 years ago. At that time, Lu Jianming founded Tongce Real Estate Development Co., Ltd., whose main business was real estate development. With Zhengheju, Hemuyuan, Tongce Plaza, Qianjiang Times and other real estate projects, Lu Jianming successfully won the first batch of real estate projects. Gold, while Tongce gradually transformed from a real estate company into a comprehensive investment company .
Time came to 2006, when Hangzhou Stomatological Hospital was restructured. This hospital, founded in 1987, was the largest dental specialty hospital in Zhejiang and was well-known in Zhejiang and even the country. At this time, Lu Jianming, who was already financially free, heard the news and without hesitation spent 100 million to successfully acquire all the equity of the hospital. In the second year, he injected all the equity of the hospital into the previously purchased hospital. Among the " shell resource " Zhongyan Textile, Tongce Medical, the "number one dental stock" in A-shares, was born.
Of course, going public is just the first step in the expansion of Tongce Medical. With financial support, Tongce Medical began to copy and expand through the "regional main hospital + branch hospital" model. The so-called "regional main hospital + branch hospital" is to build each regional main hospital into a leading hospital in local scale and level. The regional main hospital platform will support doctors' medical service skills and academic status, and form a brand in the region. Influence, the branch hospital, as the "moat" of the main hospital, can quickly spread the brand influence, realize the optimization of medical resources and facilitate customer treatment.
At that time, Tongce Medical already had three general hospitals in Zhejiang Province: Pinghai Campus, Chengxi Campus of Hangzhou Stomatological Hospital and Ningbo Stomatological Hospital. Tongce Medical used the three general hospitals as "base areas" to expand through self-construction, mergers and acquisitions, etc. Branch hospital, eventually achieving rapid expansion. According to data, Tongce Medical has achieved rapid expansion. By the end of last year, Tongce Medical had more than 50 hospitals.
With the expansion of scale, Tongce Medical's revenue has also continued to grow.According to the latest financial report data, as of the end of 2021, Tongce Medical has achieved revenue of 2.781 billion, which has increased nearly 30 times compared with the revenue of less than 100 million when it was first backdoor listed in 2007, and the net profit has also increased from 2007 to 2007. It has increased from just over 10 million in 2021 to 703 million in 2021, an increase of nearly 70 times. With the advent of
collection, can the profiteering myth of "Yamao" continue?
In fact, the reason why Tongce Medical is called "Yamao" by investors, in addition to the above reasons, is also because of its super earning power.
According to the latest financial report data, as of the first quarter of 2022, Tongce Medical’s gross profit margin was 46.75% and net profit margin was 29.07%. Although it is still difficult to compare with Kweichow Moutai , this data has already reached the peak in the pharmaceutical industry. at an extremely high level.
So, why can Tongce Medical maintain such a high gross profit margin? Behind this, it is actually related to the "sky-high" treatment fees in the dental implant industry.
Before this, there were media reports that oral treatment was very expensive, often costing thousands or even tens of thousands.
For dental implants, the cost of treatment is even higher. According to media reports, the average cost of dental implant treatment ranges from 6,000 to 20,000 yuan. Implanting a full mouth of teeth is equivalent to buying an apartment in the county. Some people even compare dental implants to "a tooth is equal to a BMW " , and also because the price is too expensive, there have been rumors in the market that dental implants will be promoted to "centralized purchasing."
Recently, there has been more clear news about the "centralized procurement" of dental implants.
According to media reports, the "Notice on Carrying out Investigation and Registration of Oral Implant Charges and Medical Service Prices" recently issued by the Office of the National Medical Insurance Administration mentioned that in order to implement the requirements of relevant documents of nine ministries and commissions, in conjunction with oral implant medical services and consumables The special management of charges will lay a solid foundation for the subsequent implementation of centralized mass procurement of implants and standardization of price items and charges for oral implant medical services. It was decided to comprehensively carry out investigation and registration of oral implant charges and medical service prices.
From the past, as long as relevant drugs enter the "centralized procurement" project, a significant price reduction will be inevitable. For example, the price of the cardiac stent , which was tens of thousands of yuan before, dropped to a few hundred yuan after the centralized procurement. Related Pharmaceutical companies' profits have plummeted. It is also because of this that once the once "hugely profitable" dental implants are "collectively purchased", it is inevitable that the price will drop significantly, and Tongce Medical's high gross profit margin will also be difficult to sustain.
Of course, from the current point of view, we still don’t know what impact the centralized purchasing will have on Tongce Medical, and Tongce Medical also responded that it “believes that the centralized purchasing of dental implants will not have an impact on the company’s product sales and profits.” However, Judging from the stock price, consumers are very worried about "centralized purchasing".
After the news of the "Dental Implant Central Purchasing" came out, Tongce Medical's stock price plummeted at the opening of trading on August 15. It was close to the limit during the session, and finally closed down by 9.03%; in the past few trading days, , Tongce Medical's stock price continued to fall, but in just five days, Tongce Medical's stock price fell by a total of 16.27%, and its market value evaporated by nearly 8 billion in two days.
Obviously, the centralized procurement of dental implants does not have as "little impact" as Tongce Medical expected. Once the centralized procurement of dental implants is implemented, the profit-making myth of Tongce Medical may disappear at any time.
"Yamao" is difficult to break through
In addition to the big disadvantage of "centralized procurement of dental implants", weak growth is another problem for "Yamao".
In fact, long before the bad news of "dental implant centralized purchasing" appeared, Tongce Medical suffered a sharp decline due to weak performance growth.
According to the latest data, as of the first quarter of this year, Tongce Medical achieved revenue of 654.6 million, a year-on-year increase of only 3.74%; its attributable net profit was 166.5 million, a year-on-year increase of only 1.25%. The growth of both data Speed has hit a new low in recent quarters.
Affected by its performance, its stock price has also seen a significant retracement. As of the close of trading on August 16, Tongce Medical’s stock price was only 132.15 yuan. Compared with its peak period, Tongce Medical’s stock price has fallen by nearly 132.15 yuan. 70%, and the market value has also evaporated by more than 90 billion.
The reason why Tongce Medical has experienced weak growth is that "being trapped in Zhejiang" is an important reason.
According to financial report data, as of the fourth quarter of last year, Tongce Medical’s revenue in Zhejiang Province was 2.482 billion, accounting for 89.27% of revenue; revenue outside Zhejiang Province was 276.1 million, and the revenue ratio was only 9.93 %. Obviously, most of Tongce Medical’s revenue still comes from Zhejiang.
Judging from the institutional distribution of Tongce Medical, as of the fourth quarter of last year, of the 60 dental institutions in operation by Tongce Medical, 43 were in the province, and the remaining 17 dental medical institutions were distributed in Hubei, Hunan, and Yunnan and Jiangsu Province, Zhejiang Province clearly accounts for the majority.
In fact, after Tongce Medical decided to implement the "regional general hospital + branch hospital" model, this situation has already been doomed. After all, Tongce Medical's powerful and famous general hospitals are still concentrated in Zhejiang Province. Once out of Without Zhejiang Province, the reputation of Tongce Medical will be greatly reduced.
Regarding the company's slow expansion, Lu Jianmin previously explained that "the expansion of hospitals cannot be as rapid as the fast-moving consumer goods industry ." He also said that if Tongce Medical's revenue is scattered across the country, not to mention the huge increase in management costs, each person No one can compete with others.” In other words, the current situation of Tongce Medical may be difficult to solve in the short term.
From the current point of view, on the one hand, there is the "centralized procurement of dental implants" that is hanging in the air and has not yet really taken off. On the other hand, it is the current situation of declining revenue growth and weak growth. Judging from various signs, the once highly sought after "Yamao" has already fallen from the altar. If the price of dental implants really drops sharply due to centralized procurement, Tongce Medical is likely to move to the next level.
