Author: Li Qingyu
Editor: He Jing
Fashion products: Shen He Cheyi
Source: Shoucai-Shoutou Finance Research Institute
Medical reform tide is moving forward, improving quality and efficiency, and developing high-quality into a new industry ecosystem. How to better survive and develop in the second half of the reshuffle and reshape, capital support is undoubtedly an important part. On November 4, Heyuan Bio's Science and Technology Innovation Board was first released; more than a month ago, Weikang Medical's application for GEM IPO was accepted.
There is no need to worry about becoming bigger and stronger, but what is the value and can it be achieved?
01
turn the blame on the cloud, data conflicts, poor R&D
What is the growth force?
Public information shows that Heyuan Bio was founded in 2013 and is a biotechnology company focusing on the field of gene therapy. The actual controller and controlling shareholder are Pan Youdong.
This is not the first show of Heyuan Bio's on the listing of .
It was listed on the New Third Board at the end of 2016, but it was a loss-making situation that was hard to say. The financial report shows that from 2014 to 2019, Heyuan Bio's losses for six consecutive years, with a loss of more than 36 million yuan in 2019. How to continue
? The prospectus disclosed that during the reporting period, the operating capital needs of and continuous capital expenditures were mainly met through bank loans and equity financing.
Turning point occurred in 2020. Heyuan Bio turned losses into profits in one fell swoop, with a net profit attributable to shareholders exceeding more than 91 million yuan.
From 2018 to the first half of 2021, the company's revenue was 44.2097 million yuan, 62.9145 million yuan, 143 million yuan, and 99.0173 million yuan, corresponding net profits were -33.4108 million yuan, -42.8303 million yuan, 91.285 million yuan, and 15.4457 million yuan, respectively. It is naturally gratifying to say that
has turned a big reversal, but there are also many doubts on the public opinion.
First of all, the signing of a major contract. In 2020, Heyuan Bio signed 9 major contracts with Kangyuan Pharmaceutical , Kanghua Bio and other companies, resulting in a significant increase in business volume.
prospectus disclosed that Heyuan Bio signed a major contract with Nanjing Jimai Bio in March 2020. However, industrial and commercial information shows that Nanjing Jimai Bio was established in July 2020.
is also in 2020. Heyuan Bio transferred 39.93% of the equity of the former holding subsidiary, Adis Bio, to the held stake in the platform controlled by the actual controller Pan Youdong. Although
has doubts about "left hand turning right hand", Heyuan Bio successfully confirmed the investment income of more than 72 million yuan, becoming the "big head" of profit that year.
It is worth noting that in 2020 and the first half of 2021, Adis' net profit was -22.8085 million yuan and -5.9298 million yuan respectively.
In other words, Adis is a loss-making company. The above-mentioned sale of Heyuan Bio can be said to have both benefited and avoided drag. It beats two birds with one stone. abacus is a masterpiece.
If this part of is deducted from non-recurring gains and losses , the net profit after deducting non-operating items in 2020 was more than 26 million. There are also doubts about the performance data of
. The prospectus shows that Heyuan Bio's revenue in 2018 was 44.2097 million yuan, corresponding to a net profit of -33.4108 million yuan during the same period. The 2018 annual report of the Stock Transfer System showed that its revenue was 43.0685 million yuan and its net profit attributable to shareholders was -28.9105 million yuan.
In the same reporting period, the revenue difference was 1.1412 million yuan and the net profit difference was 4.5003 million yuan. Which data is wrong?
During the same period, sales to major customers and purchases from major suppliers were also shown in different ways. The prospectus shows that in 2018, the company's top five customers had a total sales of 14.7675 million yuan, accounting for 33.4%. The total purchase amount of the top five suppliers was 4.2045 million yuan, accounting for 35.5%.
In the 2018 annual report, the sales of the top five customers was 14.3848 million yuan, a decrease of 382,700 yuan from the prospectus, and the proportion decreased to 33.45%. The purchase amount of the top five suppliers was 736,600 yuan higher than the prospectus, but the proportion dropped to 29.77%.
It is worth noting that on August 19, 2021, the application review status of Heyuan Bio was changed to suspended because the relevant service agency was investigated by the China Securities Regulatory Commission for information disclosure violations involving companies on the New Third Board.
Is the internal control and risk control rigorous?
is also attractive, and the sales expense rate of is . From 2018 to 2020, it was 22.67%, 21.98% and 11.67% respectively, far exceeding the peer level
During the same period, the sales expense rate of domestic CRO/CDMO leader - WuXi AppTec was only 3.41% to 3.56%; WuXi Biologics was even lower, only 1.67% to 1.93%; the industry average was only 5.7% to 7.82%. Why is
so high?
Heyuanbi said that on the one hand, the gene therapy CRO business still accounts for a significant proportion in the company's revenue structure; on the other hand, compared with the CDMO services of comparable listed companies in the same industry, the scale of Heyuanbi's gene therapy CDMO business is still relatively small, and there are differences in scale benefits.
Indeed, compared with the industry giants, Heyuan Bio is still weak in terms of scale and overall strength. So, in addition to the sales expense rate, should the R&D expense rate be more in the same frequency?
From 2018 to 2020, Heyuan Bio's R&D expenses were RMB 20.2677 million, RMB 23.7986 million and RMB 21.9826 million, respectively, accounting for 45.84%, 37.83% and 15.4% of revenue, respectively, declining year by year. It even dropped to 8.52% in the first half of 2021. Will it affect long-term growth? How to maintain long-term competitiveness?
Obviously, this is not a plus point that impacts the Science and Technology Innovation Board.
From this, look at the performance of invention patent , it will not be abrupt. As of the date of signing the prospectus, Heyuan Bio has a total of 12 invention patents. Nine of the patents were obtained from July to October 2020. In other words, before that, it had only 3 invention patents.
and "Science and Innovation Attribute Evaluation Standard 1" stipulates that companies intend to log in to the Science and Technology Innovation Board must have more than 5 invention patents that form main business income.
The geometric quality of science and technology innovation, is there any suspicion of a surprise? People don’t judge each other.
But in an emerging strategic industry, innovation first and core technology foundation have been the key elements for practitioners to survive and develop and consolidate certainty.
It is worth emphasizing that judging from the performance in the past three years, Heyuan Bio's gene therapy CDMO service has grown strongly, and its revenue scale and proportion continue to rise, accounting for 71.47% in 2020; the CRO business dropped from 67.71% in 2018 to 25.78% in 2020. Whether it is CRO or CDMO, they all have high requirements for the company's R&D capabilities and high technical content.
At the same time, looking at the domestic gene therapy, although the investment and mergers and acquisitions market is booming, there is only one gene therapy drug currently on the market, and safety has always been an important hindering the development of gene therapy. Yu Shengmei, an industry analyst at
, said that the gene therapy market has not yet taken shape, and as a pioneer of blue ocean and Metabi, it has the potential for unicorns; however, the B-side of various uncertainties cannot be ignored. In terms of competitive dimensions, new players and crossovers should not be underestimated. If Heyuan Bio, which has weak comprehensive strength, wants to maintain its advantages and not be eliminated, it must consolidate its core scientific research strength and continue to run with high quality.
In other words, Heyuan Biology has the urgency to become bigger and stronger, and IPO is also a diligent move and deserves recognition.
But whether the long-cherished wish can be realized is just the beginning. The launch of
is not a panacea. Compared to looking up at the capital starry sky, it is better to work hard on R&D innovation, product strength, efficiency and efficiency. This is the real kingdom to consolidate competitive advantages and scientific and technological innovation background.
02
main business gross profit margin declines
15 billion dividend Liu Chunliang's "fair" thought
similar thinkers, and Weikang Medical. It was established in March 2012. Its main business is the research, development, production and sales of disposable medical consumables. Liu Chunliang and Liu Lijie are the actual controllers.
2018-first quarter 2021, the company's revenue was RMB 240 million, RMB 262 million, RMB 254 million and RMB 61 million respectively; net profit attributable to shareholders was RMB 68.8242 million, RMB 69.0439 million, RMB 54.705 million and RMB 13.1872 million respectively.
Overall, the performance is not large and the growth is not outstanding. The double decline in profits in 2020 is even more eye-catching.
points of business, the surgical care series products have been the largest category of products in the past three years, accounting for about 50% of the revenue; followed by the respiratory series and anesthesia series revenue account for about 17% and 12%.
and the gross profit margin of the main business showed a decreasing trend year by year. From 2018 to Q1 2021, it was 44.67%, 43.42%, 40.90% and 40.54% respectively.
From the perspective of channels, it is mainly divided into overseas markets and domestic markets. The former is mainly produced and sold through OEM; the latter is mainly distributed and direct sales are supplemented.
During the reporting period, Weikang Medical's direct export revenue was RMB 111.745 million, RMB 135.2664 million, RMB 113.3438 million and RMB 26.0679 million, accounting for 47.58%, 53.18%, 45.92% and 44.19% of the main business revenue, respectively.
export customers are mainly Cardinal, Medline, Intersurgical and HUM, all of which are well-known foreign medical device brand operators. However, during the reporting period, the total proportion of the company's direct export revenue was more than 70%, and the risk of export customers being concentrated can not be ignored.
prospectus also admitted that if the external policy environment or market changes, or the company cannot meet the needs of export customers in terms of product quality, supply capacity, etc., resulting in the major export customers reducing the purchase amount of the company or stopping cooperation with the company, the company's operating performance will be adversely affected.
is not a deliberate exaggeration. In-depth business, Weikang Medical products belong to the category of medical polymer materials for low-value medical consumables. From the perspective of industry characteristics, there are currently many competitive entities in my country's low-value medical consumables industry, with market concentration and serious homogeneous competition.
focuses on Weikang Medical, and its size and comprehensive strength are not advantageous. It chose Weigao Co., Ltd., Condelai, Sanxin Medical, Weili Medical, and Gongdong Medical as its competitors. Taking Viagra Co., Ltd. as an example, the main business revenue from 2018 to 2020 was approximately RMB 5.011 billion, RMB 5.656 billion and RMB 5.99 billion respectively. In addition to the scale gap between
, Weikang Medical also admitted that compared with industry-leading companies such as Weigao Co., Ltd., Condellai, and Weili Medical, the company also has a certain gap in the scale of production capacity, financial strength and technical research and development accumulation.
Based on the market size of low-value medical consumables calculated by the Medical Equipment Research Institute and the China Business Industry Research Institute, the market share of from Weikang Medical's main business income in 2020 is about 3‰; based on the market size of disposable medical consumables for medical polymer materials calculated by the Medical Equipment Research Institute and the China Business Industry Research Institute, the market share of 14 billion yuan of medical polymer materials revenue is about 1.20%.
independent industry analyst Li Chen said that for homogeneous, strong competition, and low thresholds, product quality and R&D investment are the keys for practitioners to break through and grow.
Unfortunately, Weikang's R&D investment is a bit difficult to make. From 2018 to the first quarter of 2021, R&D expenses were RMB 7.0837 million, RMB 7.9142 million, RMB 6.8119 million and RMB 1.5705 million, respectively, accounting for 2.95%, 3.02%, 2.69% and 2.59% of revenue, respectively, and continued to decline and was lower than the average value of comparable listed companies in the peers.
It is worth noting that the prospectus shows that Weikang Medical passed the qualification certification of high-tech enterprises in 2015 and passed the review of high-tech enterprises in 2018, with a validity period of three years. Corporate income tax will be paid at a reduced rate of 15% from 2018 to 2020. In August 2021, it submitted an application for high-tech enterprises to review .
However, from 2018 to 2020, the average R&D expense ratio of Weikang Medical (total R&D expenses in the past three years/total sales revenue in the past three years) was 2.88%. The " High-tech Enterprise Certification Management Measures " stipulates that the proportion of enterprises with sales revenue of more than 200 million yuan in the past year shall not be less than 3%.
In other words, Weikang Medical has the risk of high-tech enterprise qualification certification. Once the qualification is lost, the impact of performance must be observed.
Mapping In terms of product forces, it is not surprising that some quality control "troubles" are.
On September 20, 2017, Weikang Medical reported that because the residual vacuum in the national supervision and sampling did not meet the standards, General Electric Medical Systems (China) Co., Ltd. voluntarily recalled the disposable suction tube (registration number: Suji Note 20142660658) it produced. The recall level is level 3;
On September 20, 2018, National Medical Products Administration issued a notice on the results of medical device supervision and random inspections (No. 7) (No. 90, 2018). A batch of disposable suction tubes produced by Weikang Medical, and the vacuum control device does not meet the standards;
On February 25, 2021, the Jiangsu Provincial Drug Administration issued an "Administrative Penalty Decision" to the company (Su Drug Administration Suji Punishment No. 9, 2020). The company was fined 35,000 yuan for producing disposable dressing packages that did not meet the standards requirements for registered product (the unqualified item is the residual amount of ethylene oxide );
On September 30, 2021, Weikang was fined 45,000 yuan for producing 300 disposable nasogastric tubes that did not meet the standards requirements for registered product.
As the opening article said, under the tide of medical reform, improving quality and efficiency and high-quality innovation have become a new watershed in value. Obviously, there are many areas where Weikang Medical needs to evolve. The prospectus for
also highlights the impact of the two-vote system and volume-based procurement policies on the company's operating performance.
In the short term, the implementation of the "two-ticket system" has not yet had a significant impact on the low-value medical consumables field in which the company is located; but in the long run, it is not ruled out that the "two-ticket system" is fully implemented in the low-value medical consumables field. If the company cannot formulate relevant response measures in a timely manner and adjusts the dealer structure, it will face the risk of market share and operating performance decline;
With the promotion of volume-based procurement, if the company implements volume-based procurement of low-value consumables products in the future, the price and sales volume of the company's products in such areas may be greatly affected.
words carefully, Weikang Medical is aware of the trend changes and is also in awe of the crisis. However, it is better to say that everything is worse than silver than to be efficient and practical and change quickly.
lengthens the dimension, and Weikang Medical is not a novice in IPO. In 2017, he sought to go public on the main board, but he had no choice but to return in a defeat. Lin Yong, an industry analyst at
, said that compared with its peers such as Viagra, Condellai, and Sanxin Medical, Weikang Medical's capital layout has fallen behind. This time, I am obsessed with listing on A shares and urged to use capital to achieve speed and volume.
Just, if you strive to speed up, you must also have enough sincerity to impress investors.
Calculated that Weikang Medical distributed a total of 150 million yuan in cash dividends to shareholders in 2020, even exceeding Weikang Medical's attributable net profit of 69.0439 million yuan in 2019. Is
suspected of sudden dividends? IPG China chief economist Bai Wenxi believes that this practice of far exceeding the net profit of that year is actually distributed part of the accumulated undistributed profits over the years, indicating that the current shareholder is unwilling to share past business accumulation with future potential investors.
's main business is hard to say, and it has made large dividends. It is still in such extensive operation in the IPO. Will investors pay for it?
Where to go, test the great wisdom of Liu Chunliang and Liu Lijie. On the eve of
IPO, Haopeng Industrial held 77.27% of Weikang Medical's stake and is the company's controlling shareholder. Liu Chunliang and Liu Lijie and his daughter indirectly control 77.27% of the company's shares through Haopeng Industrial, plus Liu Chunliang's direct holdings of 13.64% and indirectly control 9.09% of the company's shares through Suqian Hongjian, the two control a total of 100% of the company's shares.
industry analyst Hao Rui said that too concentrated equity can easily affect the transparency and fairness of major business decisions of the company. If the relevant internal control system is not perfect enough, there may be a risk of harming the interests of small and medium shareholders.
Another box, the highest proportion of Weikang social security payments from 2018 to 2020 was 64.17%, and the highest proportion of provident fund payments was 36.24%. This obviously violates relevant laws.If the social security and provident fund are paid according to the actual salary of employees, the total amounts that Weikang Medical needs to pay in 2018 to 2020 will be RMB 10.5442 million, RMB 10.489 million and RMB 3.6419 million, RMB 3,6419 million, RMB 12.59%, RMB 12.99% and RMB 5.74% of the total profits in the same period, respectively.
guarantees the legitimate rights and interests of employees and is the value basis for the growth and stability of the enterprise.
Can Weikang Medical and Liu Chunliang be fair?
03
Days of the day, value scheming
This is not an option, but a must-answer question.
Of course, outside the pain points and fals, standing at the IPO gate, Heyuan Biology and Weikang Medical also have remarkable points.
At present, Heyuan Bio continues to expand the GMP production platform and continuously improves its industrial service capabilities.
In the future, Heyuan Bio will further optimize the business model of "college cooperation + pilot research on gene therapy + industrialization of gene therapy" and become a comprehensive service platform for gene therapy drug CRO-CDMO-CMO.
In fact, before the IPO, Heyuan Bio had a high capital popularity. It has completed multiple rounds of financing in succession, attracting well-known investment institutions such as Zhengxingu Capital and Tencent .
is that its placeholding is scarce: it is the only platform in China that covers all six virus vectors , including plasmid , lentivirus , recombinant adeno-related virus, etc. The types of viral vectors cover diversification, which means that Heyuan can cooperate with research institutions and enterprises in different disease fields, and the subsequent imagination space cannot be underestimated.
See Weikang Medical again. Liu Chunliang, the head of the family, has more than 30 years of experience in the medical device industry and is a big business owner.
At the same time, Weikang Medical takes production process automation as an important research direction and is committed to improving the automation level of production and manufacturing. It has obtained patent authorizations such as an automatic assembly machine for suction tubes, automatic assembly packaging machine for nasal oxygen tubes, and an automatic assembly line for silicone catheters, and has realized the automatic assembly and production of products such as suction tubes, drainage bags, and . There is no shortage of expectations for subsequent development.
In April this year, the China Securities Regulatory Commission and the Shanghai Stock Exchange simultaneously revised the "Science and Innovation Attribute Evaluation Indicators" and the "Interim Regulations on Issuance and Listing Application and Recommendation of Enterprises on the Science and Technology Innovation Board", further emphasizing the "Science and Innovation Attributes" listing threshold. The stricter review of
is also a guiding signal for the entire A-share market: the era of "value ironclad" for listed and quasi-listed companies has arrived.
sorting shows that Heyuan Biological and Weikang Medical have both "stumbling blocks" such as insufficient R&D and poor overall competitiveness. Whether it is through the review or restart, both have a long capital journey. This is a value marathon. And the watershed between success and failure is to recognize oneself and follow the trend, and to check for omissions and fill in the gaps.
This may be the greatest significance of IPO.
This article is original
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