On March 2, according to the official website of China Resources medicine, Qin Yufeng, former party secretary and President of Dong-E-E-Jiao Co.Ltd(000423) (hereinafter referred to as Dong-E-E-Jiao Co.Ltd(000423) , Dong-E-E-Jiao Co.Ltd(000423) . SZ), is suspected of serious violation of discipline and law, and is currently undergoing disciplinary review and supervision investigation by the Discipline Inspection Commission of China Resources Medicine Holdings Co., Ltd. and the supervision commission of Liaocheng City, Shandong Province. Wu huaifeng, former member of the Party committee and senior vice president of Dong-E-E-Jiao Co.Ltd(000423) was also investigated.
Qin Yufeng joined Dong-E-E-Jiao Co.Ltd(000423) at the age of 17. He served as president of Dong-E-E-Jiao Co.Ltd(000423) since 2005 and left on January 17, 2020. The resignation announcement disclosed that the reason for his resignation was “retirement at the age of retirement”. After his resignation, Qin Yufeng will no longer hold any position of Dong-E-E-Jiao Co.Ltd(000423) any post.
At that time, it was believed that there was another secret behind Qin Yufeng’s resignation. Because in 2019, Dong-E-E-Jiao Co.Ltd(000423) suffered the first loss in 24 years since the company was listed, which is also the most significant crisis in the 15 years since Qin Yufeng printed. In 2019, Dong-E-E-Jiao Co.Ltd(000423) net profit loss was 444 million yuan, a year-on-year decrease of 121.82%; The net cash flow loss from operating activities was 1.12 billion yuan, a year-on-year decrease of 211%.
Before that, Qin Yufeng made Dong-E-E-Jiao Co.Ltd(000423) into a “big white horse” in the pharmaceutical industry. In 2005 before Qin Yufeng took office, the company’s net profit attributable to the parent company was 109 million yuan, while in 2018, Dong-E-E-Jiao Co.Ltd(000423) net profit attributable to the parent company reached a record high of 2.085 billion yuan. However, because the high performance growth rate is closely related to the price rise mode, the hidden danger is also buried.
Zheshang Securities Co.Ltd(601878) released a research report in April 2019. According to the research report, since 2005, Dong-E-E-Jiao Co.Ltd(000423) products have raised their prices 18 times in total, and the price has increased 20 times Dong-E-E-Jiao Co.Ltd(000423) ‘s price increase strategy has enabled dealers to form a continuous expectation of price increase. In addition, the storage period of donkey hide gelatin is 5 years, and dealers can obtain greater benefits from hoarding goods, thus forming a marketing chain: the company keeps pressing goods to the sales channel, and dealers’ hoarding brings book value growth to the company. When the bubble is broken, when the price is too high and the real demand can not support the sales expectation, the sales strategy at the core of the price increase is finally “unable to run”.
According to the 2019 annual report, the Dong-E-E-Jiao Co.Ltd(000423) inventory in 2019 was 2711 tons, with a value of 3.522 billion yuan; In 2018, the inventory was 811 tons, with a year-on-year increase of 234.15%.
In 2019, the big white horse Dong-E-E-Jiao Co.Ltd(000423) collapsed, and Qin Yufeng also left the field. After taking office, the new management gave up the business logic of “value return and product price rise” that has been adhered to for more than ten years. The performance forecast for 2021 shows that the net profit of Dong-E-E-Jiao Co.Ltd(000423) attributable to the parent company is RMB 428478 million, with a year-on-year increase of 888%.
