Unexpectedly, the reshuffle of the pharmaceutical industry has quietly begun
On March 14, Guangdong Vtr Bio-Tech Co.Ltd(300381) replied to the inquiry letter of Shenzhen Stock Exchange again. Previously, Guangdong Vtr Bio-Tech Co.Ltd(300381) due to stripping the biomedical business sector and focusing on the development of biological enzyme preparations and animal nutrition and health, received the inquiry letter from Shenzhen Stock Exchange twice within one month.
As of the closing on March 15, Guangdong Vtr Bio-Tech Co.Ltd(300381) shares closed at 9.08 yuan / share, down 5.42%, with the latest total market value of 4.45 billion yuan.
divestiture of pharmaceutical business
For Guangdong Vtr Bio-Tech Co.Ltd(300381) twice replying to the inquiry letter of Shenzhen Stock Exchange, the source should be traced back to the end of January this year.
On January 29, Guangdong Vtr Bio-Tech Co.Ltd(300381) issued an announcement of major asset restructuring. According to the announcement, Guangdong Vtr Bio-Tech Co.Ltd(300381) based on business development and strategic layout, it is proposed to sell all assets related to biomedical business, that is, Hunan xinhexin biomedical Co., Ltd. (hereinafter referred to as “xinhexin”) held in cash Hunan keyixin biomedical Co., Ltd. (hereinafter referred to as “keyixin”) and Henan Lihua Pharmaceutical Co., Ltd. (hereinafter referred to as “Lihua pharmaceutical”) have all the equity of the three target companies.
If this transaction is completed, it means that Guangdong Vtr Bio-Tech Co.Ltd(300381) will completely divest its pharmaceutical business.
It should be noted that the operating revenue of the three companies to be sold accounted for 70.94% in 2020, and the total assets at the end of the period accounted for 56.45% of the total assets. This means that these three companies may become the main source of income and important assets of Guangdong Vtr Bio-Tech Co.Ltd(300381) 2020. This sale not only constitutes a major asset restructuring, but also attracted the attention of many investors.
On February 16, Guangdong Vtr Bio-Tech Co.Ltd(300381) received the first inquiry letter from Shenzhen Stock Exchange on asset restructuring. The inquiry letter asked Guangdong Vtr Bio-Tech Co.Ltd(300381) to explain whether this major asset restructuring will lead to the company’s main assets being cash after this restructuring, and whether this restructuring is really conducive to enhancing the company’s sustainable operation ability.
On February 26, the company replied to the inquiry letter issued by the Shenzhen Stock Exchange, which said that if the pharmaceutical sector is not stripped off and the investment is increased according to the forecast in the future, the company will face problems such as a significant increase in asset liability ratio and increased operational risk.
At the same time, Guangdong Vtr Bio-Tech Co.Ltd(300381) also explained the future business planning. It said that in the next three years, RMB 1.433 billion would be invested in building a “global core enterprise of steroid hormone API”, and RMB 1.033 billion would be invested in developing “biological enzyme preparation, animal nutrition and health”, with a total investment of RMB 2.466 billion. At the same time, after the completion of this transaction, the company will receive a transfer price of 1.303 billion yuan and a debt repayment of 880 million yuan. Among them, 513 million yuan will be used to repay bank loans, and the remaining funds will be used to develop biological enzyme preparations and animal nutrition and health business.
In the next three years, the company released the “requirements for the development of animal health preparations” and the “requirements for the development of animal health preparations” for the next three years.
Later, Guangdong Vtr Bio-Tech Co.Ltd(300381) in the reply to the inquiry letter of Shenzhen Stock Exchange, said that building a “core enterprise of global steroid hormone API” includes three sectors. In the next three years, the funds required for the three platforms are calculated as follows: xinhexin 225 million yuan, keyixin 715 million yuan and Lihua pharmaceutical 493 million yuan, totaling 1.433 billion yuan; As for the development of “biological enzyme preparation, animal nutrition and health”, the funds required in the next three years are estimated to be 860 million yuan and 173 million yuan respectively, with a total of 1.033 billion yuan.
However, with Guangdong Vtr Bio-Tech Co.Ltd(300381) current capital situation, such a huge capital investment may be difficult to achieve immediately. It is reported that from 2015 to 2020, Guangdong Vtr Bio-Tech Co.Ltd(300381) accumulated equity fund-raising reached 1.56 billion yuan. In 2020, Guangdong Vtr Bio-Tech Co.Ltd(300381) plans to raise a non-public offering financing plan of no more than 600 million yuan to supplement working capital and repay bank loans. Finally, the actual fund raised is only 100 million yuan.
what is the future profit
Guangdong Vtr Bio-Tech Co.Ltd(300381) (hereinafter referred to as ” Guangdong Vtr Bio-Tech Co.Ltd(300381) “) was mainly engaged in the R & D, production and sales of biological enzyme products at the beginning of its listing in 2014. After listing, Guangdong Vtr Bio-Tech Co.Ltd(300381) started frequent mergers and acquisitions, further expanded the original business scale and added steroidal hormone API business.
But at the same time, under frequent mergers and acquisitions, the amount spent has reached 1.284 billion yuan, of which 609 million yuan has been paid in cash. According to the financial report data, it is not difficult to find that most of its profits come from the subject matter of M & A, and its original business even suffered losses in individual years.
Meanwhile, the performance of Guangdong Vtr Bio-Tech Co.Ltd(300381) has also grown slowly since its listing. From the performance of recent three years, from 2018 to 2020, its revenue was RMB 1.768 billion, RMB 2.048 billion and RMB 1.915 billion respectively, and its net profit was RMB 114 million, RMB 128 million and RMB 162 million respectively. In the third quarter of 2021, the company’s revenue and net profit decreased. In the first three quarters, its revenue was 1.288 billion yuan, a year-on-year decrease of 9.95%, and the net profit was only 711745 million yuan, a year-on-year decrease of 42.14%.
So, once the pharmaceutical sector is stripped off, Guangdong Vtr Bio-Tech Co.Ltd(300381) will rely on what profit?
In terms of the current main business of Guangdong Vtr Bio-Tech Co.Ltd(300381) the revenue of its pharmaceutical sector has decreased from 62.61% to 51.43% from 2019 to 2021, while that of its agricultural and animal husbandry sector has increased from 37.39% to 48.57%.
In addition, from 2019 to 2021, the gross profit margins of the company’s agriculture and animal husbandry sector were 47.90%, 53.01% and 43.87% respectively, and the gross profit margins of biomedical business in the same period were 27.91%, 28.02% and 32.55% respectively. It can also be seen that its retained business has strong profitability.
It should be noted that although the gross profit margin of agriculture and animal husbandry is high, its net profit will reach 105 million yuan in 2021. In this regard, Guangdong Vtr Bio-Tech Co.Ltd(300381) said that it was mainly due to the poor operation of vitamin B12 products in the original business of Hongying biology, the provision of goodwill impairment, the provision of asset impairment of overstocked vitamin B12 products and other factors. At present, the company has cleaned up Hongying biology business, and the future profits of biological agriculture and animal husbandry will be stable and guaranteed.
In addition, Guangdong Vtr Bio-Tech Co.Ltd(300381) high value of goodwill may also be one of the uncertainties it faces. By the third quarter of 2021, its goodwill had reached 476 million yuan. For the high goodwill left by frequent mergers and acquisitions, Guangdong Vtr Bio-Tech Co.Ltd(300381) has no plan to accrue.
The reporter noted that recently, the continuous news of pharmaceutical enterprises selling and canceling subsidiaries may also mean that the pharmaceutical industry is accelerating the reshuffle and the concentration continues to improve.
From 2022 to now, Realcan Pharmaceutical Group Co.Ltd(002589) , Hefei Lifeon Pharmaceutical Co.Ltd(003020) , Zhejiang Xianju Pharmaceutical Co.Ltd(002332) , Zhejiang Yatai Pharmaceutical Co.Ltd(002370) , Betta Pharmaceuticals Co.Ltd(300558) , humanwell pharmaceutical and other enterprises have been busy stripping assets, selling subsidiaries or transferring equity. In this regard, some industry personnel said that behind the stripping of assets by a large number of pharmaceutical enterprises, it is also the intensification of the industry reshuffle. It can be predicted that the competition in the pharmaceutical market will remain fierce in 2022.
Guangdong Vtr Bio-Tech Co.Ltd(300381) as one of the cards in the reshuffle of the pharmaceutical industry, the expectation of the capital market does not seem to be high. Since Guangdong Vtr Bio-Tech Co.Ltd(300381) announced its intention to divest its pharmaceutical business in January this year, its share price has also fallen all the way, from 12.38 yuan / share in January to 8.94 yuan / share, the lowest point in today’s session, down 27.78%.
The reporter sent an interview letter to the enterprise on the current sale of assets and business planning. As of press time, no reply has been received.
