The old pharmaceutical enterprise Harbin Pharmaceutical Group Co.Ltd(600664) finally turned losses into profits, but it was not paid by the capital market.
When it comes to “Harbin medicine”, people may first think of “blue bottle calcium” and “new middle cover” . These names play an important role in the memory of a generation.
But in fact, as China’s first listed company in the pharmaceutical industry , the performance of Harbin Pharmaceutical Group Co.Ltd(600664) has been difficult to be optimistic in recent years After a huge loss of 1 billion yuan in years, in 2021, Harbin Pharmaceutical Group Co.Ltd(600664) realized a net profit of 371 million yuan but this report card was not recognized by the capital market. On November 4, closed down by 35.
Behind it, obtaining government subsidies and housing levy compensation are the two major factors for Harbin Pharmaceutical Group Co.Ltd(600664) to turn losses around. From the financial report, “advertising king” is still a label that Harbin Pharmaceutical Group Co.Ltd(600664) can’t tear off. In 2021, the company’s sales expenses increased by 23.45% year-on-year to 1.327 billion yuan; R & D expenses increased by only 5% to 97.73 million yuan.
turning losses into profits
government subsidies contribute greatly
After a huge loss of 1 billion yuan, the performance of Harbin Pharmaceutical Group Co.Ltd(600664) 2021 has been reversed. According to the performance report disclosed by Harbin Pharmaceutical Group Co.Ltd(600664) disclosure, the company achieved an operating revenue of about 12.802 billion yuan in 2021, with a year-on-year increase of 18.66% actual current net profit is about 371 million yuan, turning losses into profits, with a loss of about 1.078 billion yuan in the same period of last year
This is a good performance of Harbin Pharmaceutical Group Co.Ltd(600664) in recent years. From 2017 to 2019, the net profit of Harbin Pharmaceutical Group Co.Ltd(600664) decreased by 48.36%, 14.95% and 83.88% respectively year-on-year. By 2020, Harbin Pharmaceutical Group Co.Ltd(600664) the first loss will exceed 1 billion yuan.
However, this profitable report card has not been recognized by the capital market. As of the first trading day after the disclosure of the financial report, i.e. the closing on April 11, Harbin Pharmaceutical Group Co.Ltd(600664) fell 2.69% to 3.25 yuan / share, with a total market value of 8.189 billion yuan
The reason why Harbin Pharmaceutical Group Co.Ltd(600664) is not favored by the market is to rely on government subsidies and housing compensation.
Harbin Pharmaceutical Group Co.Ltd(600664) explained in the financial report that there are four main factors affecting the company’s profits, including focusing on target management, continuously combing products, subdividing channels and terminal resources, continuously optimizing and improving the selection and employment mechanism and performance management system Harbin Pharmaceutical Group Co.Ltd(600664) in the fourth point, it is mentioned that the non recurring profit and loss of the company increases due to the collection of compensation of about 211 million yuan for the disposal of idle assets by its subsidiaries in addition, in 2021, Harbin Pharmaceutical Group Co.Ltd(600664) government subsidies included in the current profit and loss was 816444 million yuan, accounting for 22% of the current net profit attributable to the parent company.
several compensation for house expropriation were disclosed in the previous announcement for example, in March 2021, the urban renewal Bureau of Nangang District of Harbin levied the house of Shiyitang pharmaceutical factory, a branch of Harbin Pharmaceutical Group Co.Ltd(600664) subsidiary, and the company will receive a total compensation of 120 million yuan; In October of the same year, Daowai District of Harbin expropriated the houses of the second traditional Chinese medicine factory of the branch of Harbin Pharmaceutical Group Co.Ltd(600664) and Harbin Pharmaceutical Group Co.Ltd(600664) will receive a total compensation of 728513 million yuan.
it is also worth mentioning the continuous salary rise of Harbin Pharmaceutical executives financial report data show that in the three years since joining Harbin Pharmaceutical Group Co.Ltd(600664) general manager Xu Haiying’s annual salary has jumped three levels, with 20192021 being 3.333 million yuan, 4.016 million yuan and 4.74 million yuan respectively
After Xu Haiying joined Harbin Pharmaceutical Group Co.Ltd(600664) with a number of executives with overseas work experience and working experience in multinational companies, the salaries of directors, supervisors and senior managers directly doubled in 2019 compared with 2018, an increase of 10.25 million yuan, an increase of 114%. In 2020, the salary of directors, supervisors and senior managers continued to rise by 15%, and the amount increased by 2.89 million yuan. According to the announcement, in 2021, the total remuneration of directors, supervisors and senior managers was 210167 million yuan.
In view of the company’s business development and other issues, the reporter of Beijing business daily contacted Harbin Pharmaceutical Group Co.Ltd(600664) , Harbin Pharmaceutical Group Co.Ltd(600664) relevant person of the Securities Department said that “the content of the announcement shall prevail”. Meanwhile, the reporter sent the interview questions to the email address provided by relevant persons of the securities department, but as of press time, no more reply has been received.
In an interview with the Beijing business daily, economist song Qinghui said that obtaining government subsidies and housing levy compensation has become an important magic weapon for some listed companies to turn losses into profits, and the effect is immediate but these two incomes can only alleviate the urgent need in the short term
emphasizing marketing over R & D
fist products are difficult to produce new
As China’s first listed company in the pharmaceutical industry, Harbin Pharmaceutical Group Co.Ltd(600664) relies on high advertising tactics to get out of the “Harbin Pharmaceutical model”. Many products such as “blue bottle calcium” and “new cover and middle cover” have become the memory of a generation under the bombardment of advertising, and Harbin Pharmaceutical has also obtained huge benefits. In 2010, Harbin Pharmaceutical’s revenue reached 18 billion yuan and its net profit reached 1.13 billion yuan, reaching the peak.
From the financial report data, the marketing of Harbin Pharmaceutical Group Co.Ltd(600664) is still more important than research and development, but the “potion model” doesn’t work this time
After the huge performance loss in 2020, the Shanghai Stock Exchange issued a regulatory inquiry letter on information disclosure of periodic reports to Harbin Pharmaceutical Group Co.Ltd(600664) and of which the sharp increase of sales expenses is one of the key information . According to the financial report of 2021, Harbin Pharmaceutical Group Co.Ltd(600664) sales expense was 1.327 billion yuan, year-on-year increase of 23.45% ; The R & D cost was 97.73 million yuan, only increased by 5% .
“Harbin Pharmaceutical model” remains, but the growth bottleneck of the business sector appears. API, chemical agents, traditional Chinese medicine, biological agents and health products are the five subdivided fields of Harbin Pharmaceutical Group Co.Ltd(600664) product line in 2021, the API business of Kazakhstan Pharmaceutical Co., Ltd. continued to shrink , its API business revenue was 1.7147 million yuan, the operating cost was 1.7248 million yuan, and the gross profit margin was – 0.59%, unable to make ends meet .
The operating income of the other four businesses, chemical agents, biological agents and health products, increased in varying degrees. The business of Harbin Pharmaceutical Group Co.Ltd(600664) traditional Chinese medicine decreased by 30.33% year-on-year in 2021.
Shen Meng, executive director of Xiangsong capital, said in an interview with the Beijing Business Daily that Harbin Pharmaceutical had previously carried out carpet marketing by binding with TV dramas to expand its popularity, but the effect of TV drama marketing model has become worse and worse in recent years in addition, Harbin Pharmaceutical is short of new fist products in recent years, and its product research and development lags behind
Song Qinghui believes that the profit growth brought by government subsidies and funds obtained from the disposal of idle assets is not sustainable. For example, if the company no longer meets the relevant preferential or subsidy conditions, the positive impact of government subsidies on the company is uncertain, and its profit level may be directly impacted. In the future, Harbin Pharmaceutical Group Co.Ltd(600664) should bring healthy growth of performance by focusing on the main business and digging into the value of drugs.
