Han Yuewei, chairman of Dong-E-E-Jiao Co.Ltd(000423) resigned, which means “success and retirement” in the eyes of the industry.
On the evening of January 10, Dong-E-E-Jiao Co.Ltd(000423) announced that it had recently received resignation reports from Chairman Han Yuewei and President Gao Dengfeng respectively. The reasons for resignation were due to changes in work content.
At the opening of trading on January 11, Dong-E-E-Jiao Co.Ltd(000423) shares rose rapidly and closed the rise limit. As of the afternoon closing, the share price rose by 49.54 yuan / share, or 9.99%.
executives welcome a big change
Dong-E-E-Jiao Co.Ltd(000423) after driving on the right track, its Chairman Han Yuewei submitted a resignation report. From the financial data alone, during the two years in the charge of Han Yuewei, Dong-E-E-Jiao Co.Ltd(000423) quickly reversed the situation and returned to the growth track. Now, it seems that his resignation also means “success and retirement”.
Some people in the industry also believe that Han Yuewei himself has an important position in China Resources Pharmaceutical Group. At present, the task of Dong-E-E-Jiao Co.Ltd(000423) “fire fighting” has been completed. At the same time, Gao Dengfeng’s business strategy, then president of the company, was recognized by China Resources Senior Management, and it is reasonable to “change generals”.
The person who took over the post of chairman was Gao Dengfeng, the resigned president. That is to say, the senior management of Dong-E-E-Jiao Co.Ltd(000423) changed again in two years. Previously, in January 2020, Qin Yufeng, who had been in charge of Dong-E-E-Jiao Co.Ltd(000423) daily operation for more than ten years, resigned from all his posts due to retirement at the age of. According to the announcement at that time, Qin Yufeng applied to resign from the position of director, President and legal representative of the ninth board of directors of the company, no longer hold any position of the company, and Gao Dengfeng took over the position of Dong-E-E-Jiao Co.Ltd(000423) president.
It is reported that Gao Dengfeng was born in January 1973. After working at Dong-E-E-Jiao Co.Ltd(000423) in September 1995, he has gone through many fields and positions, such as sales, marketing, human resource management, e-commerce, health products and so on. He is currently Secretary of the Dong-E-E-Jiao Co.Ltd(000423) Party committee and director.
Another nominee for president is Cheng Jie. According to public information, Cheng Jie was born in March 1979 and graduated from Shenyang Pharmaceutical University with a bachelor’s degree in traditional Chinese medicine.
It should be noted that Cheng Jie is also an executive of the former China Resources Department. He joined China Resources Sanjiu Medical & Pharmaceutical Co.Ltd(000999) in September 2003 and has successively served as China Resources Sanjiu Medical & Pharmaceutical Co.Ltd(000999) OTC terminal representative, prescription drug management specialist, 999 Ganmaoling product manager, director of OTC sales and marketing department, Secretary of the general Party branch of professional brand business department, secretary and executive director of the Party branch of Aonuo (China) Pharmaceutical Co., Ltd, Director of Sanofi (Shenzhen) Health Industry Co., Ltd.
In the future, how the two experienced young executives will drive Dong-E-E-Jiao Co.Ltd(000423) sustainable development has become the focus of attention.
get out of the performance quagmire
After the performance storm after 2019 and the departure of the chairman, Dong-E-E-Jiao Co.Ltd(000423) fell into a performance downturn for more than a year. Its share price also plummeted with the storm of performance, from about 50 yuan / share at the beginning of 2019 to 24.41 yuan / share in March 2020, and the market value also evaporated.
For the sudden thunderstorm of performance, Dong-E-E-Jiao Co.Ltd(000423) explained at that time that it was mainly because, on the one hand, downstream customers took the initiative to reduce inventory due to environmental impact, on the other hand, the company adjusted its strategy and took the initiative to control channels.
Donkey hide gelatin, as a drug, also has a shelf life and can’t be sold after it expires, which also leads to that once there is a sign that it can’t be sold, donkey hide gelatin dealers will give priority to cleaning up the inventory. If they don’t seize the time to clear the warehouse, many products may never be sold again.
As more and more consumers do not buy, many dealers avoid donkey hide gelatin, which also directly affects the performance of Dong-E-E-Jiao Co.Ltd(000423) .
In fact, Dong-E-E-Jiao Co.Ltd(000423) has long been predicted in its performance growth rate in recent years. Since 2016, its performance growth has decreased to 15.92%. In the third quarter of 2018, its performance began to suffer losses, and its revenue and net profit decreased both. In addition, its operating cash flow also lost 1.12 billion yuan in 2019.
Facing the storm of performance, Dong-E-E-Jiao Co.Ltd(000423) learned from the experience, accelerated the pace of strategic transformation, strengthened the cleaning of channel inventory, implemented asset light, and deprived some regions of unprofitable breeding demonstration business.
After hard adjustment, the inventory reduction strategy has been effective. In April 2021, Dong-E-E-Jiao Co.Ltd(000423) said that the inventory has become benign.
According to the content of the 2021 interim report, Dong-E-E-Jiao Co.Ltd(000423) is currently transforming into the field of digitization and fast food. According to the magic mirror data, the Dong-E-E-Jiao Co.Ltd(000423) Gmv of tmall platform has reached 117 million yuan in the first half of 2021. At the same time, new instant products such as donkey hide gelatin instant powder and donkey hide gelatin bird’s nest under Dong-E-E-Jiao Co.Ltd(000423) have been sold online, and each has achieved sales of more than 50 million yuan in 2020.
In the third quarter of 2021, Dong-E-E-Jiao Co.Ltd(000423) revenue reached 1.139 billion yuan, a year-on-year increase of 20.50%, and net profit reached 151 million yuan, a year-on-year increase of 140.55%.
how to make efforts after performance recovery
Although Dong-E-E-Jiao Co.Ltd(000423) has gradually recovered its profits, the current dilemma still needs to be broken through.
According to the data, since 2012, Dong-E-E-Jiao Co.Ltd(000423) has occupied 80% of China’s market share. However, due to the continuous price increase of Dong-E-E-Jiao Co.Ltd(000423) , the market scale of donkey hide gelatin has been crazy eroded by players such as Beijing Tongrentang Co.Ltd(600085) , Jiuzhitang Co.Ltd(000989) . By 2019, the market share of Dong-E-E-Jiao Co.Ltd(000423) will decline to 61.30%.
According to statistics, Dong-E-E-Jiao Co.Ltd(000423) from 2000 to 2021, the price of donkey hide gelatin increased from 80 yuan / kg to 6000 yuan / kg.
Today, the rise in the price of donkey hide gelatin may not save Dong-E-E-Jiao Co.Ltd(000423) . Donkey hide gelatin is a solid glue made from donkey skin after boiling and concentration, which also makes donkey become the core of donkey hide gelatin industry chain.
Due to the improvement of agricultural and transportation mechanization and the acceleration of urbanization, the slow scale process of donkey breeding industry, the difficulty of donkey breeding and the long investment return cycle, many farmers lack enthusiasm for donkey breeding, and China’s donkey stock began to decline rapidly.
According to the monitoring data of China donkey online, the slaughter volume of donkey in 2019 was about 300000, a decrease of 40000 compared with 2018, a decrease of about 11.7%, and donkey hide, which can be used as raw material of donkey hide gelatin, accounted for only a part of it.
Moreover, due to the low gross profit margin of donkey breeding business, at present Dong-E-E-Jiao Co.Ltd(000423) has begun to peel off donkey breeding business. In the first half of 2021, Dong-E-E-Jiao Co.Ltd(000423) ‘s donkey breeding and sales revenue was 80.9114 million yuan, and the gross profit margin was only 7.08%.
At present, the main source of Dong-E-E-Jiao Co.Ltd(000423) revenue is the pharmaceutical industry, with a revenue of 1.57 billion yuan, a year-on-year increase of 79.11%, accounting for 93.2% of the total revenue and a gross profit of 63.3%, which is also the main driving force for the significant increase of its performance in the first half of 2021.
Although the performance has increased greatly, its expenditure in all aspects has decreased to varying degrees. According to the analysis of some investors, Dong-E-E-Jiao Co.Ltd(000423) also began to “tighten their belts”. In terms of its R & D investment, in the first half of 2021, it decreased by 18.81% year-on-year, and the financial expenses decreased by 381.26% year-on-year.
In the case of declining market share, the competitive advantage with other industries is also an urgent problem to be solved by Dong-E-E-Jiao Co.Ltd(000423) . The reporter sent an interview letter to the enterprise on the competitive advantages and business direction of the enterprise’s products. As of the press release, no reply has been received from the enterprise.
It should be noted that although the performance dilemma needs to be solved urgently, the enthusiasm of the secondary market has not decreased at all. In August 2021, Dong-E-E-Jiao Co.Ltd(000423) paid a dividend of 0.305 yuan / share, and its share price fell to the lowest point of 29.7 yuan / share. Later, on January 4, 2022, its share price has risen to 50.12 yuan / share, an increase of 40.74%.
Data source: China stock market news
(source: International Finance News)
