On the evening of May 18, Winner Medical Co.Ltd(300888) announced that the company planned to acquire 655528% equity of Hunan Ping An medical equipment Technology Co., Ltd. (hereinafter referred to as “Hunan Ping An medical equipment”) for about 652 million yuan and unilaterally increase capital to Hunan Ping An medical equipment with 100 million yuan. At present, Hunan Ping’an medical equipment is mainly engaged in the R & D, production and sales of syringes, infusion sets, blood collection vessels and other injection and puncture products. If the transaction is completed, Winner Medical Co.Ltd(300888) enters the new track of injection puncture products. Under the pressure of performance, Winner Medical Co.Ltd(300888) had to lay out new business. In 2021, Winner Medical Co.Ltd(300888) revenue and net profit decreased both, with the actual revenue of RMB 8.037 billion, a year-on-year decrease of 35.87%, and the net profit of RMB 1.239 billion, a year-on-year decrease of 67.48%.
holding Hunan Ping’an medical equipment
In order to further enrich the company’s product line, expand business channels and improve the company’s strategic layout, it was announced that Winner Medical Co.Ltd(300888) plans to use its own funds to acquire Hunan Ping An medical equipment and unilaterally increase its capital. After the completion of the above transaction, Winner Medical Co.Ltd(300888) invested 752 million yuan in total and held 68.7% of the equity of Hunan Ping An medical equipment after the capital increase and share expansion.
According to the announcement, Hunan Ping’an medical equipment is located in Changde City, Hunan Province. It is an enterprise mainly engaged in R & D, production and sales of injection and puncture products. The main products include syringes, infusion sets, blood collection needles, blood collection vessels, indwelling needles, etc., which are mainly sold in China. In 2021, Hunan Ping An medical equipment achieved a sales revenue of 360 million yuan and a net profit of 850326 million yuan.
Winner Medical Co.Ltd(300888) believes that the acquisition is highly consistent with Winner Medical Co.Ltd(300888) ‘s strategy of building a one-stop solution for medical consumables. The syringes and other products of Hunan Ping An medical equipment are matched with Winner Medical Co.Ltd(300888) operating room consumables and wound care products to form various combination packages, and finally provide one-stop customized solutions to hospital users. In addition, Hunan Ping An medical equipment has a leading hospital market share in Hunan Province, while Winner Medical Co.Ltd(300888) covers a broad national hospital network, and the two sides are highly complementary in hospital channels in China Winner Medical Co.Ltd(300888) ‘s overseas business covers more than 110 countries, enabling Hunan Ping An medical equipment to strengthen its sales in China and overseas.
Through acquisition, Winner Medical Co.Ltd(300888) fills the product gap in the field of injection and puncture. According to the transaction arrangement, after the completion of the transaction, the board of directors of Hunan Ping’an medical equipment is composed of five directors, of which three directors, including the chairman, are nominated by Winner Medical Co.Ltd(300888) and the remaining two directors are assumed by Zheng Datian, the current largest shareholder of Hunan Ping’an medical equipment, and his designated personnel Winner Medical Co.Ltd(300888) appoints the person in charge of Finance and the person in charge of risk control and compliance to the target company to cooperate with the target company and Winner Medical Co.Ltd(300888) to carry out relevant business.
In order to support the future business development of Hunan Ping’an medical equipment, Winner Medical Co.Ltd(300888) also signed the letter of intent on investment with the people’s Government of Li County, Hunan Province. In addition to investing in the acquisition of the controlling stake of Hunan Ping’an medical equipment and capital increase, the company plans to promote Hunan Ping’an medical equipment as the investor to sign investment agreements with the people’s Government of Li County, Hunan Province after the delivery for the construction of medical equipment production lines, intelligent warehouses, R & D buildings and other supporting facilities, The total investment of the project is about 700 million yuan (subject to the actual investment).
For the reasons for the acquisition and other issues, the reporter of Beijing Business Daily called Winner Medical Co.Ltd(300888) , but no reply has been received as of press time.
last year’s revenue and net profit decreased
After cutting into the new track, Winner Medical Co.Ltd(300888) performance is under pressure.
At present, the business of Winner Medical Co.Ltd(300888) is divided into two parts: medical consumables and healthy consumer goods. The main product lines of medical consumables cover wound care, infection protection and disinfection and cleaning. Specific products include high-end wound dressing products, traditional wound care and dressing products, operating room infection control products, protection products and disinfection and cleaning products for body surface cleaning.
In 2021, Winner Medical Co.Ltd(300888) achieved a revenue of 8.037 billion yuan, a year-on-year decrease of 35.87%, and a net profit of 1.239 billion yuan, a year-on-year decrease of 67.48%. As a pillar business, medical consumables are the “fuse” of Winner Medical Co.Ltd(300888) performance decline. In 2021, Winner Medical Co.Ltd(300888) medical consumables business achieved a sales revenue of 3.922 billion yuan, a year-on-year decrease of 56.03%, and its proportion in the total revenue decreased from 71.17% in 2020 to 48.8% in 2021.
The sales of medical consumables also showed a major downward trend. In 2021, Winner Medical Co.Ltd(300888) ‘s disease control and protection products, wound dressing and care products, operating room infection control products and box disinfection and cleaning products achieved revenue of 2.378 billion yuan, 722 million yuan, 434 million yuan and 282 million yuan respectively, with a year-on-year decrease of 66.09%, 4.93%, 37.19% and 24.35% respectively.
Deng Yong, a professor in the law department of Beijing University of traditional Chinese medicine, said in an interview with the Beijing business daily, “the reasons for the decline of Winner Medical Co.Ltd(300888) performance are the single product, low technical content and strong substitutability. In addition, there are many competitive products in the market, the products of Winner Medical Co.Ltd(300888) do not necessarily have a price advantage”.
In Deng Yong’s opinion, Winner Medical Co.Ltd(300888) ‘s masks, protective clothing and other products are relatively single, and the technical content of the industry is not high. Under the epidemic, more and more enterprises are engaged in mask, protective clothing and other industries, which has an impact on the market pattern, and the cake of the whole market is only so large, Winner Medical Co.Ltd(300888) we must find a new growth point.
Deng Yong further said that compared with masks, protective clothing and other products, the new track of injection puncture category has high technical content. The company should do a good job in market research, evaluate policy, legal and regulatory risks, so as to build its own competitiveness.
