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Original title: The stock price rose 203% on the 60th. After ten consecutive boards, the major shareholder “precisely” reduced its holdings of lessons learnedLongjin PharmaceuticalHow long can you fly
Source: China Times
as a little-knowntraditional Chinese medicineEnterprise, KunmingLongjin PharmaceuticalLimited by Share Ltd (hereinafter referred to asLongjin Pharmaceutical, 002750.SZ) has recently attracted the attention of the capital market.The company’s stock price has risen to the top of the list of pharmaceutical companies in the past 60 days, far exceeding the major well-known companies.traditional Chinese medicine, Chemical companies. Because of the unusually high stock price,Longjin PharmaceuticalMonitored by Shenzhen Stock Exchange.
Just as the stock price hit a recent record high, its holdingsshareholderKunming Qunxing Investment Co., Ltd. (hereinafter referred to as “Qunxing Investment”) and the actual controller Fan Xianye announced the reduction plan. This kind of “precise” reduction of holdings also appeared in March 2019, when the company’s stock price rose by 201.43%. After the company’s major shareholders announced the reduction plan, Longjin Pharmaceutical started a decline for more than two years. Until it took off again last December.
Regarding the reduction of holdings, the relevant person in charge of the Office of the Secretary of the Board of Directors of Longjin Pharmaceutical told the reporter of “China Times” that the reduction of holdings is a personal behavior of shareholders, and the company will not comment.
And after this reduction, how long can Longjin Pharmaceutical’s share price fly?
Stock prices skyrocketed, and actual controllers “precisely” reduced their holdings
Longjin Pharmaceutical issued a pre-disclosure of holding reduction on January 6announcement.According to the announcement, the controlling shareholder Qunxing Investment plans to invest within 6 months from January 28, 2022 to July 27, 2022.Large transactionsThe shareholding of Longjin Pharmaceutical shall be reduced by no more than 4,005,000 shares (accounting for 1.00% of the company’s total share capital), and the shareholding of Longjin Pharmaceutical shall be reduced by no more than 8,010,000 shares (accounting for the company’s total share capital) by means of centralized bidding 2.00%), with a total reduction of no more than 12,015,000 shares (accounting for 3.00% of the company’s total share capital). The actual controller of the company, Fan Xianye, intends to reduce its holdings of no more than 775,433 shares through centralized bidding transactions, accounting for 0.19% of the company’s total share capital. According to Tianyancha, Fan Xianye is also a major shareholder of Qunxing Investment, with a shareholding ratio of 80%.
Before the announcement of the reduction of holdings, Longjin Pharmaceutical was going through a “surge”. The stock price of Longjin Pharmaceutical has risen sharply since around December 20, 2021. From December 22 to January 5, the stock price gained ten consecutive trading days. On the 12th, Longjin Pharmaceutical once again achieved a daily limit, and its stock price reached a historical high of 21.9 yuan per share since 2016. From January to November 2021, Longjin Pharmaceutical’s share price hovered within 10 yuan.
The Shenzhen Stock Exchange released regulatory updates on December 31 last year, focusing on monitoring stocks such as “Longjin Pharmaceutical” that have experienced unusually recent gains.
According to WIND data, as of January 12, the stock price of Longjin Pharmaceutical has risen by 203% in the past 60 days, ranking among the pharmaceutical sector and thetraditional Chinese medicineThe sector had the most 60-day gain. In the most recent month, shares in the traditional Chinese medicine sector rose by an average of 9.9%, while the pharmaceutical sector fell by 0.34%.
After the stock price took off, the “precise” reduction of major shareholders’ holdings also appeared in 2019. In March of that year, Longjin Pharmaceutical increased by 201.43% in the month, and gained 7 consecutive boards in one month, and the stock price reached a high point of 23.52 yuan per share. After the major shareholder disclosed the plan to reduce its holdings, Longjin Pharmaceutical The stock price began to decline in April, falling to a minimum of 6.79 yuan per share, and it will rise again in December 2021.
The profitability of the main business is worrying
The core product of Longjin Pharmaceutical is breviscapine for injection, which is a high-purity traditional Chinese medicine freeze-dried powder injection.
The 2020 annual report shows that the revenue of freeze-dried powder injection of traditional Chinese medicine is 223 million yuan, accounting for 87.74% of the revenue. ratio is only 26.73%,Pharmaceutical businessThe amount of revenue soared to 289 million yuan, and the proportion of revenue increased to 72.63%.
It turned out that Longjin Pharmaceutical established a new holding subsidiary, Yunnan Longjin Pharmaceutical Sales Co., Ltd. in September 2020, thus adding a new wholesale business. However, this business has only been in operation for one year, and the company disclosed on October 14, 2021 that it will transfer 51% of the equity of Yunnan Longjin Pharmaceutical Sales Co., Ltd. After the transfer is completed, the company will no longer hold its equity.
As for why it quickly quit the pharmaceutical wholesale business, the relevant person in charge of the above-mentioned board secretary office told the “China Times” reporter that the company hopes to focus on the main business of high-end pharmaceutical manufacturing.The reporter compared the gross profit of the two businessesinterest rate, the difference is huge.The company’s traditional Chinese medicine freeze-dried powder injectioninterest rateIt was 88.6%, and the gross profit margin of pharmaceutical wholesale business was only 7.07%.
In this regard, Longjin Pharmaceutical’s main business “bet” on breviscapine for injection. In order to expand sales, in December 2021, breviscapine for injection plans to be selected for purchase by the inter-provincial alliance with a decrease of 67%, and in the same breviscapine drug unit, Longjin Pharmaceutical has the largest drop.
In this regard, the relevant person in charge of the above-mentioned board secretary office of Longjin Pharmaceutical told the “China Times” reporter: “Entering the centralized procurement can guarantee the sales volume, and the price reduction is the general trend of the centralized procurement.”
In recent years, the revenue of Longjin Pharmaceutical’s freeze-dried powder injections has indeed declined. The revenue from 2018 to June 2021 was 336 million yuan, 251 million yuan, 223 million yuan, and 106 million yuan, respectively.
In the future, the market prospect of traditional Chinese medicine injections is not clear. According to data from Minet.com, in 2020, only 3 Chinese patent medicines in the top 20 public hospitals in key cities have maintained positive growth, and the remaining 17 products have experienced varying degrees of decline, among which Chinese medicine injections are mostly.
In the first three quarters of 2021, the ROE of Longjin Pharmaceutical was only 1.03%, which was far lower than the median value of the traditional Chinese medicine industry of 6.83%. The price-earnings ratio is as high as 495 times, much higher than the median price-earnings ratio of 26 times for TCM, while the company’s asset-liability ratio has risen from 16.28% at the end of 2020 to 31.01%.
At present, how can such revenue data support Longjin Pharmaceutical’s stock price to continue to soar?
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Responsible editor: Feng Tiwei
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