Every reporter Yue Qi Every trainee reporter Lin Zichen Every editor Zhang Haini
Image source: screenshot of the company’s official website
Another veteran of the Chinese medicine industry left, and he was called the “King of Watermelon Frost” in the eyes of the outside world.
At noon on December 22, Guilin Sanjin (002275, SZ) issued an announcement stating that Mr. Zou Jieming, the actual controller and chairman (and legal representative) of the company, died of illness on December 21, 2021, at the age of 80. Soon afterwards, the company’s official website posted an obituary.
The legendary story of Zou Jieming leading Guilin Sanjin towards modern Chinese medicine is praised by the industry, but it also leaves behind the governance problems of family businesses and the transformation challenges of Chinese medicine companies. After sorting out by reporters, Zou Jieming’s two sons, Zou Xun and Zou Zhun, who have a background in studying abroad, respectively serve as the company’s vice chairman and vice president, respectively. Serve as president.
Who will take over is very important to Guilin Sanjin, which is on the road of transformation. On the afternoon of the 22nd, an insider of the company told the “Daily Business News” reporter that the new chairman candidate still needs a meeting of the board of directors to discuss, and there is no specific information yet.
Zou Jieming’s memorial service will be held this Saturday (December 25). The life of “Watermelon Frost King” has been collected by history, but the story of Guilin Sanjin will continue.
The death of a veteran: mutual achievement with Guilin Sanjin
“In fact, I only did one thing, and that was to work with Guilin Sanjin to explore the path of innovative modern Chinese medicine.” In 2017, when Guilin Sanjin was founded for its 50th anniversary, Zou Jieming described the mutual achievements of himself and the company. Looking back at today’s time, Zou Jieming’s words are true.
Zou Jieming was born in Changde, Hunan in May 1943, and was interested in Chinese medicine since childhood. At the age of 18, he was admitted to the Department of Biology, Wuhan University, majoring in medicinal plants. After 5 years of undergraduate study and 2 years of professional knowledge of Chinese medicine, the 25-year-old Zou Jieming was assigned to Guilin after graduation to participate in the preparation of the Guilin Chinese Medicine Factory. The predecessor of Guilin Sanjin.
However, at the beginning of its establishment, the life of the Chinese medicine factory was not easy. The lack of independent factories, the traditional production method, the unfavorable market environment, and the lack of product innovation were all problems that needed to be solved.
“You are the only college student in our factory, and the hope rests on you.” Public information shows that Zou Jieming did not live up to the trust of the old factory director. The head of the inspection department, the deputy technical director, and was appointed as the director in December 1984. During the period, he took the lead in researching and developing watermelon frost, Sanjin tablets and other products, which are still the business cards of Guilin Sanjin until today.
The memorabilia of Guilin Sanjin basically has Zou Jieming. In 1992, the wave of corporate reform spread across the country. In 1994, Zou Jieming initiated the formation of Sanjin Pharmaceutical Group, serving as chairman and president, chief engineer of the group, and party secretary; July 10, 2009, Guilin Sanjin traded in Shenzhen The listed company became the first stock after the IPO restart that year, and the company began to leave a development footprint in the capital market.
According to the official website of Guilin Sanjin, the company currently has more than 200 registered varieties and 13 pharmaceutical dosage forms, and owns 42 kinds of independently developed exclusive specialty varieties such as Guilin Watermelon Frost, Watermelon Frost Throat Tablets, Sanjin Tablets, and Naomaitai Capsules. After years of hard work, Sanjin has formed strong professional and market advantages in throat, oral medication and urinary system medication. Its representative products, Sanjin watermelon cream series and Sanjin tablets, have been in the forefront of similar Chinese patent medicines in the country for many years.
Until his death, Zou Jieming worked in Guilin Sanlin for more than 50 years. He once said, “I have only done one thing in my life, and that is to do well in the Guilin Sanjin enterprise.”
An insider familiar with Zou Jieming told reporters that in June this year, Zou Jieming also went to the Sanjin Chinese Medicine City New Park to listen to the progress report on the technological transformation project, go deep into the workshop to experience the results of lean improvement, and communicate with many grassroots employees. People present They were all impressed by his spirit and good memory. Regarding the death of Zou Jieming, he said that “he has feelings for the company and employees, and employees respect and love him”, “it is very unexpected and sad.”
“What I feel most is his’belief’ and’persistence’. He has a strong sense of belief in the cause of Chinese medicine.” Another insider said.
Successor: “The son inherits his father’s business” or “the old friend takes over”?
In 2017, at the 50th anniversary of Guilin Sanjin, Zou Jieming once said that for 50 years of an enterprise, it is necessary to know the destiny. Human life is limited, but the life of an enterprise can be continued. At that time, this speech sparked speculation about the successor of Guilin Sanjin. Now that Zou Jieming has passed away, conjecture has become a real problem facing the company.
Currently, the three most likely candidates are Zou Jieming’s two sons, Zou Xun and Zou Huai, and the company’s current vice chairman and president Wang Xufei. The 2020 annual report shows that 45-year-old Zou Xun and 41-year-old Zou Huai have both studied abroad and are currently serving as senior executives of Guilin Sanjin. Among them, the former settled in Guilin Sanjin in 1999 and currently serves as the company’s vice chairman, executive vice president, and secretary of the board of directors; the latter joined the company in 2010 and is currently a director and vice president of the company.
Wang Xufei is Zou Jieming’s “old comrade”. According to the 2020 annual report, the 63-year-old employee worked in Guilin Chinese Medicine Factory in 1984 and served as the company’s technician, production department director, technical department chief, sales department chief, assistant factory director, deputy factory director, and director. Vice President, Chief Financial Officer, etc.
According to the announcement, Zou Jieming directly holds 9.05% of the company’s equity, and directly indirectly holds 41.80% of the company’s equity through himself and his relatives. He is the actual controller of the company. According to the company’s 2020 annual report, in terms of family members, Zou Jieming’s wife Weng Yuling holds 0.88% of Guilin Sanjin’s shares, and his two sons do not directly hold the company’s shares. But the company’s president Wang Xufei directly holds 0.95% of the shares and indirectly holds 5.64% of the shares.
After the death of Zou Jieming, the current number of directors of Guilin Sanjin was reduced to 8, which was not lower than the minimum number of directors stipulated in the “Company Law”. In addition to the above-mentioned Zou Xun, Zou Huai and Wang Xufei, many directors were in Guilin Sanjin. All of them have worked for more than 20 years.
The property rights and control relationship between Guilin Sanjin and the actual controller.Image source: Screenshot of the 2020 Annual Report
Attorney Wang Zhibin from Shanghai Minglun Law Firm told reporters that Guilin Sanjin’s current governance structure has left traces of family businesses. The good news is that the company has a relatively strong executive power, but in terms of decision-making, it is easy to have a statement of risk, which will cause Some negative effects.
“From the outside world (who is better to succeed) is difficult to evaluate.” Wang Zhibin told reporters that who is the best successor must be judged on multiple dimensions such as the candidate’s understanding of the company and his/her own ability. From the system level to analyze the pros and cons of corporate governance structure.
So, is it “children’s inheritance” or “old friends take over”? All judgments still remain on outside conjectures. According to the announcement, after the death of Zou Jieming, the number of current directors of Guilin Sanjin dropped to 8, which was not lower than the minimum number of directors required by the “Company Law”. The company will make arrangements for relevant candidates as soon as possible in accordance with relevant laws and regulations and the “Articles of Association”.
On the afternoon of December 22, the reporter of “Daily Business News” dialed the number of Guilin Sanjin Securities Department. The other party said that the physical condition of the chairman had changed before, and he had less time to come to the company recently. This incident has basically no impact on the company’s operations. The candidate for the new chairman needs to be discussed by the board of directors, and there is no specific information yet.
“The chairman of the board of directors is old, and he was only responsible for some strategic assurances. The actual thing is that the rest of the bosses do more.” The person told reporters.
A member of the Zou Jie Meiji Funeral Committee told reporters: “Although my colleagues are sad, they are restrained and work hard to resolve them seriously.”
Difficult transformation: how far can “one body and two wings” fly?
As the core enterprise of Sanjin Group, Guilin Sanjin is one of the earliest manufacturers of modern Chinese medicine preparations in China. However, under the influence of policies such as medical insurance control fees, lowering the proportion of medicines, and restricting auxiliary medicines, the growth rate of the Chinese patent medicine market has gradually slowed down. Most Chinese medicine companies are facing difficult issues of strategic transformation, and Guilin Sanjin is no exception.
“One body and two wings” is the answer given by Guilin Sanjin. In the company’s 2020 board of directors’ work report, the development strategy of “focusing on traditional Chinese medicine pharmaceuticals as the core, biotechnology industry with biopharmaceuticals as the two wings, supplemented by related industries” was mentioned again, which is the first time this strategy It has been 4 years since it was proposed.
However, the company’s net profit has continued to decline in the past three years, and it is an indisputable fact that the growth of its main business has been weak. In 2020, Guilin Sanjin’s operating income totaled 1.566 billion yuan, with proprietary Chinese medicines (industry) and others (industry) accounting for nearly 97% of the total, but their revenues fell by 3.39% and 25.19% year-on-year, respectively.
Image source: Screenshot of the 2020 Annual Report
The “two wings” of Guilin Sanjin are not yet full. In 2013, Guilin Sanjin acquired Baochuan Biology, which focuses on the research and development and production of biological macromolecular drugs, and established a wholly-owned grandson company Baifan Biology in 2016, which constitutes the biopharmaceutical sector. At present, Guilin Sanjin, through its wholly-owned subsidiary Shanghai Sanjin, has wholly-owned holdings of Baochuan Biological and Baifan Biological, but Shanghai Sanjin’s net profit in 2020 is -58,008,300 yuan.
In addition, the transformation of the big health sector has a long way to go. In 2020, the net profits of Guilin Sanjin’s subsidiaries Sanjin Daily Chemical and Sanjin Dahealth are -2.988 million yuan and 1.4078 million yuan, respectively.
The two wings of the biotechnology industry and the big health industry are still in the period of loss cultivation.
In the difficult transition, the identity of the successor is particularly critical. Compared with the three candidates who are concerned by the outside world, Shi Lichen, head of the Beijing Dingchen Medical Management Consulting Center, believes that professional managers are a better choice for Guilin Sanjin.
Shi Lichen said that in the past few years, Guilin Sanjin’s product structure has been seriously aging, and product R&D innovation has been mediocre. In the context of the overall decline of the company, the change of command may provide a new direction for the company’s business decision-making.
“‘One body and two wings’ is often a conceptual thing.” Shi Lichen said that biopharmaceuticals require a large amount of capital investment and have a low degree of compatibility with the original resources of Chinese medicine companies. They are not as good as cosmeceuticals, general health industries and the main business of Chinese medicine. Coincide. Therefore, the development and transformation of Guilin Sanjin may be “very difficult” if it continues to develop in accordance with the concept of “one body and two wings”.
However, an insider of Guilin Sanjin told reporters that the company’s development strategy is still “one body and two wings”, and no news of the introduction of professional managers has yet been received.(Intern Xu Maonan also contributed to this article)
