Guizhou Sanli (603439)’s 2020 semi-annual board of directors operating review contains the following content:
1. Discussion and analysis of operating conditions
During the reporting period, the national Scope Affected by the new coronavirus, residents are quarantined at home, some hospitals' regular outpatient clinics are unable to receive patients normally, children's specialist hospitals and pediatric outpatient clinics have seen a significant decline in the number of visits, and sales at pharmacies have also been affected to a certain extent, resulting in the company's operations Performance has declined. From January to June 2020, the company achieved operating income of 281.9195 million yuan, a year-on-year decrease of 19.00%. The net profit attributable to the owners of listed companies was 46.4781 million yuan, a year-on-year decrease of 15.62%. The net profit attributable to shareholders of listed companies after deducting non-recurring gains and losses was 48.2828 million yuan, a year-on-year decrease of 10.97%.
During the reporting period, when adverse factors in the external environment had a greater impact, the company focused on promoting the following key tasks to respond to changes in the external environment:
1. Fight the epidemic together and stabilize Production
In the first quarter of 2020, affected by the COVID-19 epidemic, the domestic pharmaceutical industry also suffered a huge impact. While ensuring that epidemic prevention measures are in place and the health and safety of employees are ensured, the company actively resumes work and production and makes every effort to stabilize operations despite transportation disruptions, logistics controls, and personnel traffic restrictions. Under the correct leadership of the core management and the unremitting efforts of all employees, the company has gradually resumed normal operations from aspects such as raw material supply, marketing network construction, improvement of internal management, and highlighting of social responsibilities.
2. Open up ideas and strengthen marketing management
During the reporting period, due to the impact of the epidemic, the company’s sales model of focusing on professional academic promotion (academic promotion service provider) was affected by had a greater impact. Academic exchanges, academic promotion, market research and other activities are subject to certain restrictions. The company's sales department changed its thinking and organized academic promotion service providers to conduct online video promotions instead of traditional offline academic exchanges and promotions, effectively reducing the negative impact of being unable to hold meetings. At the same time, the company's sales department actively organizes internal employees to conduct online training and learning to improve the professional level of employees and lay a solid foundation for deepening and penetrating the market.
3. Improve management level and strengthen internal control
During the reporting period, the company comprehensively implemented organizational performance appraisal from top to bottom, strengthened internal management, and improved per capita efficiency. During the epidemic, the company, under the leadership of the core management, continued to improve its corporate governance structure and internal control system, and ensured that the company's decision-making, execution and supervision were scientific and reasonable by establishing and improving various regulatory management systems, incentives and accountability mechanisms. At the same time, the company has improved performance appraisal, promoted the improvement of management efficiency, further enhanced the company's ability to sustain curriculum development, and provided a strong guarantee for the development of future employee quality.
4. Social Responsibility
5. Strengthen cultural construction and enhance cohesion
Since its establishment, the company has been adhering to the philosophy of "responsibility, persistence, exploration, development, *** core value of "enjoyment". In 2020, the company effectively promoted new employees' rapid integration into the company and deepened old employees' recognition of corporate values ??through training, benchmarking, learning sharing, and team development. A positive and progressive cultural atmosphere of "competing with each other to catch up with others and surpassing others" has been formed within the company.
2. Possible risks
1. Policy risks
The pharmaceutical industry is a policy-driven industry and is greatly affected by national policies. Our country is advancing the reform of the medical and health system, and is gradually introducing corresponding reform measures in terms of the pharmaceutical management system and operating mechanism, the medical and health security system, and pharmaceutical supervision. The introduction of relevant reform measures and the continuous improvement of policies, while promoting the orderly and healthy development of my country's pharmaceutical industry, may cause major changes in the industry's operating model and product competition pattern, which will have a certain impact on enterprises. On August 20, 2019, the National Medical Insurance Administration and the Ministry of Human Resources and Social Security issued the "National Basic Medical Insurance, Work Injury Insurance and Maternity Insurance Drug Catalog", notifying that "all localities should strictly implement the "Drug Catalog" and are not allowed to develop their own catalogs or use them. There are flexible ways to add drugs in the catalog, and you are not allowed to adjust the limited payment range of drugs in the catalog on your own.
If the company's products are removed from the Essential Drugs List or the Medical Insurance List, it will have a certain adverse impact on the company's operations.
However, in recent years, the national medical insurance policy has given priority support to children's medication. At the same time, the company strictly follows GMP standards for production and sales. The main products have significant clinical efficacy and high safety, and there is a risk of being removed from the medical insurance catalog. At the same time, children's drugs are relatively less dependent on medical insurance reimbursement. Even if they are removed from the medical insurance catalog, they will basically not have an impact on the company's sales.
2. The risk of continued impact from the COVID-19 epidemic
In the first half of 2020, the COVID-19 epidemic broke out in full force. Governments at all levels implemented unprecedented prevention and control efforts, and the company was also restricted by transportation and logistics. , the hospital's regular outpatient clinics are unable to receive normal treatment and other difficulties. Starting from the second quarter, the domestic epidemic situation improved and the company fully resumed work and production. However, the impact of the epidemic on the country has not yet been completely eliminated. It may have a certain impact on the company's full-year sales plan.
3. Risk of product concentration
During the reporting period, the total sales revenue of the company's main products Throat Spray and Throat Spray (Children's Type) accounted for the main business of the current period. 94.91% of the revenue. The production and sales of the above products determine the company's revenue and profitability to a large extent. Once there are major adverse changes in the price of its raw materials, production and sales status, market competition pattern, etc., it will have a negative impact on the company's future operations. adversely affect performance. The company will continue to do a good job in the market promotion of its main products, while accelerating the research and development of new products and the secondary development of old products, strengthening external cooperation, continuously expanding product lines, and enhancing market competitiveness.
4. Risk of product price reduction
With the gradual deepening of the national medical reform system, medical insurance fee control continues to become stricter, the implementation of medical insurance payment standards, the establishment of the Medical Insurance Bureau and the implementation of mass procurement, Falling drug prices will become an inevitable trend in the future. On the one hand, the company will continue to improve the bidding management system, actively carry out strategic layout and response work for product bidding, and at the same time vigorously expand OTC sales channels; on the other hand, the company will also strictly control product quality and costs, and continuously improve product quality. clinical effectiveness and economy.
5. Management Risks
As the company continues to expand in scale and assets, businesses, institutions and personnel continue to expand, the company is in strategic planning, system formulation, organization building, and operation management. and internal control will face greater challenges. It is necessary to establish a management system, internal control system, organizational structure, talent reserve and business processes that adapt to the company's long-term development. There is a possibility that the company's existing management system cannot fully adapt to the company's rapid expansion in the future. , bringing risks to the normal production and operation of enterprises.
3. Analysis of core competitiveness during the reporting period
(1) Industry status
In my country’s proprietary Chinese medicine spray market for throat diseases, the sales volume in 2017 was the largest The brand is the company's throat-opening spray. The brand has grown rapidly, with a compound growth rate of 62.78% in the past six years, higher than the average level of the market. Sales increased from 41 million yuan in 2011 to 763 million yuan in 2017. 4. It is a leader in the market and has good growth potential. At the same time, in my country's market of Chinese patent medicines for throat diseases, there are few special medicines for children. Among the top four varieties in my country's market of Chinese patent medicines for children's throat diseases, there are 2 exclusive varieties, 2 medical insurance Class B varieties, 3 OTC Class A varieties, and open Throat Sword Spray (children's type) is the only product that is both exclusive and included in the national medical insurance catalog.
(2) The company’s competitive advantages
1. Brand advantage
After long-term development and accumulation, the company has won the title of National High-tech Enterprise and Top 100 Private Enterprises in Guizhou Many of its products have been rated as Guizhou Province Famous Brand Products, its trademarks have been rated as Guizhou Province Famous Trademarks, and it has been selected into the Guizhou Province Intellectual Property Advantage Cultivation Enterprise Database. The company is now applying for intellectual property standards implementation to establish a complete intellectual property strategic management system as the core force for the company's strategic development and competition. According to statistics from the Southern Research Institute, Kaithroat Spray (children's type) continued to lead the market of Chinese patent medicines for children's throat diseases in my country in 2017. It has topped the list for six consecutive years and is the absolute dominant variety in the market.
The ranking of Kaithroat Sword Spray (including children's type) in the market of Chinese patent medicine sprays for throat diseases has also overtaken Guilin Watermelon Frost Spray to occupy the top spot, ranking first for 3 consecutive years. In the hospital terminal of Chinese patent medicine sprays for throat diseases The market has been ranked No. 1 for 6 consecutive years, ranking 4th and 3rd respectively in the market of proprietary Chinese medicines for throat diseases and the terminal market of hospitals for proprietary Chinese medicines for throat diseases.
In order to continue to maintain its brand advantage, the company is committed to continuously improving product quality levels. It has established long-term strategic cooperative relationships with a number of scientific research institutes and universities to conduct research and development of new varieties and existing product quality standards. Conduct in-depth research in areas such as enhancement research, secondary development and post-marketing safety re-evaluation, pharmacology and toxicology research, and further optimize and improve the quality, safety and efficacy stability of the product. At the same time, the company also conducts in-depth research on the main raw medicinal materials of the product, conducts large-scale resource storage and distribution surveys on the origins of Ba-Zhao Jinlong medicinal materials across the country, and participates in the revision of local medicinal materials standards in Guizhou Province, independently presiding over the eight-year review of local authentic medicinal materials. The quality standards of Claw Jinlong were revised.
2. Advantages of product dosage forms
Children are a population with a high incidence of throat diseases. The onset of such diseases is relatively inner. Tablets, capsules, granules, etc. are commonly used in clinical practice at this stage. During use, oral drugs need to be absorbed by the gastrointestinal tract and liver and then distributed throughout the body. They cannot directly act on the lesion site, have slow onset of action, poor delivery targeting, low bioavailability, and may cause damage to the liver; at the same time, Oral drugs often require auxiliary conditions when taking them, such as brewing vessels, warm water, etc., and there are time intervals between taking them. Kaithroat Sword Spray (children's type) is a spray-type medicine that is easy to carry and easy to use. It does not require any auxiliary conditions and can be administered at any time. The medicine adopts a 360-degree rotating nozzle design, which can rotate 360 ??degrees up and down and 360 degrees horizontally. The extended nozzle can directly spray drugs into diseased parts such as the mouth and throat that are difficult to reach directly with conventional dosage forms. Spray administration can directly act on lesions such as the throat and tonsils, reducing the burden on the liver of drug metabolism in pediatric patients and directly absorbing and acting on the disease. It is quick-acting, highly effective and has a short course of treatment. The effectiveness and convenience of the spray form in treating children's throat diseases have been fully recognized by pediatric patients, parents and doctors, and it has become the absolute leading dosage form in the market.
3. Advantages of variety formulas
Miao medicine, as an important part of my country’s ethnic medicine, has a history of three to four thousand years. It is the long-term production activity and development of the Miao people. In the practice of fighting against diseases and injuries, we have accumulated valuable medical experience and have unique insights into pathogenic factors, disease diagnosis, treatment and prevention. We have strong national characteristics in disease classification and nomenclature, and also in clinical prescriptions. It has many unique features and is part of the treasure house of traditional medicine in my country.
Throat-opening sword spray (including children's type) is taken from the classic Miao medical prescription, and the Miao name is: Ghabghongdbusdiangd (Gagongbudang). The main medicines in its formula include four ingredients: octagonal golden dragon, mountain beanroot, cicada slough and menthol. Among them, octal golden dragon is an authentic medicinal material from the southeastern region of Guizhou.
The medicinal materials used in Kaihoujian Spray (Children's Type) are natural, of stable quality, and highly safe, which makes up for the current shortage of drugs for children's oral and throat diseases in my country. It is the most popular drug for oral and throat diseases. A rare drug specifically for children, it is accepted by the majority of pediatric patients and hospitals. As of the end of 2019, the company's product Throat Sword Spray (children's type) has covered 323 cities and 1,696 counties, covering a total of 138,474 terminals of various types. , including 4,689 grade-level hospitals, 8,621 primary medical terminals, 26,512 clinics, and 98,652 pharmacies and other retail terminals. At the same time, it has covered more than 96.12% of domestic children's specialty hospitals, and has also been selected into many authoritative domestic pediatric Chinese patent medicine medication guidelines, with high market recognition.
Based on clinical research data from many domestic children’s hospitals and scientific research experts such as Capital Medical University Children’s Hospital, Shanghai Children’s Hospital, Guangzhou Children’s Hospital, Chongqing Children’s Hospital, etc., as well as published in domestic medical journals Nearly a hundred professional papers and other relevant information show that Kaihoujian Spray (Children's Type) can treat the most common respiratory infectious diseases in children such as hand, foot and mouth disease, pharyngitis, tonsillitis, herpetic angina, oral ulcers, etc. It has obvious advantages and remarkable curative effect.
Based on the efficacy and advantages of clinical use, Kaihoujian Spray (Children's Type) was successfully selected into the "Guidelines for Diagnosis and Treatment of Hand, Foot and Mouth Disease in Guangdong Province (2018 Edition)" issued by the Guangdong Provincial Health and Family Planning Commission and Guangdong Provincial Traditional Chinese Medicine in 2018, and is The only oropharyngeal topical formulation specifically formulated for children. At the same time, it was also selected into the "2018 Traditional Chinese Medicine Variety, Technology and Competitiveness Ranking" released by the China Association of Traditional Chinese Medicine. In addition, the design of the product with a refreshing taste has greatly improved the problem that the taste of Chinese patent medicines is difficult for children to accept, thereby improving the medical compliance of children's patients.
As a national exclusive variety, Throat Sword Spray (including children's type) is adjusted in accordance with the current standards for hospital drug procurement in my country. The procurement of exclusive drugs is determined through negotiations between the manufacturer and the purchasing agency, so the company has a strong commitment to the product. Higher pricing autonomy.
4. Production technology advantages
Since its establishment, the company has always adhered to the quality policy of quality first, abiding by credibility, and dedicated service. It takes the new version of GMP as the minimum control standard, strives for excellence, and continues to improve. In terms of factory facilities, the company is equipped with standard GMP factory buildings, fully automatic air conditioning systems, fully automatic purified water systems, and fully automatic compressed air systems. In terms of production equipment, the company has domestically advanced production lines for extraction and concentration, separation and purification, liquid preparation and filling, labeling and cartoning, and data collection. In terms of the use of raw and auxiliary materials, the company will always purchase them from units that are qualified to supply pharmaceutical raw materials and auxiliary materials and have passed on-site audits. Each material will be fully inspected before use to ensure that every material used in pharmaceutical production is pure in variety and of high quality. . In terms of production institutionalization, the company has formulated a system for the procurement of raw materials and auxiliary materials, arrival acceptance, testing, qualified release, production use, use, process cleaning, instrumentation calibration, personnel operation, equipment operation, quality control of intermediate products, and finished products. A series of operating standards, management standards and technical standards such as testing and finished product release ensure that the entire production quality control process of the product is well-founded and has rules to follow. The production process is also equipped with on-site QA real-time supervision and 24-hour video recording of the entire process. Monitor to ensure strict implementation of the system.
5. Team advantage
The company has an excellent management team with theoretical expertise, rich industry experience, management innovation and common values. The senior managers have rich management experience in the pharmaceutical industry and can deeply understand and comprehensively control pharmaceutical industry policies and development laws. The average age is no more than 45 years old, and 33% of them have postgraduate degrees, ensuring the company's steady and sustainable development. In addition, there is a group of young and energetic middle-level managers who are creative and have complete knowledge of management theory. Their average age is no more than 38 years old, 89% of whom have a bachelor's degree or above. They have strong learning ability, courage and responsibility, and high execution efficiency. The entire management team is a combination of middle-aged and young people, each making up for their shortcomings. They are rigorous and steady without sacrificing innovation. The management team is sound and the talent pool is continuously supplied, laying a good foundation for the company's future sustainable development.
In terms of management model, the company’s internal control system is sound, ensuring the company’s decision-making efficiency and risk control capabilities. The company's incentive and assessment system is perfect, performance, rating and salary are linked, and the rapid growth of talents ensures the company's sustainable development. These management models ensure the rapid and sustained growth of the management team and safeguard the talent pool needed for the company's development.