The Price Of Radix Pseudo Ginseng Increased By &Nbsp, And That Of Jiang Zhong Pharmaceutical Industry Was Under Pressure.

The substantial increase in the price of Radix heterophylla will cause huge cost pressures to the [26.57 1.84% shares of the pharmaceutical industry. The gross profit margin of the main products of Jianwei Xiaoshi tablets will drop this year.

Yesterday, the stock closed at 26.57 yuan / share, up 1.84%.

Liu Jianping cartography

Jiang Zhong pharmaceutical Limited by Share Ltd (Jiang Zhong pharmaceutical, 600750) the first flagship product Jianwei Xiaoshi tablets sold 230 million boxes in 2010. It is estimated that the growth rate of sales will steadily increase in the next five years.

However, the substantial increase in price of Radix heterophylla caused heavy cost pressure to the pharmaceutical industry in the Yangtze River. The gross profit margin of Jianwei Xiaoshi tablets in the first half of this year will drop sharply.

However, with the listing of new ginseng, the gross profit margin of Jianwei Xiaoshi tablets in the second half of the year is expected to gradually increase.

In addition, with the upgrading of the initial products and the adjustment of marketing channels, the initial cost of the pharmaceutical industry was basically completed.

In addition, high-end

In the short term, the price change of Radix heterophylla is the biggest factor affecting the profit of the pharmaceutical industry in China. The annual average purchasing price of Radix pseudo ginseng is reduced by 50 yuan per kilogram, which will save about 100 million yuan.

From the medium to long term, the sales of Yuan Yuan and Shen Ling grass will have a significant impact on the company's profits.

We predict that the EPS (earnings per share) in the 2011-2013 years of the pharmaceutical industry in the Yangtze River is 0.98 yuan, 1.32 yuan and 1.75 yuan respectively. In 2011, the forecast PE (price earnings ratio) is only 26 times. If the price of the radix pseudo ginseng is deeper in the second half of the year, the company's performance will exceed the expected level, so the "recommended" rating will be given.

Yesterday, Jiang's pharmaceutical industry closed at 26.57 yuan / share, up 1.84%.

Indigestion Tablet

Slowdown in sales growth

Jianwei Xiaoshi tablet is the first flagship product of Jiang Zhong pharmaceutical industry. In 2010, it sold nearly 230 million boxes, and it used the largest amount in the field of OTC (OTC) in China. At the same time, it was also a single product with less than 1 billion yuan annual sales of OTC drugs in China.

From 2005 to 2010, the sales revenue of Jianwei Xiaoshi tablets increased from 650 million yuan to 1 billion 144 million yuan.

But we should also see that in recent two years, although the sales revenue of Jianwei Xiaoshi tablets is still growing, its growth rate has dropped from 18.81% in 2008 to 9% last year, and there may still be negative growth in the first half of this year.

With the growth of sales base, sales growth will surely slow down, but the sales of Xiaoshi tablets from the fourth quarter of last year to the first quarter of this year are mainly affected by the soaring price of Radix pseudo ginseng.

Once the price of Radix pseudo ginseng has dropped sharply, the sales of Xiaoshi tablets will be resumed.

We expect that in the next 5 years, Jianzhong Xiaoshi tablets will continue to grow steadily.

Jiang Zhong pharmaceutical will continue to strengthen the control and control of distributors and non contractual customers, reduce the number of first tier dealers to more than 30, and basically save every household. It will greatly prevent the phenomenon of fleeing and effectively stabilize the terminal order. Second, Jianwei Xiaoshi tablets won the "Jian" brand approval and the application scope has been expanded. If the company can find out the appropriate promotion strategy for health products, it is expected to get a slice from the fast-growing market of digestive health products. Third, the market of peptic drugs, especially children's digestive AIDS, will still have more than 5% stable growth in 5 years. As the leading industry, Jianwei Xiaoshi tablets should get the average growth rate of the industry. The growth point mainly comes from three aspects: the first is the improvement of marketing channels, in 2011.

New varieties of Radix heterophylla in July

"Cost pressures are slowing down"

We expect that the gross profit margin of Jianwei Xiaoshi tablets will rise gradually in the second half of this year.

The main ingredients of Jianwei Xiaoshi tablets are Radix pseudo ginseng, tangerine peel, yam, stir fried malt and hawthorn. Excipients are sucrose, dextrin and magnesium stearate.

Since last year, the price increase of Radix heterophylla and sugar has caused great cost pressure to the pharmaceutical industry in the Yangtze River.

In the river, the area of Radix heterophylla has a very small area of production, which is far from meeting its own production needs. Therefore, it mainly depends on outsourcing, of which the purchase varieties are mainly Fujian goods, and last year the purchase volume was about 2000 tons.

In 2009, the price of Radix pseudo ginseng has been stable at 30 yuan / kg, and the price in the past few years has rarely exceeded 50 yuan / kg, so the cost pressure of the company in the area of Radix heterophylla is very small.

Last year, Fujian and Guizhou suffered from natural disasters such as freezing, drought, floods and so on, resulting in a reduction of more than 1/3. The output of Radix heterophylla in the whole country is less than 3500 tons, so that the demand in the river accounts for nearly 60% of the total output of the country.

In the context of imbalance between supply and demand, hot money began to hype. The price of Radix pseudo ginseng has soared from the second half of 2010, rising from less than 50 yuan / kg in early 2010 to 400 yuan / kg in April this year, the biggest increase is nearly 10 times.

Since a box of Jianwei Xiaoshi tablets needs about 8.7 grams of Radix heterophylla on average, if the price of Radix pseudo ginseng is 400 yuan / kg, the cost of only one box of Jianwei Xiaoshi tablets is 3.48 yuan, while the average selling price of Jianwei Xiaoshi tablets is only 6.5 yuan / box, which is far beyond the endurance of the Chinese medicine industry.

Therefore, in the first quarter of this year, the price of Radix pseudo ginseng has reached its peak.

In addition, in May and August each year, Jiang Zhong pharmaceutical will shut down all production lines and stop production for half a month to a month. This time, we will arrange the production and maintenance time reasonably according to the price and marketing of Radix heterophylla.

Because Jianwei Xiaoshi tablets are placed in the parent company, the gross profit margins of the parent companies in 2008, 2009 and the first half of 2010 were 68.36%, 69.89% and 61.39% respectively, while the gross profit in 2010 was only 47.4%, and the gross profit rate in the first quarter of 2011 dropped to 38.78%.

We expect the gross profit margin in the two quarter of this year to be lower than the first quarter of this year, and the average gross profit margin of the first half of this year will probably be around 30%, which will drop by more than 30% compared to the same period.

Radix acaci is an annual raw material. The high price of last year greatly stimulated the enthusiasm of the growers. This year alone, the two main producing areas of Guizhou and Fujian expanded more than 30% over last year. It is estimated that the national planting area is over fifty thousand mu.

So far this year, there are no major disasters similar to those of last year in the three main producing areas of Guizhou, Fujian and Anhui. The output of Mu should be 20% higher than that of last year. According to the calculation of 100 kg / mu, the output of new ginseng should be above 5000 tons this year.

With the approaching of the new season in July, the price of Radix pseudo ginseng has gone down a lot from May. We expect that the price of the new ginseng will continue to decline after a new listing. If the average price in the second half of the year can be reduced to 100-150 yuan / kg, the gross profit rate of the Jianwei Xiaoshi tablet can be increased by 20% to 25% than that in the first half, but the gross profit margin this year may be 5% to 10% lower than that of last year.

Health care products will accelerate growth

In May 2008, Jiang Yuan pharmaceutical company launched the compound oral amino acid oral liquid. It has two products, which aim at the postoperative population and the weak constitution.

In the first year of the launch, Jiang's pharmaceutical industry quickly set up more than 600 professional health care products marketing team, and realized the initial product coverage of 26 provinces in the whole country. In the same year, the total sales revenue reached 49 million 340 thousand yuan.

In 2009, it reached a new level. The Yuan Yuan marketing team developed to more than 1000 people. The sales revenue of Yuan Yuan was 201 million yuan, up 308% year-on-year.

The sales revenue of yuan yuan in 2010 was 225 million yuan, up 12% from the same period last year.

Sales growth is lower than expected due to three main points. First, the newly established health care product sales team grew too fast. After two years of rapid growth, the management cost increased significantly. Second, the upgrading and replacement of products were still in an alternation period, and the old and new products coexisted. Due to the fear of selling the old products, the company did not keep up with the new product advertisements, and the new products were not fully distributed. Third, how to promote health products in pharmacies, the company was also summarizing and adjusting, which also affected the growth of sales last year to a certain extent.

Since the beginning of this year, Jiang's pharmaceutical industry is mainly upgrading the amino acid products. The initial compound peptide special dietary nutrient solution is also divided into two categories, which are targeted at the postoperative population and the weak constitution.

Compared with amino acid series, the composite peptide series has better performance and higher price.

This year, Jiang Zhong pharmaceutical has listed the comprehensive peptide series in the whole country, and the advertising investment will catch up with it. We expect that the sales growth will accelerate at the beginning of this year, which is expected to increase by 35% over the same period, and the sales revenue may exceed 300 million yuan.

In 2010, Jiang Zhong pharmaceutical introduced the advanced tonic health care product, which is mainly used to resist fatigue, enhance immunity and delay senility.

Shen Ling grass is located at the high end and the price is high. The terminal price of each box is 8150 yuan.

If you take 1 bottles per day, 30 bottles per month and take 3 months a year, it will cost 73 thousand and 400 yuan a year. If you take it every day for a whole year, you need to spend nearly 300 thousand yuan, which is far from what ordinary people can consume.

The company targeted the target population of "Shen Fu Cao" as "rich star" (rich people, dignitaries and celebrities).

Last year, Jiang Zhong pharmaceutical carried out a market test on target population in Nanjing, Beijing and Shanghai. The market responded well and the return rate reached 20% to 30%.

The market capacity of Panax quinquefolium, Cordyceps and Ganoderma lucidum in China is 20 billion yuan, 28 billion yuan and 10 billion yuan respectively.

If we calculate the capacity of 21 million bottles per year, the potential market of Shen Ling grass is more than 10 billion yuan.

The sales revenue in 2010 is around 20 million yuan. This year, it is possible to break through the sales volume of billion yuan and become a new revenue growth point for the company.

However, due to the large initial investment, it is difficult to achieve breakeven in the short term before reaching the scale effect.