Cologne Pharmaceutical Industry: Large infusion industry leading to "big" win

Recently, but bin in its blog, a rare Insight "Li" A listed company, said the company chairman a bit like BYD's Wang. This company is June 3 just landed in the SME board of the Cologne pharmaceutical industry (002422. SZ).　　Since the listing of the company's share price has climbed steadily, a short period of two months, the stock price from about 82 yuan has been up to 108 yuan or so, among the "hundred units" ranks.　　In fact, the company's large infusion industry even has a "infusion price is lower than mineral water," in the profits of such a meager industry, the Cologne pharmaceutical industry and why can be favored by the market?　　Perhaps the answer to the question is that the company is big enough.　　The market is huge but the profit is not high recently, but bin, in a book called "The impressive management of the Cologne pharmacy", recorded the experience in the Cologne survey, and praised the management of the company, saying that chairman Liu Genue a bit like BYD's Wang. "Mr. Liu Genue, Chairman of the pharmaceutical industry, was impressed by his intuition that he was a bit like Ren or Mr Wang in the medical field."　　But Bin said. He also said the company's chairman was confident about the company's performance this year.　　A large number of companies to raise funds to pay attention to, as a private enterprise, an equity incentive is very much in place of private enterprises, the concept of return on capital investment in the investigation process, so that this part of the use of funds efficiency, leaving investors a certain amount of space to anticipate. It is understood that the Cologne pharmaceutical industry is a large infusion series of drug development and production and sales leading enterprises.　　And the so-called big infusion is more than 50 ml of large capacity injections, such as the usual cold dozen needles, such as the use of salt water, are "big infusion" range. "With the enhancement of people's health awareness, outpatient, surgery, infusion products as irreplaceable products, market demand will maintain a stable growth."　　"said Huang Donglin, senior analyst at the Frost&sullivan consulting firm's medical department. Data show that the infusion industry is a rigid demand for the industry, the market growth and stability.　　2008, the national infusion output of 7.97 billion bottles (bags), than 1995 increase of 6.59 billion bottles (bags), 1995-2008-year compound growth rate of 14.44%.　　Guotai in the study predicted that by 2020 the market capacity of the large infusion industry will reach at least 8.5 billion bottles (bags), of which glass bottles and plastic bottles will each reach 3.4 billion bottles, the soft bottle will reach 1.7 billion bottles (bags).　　Although the market capacity will generally expand gradually, however, because of the large infusion industry as a whole, the technical content is not high, the market concentration is low, different from the chemical generics and other high margin of the sub-industry, large infusion industry gross margin is relatively low, generally not more than 40%, so the industry has a "infusion price lower than mineral water" argument　　Scale effect building a performance moat now that the overall profit of the industry is so low, why is the company of the pharmaceutical industry in the market in hot pursuit? "The main advantage of the Cologne industry is its regulation.The mold is big enough, the product line is very complete. It may not have an explosive product, but a small product can also form a huge force, and this kind of product is very popular with the hospital.　　"Huang Donglin said. Data show that the company currently has 96 varieties, 219 kinds of specifications of large infusion products, is currently the domestic infusion industry, one of the most complete variety of enterprises.　　Among them, the company also has 25 varieties of large infusion products into the national Basic Medicines directory. In addition, the company's packaging form is also the most perfect.　　Product packaging In addition to the traditional glass bottles, but also includes plastic, soft bags, upright type of soft bags.　　It is worth mentioning that, because in the clinical, product transport and storage, soft plastic packaging is relatively strong advantages of glass bottle packaging, so, the future development trend of large infusion industry, glass bottle packaging will gradually be replaced by soft plastic packaging.　　For the Cologne pharmaceutical industry, the proportion of glass products has declined gradually, from 83.3% in 2005 to 66.6% in 2007, while plastic bottle packaging increased from 11.9% to 21% and soft bags from 4.8% to 11%. Haitong Securities analyst Jiangwina that the industry's continued growth in demand, soft plastic packaging to replace glass bottle packaging will bring market opportunities, the company relies on capital strength and the advantages of the first advantage will be achieved.　　Company Glass Bottle Packaging infusion will be on the existing basis gradually narrowed, plastic bottle through capacity expansion will occupy the basic glass bottle part of the market, the company's current cost of plastic bottles and glass bottles are basically close, in the low-end market has a strong competitive edge.　　In the company's several major categories of products, because the company's patented products upright soft bag with safety, low cost, the price is suitable for the characteristics, so become the company's main push varieties, this product is also favored by the outside world. But Huang Donglin said: "Patented products can improve the reputation of pharmaceutical companies, but often in the proportion of sales is not large, improve performance is limited."　　"National network to improve sales efficiency in fact, the company's" big "is not only reflected in the product line and product range of rich, its production base and distribution network layout is also better than competitors. "Large infusion products because of weight, so from the point of transport logistics, the cost is quite high, this time, the company's production base layout is very important." In addition, for this industry, because the overall price of products is not high, so the construction of marketing channels is also very important.　　"Huang Donglin said.　　It is understood that the company's production base throughout the country in nine provinces, has basically formed a national industrial layout, better meet the needs of large infusion products market characteristics, effectively eliminating the large infusion product sales transport radius constraints.　　In addition, the company through the country's 57 sales to all parts of the country distributors at all levels of sales of products, sales area covering China except Taiwan, Hong Kong and other provinces and cities. Industrial Securities analyst Wang Yu that the company's national network to improve product sales efficiency, in order to continuously upgrade the company's brandMarket visibility and expansion of the market coverage of products to provide protection. In fact, it is based on the advantages of scale, so that the company's competitive strength is very strong. 2008 data show that the first 10 enterprises in China infusion industry production concentration of about 48.4%, of which the market share of the Cologne pharmaceutical industry 22%, the main competitor of the double Crane pharmaceutical industry (600062.　　SH), Shandong Lu-Chen New Co., Ltd. accounted for the market share of 9% and 4% respectively, the two combined up less than the Cologne pharmaceutical industry. It is understood that the company's main rival of the two-crane drug industry to high-end treatment of the main infusion, high gross margin, the Cologne pharmaceutical industry is the low-end of the balanced infusion and high-end treatment of infusion simultaneously.　　Wang Yu that the company can maintain such a high margin, scale effect is not. In addition, representing the industry average level of the Southwest pharmaceutical Industry (600666. SH), Tai Lung Pharmaceutical Co., 600222.　　SH) and Tonghua Dongbao (600867.SH), the gross profit margins of these companies are far lower than that of the Roentgen pharmaceutical industry. Wang Yu that, in terms of major infusion industry, due to product structure adjustment, high margin of new products continue to launch, these years is the company's golden period of development, will continue to maintain rapid growth.　　But after all, the market capacity is limited, and growth is stable, if there is no new profit model, a few years later the company's growth will inevitably slow down.　　And in the National Gold Securities analyst Li Jinglei view, the Cologne pharmaceutical industry currently 3 billion yuan infusion sales and international giant Faison Yuscabi 25 billion yuan sales have a huge gap, the company also has sufficient domestic market is worth fighting for. Risk hint: The government price control risk, the infusion product market competition intensifies, the research and development new product has certain uncertainty.