The boss Xie Zilong was taken away, what will happen to Laobaixing Pharmacy?
2024-08-01
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Many years ago, Xie Zilong publicly stated in an interview with the mediaI am not a person who can settle down.
Due to his personality, he took a different approach in the chain drugstore industry, leading the company into the era of tens of thousands of stores and becoming one of the industry leaders.However, holding14,000 stores, 40,000 employeesIn recent years, he has been frequently awarded with honors for photography, which has nothing to do with the pharmaceutical business.In 2017, he was inspired and spent 150 million yuan of his own money to build a non-profit video art museum in Changsha Yanghu Wetland Park on the bank of the Xiangjiang River. It has become a fixed venue for some exhibitions in the industry and a landmark building for local cultural and tourism check-in.After his success, Xie Zilong suddenly became low-key. In March this year, rumors circulated that he might be under investigation, but his subsequent public appearance dispelled the rumors.The rumors had just died down. Yesterday, Laobaixing announced that Chairman Xie Zilong had been detained and a case was filed for investigation.Now that the “number one person” has been taken away, where will this pharmacy chain giant go?Xie Zilong's detention and investigation is no less than an earthquake for the common people (603883.SH). His status as the company's founder, actual controller and chairman, as well as his influence in the chain drugstore retail industry, means all kinds of uncertainty.Although the company emphasized in the announcement that the matter involved had nothing to do with the company, it still caused a huge wave in the secondary market. When the market opened yesterday, Laobaixing once hit the limit down and closed at 13.89 yuan for the whole day, a sharp drop of 5.06%, with a total market value of 10.56 billion yuan.Since late May this year, the pharmacy sector index has fallen by more than 30%, and the share prices of many listed chain pharmacies have continued to plummet.The same is true for Laobaixing. Since May 14, the share price has fallen by about 46%, almost halved. Xie Zilong's incident is undoubtedly a further blow to the company.In fact, there were signs that Xie Zilong was in trouble. According to public reports, during an important meeting held in March this year, he was absent from several important occasions, and rumors that he was under investigation were rampant.Xie Zilong appeared in some public events in May, and the rumors were dispelled. Unexpectedly, just as the rumors died down, on July 28, he was formally detained and investigated by the Hunan Provincial Supervision Commission.In the past few years, Xie Zilong has been high-profile.Kangmei PharmaceuticalThe former chairman Ma Xingtian was a wealthy man. In the past two years, he has become unusually low-key and modest, always polite to everyone and willing to meet almost any request.After this year's Spring Festival, his WeChat Moments can no longer be seen.China's first chain pharmacy appeared in Shenzhen in 1995, with Zhonglian Pharmacy pioneering this model.At that time, 29-year-old Xie Zilong had just resigned from the Xiangtan Traffic Police Brigade and went to Changsha to start a pharmaceutical company. Six years later, he understood the business model of chain pharmacies and opened the first Laobaixing Pharmacy near Changsha Xiangya Hospital, and launched the brand.The slogan is 45% lower than the national approved retail price, shocking the industry.The affordable strategy became Xie Zilong's trump card in conquering the market. This also allowed Laobaixing to gradually move from a private single drugstore to the fast lane of chain expansion.In 2015, the company successfully entered the capital market. With the advantage of the financing platform, the company's land grabbing accelerated again. In June 2022, the number of Laobaixing stores exceeded 10,000. However, in the post-10,000-store era, the company's performance growth rate has slowed down significantly.From 2022 to 2023, the company achieved operating income of 20.18 billion yuan and 22.44 billion yuan, an increase of 28.54% and 11.21% respectively over the previous year. During the same period, the net profit attributable to the parent was 785 million yuan and 929 million yuan, an increase of 17.29% and 18.35% respectively over the previous year.In the first quarter of 2024, the company's operating income and net profit attributable to shareholders increased by 1.81% and 10.27% respectively.In the era of rapid expansion, chain drugstores have reaped the benefits of scale.The stability of the pharmaceutical retail business is facing a test.In the past, the implementation of industry policies such as centralized pharmaceutical procurement has not directly affected the operation of chain pharmacies. However, with the upgraded supervision of retail pharmacy companies by medical insurance and other departments in recent years, the survival and ecology of this industry is changing.In May this year,Isshindo(002727.SZ) was interviewed by the National Medical Insurance Administration. Its stores had switched drugs and prescribed excessive amounts of drugs, becoming a typical example of illegal and irregular behavior. On the day the news was disclosed, the market value evaporated by more than 1 billion yuan.In 2022, the Hunan Medical Insurance Department pointed out that some designated retail pharmacies were involved in illegal and irregular activities such as switching the sales of medical insurance drugs, such as directly swiping medical insurance cards to purchase salt, wolfberry, etc., which sounded the alarm for local pharmacy companies.Xie Zilong's detention for investigation has dealt a double blow to the company's stock price and market confidence. Afterwards, it is crucial for the company to restore investor confidence and eliminate negative impacts.In his early years, his father could not afford medical treatment or medicine, and died in his prime, which always stimulated Xie Zilong.It launched the affordable pharmacy strategy, challenged inflated drug prices, and created a business legend.As the head of a chain pharmacy business, in addition to participating in some industry activities, Xie Zilon seems to be more fascinated by photography.Although he is not a professional photographer, his works have won many awards. At the end of 2020, he won the highest individual achievement award in the Chinese photography industry, the Academy Award, for his works "Glorious Workers", "Field Dancers" and "Chinese Stories in Film".Selling medicine with his left hand and taking photos with his right hand, as Xie Zilong continues to switch his identities in the two major fields, his personal influence in the photography circle is growing.Due to his outstanding contributions in the field of culture and art, Xie Zilong was approved as a special allowance expert. He also holds important positions in the provincial Federation of Literary and Art Circles and the National Photographers Association.As the saying goes, photography makes three generations poor, and SLR cameras ruin one's life. But Xie Zilong has found a new world. As he became more and more addicted to photography, in 2017, Xie Zilong paid 150 million yuan out of his own pocket to build a video art museum in Changsha Yanghu Wetland Park, and organized and curated related exhibitions.This venue, with its cool black and white tones, high-end simplicity and unique style, was selected into Changsha’s TOP 10 cultural and tourism check-in list last year.
