news

한어Русский языкEnglishFrançaisIndonesianSanskrit日本語DeutschPortuguêsΕλληνικάespañolItalianoSuomalainenLatina

Yangtze Business Daily News● Yangtze Business Daily reporter Shen Yourong

The performance of Changchun High-Tech (000661.SZ), the "Northeast Moutai", changed drastically, causing its stock price to plummet.

On the evening of August 15, Changchun High-Tech disclosed its 2024 semi-annual report, which surprised the market. In the first half of the year, the company achieved operating income of 6.639 billion yuan, a year-on-year increase of more than 7%; the net profit attributable to the parent company's shareholders (hereinafter referred to as "net profit") was 1.72 billion yuan, a year-on-year decrease of more than 20%.

The last time interim net profit declined year-on-year was in 2014, 10 years ago.

A reporter from the Yangtze Business Daily found that the decline in net profit was due to a rare decline in net profit of the company's "profit cow" Jinsai Pharmaceutical.

On August 16, in the secondary market, Changchun High-New's share price fell 3.62% to close at 86.15 yuan per share, setting a new low in nearly five and a half years.

On August 16, the company's directors, supervisors and senior managers completed their share purchase plan at lightning speed, but failed to prevent the stock price from falling.

Faced with the new situation, Changchun High-Tech has made a series of arrangements, such as accelerating the international sales of growth hormone, enriching Jinsai Pharmaceutical's product line and exploring product application areas.

A reporter from the Yangtze Business Daily found that in the first half of this year, Changchun High-New's sales expenses, administrative expenses, and R&D expenses all increased significantly.

Whether the industrial layout can bring new growth points to Changchun Hi-Tech remains to be further observed.

"Profit Cow" rarely declines

Changchun High-Tech has been under great scrutiny for its high reliance on Jinsai Pharmaceutical, a "profit cow". Now, Jinsai Pharmaceutical's performance has dragged down Changchun High-Tech.

According to the latest disclosed semi-annual report, in the first half of this year, Changchun High-Tech achieved operating income of 6.639 billion yuan, a year-on-year increase of 7.63%; net profit was 1.720 billion yuan, a year-on-year decrease of 20.40%; net profit after deducting non-recurring gains and losses (hereinafter referred to as "net profit after deducting non-recurring gains and losses") was 1.737 billion yuan, a year-on-year decrease of 19.722%.

Both net profit and non-net profit decreased year-on-year, and the decline was basically the same, indicating that the root cause of the decline lies in the main business.

The Yangtze Business Daily reporter found that Changchun High-Tech, known as the "Northeast Mao", had maintained rapid growth in operating performance for a long time. The last time its mid-term net profit fell was in mid-2014, which means that the net profit fell in the first half of this year, which is the first time in 10 years.

In fact, the decline in Changchun High-Tech's net profit was expected. In the first half of 2023, the company's net profit was 2.16 billion yuan, a year-on-year increase of only 1.91%. It was the first time since 2015 that the mid-term net profit growth rate fell below 10%.

Changchun High-New's business includes the research and development, production and sales of biopharmaceuticals and traditional Chinese medicines, supplemented by real estate development, property management and service businesses. Its revenue mainly comes from its subsidiaries Jinsai Pharmaceuticals and Beike Biopharmaceuticals.

In the first half of this year, the "culprit" that caused the company's net profit to decline was its core subsidiary Jinsai Pharmaceutical.

Subsidiary Beike Bio achieved a net profit of RMB 138 million, a year-on-year increase of 23.54%. Subsidiary Huakang Pharmaceutical achieved a net profit of RMB 24 million, a year-on-year increase of 26.42%. Subsidiary Gaoxin Real Estate achieved a net profit of RMB 33 million, a year-on-year increase of 533.17%.

The interim net profits of the above-mentioned subsidiaries have increased year-on-year, while the net profit of Jinsai Pharmaceutical has decreased. In the first half of the year, Jinsai Pharmaceutical achieved operating income of 5.152 billion yuan, a year-on-year increase of 0.25%; net profit of 1.769 billion yuan, a decrease of 19.49% from the same period last year.

Jinsai Pharmaceutical has always been the "profit cow" of Changchun High-Tech.

From 2021 to 2023, Jinsai Pharmaceutical achieved net profits of 3.684 billion yuan, 4.217 billion yuan and 4.514 billion yuan respectively. In 2023, Jinsai Pharmaceutical's net profit accounted for 99.60% of Changchun High-Tech's net profit.

In the past three years, Jinsai Pharmaceutical's net profit growth rate was 24.63%, 14.47% and 7.04% respectively, and the growth rate continued to slow down, but it maintained growth. In the first half of this year, its net profit fell sharply, which led to a decline in Changchun High-Tech's net profit.

So why did Jinsai Pharmaceutical's net profit drop so rarely? Is it related to the centralized procurement of growth hormone? Changchun High-Tech responded that the centralized procurement had no impact on its performance in the first half of this year.

Changchun High-Tech did not provide any explanation as to the reasons that led to the significant decline in Jinsai Pharmaceutical's net profit.

The market speculates that this may be due to intensified market competition.

The fund has reduced its holdings for two consecutive quarters

As its performance changed drastically, Changchun High-New’s stock price plummeted.

On August 16, Changchun High-Tech fell more than 2% at the opening of the morning session, and the intraday decline once expanded to 4.68%. At the close of the session, the decline narrowed to 3.62%, closing at 86.15 yuan per share.

Before readjustment of equity, the share price of 86.15 yuan per share is the lowest since January 23, 2019, which means that the current share price has hit a new low in nearly five and a half years.

Since 2021, due to rumors that growth hormone was included in centralized procurement, Changchun High-New's stock price has collapsed six times and its stock price has been "falling continuously."

The candlestick chart shows that on May 17, 2021, Changchun High-New's stock price hit an intraday high of 523 yuan per share. Compared with that, the current stock price has fallen by about 83.53%.

Currently, the market value of Changchun High-New is about 34.8 billion yuan, which has shrunk by 177 billion yuan from its peak market value of 211.8 billion yuan in 2021.

It is worth mentioning that on the evening of August 15, when Changchun High-Tech disclosed its interim performance report this year, it also disclosed the planned share purchase plans of nine directors, supervisors and senior managers, including Chairman and General Manager Jiang Yuntao. The total amount of share purchase will not be less than 15 million yuan, and the period of share purchase will be 6 months.

On the evening of August 16, Changchun High-Tech disclosed that these nine directors, supervisors and senior managers had completed the share purchase at a total cost of 17.6677 million yuan on that day.

It can be seen from this that within just one day, the nine directors, supervisors and senior managers completed their shareholding increase plan at lightning speed.

Based on this, it can be judged that if no directors, supervisors and senior managers had completed the share purchase on August 16, the company's stock price would have fallen even more. From another perspective, as many as nine directors, supervisors and senior managers collectively increased their holdings, but still failed to prevent the company's stock price from falling.

A reporter from the Yangtze Business Daily found that funds have also been reducing their holdings in Changchun High-New Technology.

Wind data shows that at the beginning of this year, fund companies held a total of about 78.9439 million shares of Changchun High-Tech, accounting for 19.64% of the company's total outstanding shares. At the end of the first and second quarters of this year, fund companies held a total of 40.6219 million shares and 33.2942 million shares, respectively, reducing their holdings for two consecutive quarters.

Changchun Hi-Tech also felt the operating pressure and continued to carry out its industrial layout.

In April last year, Changchun High-Tech stated that in addition to growth hormone, Jinsai Pharmaceutical has expanded into business segments such as children and women's health, adult endocrinology, dermatological medical beauty, and oncology.

According to this year's semi-annual report, the company accelerated the sales of growth hormone and other products in the international market, and achieved sales revenue of 85.238 million yuan in foreign regions, a year-on-year increase of 267.78%. In addition, it accelerated the application of growth hormone in assisted reproduction and adult growth hormone deficiency, and strengthened the sales and promotion of nutritional products, follicle-stimulating hormone, etc.

So far, the effect is not obvious.

It is worth mentioning that in January 2023, Beike Biopharmaceuticals' shingles vaccine was approved for marketing, which is the first shingles vaccine in China suitable for adults aged 40 and above. However, whether this product can bring new growth points to Changchun High-Tech remains unknown.