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in addition to frequent personnel changes, baiyunshan's performance has also reached a critical juncture where it needs to replan its corporate strategy and solve the problem of where its future should go.

written by shi ruoxiao

after li chuyuan announced his resignation as chairman of guangzhou pharmaceutical group and the news of his investigation was "officially announced" by the guangdong provincial commission for discipline inspection and supervision, another senior executive of guangzhou pharmaceutical group resigned on the evening of september 1.

on the evening of september 1, baiyunshan announced that it had received a resignation report from zhang chunbo, a director of the company. “for personal reasons,” zhang chunbo resigned from his positions as executive director and member of the board’s budget committee and no longer held any position in the company. according to relevant media reports, zhang chunbo was also taken away for investigation.

the investigation of the company's top leaders and senior executives has brought market fluctuations not only to the real-time stock price, but also to its future growth potential. from this perspective, li chuyuan has achieved some interim results in his 11 years of management of guangzhou pharmaceutical group and baiyunshan pharmaceutical, but the foundation he has left for his successors to boost confidence in future performance is not solid.

the 2024 semi-annual report shows that baiyunshan achieved operating income of 41.043 billion yuan, a year-on-year increase of 2.68%; the net profit attributable to shareholders of listed companies was 2.55 billion yuan, a year-on-year decrease of 9.31%, which is not a good result.

baiyunshan's business is mainly divided into three business segments: great southern medicine, great health, and great commerce. the great commerce segment has been relatively stable with a low gross profit margin. in the first half of this year, the two businesses that saw a decline in revenue were great southern medicine and great health, which fell by 2.04% and 7.24% respectively, with operating income of 6.183 billion yuan and 6.538 billion yuan respectively.

the great southern medicine sector includes both chinese and western medicine. among western medicine products, the most powerful one is "jin ge", a generic version of viagra, with a single medication cost of only 40% of the original drug. in 2014, jin ge obtained the exclusive license for the "viagra" trademark, becoming the only sildenafil product in china that legally owned the "viagra" trademark at that time. its sales volume reached 29,200 tablets in the first year of listing, and it has been the top brand in ed sales for many years.

however, over the years, jin ge's growth rate has slowed down. in addition, since 2023, sildenafil citrate tablets of renhe pharmaceutical and qilu pharmaceutical have been approved one after another. in addition, many companies are also planning to develop generic drugs with the same indications such as avanafil and tadalafil. jin ge is facing increasing pressure of "encirclement and suppression".

in the traditional chinese medicine sector, baiyunshan owns 12 time-honored chinese pharmaceutical companies, including chenliji pharmaceutical factory, qixing pharmaceutical, jingxiutang pharmaceutical, and pangaoshou pharmaceutical, as well as products such as xiaoke pills, xiaochaihu granules, zishen yutai pills, isatis root granules series, huatuo zaizao pills, and naoxinqing tablets series. the advantage is that the varieties are very complete, but the disadvantage is that the market share and market recognition are not high.

taken individually, these sub-brands have a great background. for example, chenliji was once known as the "first of southern medicines" and was on par with tongrentang in the qing dynasty. however, the reality is that even if all the assets of baiyunshan were packaged together, the market value is still not as high as tongrentang alone, let alone chenliji.

in the big health sector, the no. 1 product is undoubtedly wanglaoji, which accounts for more than 90% of the sector's revenue. but in fact, in 2023, the sector has already shown obvious signs of slowing growth, with revenue increasing by only 6.15% year-on-year, of which wanglaoji big health company achieved a net profit of 1.459 billion yuan, an increase of only 0.78% year-on-year. in the first half of this year, performance turned from a slight increase to a decline.

wanglaoji's pressure may be related to the change in consumers' overall taste. nielsen iq data shows that sugar-free tea doubled in 2023, reaching an astonishing 110%, far exceeding the overall growth rate of the beverage industry by 6%. the overall market size of sugary herbal tea represented by wanglaoji and jiaduobao has been declining for many years.

from every angle, the entire baiyun mountain has entered a development bottleneck period and urgently needs a breakthrough.

looking back, li chuyuan has caught up with three good times since he took charge of baiyun mountain in 2013:

first, jin ge was approved for marketing in 2014.

second, guangzhou pharmaceutical group reclaimed the wanglaoji trademark in 2012, and then in 2017, it was ruled to share the rights to the packaging and decoration of the "red can wanglaoji herbal tea" with jiaduobao.

third, in 2018, baiyunshan completed the asset handover and industrial and commercial change registration with guangzhou pharmaceutical company. the pharmaceutical company became a holding subsidiary of the company with an 80% stake and was included in the merger scope of the listed company, doubling baiyunshan’s total revenue.

it can be seen that the occurrence of these three events has limited relationship with li chuyuan himself: the withdrawal of the wanglaoji trademark occurred before he took office; the research and development and imitation layout of jin ge had been carried out more than ten years ago; and relying on mergers and acquisitions of commercial companies to increase revenue is normal and there is not much to praise.

but judging from the results, the achievements brought by these works are all attributed to this leadership team.

considering the secondary market, we can clearly see the problems of baiyun mountain.

the stock prices of representative a-share listed chinese medicine companies, such as yunnan baiyao, china resources sanjiu, pien tze huang, and tong ren tang, all show strong performance correlation and cyclical fluctuations. for example, china resources sanjiu's stock price has been rising steadily amid fluctuations since its listing; tong ren tang, pien tze huang, and yunnan baiyao's stock prices all began to fall after reaching highs in 2021-2023.

only baiyunshan has been experiencing a period of constant growth in its stock price and market value over the past decade, even though its financial report data appear to have been growing. its current level is even lower than that in 2015, and no one has mentioned the goal of a "100 billion market value" at that time.

therefore, based on all the above information, in addition to frequent personnel changes, baiyunshan's performance has also reached a critical juncture where it needs to replan its corporate strategy and solve the problem of where it should go in the future.

first instance | huang jia

second trial | li fangchen

third review | li jingzhi