Wang chuncheng was born in December 1962 and holds a bachelor's degree in economics from jilin university of finance and trade. Ministry of foreign trade and economic cooperation, a former (now the ministry of commerce) personnel department, deputy director of the China China Resources Co., Ltd personnel, general manager, deputy general manager assistant general manager of China China Resources Co., Ltd, China Resources (holdings) Co., Ltd., the board of directors of the standing deputy general manager, general manager office, tak nobuyuki Co., Ltd., chairman of the board of directors, general manager, China Resources textiles (group) Co., Ltd., chairman, China Resources Sanjiu Medical & Pharmaceutical Co., Ltd., chairman of the board of directors. Currently, he is assistant general manager of China resources (group) Co., Ltd., executive director and CEO of China resources pharmaceutical group Co., Ltd., party secretary and chairman of China resources pharmaceutical holding Co., Ltd., chairman of China resources pharmaceutical commercial group Co., Ltd., dong-e-e-jiao Co., Ltd.
In the third quarter financial report released by dong-e-jiao on the evening of October 30, it was disclosed that the accumulated operating income in the first three quarters was 2.83 billion yuan, and the net profit attributable to the shareholders of the parent company was 209 million yuan, among which the operating income in the third quarter was 940 million yuan in a single quarter, and the net profit attributable to the shareholders of the parent company was 15.9353 million yuan in the third quarter. Review the data of dong-e-jiao in the second quarter: the quarterly loss of the second quarter was 200 million yuan, which was the first quarterly loss of dong-e-jiao in nearly 10 years. Just as the disclosure of the third quarter, how to view the latest data of dong-e e jiao objectively, has also become the focus of many investors. In fact, entering 2019, done-e-jiao's performance declined further. In the first quarter, the profit of dong-e-jiao dropped by 35.48% and the profit of zhongbao company dropped by 77.62%. The third quarter report released on October 30 has dropped another shock bomb on the market. The financial report shows that in the third quarter, dong-e-jiao achieved an operating revenue of 940 million yuan, a year-on-year decrease of 32.79%. Net profit of 15.94 million yuan, down 95.61% year-on-year; Deducting non-net profit was -4.57 million yuan, down 101.41% year-on-year. Basic earnings per share were 0.02 yuan, down 95.57% year-on-year. In the third quarter, the revenue of dong-e-jiao decreased by 32.79%, but the net profit decreased by 3 times. In recent years, the net profit of dong-e-jiao went from bad to worse and became the focus of hot discussion in the market.
"Boiled donkey skin", "IQ tax", "useless traditional Chinese medicine" and other public opinion plus medical insurance policy to control the cost of dong-e-jiao's living environment deteriorated rapidly. Under the pressure of destocking, dong-e-jiao, which was in internal and external difficulties in 2019, ended 12 years of continuous growth and its share price almost halved compared with 2016.
In 2018, dong-e e jiao's declining performance caused a big market shock. The first quarter results of dong-e-jiao failed to meet expectations and its share price went down by the daily limit immediately after opening. By the end of closing, more than 23,000 people had sealed the daily limit. Compared with the previous trading day, the market value of dong-e-jiao decreased by 3.852 billion yuan.
In view of the sharp decline in stock prices in recent years, dong-e - jiao has also taken many measures. On May 24, 2019, dong-e-jiao issued a share repurchase announcement: it plans to invest no less than 750 million yuan and no more than 1.5 billion yuan to buy back the company's shares at a price no more than 45 yuan/share. However, in the context of declining performance, share buybacks do not solve the problem, and many institutions put their foot in their mouth. According to Oriental fortune choice, there were only 13 shareholding institutions in the third quarter of 2019, down 181 from 194 in the 2018 annual report.
In terms of profitability, the company reported a gross profit rate of 54.87% in the third quarter, which was still a slight decline compared with 55.67% in the semi-annual report. However, compared with the semi-annual gross profit rate of 55.67% to the quarterly report of 66.98% gross profit rate cliff-like decline, the initial signs of stop falling.
Trust in investment values needs to be rebuilt
According to WIND information, after dong-e-jiao released its quarterly report, no brokerage institution has issued a formal research report to analyze and evaluate the company. To some extent, this also reflects that institutional investors still hold different opinions on the current dong-e-jiao. After experiencing the "Waterloo" of the second quarter performance loss, the market's trust in the investment value of dong-e-jiao is still in the process of rebuilding.
According to the public information, the latest research report of dong-e-jiao was released by huatai securities on August 25, with the title of "performance under pressure, awaiting adjustment" slightly cautious. In the research report, it also mentioned that the channel destocking is expected to be adjusted at least to 2020, the three major strategies to restructure done-hide gelatin, and the innovation of single products to improve the added value of products, etc. At the same time, it also made the judgment that "it is expected that the end of the report will be more consistent with the terminal net sales after the adjustment, but the adjustment pace remains to be seen".
The above information indicates that, after experiencing the painful performance caused by the original distribution channel rectification and destocking pressure, dong-e e-jiao is trying to drive the company's business level to climb slowly by facing new consumer groups and new direct selling channels, but the effect still needs to be continuously observed. At the same time, there is still a long way to go to regain the confidence of secondary market investors.
Can the performance legend of "white horse stock" continue?
In the past ten years, dong-e-jiao began a similar "high-end operation" with moutai, will be their own "price" again and again. From 2006 to 2018, dong-e e jiao raised prices 17 times, or more than 37 times. But now, the biggest challenge for dong-e-jiao is how to continue its "white horse" success story when it can no longer rely on price increases.
Before 2006, dong-e e jiao took advantage of low prices to expand its business channels and suppress its competitors, accounting for 70% of the market share. In 2006, qin yufeng, known as "little marshal of done-e-jiao", came to power after 32 years of working in done-e-jiao. He formulated a "value return" strategy for dong-e-jiao. In his opinion, donkey-hide gelatin is truly noble food.
In this way, the retail price of dong-e-jiao products gradually increased from 80 yuan per kilogram in 2001 to 160 yuan per kilogram in 2006, and then rocketed to 5,996 yuan per kilogram in 2019, an increase of 74 times in 18 years and a compound annual increase of 27.1%, which not only far exceeded the growth rate of China's economy, but even exceeded the crazy housing price.
Qin yufeng in order to make donkey-hide gelatin "nourishing national treasure", through a wave of dazzling operations, once made donkey-hide gelatin infinite scenery, the momentum is no less than the current maotai. "Thousands of years of nourishing premium products, cultural moat, right to raise prices, high profit margins, high quality cash flow" - dong-e-jiao has become the perfect incarnation.
Dong-e e jiao's subsequent performance was indeed impressive, with profits rising tenfold from 200 million to 2 billion. In the same period, moutai's profit increased 12.5 times from 2.8 billion to 35.2 billion, showing a very similar growth curve. However, behind the continuous growth of its performance, moutai's market value soared like a monkey in the sky, while dong-e-jiao climbed up to 40 billion, and within two years, it quickly halved and fell back to "before liberation".
The performance growth that does not match with rise in price
It is reported that during the 12 years from 2006 to 2018, the factory price of donkey-hide gelatin blocks, the company's main product, was increased 17 times. In 2010, dong-e e jiao raised its price slightly three times, up more than 50%. Since December 28, 2010, the price of donkey-hide gelatin block will no longer be limited by the government, so there is more room for the price increase of donkey-hide gelatin. In 2014, the price of dong-e-jiao was raised three times.
Starting from 2015, the company's rate of price increases has slowed down to an annual rate, focusing on November of that year. It was just the peak season for selling donkey-hide gelatin. The company took advantage of consumers' herd mentality, gift-giving complex and competitive consciousness to raise the price substantially. According to the company's official website and flagship store, the current price of dong-e-jiao's high-end product is 103,996 yuan per kilogram, the price of gold standard dong-e-jiao is 8,600 yuan per kilogram, and the price of red standard dong-e-jiao is 5,996 yuan per kilogram.
From 2006 to 2018, the price of dong-e-jiao increased by more than 30 times, but the operating revenue only increased by nearly 7 times, from 1.069 billion yuan to 7.338 billion yuan, and the net profit increased by less than 14 times, from 154 million yuan to 2.087 billion yuan. The rise in the price of dong-e - jiao has brought about a decline in market share.
With the price of donkey hide going up every year, it was a natural choice to make a profit. From 2014 to 2018, dong-e e-jiao accumulated net profit of 8.37 billion yuan, while operating cash flow was only 5 billion yuan, which was over 3 billion yuan. Where did the money go? "We have strategic reserves of a lot of raw materials," was qin yufeng's answer.
But, once let dong - e - jiao tasted sweet hoarding, buried the bitter fruit. As the price of raw materials plummeted, dong-e-jiao's strategy of donkey-hide leather began to slow down temporarily. According to dong-e-jiao's financial report, the book balance of raw materials in its inventory in 2017 and 2018 was 1.954 billion yuan and 1.822 billion yuan respectively. Dong-e e jiao's profits have been frosted by slowing price increases since 2015, soaring donkey skin prices since then, inventories built up at high prices, and changes in the market outlook as raw materials have plummeted. The consistency between price increases and profit growth was broken.
With the decrease of raw material price, the discounted inventory of dong-e-jiao under the containment of many, the difficulty of clearance may become greater.