Yunnan Baiyao Performance Bottleneck: Ping An Life Reduction Cash of 800 million yuan

 Yunnan Baiyao Performance Bottleneck: Ping An Life Reduction Cash of 800 million yuan

In an interview with the Securities Daily, Qu Rong, executive director of Oriental Gaosheng, said that the position of the companys largest shareholder would be uncertain if the shareholders 100% pledged shares fell sharply and the stock price could not replenish or increase the collateral in time. Generally speaking, the major shareholders of listed companies pledge their shares, there will be relevant wind control measures.

Whole listing of Baiyao Holdings

Chen Fashu is the actual controller of Xinhua Du Industrial Group Co., Ltd. Data show that the State-owned Assets Management Commission of Yunnan Province, Xinhua Capital Industry and its concerted action hold 25.14% of the shares of listed companies per capita.

Shortly after the announcement, on July 8, Yunnan Baiyao issued the Notice on Shareholders Share Pledge. Xinhua Du Industrial Pledged 275.9 million shares of listed companies, accounting for 88.64% of the shares held by listed companies. The purpose of the pledge was financing. As of July 5, 2019, Xinhua Du Industrial Holded about 3 shares of the company. 111 million shares, accounting for 24.37% of the companys total equity, 275.9 million new pledged shares, the total number of Pledged Shares is about 311 million shares, accounting for 24.37% of the companys total equity.

This means that Xinhua Du Industries pledged all of its shares in Yunnan Baiyao.

Ping An Life Reduction Cash

Before Xinhuadu pledged Yunnan Baiyao shares, Ping An Life began to reduce its holdings of Yunnan Baiyao shares.

According to the announcement issued by Yunnan Baiyao, on June 25, 2019, the company received Pingan Lifes Notification Letter on the Implementation of the Reduction of Yunnan Baiyao Share. As of June 25, 2019, Pingan Life reduced its shareholding to 0 shares by bulk trading and 10 413 911 shares by centralized bidding, accounting for 1% of the companys total equity. Since the disclosure of the Report on Equity Change on August 12, 2008, the cumulative reduction rate of Ping An Life and its concerted actors is 1.21%.

It is understood that Pingan Lifes shares reduced in the centralized bidding transaction came from the shares of Yunnan Baiyao Directional Issuance (including the shares to be sent after the issuance or the shares to be transferred from capital reserve) acquired in December 2008.

According to the announcement issued by Yunnan Baiyao, the above-mentioned investment will increase to RMB 1,393.5 billion for Ping An Life to participate in the subscription of 50 million shares issued by Yunnan Baiyao. Nowadays, Ping An Life has made a lot of money. From May 8 to June 25, 2019 alone, the company reduced its total holdings by 10.414 million shares, with an average reduction of 79.73 yuan per share and a total cash package of about 830 million yuan.

For the reduction of Ping An Life, Qu Rong believes that capital should also consider the return and future value-added space.

Yunnan Baiyao has entered the performance bottleneck period?

In the view of the industry, how to develop Yunnan Baiyao is more important after the completion of the mixing reform and the overall listing of Baiyao Holdings.

Yunnan Baiyaos annual report for 2018 shows that the companys profit growth last year was the lowest in the past five years. The data show that the company realized revenue of 26.708 billion yuan last year, an increase of 9.84% over the previous year, and net profit of 3.307 billion yuan, an increase of 5.14% over the previous year. The companys first quarter report of 2019 shows that in the first three months of this year, the company realized revenue of 6.97 billion yuan, an increase of 10.04% over the same period last year, and realized net profit of 846 million yuan belonging to shareholders of listed companies, an increase of 4.97% over the same period last year.

Yunnan Baiyao has developed to this scale. In theory, it is difficult to achieve high-speed growth without new products in the original channels and modes. This is also the performance bottleneck period faced by many traditional Chinese medicine enterprises. After the market development and penetration reach a certain stage, we need to explore new areas, brands and varieties to increase the market. Qurong told Securities Daily that after mixing and introducing strategic funds, it is crucial for Yunnan Baiyao to seize the opportunity to achieve development, but it also needs time.

New starting point, the future development direction of Yunnan Baiyao has also become a common concern of investors.

In response to investor research, Yunnan Baiyao said that in the future, the company will adapt to the important opportunities brought about by the mixing and transformation, take advantage of the strategic funds acquired by the merger, exert the advantages of brand, channel and medical resources accumulated over a long period of time, through drug patent authorization, strategic cooperation, new product research and development, merger and acquisition, etc. Create new competitive advantages and performance growth points, and gradually build a comprehensive platform covering the whole healthy industrial chain.

Source: Liable Editor of Securities Daily: Yang Qian_NF4425