Jianzhijia, as Yunnan people all know, may fall into entanglement with Yixintang

 Jianzhijia, as Yunnan people all know, may fall into entanglement with Yixintang

Superfluous convenience store

The novel coronavirus pneumonia has brought about the growth of demand for medical masks, antivirus, temperature and other related materials since the first half of the year.

In the first half of 2020, jianzhijia achieved operating revenue of 2.109 billion yuan, an increase of 29.23% over the same period of last year, and the net profit of parent company after deduction of non-profit was 97 million yuan, with a year-on-year increase of 34.42%. From 2017 to 2019, the compound growth rates of jianzhijias operating revenue and net profit after deducting non-profit were 22.62% and 36.63% respectively.

It is worth noting that among the 1534 Direct stores under jianzhijia, there are also 211 direct convenience stores. These 211 convenience stores account for about 10% of revenue. However, the compound annual growth rate of life convenience plate from 2017 to 2019 is 7.35%, which is far less than the overall income growth rate, so its proportion in the total income is also declining year by year.

It can be speculated that jianzhijias direct operated convenience store business has appeared bottleneck at the revenue side. In terms of profitability, life convenience products also have no big advantage. In 2019, the gross profit rate is only 23.10%, which is the bottom of all sub sectors of jianzhijia. In addition, the construction of new drugstores will only involve the construction of new convenience stores.

Against base Yixintang

Consolidating the base market is the common goal of all local chain drugstores in Yunnan.

In addition to jianzhijia, Yixintang and Yunnan Baiyao pharmacy (000538. SZ) are the main players in Yunnan. In contrast, Yixintang chain has the largest scale. As of June 30, Yixintang has 4063 Direct stores in Yunnan, and the number of jianzhijia is 1534.

Yunnan and southwest China are the headquarters of Yixintang, with 5392 stores in Southwest China, accounting for 80.68%. In the first half of this year, Yixintang still expanded greatly, with 535 new closed stores, a net increase of 505, with a total of 6683 stores. https://www.jiemian.com/article/4846136.html

But over the same period, the speed of jianzhijias new stores has slowed down. According to the data, from 2017 to the first half of 2020, jianzhijia has 142, 216, 276 and 83 new stores respectively. The backward speed of opening stores means that the gap between jianzhijia and Yixintang has been further widened. How to consolidate the market in this province is the first problem of jianzhijia.

From a strategic point of view, jianzhijia is not willing to settle down in a corner. According to the plan of the prospectus, the new stores will enter Sichuan, Chongqing and Guangxi. If successful, jianzhijia will gradually transform from local chain drugstores to regional chain drugstores, and most listed chain drugstores belong to the latter.

Due to the long-term rapid expansion strategy adopted by various chain pharmaceutical enterprises, the pharmaceutical retail industry has shown some signs of saturation, which also means that the collision between regional chain drugstores will gradually increase. According to the data of the State Drug Administration, in 2019, the number of pharmacies in China will reach 524000, including 290000 retail chain stores, with a chain rate of 55.3%.

In addition, for Sichuan, Chongqing, Guangxi, which are in the development stage, jianzhijia may lack scale advantage, logistics distribution advantage and lack of consumer awareness. Going out of the Yunnan market also means that jianzhijia will shift from defending to attacking, and will compete directly with the common people (603883. SH), Da Shenlin (603233. SH), etc. How to gain a firm foothold in the market of other provinces is the second problem of jianzhijia.

Like all chain drugstores, goodwill is one of the problems jianzhijia is facing. As of June 30, the goodwill value of jianzhijia reached 57.57 million yuan, mainly from the merger of kangyuantang Yongren, Chuxiong Yuansheng and other stores. If some of its stores are not well managed, goodwill may be impaired, which will put forward higher requirements for the future operation and management of jianzhijia.

Source: interface news editor: Yang Qian_ NF4425