I. Discussion and Analysis of the Operating Situation
During the reporting period, the country as a whole was affected by the impact of the new Crown Pneumonia, with the residents quarantined at home, and some of the hospitals' regular outpatient clinics failing to receive normal consultations, and a larger decrease in the volume of consultations at children's specialty hospitals and pediatric clinics, etc., as well as a larger decrease in sales at the pharmacy end of the spectrum, resulting in a decline in the Company's operating results. Sales were also affected to a certain extent, resulting in a decline in the company's operating results.From January to June 2020, the company realized an operating income of 281,919,500 yuan, a year-on-year decline of 19.00%. It realized net profit attributable to owners of listed companies of RMB 46,478,100, a year-on-year decrease of 15.62%, and net profit attributable to shareholders of listed companies after deducting non-recurring gains and losses of RMB 48,282,800, a year-on-year decrease of 10.97%.
During the reporting period, under the influence of unfavorable factors in the external environment, the Company focused on promoting the following key tasks to cope with the changes in the external environment:
1. Fighting against the epidemic and stabilizing the production with a concerted effort
In the first quarter of 2020, affected by the epidemic of New Crown Pneumonia, the domestic pharmaceutical industry was also subjected to a huge impact. The company actively resumed production and made every effort to stabilize the operation under the influence of transportation obstruction, logistics control and personnel traffic restriction, while ensuring the epidemic prevention measures in place and the health and safety of employees. Under the correct leadership of the core management and the unremitting efforts of all employees, the Company has gradually resumed normal operation by starting from the supply of raw materials, the construction of marketing network, the enhancement of internal management and the highlighting of social responsibility.
2, open the mind, strengthen marketing management
During the reporting period, due to the impact of the epidemic, the company adopted a specialized academic promotion-based (academic promotion service providers) sales model has been greatly affected. Academic exchanges, academic promotion, market research and other activities were all subject to certain restrictions. The company's sales department changed its mindset to traditional offline academic exchanges and promotions, and organized academic promotion service providers to carry out online video promotions, which effectively reduced the negative impact of the inability to hold meetings. At the same time, the company's sales department actively organizes internal staff to carry out online training and learning to enhance the professional level of employees, in order to do deep and thorough market to lay a solid foundation.
3. Enhance management level and strengthen internal control
During the reporting period, the Company comprehensively implemented organizational performance assessment from top to bottom, strengthened internal management, and enhanced per capita effectiveness. During the epidemic period, the Company, under the leadership of its core management, continued to improve its corporate governance structure and internal control system, and safeguarded the science and rationality of the Company's decision-making, execution and supervision through the establishment of sound rules and regulations, management systems, incentives and accountability mechanisms. At the same time, the company has improved the performance appraisal, promoted the improvement of management efficiency, further enhanced the company's ability to sustain the development of the course, and provide a strong guarantee for the future development of the quality of work.
4, social responsibility
5, strengthen the cultural construction, enhance cohesion
The company from its inception to date, has been adhering to the "take charge of, adhere to, explore, pioneering, **** enjoy the" core values. 2020, the company through the training, set up a benchmark, learning and sharing, team development In 2020, through training, benchmarking, learning and sharing, team development, etc., the company effectively promoted the rapid integration of new employees into the company, and deepened the recognition of corporate values among old employees. In the company formed a positive cultural atmosphere of "compare, learn, catch up, help and surpass".
Second, the possible risks
1, policy risk
The pharmaceutical industry is a policy-driven industry, by the national policy has a greater impact. China is promoting the reform of the medical and health system, for the pharmaceutical management system and operating mechanism, medical and health care system, medical supervision and other aspects are gradually introduced corresponding reform measures. The introduction of relevant reform measures and the continuous improvement of policies in promoting the orderly and healthy development of China's pharmaceutical industry may, at the same time, lead to greater changes in the industry's mode of operation and the pattern of product competition, which will have a certain impact on the enterprises.On August 20, 2019, the National Health Insurance Bureau and the Ministry of Human Resources and Social Security issued the National Catalog of Medicines for Basic Medical Insurance, Workers' Compensation Insurance, and Maternity Insurance, with a notification requesting that "All localities shall strictly implement the Drug Catalog, and shall not formulate their own catalogs or increase the drugs in the catalogs by alternative methods, nor adjust the limited payment scope of the drugs in the catalogs on their own. If the company's products are transferred out of the basic drug catalog or medical insurance catalog, it will have a certain adverse impact on the company's operation.
But in recent years, the national health insurance policy for children's drugs to give priority to support, while the company strictly in accordance with the GMP standards for production, sales, the main products of clinical efficacy, high safety, the risk of being transferred out of the directory of the health insurance is relatively small, at the same time, children's drugs on the reimbursement of the health insurance is relatively low dependence on even if it is transferred out of the directory of the health insurance, the company's sales basically will not have an impact.
2, the new crown epidemic brought the risk of sustained impact
In the first half of 2020, the new crown pneumonia epidemic broke out in full force, all levels of government prevention and control efforts unprecedented, the company was also subjected to transportation and logistics restrictions, the hospital regular outpatient clinic can not be a normal clinic and other difficulties. Beginning in the second quarter, the domestic epidemic situation improved, the company completely resumed work and production, but the impact of the epidemic on a national scale has not yet been fully eliminated. It may have a certain impact on the company's annual sales program.
3, the risk of product concentration
During the reporting period, the company's main products, open-throat sword spray and open-throat sword spray (children's) of the combined sales revenue accounted for 94.91% of the current main business income, the production and sales of the above products to a large extent determine the company's income and profitability level, once the price of its raw materials, the state of production and sales, the pattern of competition in the market, etc., there will be a significant adverse changes to the company's future. Once the price of its APIs, production and sales conditions, market competition pattern, etc. have changed, it will have an adverse impact on the Company's future operating results. The company will continue to do a good job of marketing its main products, while accelerating the research and development of new products and the secondary development of old products, strengthening external cooperation, and constantly expanding its product line to enhance market competitiveness.
4, the risk of product price reductions
With the gradual deepening of the national health care reform system, the health insurance fee control continues to tighten, the health insurance payment standard landing, the establishment of the Health Insurance Bureau, as well as the implementation of the quantitative purchasing, the price of medicines will become the unavoidable trend in the future. On the one hand, the company will continue to improve the bidding management system, and actively do a good job in the strategic layout of the product bidding and response work, while vigorously expanding OTC sales channels; on the other hand, the company will also strictly control the quality of the product and cost, and continue to improve the clinical effectiveness of the product and the economy.
5, management risk
With the continuous expansion of the company's scale, assets, business, institutions and personnel continue to expand, the company will face greater challenges in strategic planning, system development, organizational structure, operations management and internal control, etc., the need to establish a management system for the long-term development of the company's management system, internal control system, organizational structure, talent pool and business processes, the company has the existing management system can not fully adapt to the future of the company. There is a possibility that the existing management system can not fully adapt to the rapid expansion of the company in the future, bringing risks to the normal production and operation of the enterprise.
C. Analysis of core competitiveness during the reporting period
(I) Industry status
In China's market of proprietary Chinese medicine sprays for throat diseases, the brand with the largest sales in 2017 was the Company's Open Throat Sword Spray, a brand that has grown rapidly, with a compounded growth rate of 62.78% in the past six years, which is higher than the average of this market, and with sales increasing from 0.41 in 2011 million yuan in 2011 to 763 million yuan in 20174 , a leader in the market with good growth. Meanwhile, in China's proprietary medicine market for throat diseases, there are fewer medicines for children. Among the top four varieties in China's proprietary medicine market for children's throat diseases, there are two exclusive varieties, two medical insurance category B varieties, and three OTC category A varieties, and Open Throat Sword Spray (Children's) is the only one that is both an exclusive variety and enters the national medical insurance catalog at the same time.
(B) the company's competitive advantage
1, brand advantage
After a long period of development and accumulation, the company won the National High-tech Enterprise, Guizhou Private Enterprise 100 and other honors, a number of products have been named Guizhou Province, Guizhou Province, Guizhou Province, famous brand trademarks, and was selected as Guizhou Province, intellectual property rights advantage of the cultivation of the enterprise database. Now the company is in the process of applying for the IPR standardization, in order to establish a complete IPR strategic management system as the core force of the company's strategic development and competition. According to the statistics of the Southern Institute, in 2017, Open Throat Sword Spray (Children's Type) continued to lead China's children's pharyngeal disease proprietary medicine market, and has topped the list for six consecutive years, and is an absolutely dominant variety in the market. Open Throat Sword Spray (with children's type) has also caught up with Guilin Watermelon Cream Spray and occupied the chief position in the market of proprietary Chinese medicine sprays for throat diseases, ranking No. 1 for three consecutive years, and has been ranked No. 1 in the market of hospital terminals for proprietary Chinese medicine sprays for throat diseases for six consecutive years, and ranked No. 4 and No. 3, respectively, in the market of proprietary Chinese medicines for throat diseases and the hospital terminals market of proprietary Chinese medicines for throat diseases.
In order to maintain the brand advantage, the company is committed to continuously improve the quality of products, and has established long-term strategic cooperative relationships with a number of scientific research institutes and universities and colleges, to conduct in-depth research on the research and development of new varieties, product quality standards to enhance the study, the secondary development and post-launch safety re-evaluation, pharmacology and toxicology research and other areas, to further optimize and improve the quality and safety of products and efficacy and stability. Stability. At the same time, the company also carries out in-depth research on the main raw materials of the product, conducts large-scale resource storage and distribution surveys for the production areas of the eight-clawed golden dragon herbs across the country, and participates in the revision of the local standards of herbs in Guizhou Province, independently presides over the revision of the quality standards of the local local herbs of the eight-clawed golden dragon.
2, product dosage form advantages
Children are the high incidence of throat diseases, the onset of such diseases in the area of the more mile, the current stage of clinical use of tablets, capsules, granules and other commonly used oral drugs in the process of the use of the gastrointestinal and hepatic absorption of the distribution of the whole body, can not be directly affected by the focal point of the site of the slow onset of the effect of the poor targeting of the drug, the low degree of bio-availability and may be detrimental to the liver; at the same time, the oral drug is not suitable for the treatment of the liver. At the same time, oral drugs often need auxiliary conditions, such as brewing utensils, warm water, etc., and there are time intervals between doses. Open Throat Sword Spray (children's type) is a spray drug, easy to carry, easy to use, no need for auxiliary conditions and can be given at any time, the drug is designed with a 360-degree rotating nozzle, which can rotate 360 degrees up and down and 360 degrees horizontally, and the extended nozzle can directly spray the drug into the sick parts of the oral cavity and the pharynx that are difficult to be reached by the conventional dosage form, so that the spray can be given to the sick parts of the pharynx and tonsils, and reduce the risk of children's patients' diseases. The spray can directly act on the foci of pharynx and tonsils, reduce the burden of liver in drug metabolism of pediatric patients, direct absorption, fast onset of action, high efficacy and short course of treatment. The effectiveness and convenience of spray dosage form for the treatment of children's throat diseases has been fully recognized by children's patients, parents and doctors, and has become the absolute market leader in dosage form.
3, varieties of formula advantage
Miao medicine as an important part of China's national medicine, three or four thousand years ago, is the Miao people in the long-term production activities and diseases, injuries in the fight against the practice, the accumulation of valuable medical experience, on the causative factors, diagnosis of diseases, treatment and prevention have a unique understanding of the classification and naming of diseases with a strong ethnic characteristics, clinical prescriptions. In the classification and naming of diseases, it has strong national characteristics, and there are many unique features in the prescription and use of medicine, which is part of the treasure house of traditional medicine in China.
Open Throat Sword Spray (including children's type) is taken from the classic Miao medical prescription, the name of which is Ghabghongdbusdiangd (Ghabghongbu file). The formula consists of four main medicines: Ghabghongdbusdiangd (eight-clawed golden dragon), Yam bean root, Cicada metamorphosis, and Menthol, of which Ghabghongdbusdiangd is a local medicine from the Qiandongnan region of Guizhou.
Open Throat Sword Spray (Children's Type) is made of natural raw materials, stable quality and high safety, which makes up for the shortage of medicines for children's oral and pharyngeal diseases at this stage of our country, and it is one of the rare children's special medicines for oral and pharyngeal diseases, which is accepted by the majority of children's patients and hospitals, and the company's product, Open Throat Sword Spray (Children's Type), has covered 323 cities, 1,696 cities, and 1,696 cities, and is widely used in children's hospitals. cities and 1,696 counties, covering 138,474 terminals*** of various types, including 4,689 grade hospitals, 8,621 primary care terminals, 26,512 clinics and 98,652 retail terminals such as pharmacies. At the same time, it has covered more than 96.12% of children's specialty hospitals in China, and has also been selected as one of the many authoritative pediatric pCms medication guides in China, with a high degree of market recognition.
According to the clinical research data of many children's hospitals and research experts in China, such as Children's Hospital of Capital Medical University, Shanghai Children's Hospital, Guangzhou Children's Hospital, Chongqing Children's Hospital, as well as nearly 100 professional papers published in domestic medical journals and other relevant data, Open Throat Sword Spray (children's type) is effective against hand-foot-mouth disease, pharyngolaryngeal inflammation, tonsillitis, herpetic pharyngitis, oral ulcers and other children's most common diseases, Oral ulcers and other children's most common respiratory tract infectious diseases treatment has obvious advantages, the efficacy is remarkable. Based on the efficacy and advantages of clinical use, in 2018, Open Throat Sword Spray (children's type) was successfully selected in the Guangdong Province Hand, Foot and Mouth Disease Diagnostic and Treatment Guidelines (2018 Edition) issued by Guangdong Provincial Health Planning Commission and Guangdong Provincial Traditional Chinese Medicine, and it is the only children's-specific dosage form of oropharyngeal topical medication. It was also selected in the "2018 Competitiveness Ranking of Large Varieties of Traditional Chinese Medicine Technology" published by the Chinese Society of Traditional Chinese Medicine. In addition, the refreshing taste of the product is designed to maximize the improvement of the problem that the taste of pCms is more difficult to be accepted by children, thus improving the medical compliance of medication for children patients.
As a national exclusive variety, according to the current standardized adjustment of China's hospital drug procurement, the procurement of exclusive drugs is decided through negotiation between manufacturers and procurement agencies, so the company has a high degree of pricing autonomy over the product.
4, production technology advantages
Since its inception, the company has always adhered to the quality first, abide by the credibility of the quality policy, dedicated service, the new version of the GMP as the minimum control standards, excellence, continuous improvement. In terms of plant facilities, the company is equipped with standard GMP plant, fully automatic air conditioning system, fully automatic purified water system, fully automatic compressed air system. In terms of production equipment, the company has domestic advanced production lines for extraction and concentration, separation and purification, dispensing and sealing, labeling and cartoning, and data collection. In terms of the use of raw and auxiliary materials, the company always purchases from the units that have the qualification of supplying raw and auxiliary materials for medicinal use and have been qualified by on-site auditing, and conducts a full inspection of each material before use, so as to ensure that each material put into the production of medicines is of pure varieties and of good texture. In terms of production institutionalization, the company has formulated a series of operation standards, management standards and technical standards from raw and auxiliary materials procurement, arrival acceptance, testing, qualified release, production, use, process cleaning, instrumentation calibration, personnel operation, equipment operation, intermediate product quality control, finished product testing, release of finished products, etc., to ensure that the entire production of products and quality control process has a basis and rules to follow, the production process also has an on-site QA team to ensure that the quality control process of the products. The production process is also equipped with on-site QA real-time supervision and 24-hour video monitoring of the whole process to ensure the strict implementation of the system.
5, team advantage
The company has a theoretical professional, industry experience, management innovation, *** with the values of the excellent management team. Senior management of the pharmaceutical industry management experience, can y understand and comprehensive control of the pharmaceutical industry policy and development laws, the average age of not more than 45 years old, of which 33% of postgraduate qualifications, to ensure that the company's steady and sustainable development. In addition, there is a group of young and energetic middle management personnel, rich in creativity, perfect knowledge of management theories, average age of not more than 38 years old, of which 89% have bachelor's degree or above, strong learning ability, boldness to take responsibility, and high implementation efficiency. The whole management team combines the young and the middle-aged, each complementing the shortcomings, rigorous and steady without losing innovation, the management echelon is sound, the talent reserve continues to transport, for the company's future sustainable development has laid a good foundation.
In terms of management mode, the company's internal control system is sound, which ensures the company's decision-making efficiency and wind control ability. The company's incentive assessment system is perfect, with performance, rating and salary linked to the rapid growth of talent, ensuring the sustainable development of the company. These management modes ensure the rapid and sustainable growth of the management team, and escort the talent pool required for the company's development.