The so-called "success is also Xiao He and failure is also Xiao He", was founded in 1991, a professional medical big health enterprise - steady medical due to the epidemic masks protective clothing and other supplies of mass production and fame, not only the profits soared, but also successfully in September last year, landed on the A-share listing.
However, as the epidemic gradually stabilizes, can the stable healthcare, which relies on the profit support of masks, still be able to soar all the way on the track of performance, "stable for a long time"?
Producing masks for a rainy day
Opportunity only favors the prepared mind. The main business of the first steady medical is the production of gauze, cotton swabs and other medical dressings. in December 1995 in Jingmen City, Hubei Province, the establishment of Jingmen steady medical textiles limited company, the founder of the Li Jianquan enterprising, the earliest to establish from the procurement of cotton to spinning, weaving medical gauze whole industry chain.
Sensing the backwardness of the quality of China's products, led the company's R & D team hard research, independent research and development, as early as 1997 with excellent quality exports to Japan and the European Union, the realization of sterilized gauze finished products directly exported to the outside world, the products have been certified by the European Union CE certification, the U.S. FDA certification and certification of the Ministry of Health and Welfare of Japan, the dressings are sold to the world's more than 70 countries, the strength of the company.
It can be said that as early as four years before China's accession to the World Trade Organization has opened up sales in the international market, and become the pride of the national brand. 2009, the "winner" trademark of the stable health care was named China Well-known Trademarks. 2015, the stable health care was evaluated as a national high-tech enterprises. It can be said that the strength is full, low-key but not publicized.
The wheel of time to December 2019, the news of the new Crown pneumonia epidemic has just come out, who did not expect this gray swan will become a black rhino, and ultimately swept the world and so far unceasing.
Chairman Li Jianquan advance prediction, with more than 20 years of industry sensitivity, foreseeing that the aftermath of the market may be on the rise in demand for protective materials such as masks, so December 20, 2019 onwards, steady medical that began the production of masks.
On January 10 this year, Steady Medical mobilized its wholly-owned subsidiary's only mask workshop of 380 people, the Spring Festival does not take a vacation, Huanggang, Hubei mask production workshop workers' wages reached 400 yuan per day, full production of N95 masks and other protective masks.
In this way just one month, steady medical overtime a **** production and send more than 100 million masks, 110,000 sets of protective clothing. According to statistics during the same period of steady medical average daily supply of about 2.86 million masks, the national average daily supply of masks during the same period of 8 million, steady medical only this one more than 1/3 of the national production of masks, can be said to be highly meritorious.
Insist on masks without price increases
According to statistics, only from January to May 2020, Steady Medical has provided a total of 470 million masks of all kinds and 4 million pieces of protective clothing to the country. By the end of May 2020, the cumulative production and export of 210 million masks and 950,000 pieces of protective clothing were delivered to Italy, France, the United States, Japan, Singapore and other countries with serious epidemics.
The remarkable thing is that, although the domestic masks at the time of the sharp rise in raw materials, meltblown cloth from the price increase of 3, 5 times to the highest later when the 50 times, but steady medical is still not moved, resist the temptation of profit, adhere to the price does not increase.
This behavior won the favor of consumers and dealers praise. In the same period, many peers price trend, the original loss of some customers and even some of the competitors' customers have joined the ranks of the purchase of stable health care.
In the first half of last year, stable health medical chairman Li Jianquan daily cell phone and WeChat ringing non-stop, almost all of the government enterprises and institutions to request "special approval mask" request, the demand is almost a blowout, and production capacity is relatively limited, which makes Li Jianquan once difficult.
Adhering to the social responsibility of consumers, not to raise prices, but also for the steady medical industry has won a good reputation and rich performance return.
On September 8, 2020, Stable Medical's subsidiary, Stable Medical (Huanggang) Co., Ltd. was honored as the "National Advanced Collective in the Fight Against the New Crown Pneumonia Epidemic".
On October 14, 2020, Mr. Li Jianquan, Chairman of SteadyHealth, was invited to attend the 40th Anniversary Celebration Conference of the Shenzhen Special Economic Zone and was honored as the Innovative Entrepreneurial Person and the Advanced Person of the 40th Anniversary of the Establishment of the Shenzhen Special Economic Zone.
In terms of performance, in the first three quarters of 2020, Steady Medical's sales of medical dressings amounted to RMB 6.927 billion, an increase of 680.67% year-on-year.
According to the company's 2020 annual performance preview released in January this year, it is expected to have operating revenue of 11.5-13.5 billion yuan, up 151%-195% year-on-year; and net profit attributable to the mother of 3.65-3.95 billion yuan, up 568%-623% year-on-year.
Sub-brand Cotton Times PR rollover
It is reported that the stable health care under the banner of the stable health care, Cotton Times, Jinliang life of the three major brands, the company has evolved from a single gauze class of dressings manufacturers to cotton as the core raw material, mainly engaged in the research and development of cotton products, production, sales, covering health care, personal care, home care, maternal and child care. The company has developed from a single gauze dressings manufacturer into a leading health enterprise mainly engaged in the research and development, production and sales of cotton products, covering health care, personal care, home care, mother and child care, home textile and clothing.
This is one of the cotton era before the outbreak of the epidemic can be described as a great credit. According to statistics, from 2017 to 2019, the steady medical revenue was 3.5 billion yuan, 3.84 billion yuan, 4.58 billion yuan, corresponding to a net profit of 430 million yuan, 430 million yuan, 540 million yuan.
And in these three years, the cotton era to achieve operating income of 2.14 billion yuan, 2.38 billion yuan, 3.03 billion yuan, accounting for more than 60% of the overall revenue.
And the arrival of the epidemic, masks and other medical dressings revenue surge, the cotton era's share of revenue declined, worse, in January of this year, the cotton era of an advertising public relations overturned, it caused significant losses.
Cotton era was founded in 2009, the main diapers, sanitary napkins, wet wipes, cotton pads and other maternal and child female daily consumer goods. On January 7 this year, All Cotton Times released a small video promoting its makeup remover wipes.
In the video, a beautiful young woman was followed by thugs late at night, the heroine had the idea to take out the cotton era of makeup remover wipes for their own makeup in a hurry, the result of removing the makeup after the beauty of a male face, because of the ugliness of the thugs were scared away on the spot.
Soon this advertisement of Cotton Age was accused of "objectification and ugliness of women" due to its over-exaggerated propaganda and was pushed into the limelight.
However, in the official apology letter released later, only 20% of the content was a perfunctory apology, while the remaining 80% of the content was a lengthy and boastful brand promotion.
This directly creates an industry brand PR antithesis, consumers are even more unimpressed, and many users have left comments that they will never buy another Cotton Time product.
This failed PR operation not only led to the reduction of users, brand recognition, but also brought the parent company steady medical share price decline and market value has shrunk significantly.
On January 12 of this year, the stock price was 194 yuan per share, with a market value of more than 80 billion yuan, and now in just over two months the stock price has fallen to about 135 yuan, with a market value of less than 60 billion yuan.
After the epidemic, the health care can still be "steady and long"?
1-3 this year, the major domestic brokerage firms more optimistic about the health care market. For example, CICC pointed out in a research report on January 26 this year, optimistic about the steady medical as medical, consumer synergistic development of the development prospects of large health leaders; CITIC Securities pointed out in a research report on February 19 this year, taking into account the steady medical medical medical consumables and consumer goods business have faster growth, give the target market value of 100 billion yuan, corresponding to the target price of 235 yuan; March 21 this year, Tianfeng Securities maintains a buy rating on the Stable medical buy rating. However, ten fingers are not generally long, steady medical still has a lot of hidden worries.
First, liquidity risk. Including accounts receivable and inventory risk are increasing. 2016 to the first three quarters of 2020, steady medical accounts receivable were 291 million yuan, 320 million yuan, 422 million yuan, 416 million yuan and 920 million yuan. The exponential growth of accounts receivable has brought challenges to the liquidity of the company, how to prevent the risk of bad debts is key, and the inventory is also growing rapidly.
Inventory from 2016 to the first three quarters of 2020 were 436 million yuan, 762 million yuan, 843 million yuan, 992 million yuan and 1.278 billion yuan. On the one hand, the funds are slow to return, on the other hand, the products have the risk of stagnant sales, both affecting the liquidity of the enterprise, which is not conducive to cash flow management.
Second, the brand credibility decline. After the public relations crisis, the cotton era is facing a part of the loss of users and new users to expand the difficult predicament, brand reputation and credibility decline, how to expand the business of online sales, offline layout of new stores, there are still unknowns, although in the long term, there is favorable support for consumer upgrades.
Third, the decline in demand after the epidemic. Stable era 2020 is expected to net profit of 3.65-3.95 billion yuan, an increase of 568%-623%. Such a high five or six times the rate of profit growth, in the listed companies is rare, the future can maintain sustained high growth, is also unknown.
With the stabilization of the epidemic in the aftermath, the world's demand for masks and protective clothing gradually declining, the field of medical dressings, profits no longer maintain the previous high-speed growth, and the cotton era by such as the former crisis public relations and other negative impacts, to achieve a significant breakthrough in the performance of the difficulty is not small.
Even steady medical chairman Li Jianquan has also confessed that the outbreak of the epidemic after the business growth rate is indeed unimaginable, but it is also difficult to maintain such a high-speed operation for a long time.
Overall, the company is still a good leader in the healthcare field, with good prospects for development. But it remains to be seen whether it can maintain the high rate of profit growth and continue to soar at five or six times the rate of profit growth.