Investor's Network" Xie Yingjie.
At the beginning of the new year, Ma Yinglong (600993SH) is on the cusp of the first generation, because the sales of hemorrhoids cream doubled after the Spring Festival.
On the one hand, after the expiration of R&D patents, the market share of core products has declined, and the market competition is fierce; On the other hand, after years of transformation, diversified industries have not yet developed into supporting businesses.
In recent years, Ma Yinglong has made many changes, including expanding channels, laying out new tracks and many other measures. However, sales of new business have remained low so far. In the special period of product matrix expansion and sales channel transformation, how to break the preconceived notions of consumers and create a second growth point is still a big challenge for Ma Yinglong.
Slow growth in performance
Since the 80s of the 20th century, the company has successively developed and launched Ma Yinglong musk hemorrhoids cream, musk hemorrhoids suppositories, dragon ball ointment and Ma Yinglong Babao eye cream and other products, gradually building a dominant position in the anorectal market segment. In 2004, the company went public and was involved in many fields such as drug manufacturing, drug research and development, drug wholesale and retail, and chain hospitals.
As a time-honored brand, Ma Yinglong has frequently crossed over in the consumer market in recent years, co-branded gift boxes with hot pot chain brands, and cooperated with trendy brands to embark on Florence Fashion Week.
Ma Yinglong thus became a new Internet celebrity and was regarded as a "panacea". According to data from third-party platforms, the sales volume of hemorrhoids** products increased by more than 3 month-on-month after the Spring Festival5 times. In some areas, Ma Yinglong musk hemorrhoids cream has climbed to the first place in sales.
However, the high popularity of the market did not push Ma Yinglong's performance to a higher level. From 2020 to 2022, the company's operating income will be 2.8 billion yuan and 33.3 billion yuan respectively8.5 billion yuan, 35$3.2 billion; The net profit attributable to the parent company was 41.9 billion yuan, 46.5 billion yuan, 47.9 billion yuan.
In the first three quarters of 2023, Ma Yinglong's revenue was 244.6 billion yuan, down 12 percent year-on-year17%；Net profit attributable to the parent company 41.8 billion yuan, a year-on-year increase of 056%。
In the secondary market, the stock has performed steadily in the past six months. As of March 5**, it was reported at 2353 yuan shares, market value of 10.1 billion yuan, dynamic price-earnings ratio of 21 times, since the opening of the Spring Festival, a total of **36%。
Explore the "second curve".
Relying on hemorrhoids medication alone, Ma Yinglong did support the company's development at the beginning, but a single product is difficult to support the long-term survival of the company. In fact, Ma Yinglong has already taken precautions and started the road of diversified transformation.
In 2009, the company released eye cream products;In 2012, a subsidiary, Ma Yinglong Babao, was established, which is mainly responsible for the R&D and sales of cosmeticsIn 2018, a big health company was established, mainly engaged in functional cosmetics, food, baby and anorectal care products.
According to Ma Yinglong's financial report, its big health category structure is based on "mechanical food, health and cosmetics", which comprehensively covers four categories: functional cosmetics, functional care products, functional foods, and consumer products, with more than 400 SKUs on the market and more than 100 products under development.
So far, Ma Yinglong's transformation to health has been slow. **It shows that the sales volume of hemorrhoid cream is hundreds of thousands, and the highest sales volume of other products is only 40,000+, and the top-selling products are almost all consistent with the tonality of hemorrhoid cream, and the sales volume of facial cleanser, moisturizer and other products is 100+.
In the dilemma of not accepting the old and new brands, the company chose to increase marketing, and its sales expenses from 2020 to 2022 and the first three quarters of 2023 were 59.5 billion yuan, 71.7 billion yuan, 7800 million yuan and 500 million yuan, accounting for more than 21% of revenue.
Correspondingly, R&D expenses are relatively low, with 5883 in the last three years530,000 yuan, 6885870,000 yuan, 9051220,000 yuan and 48.39 million yuan, accounting for about 2% of revenue, slightly lower than the industry average.
The overall market environment is not good, and as a traditional brand, Ma Yinglong's hemorrhoid cream is deeply rooted in the hearts of the people, resulting in no improvement in new business all year round. In terms of its own growth, the dividends of domestic products are gradually dissipating, the competition in the industry is becoming more and more fierce, and the company's patents have expired one after another, and the future is long and difficult.
According to the financial report, the invention patents of some of Ma Yinglong's core products (Ma Yinglong Musk Hemorrhoids Ointment, Musk Hemorrhoids Suppository, Dragon Ball Ointment) have expired in October 2022, and the formula of more than 400 years will no longer be protected by patents, and it is unknown whether it will be greatly affected in the future.
After the expiration of the core patent, the related products are protected by other peripheral patents, such as raw material preparation methods, improved dosage forms, active ingredient detection methods, etc., and it is difficult to imitate traditional Chinese medicine. Ma Yinglong said in the financial report.
Some institutions are optimistic about the future
Hemorrhoids is a common disease in the population, and the space for medication is gradually expanding. According to data from Zhiyan Consulting, the market size of hemorrhoids medication in China will be close to 5 billion yuan in 2022, and the scale is expected to exceed 7 billion yuan in 2028, with an average annual compound growth rate of medium to high single digits.
According to the data of the enterprise, Ma Yinglong has obtained a new invention patent authorization, the patent name is "** hemorrhoidal anorectal diseases of traditional Chinese medicine composition, traditional Chinese medicine preparation, preparation and application", the authorization date is February 27, 2024.
Despite this, its market share is still affected to a certain extent. According to incomplete statistics from Zhiyan Consulting data, in 2022, the revenue of Ma Yinglong's hemorrhoidal treatment products will be 148.8 billion yuan, a year-on-year increase of 752%, accounting for about 30% of the overall market share. From 2018 to 2021, its market share of hemorrhoids drugs in domestic retail terminals was %.
At the profit level, traditional Chinese herbal medicines have soared, which has further dragged down its gross profit margin. According to the report of the China Association of Traditional Chinese Medicine, from the beginning of 2023 to July of that year, more than 100 conventional varieties of Chinese herbal medicines have increased by more than 100%, and 25 commonly used bulk medicinal materials have increased by more than 200%, including precious Chinese medicinal materials such as musk and bezoar.
Judging from past cases, domestic brands often have explosive models, but there are not many cases of continuous success. Limited sales growth for a single product can have an impact on profitability if new brands are not successfully incubated or acquired.
At the same time, the company has lost a lot of money on investment in the past two years. As of the end of the third quarter of 2023, the company's trading financial assets reached 85.4 billion yuan, in 2022, Ma Yinglong will hold Hengrui Pharmaceutical (600276SH), Baiyun Mountain (600332sh) and so on, with a total loss of about 1479550,000 yuan. In the first half of 2023, it invested in Kyodo Pharmaceuticals (300966SZ), with a loss of more than 3.2 million yuan.
The market remains divided on the company's future prospects. There is a view that the public's impression of Ma Yinglong has long been anorectal medication, resulting in an extremely fixed product positioning. Although Ma Yinglong has frequently deployed in the field of big health, it has also exposed the problems of enterprises in many aspects such as industry competition, capital operation, and transformation strategy.
According to the company's data, Ma Yinglong's largest shareholder is China Baoan, holding about 29% of the shares, while China Baoan's largest shareholder is Shenzhen State-owned Assets Supervision and Administration Commission, holding about 16% of the shares, which means that China Baoan has no actual controller, and Ma Yinglong has no actual controller.
At present, some industry insiders are still optimistic about it. Huafu**'s latest research report pointed out that it is optimistic about the brand power of Ma Yinglong's hemorrhoidal treatment products and the development potential of the whole industrial chain of "medicine + medicine + maintenance". **The company's revenue from 2023 to 2025 is 323.7 billion yuan, 387.8 billion yuan, 432.3 billion yuan, with a growth rate of % and a net profit attributable to the parent company of 50.7 billion yuan, 61.4 billion yuan, 66.4 billion yuan, with a growth rate of %. Produced by Thinking Finance).