2.9 billion! CR Sanjiu joined KunYao Group

On November 29, China Resources Sanjiu issued an announcement that the board of directors deliberated and approved the "Report on Major Asset Purchase (Draft)". After the completion of the equity transaction, KunYao Group will become the holding subsidiary of CR Sanjiu. The total price of the transaction was 2.902 billion yuan.

After the completion of this acquisition, the pharmaceutical listed company under the "China Resources Department" is expected to lose another son. Previously, it has included China Resources Sanjiu, China Resources Shuanghe, China Resources Medical, China Resources Pharmaceutical, Jiangzhong Pharmaceutical, Dong'a Ejiao, Dirui Medical, etc.

Focus on the layout of the traditional Chinese medicine industry chain

CR Sanjiu said that after the acquisition of KunYao Group, it will further broaden the main product matrix on the basis of the original business and supplement traditional Chinese medicine brands, especially natural plant medicine products using Panax notoginseng and Artemisia annua as raw materials.

At present, Yunnan Baiyao, Pian Zixi and other traditional Chinese medicine enterprises have layouts for Sanqi, while Yunnan Baiyao frequently mentions Sanqi in its annual report, and said that it will actively explore the Sanqi series of oral liquids, build and operate the "Digital Sanqi Industry Platform", and strive to become the leader of the Sanqi industry.

KunYao Group has a complete industrial chain from Sanqi GAP planting, drinking piece processing to Sanchi total saponin extraction, preparation production, professional marketing and promotion, and has established a traceable intelligent control system from planting, procurement, research and development, production, quality inspection to the whole life cycle of warehousing and logistics, which has also become the advantage of the target asset.

In terms of performance, although CR 39 has maintained an overall upward trend in recent years, it has become necessary to broaden the scope of its main business in order to further develop in the field of traditional Chinese medicine.

In the first three quarters of 2022, CR Sanjiu's main business achieved operating income of 12.111 billion yuan, ranking third after Baiyunshan's 54.806 billion yuan and Yunnan Baiyao's 26.916 billion yuan; the net profit was 1.978 billion yuan, and the net profit of Baiyunshan, Yunnan Baiyao and Pian Zixi in the same period was 3.685 billion yuan, 2.140 billion yuan and 2.093 billion yuan respectively, and China Resources Sanjiu ranked fourth.

M&A has become a tradition

Since 2002, China Resources Pharmaceutical Group has also incorporated A-share listed companies such as China Resources Sanjiu, China Resources Shuanghe, Jiangzhong Pharmaceutical, Dong'a Ejiao and Boyaa Biotechnology into the huge territory of China Resources Pharmaceutical with the help of multiple mergers and acquisitions.

Similarly, CR Sanjiu also continues CR's consistent practice of "mergers and acquisitions", constantly expanding business areas and enriching product lines. According to incomplete statistics from Times Finance, from 2011 to 2021, a total of 12 mergers and acquisitions occurred in CR Sanjiu, including partial or full equity acquisitions of Zhongyi Pharmaceutical, Bioott, Kunming Shenghuo Pharmaceutical, Shenghai Health, Aonuo Pharmaceutical and China Resources Tang.

At present, CR Sanjiu CHC health consumer goods business has covered nearly 10 categories such as cold, skin, gastrointestinal, cough, orthopedics, pediatrics, etc., and its core products occupy a high market share in cold, gastrointestinal, skin, pediatrics, mineral mineral, cough and orthopedic medicine; The prescription drug business covers the core areas of digestion, orthopedics, cardio-cerebral severe diseases, and tumors.

It is worth mentioning that CR Sanjiu is quite out of the circle in marketing, and TV series advertisements are frequently implanted. It is precisely because of this that CR Sanjiu has always given the impression of "heavy marketing and light research and development" to the outside world. From 2018 to 2021, CR Sanjiu's sales expenses were as high as 6.469 billion yuan, 6.505 billion yuan, 5.015 billion yuan and 5.021 billion yuan, respectively, which was much higher than the R&D expenses of 100 million yuan.

Now with "Sanqi", CR Sanjiu layout "Chinese medicine empire" has another piece of the puzzle. However, for CR Sanjiu, the future development of traditional Chinese medicine still has a long way to go.