Cp Tianqing plans to sell three subsidiaries

On December 20, Nanjing Pharmaceutical signed the equity transfer framework agreement with CP Tianqing, in which Nanjing Pharmaceutical planned to acquire part or all of the shares of 3 controlling subsidiaries held by CP Tianqing, namely 55% of the shares of Suzhou Tianqing, 55% of the shares of Zhejiang Tianqing and 100% of the shares of Lianyungang Tianqing. The transaction is tentatively valued at $148 million.

From the perspective of acquisition target, Suzhou Tianqing is a liver drug developer, whose products involve liver disease, tumor, diabetes, respiratory, cardiovascular and cerebrovascular fields. Zhejiang Tianqing is a pharmaceutical wholesale enterprise mainly engaged in biological products. The main business of Lianyungang Tianqing is medicine and medical equipment wholesale.

Cp Tianqing parent company

Focus on core business

The three subsidiaries of the sale are all commercial companies of CP Tianqing engaged in pharmaceutical sales and distribution business.

Yesterday, CP Tianqing's parent company, China Biopharmaceutical, said in response to "Caijing" reporters that the transfer of all or part of the shares of the three subsidiaries to Nanjing Pharmaceutical is "the company plans to divest commercial circulation subsidiaries or assets, in line with the long-term development strategy of concentrating resources on core business." "It will help the company further focus on its future strategic expansion direction and optimize its assets and business structure."

The main business of China Biopharmaceutical is drug research and development and manufacturing, and CP Tianqing is one of its most important subsidiaries. There are 33 products with annual sales of over 100 million yuan. Cp Tianqing has set up 5 R&D and production bases in Nanjing and Lianyungang of Jiangsu Province, and owns tumor, liver disease, respiratory and other product clusters.

It is understood that CP Tianqing is currently researching 178 products, 95 innovative drugs, 19 biological drugs, and more than 2500 invention patent applications. In 2021, the company invested 2.738 billion yuan in research and development.

Nanjing Pharmaceutical

External expansion and internal reform

Nanjing Pharmaceutical is the first Sino-foreign joint venture to go public in the pharmaceutical distribution industry. It was listed on the Shanghai Stock Exchange in 1996. At present, the company's business model includes pharmaceutical wholesale, pharmaceutical retail, pharmaceutical "Internet plus" and pharmaceutical third-party logistics services. The business network covers Jiangsu, Anhui, Fujian, Hubei and Yunnan parts.

The three companies that Nanjing Pharmaceutical intends to acquire are located in Suzhou, Hangzhou and Lianyungang, which are cities where Nanjing Pharmaceutical's sales force is relatively weak, and they are all pharmaceutical distribution companies. If successful, the deal will help it expand in the local market.

On the acquisition of the provisional estimate of 148 million yuan, the amount is slightly higher than the third quarter of Nanjing Pharmaceutical net profit - 137 million yuan. However, for Nanjing Medicine, want to easily come up with the acquisition of money, there may be some difficulty.

According to Wind data, as of September 30, 2022, Nanjing Pharmaceutical's monetary funds were 1.496 billion yuan, but short-term borrowings were as high as 3.404 billion yuan, and the asset-liability ratio was as high as 79.01%. Among the 31 pharmaceutical commercial enterprises, the asset-liability ratio of Nanjing Pharmaceutical is second only to Haiwang Bio-79.87%, ranking the second in the industry.

Nanjing Medicine in the purchase of assets, extension expansion at the same time, internal is also "reform".

Just a week ago, Nanjing Pharmaceutical said it would list its 49 per cent stake in Sun Heling Pharmaceutical in the Nanjing Public Resources Trading Centre and introduce a strategic investor in a mixed-ownership reform. The underlying listing price of the underlying equity is 80.85 million yuan.

It is reported that after the completion of the mixed ownership reform, Nanjing Pharmaceutical will simultaneously implement the professional manager system, in order to better stimulate the vitality and power of entrepreneurship and enterprise development, to achieve the objectives of the mixed ownership reform. It is worth mentioning that this is not the first time Nanjing medicine mixed reform.

Under the current industry situation, focusing on the core areas and expanding the market network is also one of the ways that most enterprises choose.