Annual inventory: Under the cold winter, these companies will fall in 2022

Under the influence of multiple reasons such as huge changes in the industry, fierce competition, cash flow disruption, and business adjustment, many pharmaceutical companies have fallen into life and death and went to bankruptcy and liquidation, including unknown micro enterprises and giants in the pharmaceutical industry. In 2022, the A-share pharmaceutical sector has fallen endlessly, and the frequent IPOs have also proved the cruel survival conditions of pharmaceutical companies, and the pharmaceutical sector has fallen to a low point in nearly a decade in 2022, with the sector as a whole falling by more than 20%, and the industry is no longer the darling of the capital market. Let's take a look at the pharmaceutical companies that fell in the cold winter of 2022, which can't help but make people sigh.

1. Empire falls! Yuheng Pharmaceutical went bankrupt and auctioned 706 million shares

On November 11, 2022, Yuheng Pharmaceutical issued an announcement that after the Harbin Intermediate People's Court ruled to terminate the reorganization procedure of Yuheng Group, the company's controlling shareholder, and declared bankruptcy. On December 28, 2022, Yuheng Pharmaceutical announced again that it will publicly auction all 706 million shares of the company held by Yuheng Group from 10:00 on January 12 to 10:00 on January 13, 2023 for the disposal of the bankruptcy estate, and the number of auctions accounts for 32.13% of the total share capital of the company. If the auction of 706 million shares of the listed company held by Yuheng Group is completed, the control of Yuheng Pharmaceutical will be changed accordingly.

The decline of Yuheng Pharmaceutical is not without traces, and it all starts in 2017. In January 2017, the state implemented the "two-invoice system" for drug procurement to reduce drug prices and reduce people's drug burden. The reform policy has had a greater impact on domestic pharmaceutical companies, and Yuheng Pharmaceutical is also difficult to escape. In 2017, the sales volume of Yuheng Pharmaceutical decreased by 32.92%, and the inventory increased by 112.24%. From 2015 to 2019, the sales expenses of Yuheng Pharmaceutical were 359 million yuan, 261 million yuan, 1.065 billion yuan, 2.938 billion yuan and 2.687 billion yuan, and the proportion of sales expenses to operating income was 13.39%, 8.75%, 35.01%, 53.6% and 53.17%. It can be seen from this data that since 2017, Yuheng Pharmaceutical's sales expenses have increased significantly, thereby reducing the profitability.

The decline of Yuheng Pharmaceutical is inseparable from equity pledge and asset acquisition. Since its listing in 2010, Yuheng Pharmaceutical has successfully initiated 13 mergers and acquisitions, and each merger and acquisition has been accompanied by equity pledge, the following table shows the mergers and acquisitions and equity pledge information of Yuheng Pharmaceutical.

Table 1 Equity pledge of Yuheng Pharmaceutical

It can be seen from the situation of Yuheng Pharmaceutical that frequent mergers and acquisitions and equity pledges are not conducive to the development of enterprises, and will bring great risks to enterprise operations and capital flow.

Yuheng Pharmaceutical has been trying to get out of its situation. On November 29, 2019, Yuheng Pharmaceutical transferred 100% of the equity of its subsidiary Aonuo Pharmaceutical to China Resources Sanjiu for 1.42 billion yuan, which brought the company investment income of 1 billion yuan, which is conducive to improving the company's working capital and cash flow and alleviating the company's short-term debt pressure. This move can be described as a strong man's broken wrist, but it is still difficult to escape the fate of failure.

2. With a debt of 130 million yuan, Beijing Junhai Pharmaceutical Co., Ltd. went bankrupt and liquidated

On September 09, 2022, the Beijing No. 1 Intermediate People's Court accepted the bankruptcy liquidation application of Zhejiang Hisun Pharmaceutical Co., Ltd. against Beijing Junhai Pharmaceutical Co., Ltd.

As of April 20, 2021, Junhai Company owed Hisun Pharmaceutical a total of more than 280 million yuan in loan principal, and Beijing Junhai Pharmaceutical did not have any source of funds and income to repay the above-mentioned repayment loans and loans due. According to the balance sheet submitted by Junhai Company, as of March 31, 2022, Junhai Company's total assets were 188805518.56 yuan, liabilities totaled 322623158.62 yuan, and the total owner's equity was -133817640.06 yuan. Finally, after the ruling of the Beijing No. 1 Intermediate People's Court, Junhai Company could not pay off its debts when due, obviously lacked solvency, and had met the bankruptcy reasons stipulated in the Bankruptcy Law, Hisun Pharmaceutical Company applied for bankruptcy liquidation of Junhai Company.

The bankruptcy of Junhai Pharmaceutical is not without a trace, judging from the performance in recent years, Junhai Pharmaceutical has not produced outstanding results, and it also lost about 170 million yuan in 2021, which has warned that Junhai Pharmaceutical has been teetering on the verge of bankruptcy.

3. With a debt of 1 million, Changzhou Xinying Pharmaceutical Co., Ltd. went bankrupt and liquidated

On July 11, 2022, the Intermediate People's Court of Changzhou City, Jiangsu Province officially accepted Zhang Jianping's bankruptcy liquidation application against Changzhou Xinying Pharmaceutical Co., Ltd.

The total application execution amount of Changzhou Xinying Pharmaceutical Co., Ltd. is 4208870.39 yuan, and the execution is 3134186.69 yuan. Changzhou Xinying Pharmaceutical Co., Ltd. is unable to repay its debts due and meets the conditions for bankruptcy liquidation.

4. A penny stumped the hero Han, Jiangsu Lingbao Pharmaceutical Co., Ltd. went bankrupt and liquidated

On June 08, 2022, the Wuxi Intermediate People's Court of Jiangsu Province accepted the bankruptcy liquidation application of Changzhou Baiyang Packaging Co., Ltd. against Jiangsu Lingbao Pharmaceutical Co., Ltd.

On December 27, 2018, the Wuxi Arbitration Commission ruled that Lingbao should pay Baiyang 91,780 yuan for the goods, interest, lawyer fees, arbitration fees, etc., but Lingbao Pharmaceutical found no property available for enforcement. Finally, since Lingbao Company could not pay off the debts due to Baiyang Company, Baiyang Company's bankruptcy liquidation application for Lingleo Company met the conditions for acceptance.

5. With a debt of 60 million, Zhejiang Taizheng Pharmaceutical Co., Ltd. was liquidated in bankruptcy

On January 24, 2022, the People's Court of Changshan County, Zhejiang Province, transferred Zhejiang Taizheng Pharmaceutical Co., Ltd. for bankruptcy review after obtaining the consent of the applicant Ye Zhaohui.

The total amount of debt of Zhejiang Taizheng Pharmaceutical Co., Ltd. is nearly 120 million yuan, and the amount of targets that have not yet been implemented has reached more than 60 million yuan. Because Zhejiang Taizheng Pharmaceutical Co., Ltd. cannot pay off its debts when due, and obviously lacks solvency, it meets the acceptance conditions for bankruptcy liquidation.

6. With a debt of nearly 100 million yuan, China Pharmaceutical Co., Ltd. applied for bankruptcy reorganization

On March 29, 2022, China Pharmaceutical Co., Ltd. filed an application for bankruptcy reorganization with the court on the grounds that it could not pay its debts due and obviously lacked solvency, and was seriously insolvent. According to the audit report submitted by China Pharmaceutical Co., Ltd., as of October 31, 2021, its total book assets were 294075912.26 yuan, the total book liabilities were 380360367.36 yuan, and the asset-liability ratio was 129.34%, which was in a state of serious insolvency. The applicant is unable to pay off its debts when due and is obviously insolvent, is seriously insolvent, and has bankruptcy reasons. On April 22, 2022, the People's Court of Laishan District, Yantai City, Shandong Province accepted the bankruptcy reorganization application of the applicant Shenzhou Pharmaceutical Co., Ltd.

summary

Bankruptcy liquidation is the last decent thing for a business, but it also means exiting the industry stage. 2022 is the cold winter of the pharmaceutical industry, and countless companies have not survived this winter, and finally regret to be out. Most bankrupt companies are small and medium-sized enterprises, but there are also industry giants such as Yuheng Pharmaceutical. With the continuous reform of the pharmaceutical industry, pharmaceutical companies will not be eliminated by history only if they show excellent strength.

Danger and opportunity have always coexisted, and if winter is over, will spring be far away? Under the premise of responding to national policies, what we can do is to improve the competitiveness of enterprises, and strive to break the cold winter in this round of pharmaceutical reform and take the lead!