Investor Website Cai Jun
Through the difficult period, Kelun Pharmaceutical (002422.SZ, hereinafter referred to as "the company") has passed a thousand mountains.
In May, the company will publicly subscribe for domestic shares of its holding subsidiary, Kelenbotai. Previously, the company published its 2023 annual report. Since 2019, its performance has returned to double-digit growth for the first time. At the same time, the company's asset liability ratio has significantly decreased due to the warming of the beneficiary market and the spin off listing.
Liu Gexin, the helmsman of this enterprise, is now 73 years old. He continued to write his management career when he was over seventy years old. At the same time, his 40 year old son Liu Sichuan is the general manager of the company. After several industry cycles, Kelun Pharmaceutical is climbing to a higher dimension.
The first entrepreneurial cycle
In Chengdu in 1995, Liu Gexin, who had made great achievements in his career, decided to start his own business, and the gear of fate began to turn.
In the first half of his life, Liu Gexin was born into an intellectual family in Wuhan, and later came to Chengdu with his parents. After completing his studies in the pharmacy of Dalian Railway Medical College (now "Dalian University"), he worked in a state-owned pharmaceutical factory, and then transferred to the joint venture Sichuan Qili Pharmaceutical as the general manager.
The foreign side had more say in the joint venture at that time. In the process of operation, Liu Gexin resigned angrily because he was dissatisfied with the foreign demands. At the age of 45, he, together with the Deputy General Manager and the Chief Financial Officer, formed a "three swordsman", and raised 1 million yuan to build a new pharmaceutical factory in Chengdu, named "Kelun".
The name "Kelun" comes from Liu Gexin's belief that science and technology should be combined with ethics. Since he was young, he liked to read Lu Xun's works and had strong humanistic feelings. However, no matter how full the ideal is, it also needs the support of reality. At the beginning of entrepreneurship, what products to make became the top priority of Kelun Pharmaceutical.
On this point, Liu Gexin found business opportunities. At that time, there was no special injection for children in China, so children with small dosage could only inject 500 ml of adult dosage. After exploring the pain points of differentiation, Kelun Pharmaceutical launched a 100ml large volume injection for children and quickly sold it in the market.
The process of accumulating the first barrel of gold fully proves Liu Gexin's unique business vision and his leap from 0 to 1. A few years later, Kelun Pharmaceutical found a way to expand: acquisition.
At that time, due to the implementation of GMP certification by the country, a number of infusion production enterprises and hospital preparation rooms that did not meet the standards were closed. The door of the times opened a narrow gap in dividends, and Liu Gexin was keen to catch it. From 2003 to 2010, it acquired 13 infusion enterprises, including Zhejiang Guojing Pharmaceutical. After a series of operations, Kelun Pharmaceutical has established its position as the leading infusion company in China.
Liu Gexin and Kelun Pharmaceutical have stood at the forefront of the times from breaking the boat to becoming the leader of the track. In 2010, Kelun Pharmaceutical was successfully listed in Shenzhen Stock Exchange. On the business stage of the alternation of old and new, Liu Gexin enjoys the attention of the capital market, but has decided to open the next challenge in his heart.
The second entrepreneurial cycle
In 2011, in Yili, Xinjiang, Liu Gexin, who was in his 60s, started his business again here. In the first cycle of life entrepreneurship, he has accumulated rich experience. This time, Liu Gexin wanted to replicate success with a keen business mind.
The newly established enterprise is Chuanning Biology, which is a subsidiary of Kelun Pharmaceutical, mainly engaged in antibiotic APIs. Just as he predicted the prospect of infusion in that year, Liu Gexin believed that the price of antibiotic APIs in the world would continue to rise, so he came up with the idea of building a factory. In order to realize the idea, it took more than ten hours to travel between Chengdu and Yili.
A few years later, Chuanning Biological became the world's largest intermediate embodiment chemical plant of antibiotics. During the process, it is also a constant suffering. The enterprise has been punished for excessive emissions of waste gas and water for many times, and billions of yuan has been invested in environmental protection.
Lei Jun of Xiaomi once said that the core of modern business is to find outlets, so he has successively set foot in mobile phones, smart appliances and cars. In the pharmaceutical industry, Liu Gexin has also been constantly looking for outlets, first for infusion, and then for antibiotic APIs. Moreover, the search for air outlets continues.
In 2016, Liu Gexin founded Kelun Botai, a subsidiary of Kelun Pharmaceutical, which is mainly engaged in ADC (antibody coupling) innovative tumor drugs. From the current perspective, ADC is a strong outlet for innovative drugs, and large domestic and overseas factories are competing for layout, which once again proves Liu Gexin's business vision.
Here, Kelun Pharmaceutical has built a prototype of three wheel drive, called the "product" type operation structure. In the "thick snow and long slope" of the medical industry, Liu Gexin continued to look for directions, and again rolled out the "big snowball" of wealth with the help of capital power.
At the end of 2022, Chuanning Biology will be listed in Shenzhen Stock Exchange. In July of the next year, Kelenbotai was listed on the Hong Kong Stock Exchange. Including Kelun Pharmaceutical, Liu Gexin owns three listed companies. As of May 20, the total market value of the three enterprises was nearly 130 billion yuan.
So far, Liu Gexin has fulfilled the long cherished wish of Kelun's market value of 100 billion yuan, but looking back, the process is full of waves and obstacles.
It has passed a thousand mountains
Liu Gexin and Kelun are looking for the outlet, which is a way for individuals and enterprises to climb to a higher dimension. However, climbing will follow the evolution of the market, stretching out vines and thorns.
The biggest obstacle comes from the liabilities brought by the construction of factories and R&D platforms. In 2022, the asset liability ratio of Kelun Pharmaceutical will reach 50.68%.
Under the pressure of the liability side, the company's main infusion products have experienced price decline since 2019. Even the prices of antibiotic APIs sent to Tuozhou have been in the consolidation stage for a long time due to the capacity competition of domestic manufacturers such as Shijiazhuang Pharmaceutical, Lukang Pharmaceutical and Harbin Pharmaceutical. As for the research and development of innovative drugs, it is a necessary stage to burn money without commercializing products.
However, the three difficulties come together, and Kelun Pharmaceutical is under great pressure. From 2020 to 2022, the company's performance will grow slowly. Until 2023, three things will reverse the force field.
First, Kelun Botai completed the listing of Hong Kong shares and raised more than 2 billion yuan with Chuanning Biology. Among them, Chuanning Biotech, which invested heavily in assets, not only reduced its liabilities, but also the balance of the market was tilted to it after shouldering the pressure of environmental protection and shrinking its competitors' production capacity, and the price of API rebounded. In 2023, the operating revenue and net profit attributable to the parent company of Chuanning Biology will increase by 26.42% and 128.56% respectively year on year.
Second, when Kelenbotai has no commercial products, MSD has reached a cooperation with Kelenbotai to purchase the rights and interests of R&D projects. In 2023, Kelun Botai's net cash flow from operating activities will reach 60 million yuan.
Third, the infusion sector benefited from the challenges of epidemic management and influenza factors. The supply of products fell short of demand, and the quantity and price were stable or even slightly increased. In 2023, the infusion sales of Kelun Pharmaceutical will increase by 6.96% year on year.
Three things worked together to make Kelun Pharmaceutical warm up and see the dawn of passing through the medical cycle.
In 2023, the company's operating income and net profit attributable to the parent company will be 21.454 billion yuan and 2.456 billion yuan respectively, with year-on-year growth of 12.69% and 44.03% respectively, and will return to double-digit growth after many years. In the same period, the net cash flow from the company's operating activities was 5.337 billion yuan, up 70.68% year on year. Most importantly, the company's asset liability ratio dropped to 36.87%.
In this regard, Kelun Pharmaceutical said to Investor Network that "with the continuous increase of operating cash flow, the company will further optimize the financing structure, reasonably arrange the proportion of long-term and short-term debt, and reduce the scale of interest bearing debt".
"An old hero is ambitious; a martyr is ambitious in his old age.". At the recent exchange meeting, Liu Gexin, who loves literature, quoted the lines of Cao Cao's "Although the tortoise lives long" in reply. For the future, it will fall again.
At present, Chuanning Biology, which is the leader of antibiotics, is making full efforts to lay out a new track of synthetic biology, launch a two wheel drive strategy, and anchor a new growth pole. The marketing applications of three products of Kelunbotai have also been accepted. In May, Kelun Pharmaceutical announced its subscription of domestic shares issued by Kelun Botai, amounting to 603 million yuan.
Kelun Pharmaceutical said to Investor Network, "Kelunbotai will accelerate to usher in the milestone of multiple new drug IND submission and listing, and will continue to improve the 'end-to-end' drug development capacity building, production capacity building and commercialization system building, forming an industrial chain covering the full cycle of innovative drug development, while further actively promoting the company's global strategic cooperation, and maximizing the global value of pipelines".
The Kelun family, with a market value of 100 billion yuan, has already passed a thousand mountains. (produced by Think Finance) ■
