1、The core founder of Coren Mansion: Liu Xin, who is not perplexed to establish a career

Our generation is burdened with the expectations of an era. " Liu Xin, born in 1951, witnessed the whole process of China's reform and opening up. Liu Xin, who graduated with a master's degree in pharmacy, used to be a man with an "iron rice bowl". In 1992, when the wind of urban economic reform was just blowing, after leaving the state-owned pharmaceutical factory where he worked, he chose to join a Sino-US joint venture. "the spring breeze of reform and opening up and the reform of the urban economic system is unavoidably exciting." "five disciples" do not hesitate to start a business.

1995Although reform and opening up have begun to approach20But starting a business is still a distant thing for most people. Liu Xin made a move that seemed unwise to everyone at the time: he resigned from the Sino-US joint venture where he had been in office for four years. "I will do the same thing as you, and I will prove that the Chinese are absolutely superior to you." He also resigned with Cheng Zhipeng, deputy general manager of the Sino-US joint venture, and Pan Hui, chief financial officer, who became a start-up partner of Colin Pharmaceutical.

Liu Xin, who has entered the age of 40, took 1 million yuan borrowed from relatives and friends and went with his partners to Xindu, Sichuan, to carry out technical transformation of a capsule factory, Sichuan Kelun Pharmaceutical Factory (the predecessor of Coren Pharmaceutical Industry, hereinafter referred to as "Koren Pharmaceutical Industry")."Cullen") was born ever since.

He spent that year in the factory on the 30th and the first day of the Lunar New year. In addition to the rented plant and equipment, he was accompanied by a puppy named Bobby. The winter in Sichuan is unforgettable. The moist air, the chilly north wind, and the cold piercing to the bone marrow, coupled with the ringing of bells in the ancient temple next to the factory building, make it look particularly lonely and desolate.

Liu Xin knows very well that the opportunity is rare, but if1996年5Cannot be finished before the end of the monthGMPThe window of opportunity for a series of work, including programme review, project implementation and acceptance and certification, may be closed forever. In order to3Completed within a monthGMPAfter the transformation, Liu Xin decided to emulate Edison's60Working hours of imprisonment ", also imprisoned himself."100day. He even promised that he would never leave the factory and go home until the pharmaceutical factory formally passed the acceptance and issued the certificate.

This one"incarceration" in exchange for Curran in that year7It was officially put into production in March. Coren's first breakthrough was on high-dose injections for children. For a long time before this, there was no independent infusion for children in China, and children could only use it for adults.500Milliliters of large-volume injection will have to be wasted if they can't be used up. Curran mobilized his efforts to produce children-only products in a short period of time.100Ml large volume injection, which is its sharp weapon to quickly open the market.

到1996By the end of the year, Coren was already profitable.

1、The Battle of the rise of Colin

2.1 Seize the opportunity to merge and acquire

At the beginning of his business, Colin was not favored by the outside world. Everyone was skeptical about this iron-blooded entrepreneur and felt that his leadership was just like his style, hasty and reckless. Liu Xin does not retort. Before he really grows, he wants the company to keep a low profile:"We just acted according to our ability and screened out in advance what we couldn't do at all."

This requires to treat yourself calmly and would rather look down on your own strength. For a long time, Coren Pharmaceutical was interested"show weakness":2006Almost every day before 2000, enterprises announced that they were going to3Wipe out the company within a month. This is the intention of Coren Pharmaceutical Co., Ltd., only with the help of the arrogance, impetuosity and paralysis of competitors can they grow up secretly.

The time has come.2000In #, China's infusion industry was faced with unprecedented changes-forced by the state.GMPAccording to the certification, a large number of domestic infusion production enterprises and hospital preparation rooms that did not meet the requirements were suspended and closed within the prescribed time limit. For a time, the supply chain suddenly collapsed, and there was a huge demand black hole in the infusion market, and all the enterprises that met the conditions for infusion production could not meet the needs of the market no matter how much overtime they worked. All infusion production enterprises in the country can feel the degree of hunger and thirst in the market without any research.

While other competitors in the industry are still discussing step by step how long it will take to recover the cost of acquiring a company to do research, meetings, and write plans, Curran is not here.6Within a period of six months, it will be purchased with a lease.3Enterprises have been brought into the system, and their production capacity has been raised from the original tens of millions of bottles to 200 million bottles in a short period of time, becoming one of the first group army of large infusion in China. There have been internal differences of opinion on this situation. "all the mergers and acquisitions in that year, I called it shooting first and aiming later." 'There is no time to wait, 'Liu said in an interview with this newspaper. "in this case, if we hold another meeting to discuss the feasibility, we will miss the opportunity."

2.2 Asking for living space from innovation

2003At that time, glass bottle infusion was the most commonly used in China, and glass bottle was semi-open during infusion. All pathogenic microorganisms harmful to human body may enter the blood vessels with the air, resulting in infusion pollution. After the outbreak of SARS, the "soft bag" infusion products of fully closed infusion products are in short supply. However, health care workers generally report that "soft bags" are not convenient for needling and upright placement.Liu Xin decided to solve the problem.

2007年，CorenVertical bag infusion can be industrialized and successfully listed on the market.，A steady stream of orders eventually made Colin stand out from the infusion competition.

2、Acquisition of Stone four Pharmaceutical Group, establishing the absolute leader of large infusion

Coren Pharmaceutical Industry's dedication to Stone four drugsStarting in 2012.

　　On December 29, 2012, Coren Pharmaceutical announced that the wholly-owned subsidiary Coren International intends to transfer 180 million shares held by Junlian and Zhonghua Pharmaceutical respectively for HK $525 million. After the completion of this transfer, Coren International will also purchase Lijun International shares through the open market and other legal means with a total capital of no more than HK $1.413 billion and a total holding of no more than 30 per cent of Lijun International's public offering shares. The total is 2.463 billion yuan.

However, the HKEx believes that Coren Pharmaceutical and the above two companies may be acting in concert, and the reasons for triggering a full takeover in the futureThe acquisition was rejected in November 2013.

But Colin Pharmaceutical still hasn't given up."Stone four drugs". On June 5, 2014, Lijun International announced that it had been informed by its major shareholder, Junlian Industrial, that it planned to sell 515 million shares, 110 million shares and 145 million shares to a third party, the Group's major shareholder and director qu Jiguang, and independent enterprise investors at a price of 2.75 yuan per share. A total of about 770 million shares, accounting for about 26.28% of the issued share capital of the group, cashed out about 2.117 billion yuan. The price of 2.75 yuan per share is 3.08 yuan higher than the previous closing price, a 10.71% discount. Coren Pharmaceutical 398 million took over 145 million shares, accounting for 4.96 per cent.

Since then, Coren Pharmaceutical Co., Ltd.In December 2015 and March 2016, the market increased its holdings by 2.3 million shares and 1.868 million shares respectively, increasing its shareholding ratio to 10.02%. On October 19, 2016, the company increased its holdings of 6.93 million shares of Stone four drugs at a cost of 18.69021 million Hong Kong dollars, with an average transaction price of 2.697 Hong Kong dollars, with a maximum transaction price of 2.72 Hong Kong dollars. After the change, 403.05 million shares are held, accounting for 14.17% of the issued shares of the company.

For Coren Pharmaceutical's shareholding, the person in charge of Stone four Pharmaceutical has publicly explained that the cooperation between the two sides is a combination of strong and strong, and Stone four Pharmaceutical can make use of the relevant resources of Coren Pharmaceutical Industry to expand its market share and scale. According to the data, with the entry of Coren Pharmaceutical Industry, the production capacity and economies of scale of Stone four drugs have been greatly released.In the first half of 2016, Shi Siyao has 17 large infusion production lines, with a total production capacity of 1.6 billion bottles (bags).

With the continuous increase of Coren Pharmaceutical Co., Ltd., its shares account for the issued share capital of Stone four Pharmaceutical Group.20.0497% of the total share capital of 2.847 billion shares as of November 14, 2017. at the same time, the company will recommend directors to Shisiyao Group in accordance with relevant laws and regulations. This means that Coren Pharmaceutical will have a say in the business decision-making and management of the Stone four Pharmaceutical Group.As ofAccording to the 2018 semi-annual report, Sichuan Kelun Pharmaceutical Co., Ltd. owns 19.18% of Shisi Pharmaceutical Group and appoints a director.

3Big infusion absolute leader, striding into parenteral nutrition

At present, the company is the absolute leader of the domestic infusion industry, although the company's market share exceeds 40%However, the industry concentration is still on the rise.

With the deepening of the supply-side reform of the pharmaceutical industry, the survival of small enterprises will be difficult to maintain, and the industry concentration will be further improved. The phenomenon of concentration in mature markets in Europe, America and Japan is very obvious, with a small number and large scale of infusion production enterprises. For example, Baxter in the United States occupies the whole United States. 80%In Europe, the large infusion market is basically occupied by four major companies: Fresenius, Belan, Baxter and Malfasia.

The company continues to take the route of softening and plasticizing in the packaging materials. at present, the proportion of glass bottles and plastic bottles is still high, about55%New packaging materials such as soft bags and upright bags account for about45%And the utilization rate of new packaging materials in the United States has reached90%, Europe for70%At present, the company's gross profit margin of plastic bottles is much lower than that of plastic bottles.50%The gross profit margin of new packaging materials such as erect bags is60%Above. In terms of the types of infusion, the company has actively entered the field of parenteral nutrition. So far, the company has been approved with the first imitation qualification for a variety of two-chamber bags and three-chamber bags for nutritional transfusion. the current market scale of nutritional infusion is larger than that of the current market.100100 million, mainly occupied by foreign enterprises, we believe that in the context of import substitution, nutrition infusion will become a new growth point of the company's infusion business.

WithWith the demand for GMP update in January 2018, it is expected that more small businesses will withdraw and the industry concentration will be further increased. The large infusion market has a steady growth rate of 2%, and the number of beds in China's medical and health institutions has grown at a compound growth rate of 6.9% in the past three years. It is conservatively estimated that the number of bottles and bags will grow slowly at a rate of 2%. By 2021, the annual consumption will reach about 11 billion bottles per bag. Taking into account the increase in prices, it is predicted that the consumption of the large infusion industry will grow at an average rate of 5%. (Guoxin Securities)

The barrier of large infusion industry is high, mainly in four aspects: policy, capital, technology and channel. At this stage, the top three of the domestic industry (Coren, China Resources Shuanghe, Stone four drugs) account for 70%, and the market is constantly concentrated.It is expected that in five years (2022) market concentration is expected to increase to 95%.

Revenue scale of listed companies in large infusion field:

三、Eight years of hard Anti-Japanese War finally became the leader of antibiotics.

1The eight-year long March ushered in the harvest period, and the five advantages established the leading position of domestic antibiotic intermediates in Chuanning.

From Coren's description of the Yili Chuanning antibiotic project, it is not difficult to see that the project is of great significance for Karen Pharmaceutical to open up the whole antibiotic industry chain.

"the first phase of the Yili Chuanning project was officially put into production after passing the environmental protection acceptance on April 16, 2014. it was prior to the trial production stage, while the second phase of environmental protection was under construction in 2014. the low capacity utilization rate of the whole year resulted in a loss of 57.3339 million yuan in 2014."

"the production capacity of Yili Chuanning was released in the first half of 2018 and reached full production in the first half of 2018, with operating income of 1.645 billion yuan, an increase of 69.69% over the same period last year, and a net profit of 350 million yuan, an increase of 548.06% over the same period last year."

Chuanning Biology is the core body of the company's layout of upstream intermediates of antibiotics.2011年 4 A phase has been laid out and put into production in the eight years since the start of construction in March.3000 Intermediate of erythromycin thiocyanate and secondary penicillin5000 吨 6-APA、3000 Tons of penicillin industrial salt, and3000 Ton cephalosporin intermediate7-ACAIn the medium and long term, Chuanning has five advantages in scale and products, environmental protection, resources, foreign trade, organization and manpower, which is expected to help it occupy the leading position of domestic antibiotic intermediates.

2Under the new normal of environmental protection and high pressure, the three core varieties of Chuanning biology are expected to make a stable contribution.6-8 Net profit of 100 million yuan.

① penicillin intermediate--6-APAThe pattern is highly concentrated, considering that the company's penicillin industrial salt is basically used for self-use (average per2 Tons of penicillin industrial salt can be produced1吨 6-APA），则 3000 Ton penicillin industrial salt discount contract1500 吨 6-APAAccording to the total number of creatures in Chuanning6500 吨 6-APAOutput,185 元/ kgIt is estimated that the company6-APAThe annualized net profit is expected to reach2.87 About 100 million yuan

② erythromycin thiocyanate-serious supply shortage, we expect the main supplier Ningxia Qiyuan to complete the environmental protection transformation will be at least2019 In the second half of #, the shortage of erythromycin thiocyanate was still serious on the market.2019 年 Q1 The prosperity and quotation of erythromycin thiocyanate are expected to continue to improve, with the company3000 Ton output,465 元/ kgAs a benchmark, the annualized net profit of erythromycin thiocyanate is expected to reach5.3 About 100 million yuan.

③ 7-ACA-- the pattern is relatively scattered, major suppliers are in full supply, and prices are expected to remain stable without incremental capacity; at present7-ACAIt is a weak link in the cost advantage over competitors in the Chuanning project. Although the price fluctuates slightly, it is not the main profit contribution point of Chuanning.3000 Ton output,440 元/ kgMeasure as a benchmark7-ACAThe annualized net profit is expected to reach0.7 About 100 million yuan。

Fourth, eat the bowl and watch the pot: focus on innovation

The company in 2012 In the same year, Wang Jingyi left Qilu to join Coren, and the company introduced in the following years.100 The rest of the leading talents with rich experience in international research, the main production base has set up R & D and innovation teams dominated by doctorates and masters, and the company has attracted1000 A number of doctors and masters have joined in to create a2000 A scientific research team with a high scientific level, a strong will to fight and in line with international standards.

In terms of generics, the company has about 340 Project on domestic generic drugsBEThe project currently has a total of84 Item, completedBEAnd equivalent21 Item, the rest of the plan will be completed within three years, and the consistency evaluation of injection will be arranged in advance. In terms of innovation, small molecules are being studied.40 Item, covering tumor, liver disease, anesthesia, analgesia and other fields.4 项 INDIn the study of targets21%The project is the clinical target of unfinished phase Ⅱ.(fast follow-on); begin to intervene in preclinical targets this year(fist in class)In proportion18%. In the field of biological macromolecules, it is under research.30 项，INDDeclare5 Item, approved5 项；A140 Enter the clinical Ⅲ phasePD-L1Initiation of clinical Ⅱ phaseHER2-ADCStart the Sino-American phase Ⅰ clinic. In terms of drugs in the new drug delivery system, about20 A new drug delivery system project was established, in which paclitaxel (albumin-bound type)BEIt has been completed, irinotecan liposome and aripiprazole long-acting injection are in clinical stage.。

Research and development achievements of Coren Pharmaceutical Industry:

Innovative drug research and development:Cut offOn December 31, 2018, eight innovative drugs of the company have entered the clinical stage. throughout 2018, innovative drugs such as recombinant human thrombopoietin-like peptide-Fc fusion protein, peripheral κ receptor agonist KL280006, innovative small molecule JAK inhibitor KL130008, KL070002 capsule, antibody coupling drug A166 and VEGFR2 monoclonal antibody have been approved clinically, covering colorectal cancer, lymphoma and other malignant tumors. Involving the three hot targets of EGFR, PD-L1 and HER2, among which A140 cetuximab is the most advanced similar drug. At present, the third phase of clinical recruitment has begun. It is expected to complete the third clinical phase and report for production in 2020, becoming the first innovative drug approved to be put on the market in Coren Pharmaceutical Industry. The peak sales are expected to reach about 700 million yuan, and the cash-out period for innovative drug achievements of the research institute is coming soon.。

The number of approved consistency evaluation is among the highest in the industry.：Coren is in the first echelon of the progress of consistency evaluation, and the approved varieties reach 6 Item. Cut off2018 年 12月 31 At present, among the top 10 enterprises ranked by consistency evaluation variety data, Colin ranks fifth, and there are6 Through the consistency evaluation, the varieties approved were products for the treatment of depression and infection, of which escitalopram oxalate and citalopram hydrobromide tablets, metronidazole tablets and tinidazole tablets for anti-infection were the first to pass.。

Coren Pharmaceutical used to be9Annual cumulative R & D investment40.23100 million yuan, Hengrui Medicine in the past9Annual R & D investment84100 million yuan, Haizheng invested in research and development.50100 million yuan. As the leader of second-tier medicine, Coren Pharmaceutical can also be regarded as the leader among the representatives of the new forces of second-tier innovative drugs.2017The annual R & D expenditure ranks first.4名。

五、Looking at Colin from a financial point of view

2014-2015In 2000, the price of Coren pharmaceutical products dropped, and the sales volume2015In 2000, there was no large growth, and the performance was negative. At the same time, due to increasing investment in R & D and fixed assets year by year, income increases while profits grow slowly.

Without smoothing R & D expenses, only add back depreciation and net profit margin2013Ten years ago in20%Above2013After 2000, R & D expenses continued to increase, and the financial interest expenses caused by loans caused by large-scale investment in fixed assets continued to increase, affecting profitability. At the same time, a large part of the company's traditional large infusion business is the low-end business with low gross margin, and the proportion of therapeutic infusion is relatively low. (the purpose of purchasing the shares of Shisiyao Group is to obtain high-end infusion varieties.)

Source:WindInstitute of Information and Research

Source:WindInstitute of Information and Research

In order to further obtain more profit cake, while maintaining the advantage and position of the traditional main business, Coren Pharmaceutical Co., Ltd. has increased its R & D investment year by year and made continuous progress in the field of generic drugs and innovative drugs, making the proportion of non-infusion business reach.39%I believe that in the future2In 2000, the proportion of non-infusion business will reach50%. In particular, the full production of Yili Chuanning antibiotic raw material intermediate project has accelerated the development of non-infusion business.

Source:WindInstitute of Information and Research

It is obvious that the long-term growth of Coren Pharmaceutical Industry will be driven by non-infusion business. Coren's continuous R & D intensity is relatively strong, and the number of R & D personnel reaches2200People, the team is stable, generic drugs are fruitful, and innovative drugs are about to enter the harvest period.

Colin has invested in the Chuanning project in Yili.55He also invested 100 million yuan in the acquisition of shares in Shisiyao Group.20As well as the continuous increase in R & D investment and other asset construction and foreign acquisitions over the years, interest-bearing liabilities have reached77.57100 million yuan. With the end of large-scale fixed asset investment, capital expenditure will be greatly reduced in the future, especially the new Yili Chuanning project every year.7-8A profit of 100 million yuan. The future of Coren Pharmaceutical Industry5Enter the debt repayment cycle in # and repay it annually.14100 million computing (2018Annual deduction of depreciation8-9100 million yuan, forecast net profit and11.6-13.8100 million), less than6The interest-bearing liabilities can be fully settled in two years.

Coren Pharmaceutical's growth is mainly internally driven, rarely from the outside, and the total goodwill is less than2Billion yuan, foreign mergers and acquisitions are very few, except in the early stage. Large-scale fixed asset investment has laid a solid foundation for Colin's future growth.

Due to the reform of the two-vote system, VAT invoices changed from low to high, resulting in profits given to the sale as expenses directly into the financial statements, due to the expansion of the scale of sales, the company's management expenses have decreased. It is expected that the future sales expenses will be stable30%Nearby, the rate of financial expenses will decline year by year.

On the whole, with the end of the investment period of fixed assets, future depreciation expenses and financial expenses enter a downward cycle.6It can be settled in a year.77Interest-bearing liabilities of 100 million yuan, more than5The continuous development of non-infusion business brings new growth, infusion develops from low-end to high-end, gross profit margin is improved, the company has a broad moat in the field of infusion, and high-intensity R & D investment is driven in generics and innovative drugs. especially with the long-term development of biological drugs, the future prospect of Coren Pharmaceutical will become brighter with the arrival of the aging era.

五、Prediction of the future business performance of Karen Pharmaceutical Co., Ltd.

Legal statement: this article is only the author's personal study notes, not as any investment opinions or suggestions, and is not legally responsible for the consequences of any economic behavior. Please be aware.