Xinlitai has withdrawn 283 million yuan of goodwill impairment due to the failure of centralized support mining

in December 12th, novel coronavirus pneumonia (Limited by Share Ltd), Shenzhen’s announcement of the announcement of the announcement of the 002294.SZ, was affected by the new crown pneumonia epidemic and the November national organization’s support for the coronary stent. The wholly owned subsidiary of Suzhou Huan Chen medical technology limited company (hereinafter referred to as “Suzhou Huan Chen”) has been adversely affected by the future operating earnings and is not favorable. The sustainability of the impact is uncertain. As a result, xinlitai will withdraw 283 million yuan of goodwill impairment from Suzhou Huanchen. < / P > < p > after the withdrawal, the book value of Suzhou Huanchen’s goodwill is 0 yuan. The book value of xinlitai’s goodwill is 87 million yuan. At the same time, xinlitai increased the capital of Shenzhen xinlitai Biomedical Engineering Co., Ltd. (hereinafter referred to as “biomedical”) with the equity of Suzhou Huanchen. After the completion of the capital increase, biomedical will become the controlling shareholder of Suzhou Huanchen. < / P > < p > does Suzhou Huanchen have a plan to make up for this part of the market share after the loss of bidding? What is the layout logic of xinlitai in terms of medical devices? In response to the above problems, a reporter from China business daily wrote to xinlitai securities department by telephone on December 16. As of press release, xinlitai has not given a reply. However, on the evening of December 18, the Secretary of xinlitai sent a short message to respond to the reporter: “in fact, the announcement has explained the situation, and the coping strategies are not convenient for external expression, and we are still demonstrating.” According to Tianyan survey, Suzhou Huanchen was founded on July 25, 2008 with a registered capital of 22.826 million yuan. Suzhou Huanchen’s main product is “alpha stent drug-eluting coronary stent system”, and obtained “medical device registration certificate” in 2015. Among them, the operating revenue in 2017 and January to March 2018 were 14.803 million yuan and 5.1309 million yuan respectively, and the net profit was – 13.691 million yuan and – 1.7348 million yuan respectively. < / P > < p > although the performance of the above assets is not good, xinlitai emphasizes the synergy between the above assets and its own business when talking about the purpose of the transaction. According to the announcement, after xinlitai’s acquisition of 100% equity of Suzhou Huanchen, “alpha stent drug-eluting coronary stent system” will cooperate with xinlitai’s Taijia, taijianing and other excellent products to provide a comprehensive treatment plan for PCI operation and enhance xinlitai’s position as a comprehensive solution in the cardiovascular field. < / P > < p > as xinlitai wishes, Suzhou Huanchen has completed the expansion and transformation of its production line. The annual semi annual report of its product line shows that in the field of medical devices, Suzhou Huanchen’s “alpha stent drug-eluting coronary stent system” added 35 new implantation hospitals in the first half of the year, with a year-on-year increase of more than 160%. The overall revenue of medical devices was 33.6651 million yuan, accounting for 1.43% of the company’s revenue. < / P > < p > according to the financial report of 2019, the fixed assets, construction in progress, intangible assets (patents, proprietary technology), other non current assets and goodwill of drug-eluting coronary stents produced by Suzhou Huanchen are regarded as an asset group, and the present value of net cash flow in the next five years after the statement date is predicted. The sales growth rates from 2020 to 2024 are 69.99%, 32.01%, 29.39%, 15.08% respectively 10.00%。 < / P > < p > unexpectedly, in the second half of 2020, Suzhou Huanchen’s main product “alpha stent drug-eluting coronary stent system” lost its standard in centralized procurement, which means that the market share will shrink sharply. < / P > < p > according to the public information, on October 16, 2020, the national high value medical consumables joint procurement office issued the document of national organization for centralized procurement of coronary stents, which opened the prelude of nationwide procurement of high value medical consumables. The number of coronary stents purchased in the first year was as high as 1074700, accounting for about 70% of the annual consumption of coronary stents in China, close to the total consumption of drug loaded co Cr alloy coronary stents in China. According to the results of the bidding announcement, the median price of the proposed winner is about 700 yuan, which is lower than the expected price of about 1000 yuan. But xinlitai Suzhou Huanchen’s product quotation is 920 yuan, has not been shortlisted. < / P > < p > in fact, from the perspective of performance composition of xinlitai, in 2019, 98.46% of xinlitai’s revenue comes from the pharmaceutical manufacturing industry, and 1.54% of xinlitai’s revenue comes from medical devices. Although Suzhou Huanchen’s contribution to xinlitai’s performance is not big, the goodwill behind it has become another factor of xinlitai’s performance fluctuation. < p > < p > on December 12, 2020, xinlitai said in the announcement on the provision for goodwill impairment that xinlitai made a provision for goodwill impairment of 283 million yuan for Suzhou Huanchen, and the impairment loss was included in the company’s consolidated profit and loss in 2020, and the company’s net profit attributable to the parent company in 2020 decreased by 283 million yuan. < / P > < p > as for the provision of goodwill impairment, xinlitai mentioned that the sales mode of alpha stent? Drug-eluting coronary stents of Suzhou Huanchen is to obtain the admittance qualification of hospitals in various provinces and cities through provincial and municipal bidding and secondary bargaining. The company sells its products directly to agents, who sell them to hospitals. As a result, it has obtained the admittance and sales license of 29 provinces (autonomous regions and municipalities) and 1 hospital without network, and the products have entered 247 hospitals.

however, novel coronavirus pneumonia and the November 2020 national organization’s support for coronary stent were not successful. The future operating earnings of Suzhou Huan Chen were adversely affected, and the sustainability of the adverse effects was uncertain. < p > < p > in 2019, xinlitai core product Taijia (drug common name: clopidogrel bisulfate tablets) was eliminated from the second batch of drugs “4 + 7 with volume procurement”. Since then, the performance of xinlitai once declined. < / P > < p > relevant data show that the operating revenue of xinlitai decreased from RMB 4.652 billion in 2018 to RMB 4.47 billion in 2019, and the net profit also decreased significantly. The net profit of xinlitai in 2018 was RMB 1.458 billion, and only RMB 715 million in 2019. < p > < p > in the first half of 2020, xinlitai achieved an operating revenue of 1.536 billion yuan, a year-on-year decrease of 34.81%, and its net profit attributable to its parent company was 197 million yuan, a year-on-year decrease of 68.92%. In the third quarter of 2020, the total operating revenue was 2.13 billion yuan, a year-on-year decrease of 40.1%, and the net profit attributable to the parent company was 270 million yuan, a year-on-year decrease of 62.7%. < / P > < p > in this regard, there are many investors who question why the operating revenue and net profit of xinlitai are still declining. Xinlitai said frankly that due to the influence of the purchasing policy with volume, Taijia, the company’s main product, failed to win the bid in the surrounding area, and the unit price of the product further decreased, resulting in the decrease of its income. In addition, the novel coronavirus pneumonia epidemic situation, resulting in the letter of the brand (commodity name: alisartan ester) revenue growth slowed significantly, Teganin (drug generic name: Bivalirudin For Injection) revenue declined. < / P > < p > in order to cope with the impact of centralized purchasing, xinlitai is seeking new performance support points to change the past situation of “single product takes the world”, and this layout has been launched several years ago. < / P > < p > in order to break through the bottleneck of single product structure, on the basis of focusing on the cardiovascular field, xinlitai actively extends to hypoglycemic, anti-tumor and orthopedic fields, builds three innovative main lines of high-end prescription drugs, innovative biological drugs and medical device industry chain, and improves the layout and planning of R & D pipeline. However, far water can not save near fire. < / P > < p > Disclaimer: the purpose of this article reprinted by CNFC is to convey more information, and it does not represent the opinions and positions of CNFC. The content of this article is for reference only, and does not constitute an investment proposal. Investors operate on this basis at their own risk. < p > < p > Chinanet is a state key news website under the leadership of the Information Office of the State Council and the management of China foreign language publishing and Distribution Bureau. Through 11 versions in 10 languages, the website publishes information 24 hours a day. It is an important window for China to carry out international communication and information exchange.