In 2023, in an environment of many uncertainties, many industries will enter a critical period of transformation. Faced with the ever-changing market environment and demands, different pharmaceutical companies also gave different answers.
Among them, Jinhuo Pharmaceutical Group Co., Ltd. (hereinafter referred to as “Jinhuo Pharmaceutical”), which has been established for more than 20 years, has been successfully operating many well-known pharmaceutical products, including Kyoto Nianjian Honey Refined Kawakai Loquat Cream, which can be called “the light of domestic products.” In recent years, Jinhuo Pharmaceutical has also relied on its rich marketing strategies to meet market demand and transform it into its own growth vitality, achieve multiple breakthroughs, and lead the company through a good growth curve.
Profit attributable to owners has increased significantly67.5%
First, from a performance perspective, Jinhuo Pharmaceutical's2023Year-round performanceBrilliant.
Overall, with many popular national brands, Jinhuo Pharmaceutical still played a fundamental role in stabilizing performance this year, and each brand relied on different marketing strategies to achieve new growth. Among them, the company's many business segments achieved effective development during the year, enabling the company's multiple business segments to fully blossom, and multiple sectors to contribute more effectively to the company's performance.
According to WIND data, Jinhuo Pharmaceutical achieved annual revenue of 1,079 million yuan (RMB, same below) in 2023, up 12.6% from 958 million yuan in the same period last year. During the same period, the company implemented cost reduction and efficiency. The company's gross profit increased by 1.1% to 281 million yuan, and the profit attributable to owners was 38.96 million yuan, a significant increase of 67.5%.
Chart 1: Performance Chart
Data source: Company performance report, compiled by Gelonghui
The main business has gained new vitality, and multiple sectors are developing in parallel
Looking at the performance of various businesses, there are still many highlights behind Jinhuo Pharmaceutical's performance growth.
Among them, pharmaceuticalsproxyThe distribution business is the traditional main business of Jinhuo Pharmaceutical in 2023salesCNY7.35 billionYuan, compared to the same periodSignificant growth23.8%.
On the one hand, Jinhuo Pharmaceutical's strong sales network has become an important support for this round of sales boom.
As a business segment that Jinhuo Pharmaceutical has continued to cultivate for many years, the company has continuously made efforts to strengthen the market coverage of its sales network.Now covered418 cities, with nearly 100,000 single pharmacies, 120,000 chain pharmacies, 30,000 primary care institutions, nearly 20,000 clinics, and nearly 2,000 hospitals, in addition to coveragemultitudeSupermarkets and convenience stores. Combined with the company's marketing and sales traceability management system (SMART), it is finally possible to achieve accurate marketing strategies and sales management, more effectively and flexibly grasp market order requirements, and formulate accurate distribution strategies to ensure that products can be quickly put on the market to meet consumer needs.
On the other hand, in the face of changing market demand, Jinhuo Pharmaceutical is also actively expanding its new product pipeline to grasp market trends.
According to data from Zhongkang CMH, in the categories of physical pharmacies (including O2O), there was a rapid increase in nourishing health care such as qi and blood supplements. In 2023, sales of qi and blood supplements in the domestic retail market reached 6.77 billion yuan, an increase of 20% over the previous year. Facing the rapidly growing demand in the blood and blood products market, Shenzhen Jinhuolisheng Pharmaceutical, an affiliate of Jinhuo Pharmaceutical, not only produces American ginseng capsules, but also has a citronella demonstration planting base in Luhe. Jinhuolisheng Pharmaceutical is developing citronella essential oil products to cover more consumer groups. The activation of a series of its own brands and extended series of existing mature products, such as safflower stickers, are being promoted at an accelerated pace.
Moreover, Jinhuo Pharmaceutical also pays attention to product brand cultivation, in2023Passed various types during the yearbrandsimageVisageTo different consumer groups,Increase product awareness online and offlineAt the same time, attract new customer groups.
Take Kyoto Nenji-an as an example. In 2023, the product adopted a very aggressive marketing strategy to promote the brand on many popular TV shows. In addition to the title iQiyi's “Crazy Rush”, which has over 1 billion hits, the variety show “I Want to Sing with You” on Hunan TV, and the phenomenal urban drama “Blossoming Flowers” on the Tencent platform, which was advertised first in the series, the highest number of online broadcasts in a single day reached 145 million. Through multi-channel coverage, consumer awareness and recognition of products are deepened, thereby expanding market influence and brand value more effectively.
Meanwhile, for Jinhuo Brand Yimadazheng Safflower Oil, the company adopted a strategy of simultaneous online and offline promotion.online,Jinhuo Pharmaceutical uses short video platforms such as Douyin and Kuaishou to create a communication and interactive voice platform with young consumers for other drugs such as Jinhuo Brand Yimatazheng Safflower Oil, in a consumer-led way to drive product promotion. The offline company participated deeply in many events. Jinhuo Yimatazheng Safflower Oil participated as the designated topical medicinal oil for the competition, and the safflower oil massage service in the relaxation and stretching area of the competition was widely praised by runners. Through the above innovative marketing methods, consumers have been transformed from passive brand recipients to active brand participants and evangelists, and many consumers have received support for products.
Figure 2: Examples of promotion effects of Jinhuo Pharmaceutical products
Data source: Internet pictures, compiled by Gelonghui
While maintaining its leading position in leading products, Jinhuo Pharmaceutical is also promoting its high-quality drugs into a wider market.
For example, the world-famous cold drug Happiness Caudalin, which sells well in Europe and America, has been ranked No. 1 in sales in Hong Kong for 24 consecutive years, but in the past, it was not well known domestically. In 2023, Jinhuo Pharmaceutical was authorized to promote a three-year cooperation in the five provinces and cities of Shanghai, Henan, Anhui, Shaanxi and Gansu, and has successfully sold in the above regions. According to the company's plan, in the future, Jinhuo Pharmaceutical is expected to achieve sales leadership similar to that in Hong Kong by strengthening brand promotion.
It is worth noting that for the first time this year, Jinhuo Pharmaceutical carried out online sales through cross-border pharmaceutical e-commerce, bringing the cold medicine Puji anti-allergic granules from its agent to the domestic market. Jinhuo Pharmaceutical cooperated with pharmacy chains to develop prescription drug sales through OTC channels to distribute hospital customers. Yiye's brand awareness in the market was further enhanced, and sales also grew.
As the second largest business segment of Jinhuo Pharmaceutical, in an environment where society's demand for health is becoming increasingly strong, the company's health products and daily chemicals business achieved rapid growth in 2023，Achieved throughout the yearSales in RMB103 millionYuan, year-on-year increase7.9%.
For example, the number of first-class customers in the Hong Kong and Macau markets increased by more than 10% in 2023 by consolidating marketing channels and developing new channels with popular products such as Kangcule Probiotics, which sold the most in the US, Life's DHA series, and Carmex. Among them, Kangcule Probiotics has a stable sales channel in pharmacies such as Watsons, Wan Ning, SaSA, and Hong Kong Huaruntang in Hong Kong and Macau, and the repurchase rate has increased. Adult enhanced and female probiotics have become the main products. They are an important driving force for the growth of Jinhuo Pharmaceutical and health products, with a year-on-year increase of 46.6%.
In the online transaction process, Jinhuo Pharmaceutical uses data to understand customer behavior and preferences, and uses accurate and personalized marketing strategies to recommend products, promote, and content. Through various marketing activities such as repurchase referrals for members, especially old customers, membership rewards, and exclusive discounts when purchasing multiple boxes, e-commerce core channels have increased the conversion rate of products such as Kangcule Probiotics and Life's DHA.Within the yearAt the same time, the first in-depth cooperation was carried out with JD Health to carry out cross-category exchange activities, which successfully increased product exposure and conversion rates, optimizing the gross profit margin of online product sales.
Figure 3: Online Event Display
Data source: Internet pictures, compiled by Gelonghui
Furthermore, Jinhuo Health Home's overseas flagship store is one of the first batch of cross-border pharmaceutical e-commerce pilots. It carefully selects high-quality overseas pharmaceutical brands and products. The number of SKUs has reached more than 100, covering Hong Kong, Japan, the United States, Germany and Southeast Asia, including a total of 7 Jinhuo agents and independent brands. In 2023, the company and French company Innopharm will build a high-end French natural nutrition brand based on Europe's leading biotechnology and pharmaceutical advantages, using high-quality global raw materials and combining the latest scientific research results. According to reports, the Innopharm brand began in 1983, and the founder, Dr. Nori, has participated in formulation research and clinical trials for 40 years for many best-selling drugs in Europe and major health products such as celebrity oral nutritional supplements and cosmetics. At present, two high-end fish oils representing the ceiling (top) quality of fish oil have been developed and launched. They have a purity of up to 95%, high absorption rate and high ratio. They have many international quality certifications such as IFOS, FDA, FOS, HALAL, NSF, MSC, etc., and are on sale in 2024. In addition, the company is also speeding up the design of grape seed and coenzyme Q10 series products. Through a dual line layout at home and abroad, it will accelerate the enrichment of the company's health products product line and further promote the business sector's contribution to revenue.
The company's medical device business segment, with the recovery of the global economic environment, in particular the gradual increase in purchasing power in the European and American markets, the company's overall sales performance was ideal, and the sales target for the whole year was achieved. During the performance period, the company generated sales from the Medical Devices segmentCNY2.41 billion yuan.
Summarize
Over the past year, Jinhuo Pharmaceutical has continued to advance the strategic goals in the May 5 Strategy, and the company has moved forward around outstanding main business and diverse related development ideas. At the micro level, the company leverages its market advantages of holding many national brands to vigorously promote the development of health products, daily chemicals, medical equipment business, and other business segments, forming a parallel attitude, providing complementarity and support for the operational quality of the pharmaceutical agency distribution business, and creating diverse growth engines for the company in the future.
With the operation of the company's digital intelligence marketing platform and the effect of employee share incentives, the company's development has become more dynamic. According to the company's vision, 2024 will be an important year to accelerate cooperation with Southeast Asia and countries along the Belt and Road, strengthen product promotion in the European market, implement an overseas development path, and consolidate the global development landscape. As an investor, seeing national brand flags flying around the world is also worth looking forward to.