The Sustainability Of Yahuilong'S IPO Agency Business Is Still To Be Solved

After an extension, on August 28, Shenzhen yahuilong Biotechnology Co., Ltd. (hereinafter referred to as "yahuilong") finally accepted the deliberation of the municipal Party Committee on the science and technology innovation board.

Yahuilong is mainly engaged in the R & D, production and sales of in vitro diagnostic instruments and supporting reagents based on chemiluminescence immunoassay, as well as the agency sales of some non self-produced medical device products.

In vitro diagnosis (in vitro It is convenient to judge the quality and quantity of a substance outside the body (IVD) by detecting the quantity and quantity of a substance outside the body (IVD).

Before that, Mindray medical, a leading enterprise in China's IVD industry, once became the "gem's biggest player in market value" after landing on a shares. It ranks first in domestic IVD market, but most of this market is still occupied by foreign brands, and domestic brands still have a long way to go.

Nowadays, more domestic counterparts such as yahuilong are gradually stepping into the stage of capital market. However, the analysis of its prospectus shows that there are still many challenges.

Agency products account for nearly half of the total

According to the prospectus, since its establishment in 2008, Asia Huilong has been developing its own in vitro diagnostic products.

As an enterprise mainly engaged in in in vitro diagnostic products, yahuilong has not been absent from the fight against the new crown epidemic.

According to the data, during the outbreak of the new coronavirus, yahuilong successfully developed a high-throughput new type of coronavirus IgM and IgG antibody detection kit and supporting products with independent intellectual property rights, and successively distributed to dozens of hospitals in Hubei and the whole country, including Wuhan huoshenshan hospital, Tongji Hospital Affiliated to Huazhong University of Science and technology, Asian heart disease hospital, central theater general hospital, Hubei Provincial People's Hospital, etc The first-line key medical institutions for epidemic prevention and control donated new coronavirus detection products.

During the reporting period, yahuilong has a good growth. From 2017 to 2019, yahuilong's operating revenue was 530 million yuan, 729 million yuan and 877 million yuan respectively, with an annualized compound growth rate of 28.65%; the net profit attributable to its parent company was 5.8946 million yuan, 38.0334 million yuan and 107.5445 million yuan, respectively, with an annualized compound growth rate of 327.14%.

However, the prospectus shows that yahuilong's self-made products account for a relatively low proportion of the operating income.

From 2017 to 2019, the revenue of self-produced products of yahuilong was 139 million yuan, 246 million yuan and 448 million yuan respectively, accounting for 26.25%, 33.78% and 51.12% of the main business income; the income of agency products was 389 million yuan, 476 million yuan and 414 million yuan, accounting for 73.36%, 65.30% and 47.20% of the main business income respectively.

Due to the low and large proportion of business gross profit margin of yahuilong's agency for other brand products, the company's comprehensive gross profit margin was also reduced on the whole. During the reporting period, the comprehensive gross profit margin of yahuilong was 36.63%, 39.59% and 50.68%, while the average value of comparable companies in the same industry was 62.31%, 61.08% and 61.29%, respectively. The comprehensive gross margin of yahuilong was far lower than that of the same industry The average of the company.

From the perspective of trend, the proportion of self-made product distribution income has increased year by year, and yahuilong also explained in the reply.

It said that the proportion of sales revenue of self-made products has increased year by year, mainly because the company's self-made products adopt the sales model of "distribution oriented, direct sales supplemented". The company mainly adopts the direct sales mode for Shenzhen, Dongguan, Zhongshan, Zhuhai customers and a few domestic key customers, while other domestic customers and overseas customers mainly adopt the distribution mode.

"The sales model adopted by the company is in line with industry practice. The end users of IVD industry are mainly medical institutions at all levels, with a large number of users, wide regional distribution and strong professionalism. In the development of the industry, the division of production and sales has gradually formed, and a large number of dealers specializing in IVD products have emerged. From the perspective of comparable listed companies in the same industry, the distribution mode is the main sales mode. " Yahuilong said.

At present, the sales of overseas brand products mainly include Beckman, bidi and wofen. The impact and Countermeasures of industry policy changes, such as "two vote system", "one vote system" and volume purchase, on the company's agency business, and the sustainability of agency business has also attracted the attention of Shanghai Stock Exchange.

Yahuilong replied that with the promotion of the reform of the medical and health system, measures such as "two vote system", "one vote system" and "procurement with volume" may be gradually extended to the field of in vitro diagnostic reagents. The promotion of relevant policies, on the one hand, is conducive to reducing the difficulty of issuers' promotion into medical institutions, improving the predictability of the issuer's production and operation, and facilitating the issuers to focus on R & D and technological innovation. On the other hand, purchasing with volume may lead to a downward trend in the price and gross profit rate of the issuer's products.

Independent director with eight duties

In addition to the business continuity to be confirmed, the qualification and practice ability of an independent director of yahuilong is another focus of attention from the outside world.

The independent director of a listed company refers to the director who does not hold any other post except director in the company, and has no relationship with the listed company and its major shareholders that may hinder the independent and objective judgment.

As we all know, the purpose of setting up independent directors is to objectively supervise the management, safeguard the rights and interests of small and medium-sized shareholders, and prevent insider control. Based on this principle, it is pointed out in the guidelines for the performance of independent directors of listed companies that "independent directors should ensure that they have enough time and energy to effectively perform their duties. In principle, they can concurrently serve as independent directors in at most five listed companies ”。

One of yahuilong's independent directors is actually the sole director of eight enterprises.

According to the prospectus of yahuilong, Zhang Shunwen, its independent director, is currently not only an independent director in yahuilong, but also in Shenzhen mingdiao Decoration Co., Ltd., Shenzhen Special Economic Zone Real Estate (Group) Co., Ltd., Shenzhen Yatai International Construction Co., Ltd., Shenzhen high tech Investment Group Co., Ltd., and neusberg guangsai (Guangdong) Biotechnology Co., Ltd Ltd., Yidong Electronic Technology Co., Ltd. and Shenzhen weimaisi new energy Co., Ltd. serve as independent directors.

Then, whether Zhang Shunwen, the independent director of yahuilong, has eight duties in violation of the relevant provisions, and whether he can fulfill his duties as an independent director and play a supervisory role in the listed companies?

"The director of Huilong had to appear in a series of temporary changes before he took office." An intermediary close to yahuilong disclosed to the 21st century economic news reporter that on the eve of yahuilong's IPO application, an independent director named Zhou Yang suddenly applied for resignation for personal reasons during his term of office. At this time, it was the end of March 2020. In order to submit the IPO application in late April 2020 according to the original plan, yahuilong temporarily found it in early April 2020 Zhang Shunwen, partner of Shenzhen Branch of Lixin Accounting firm, who has rich experience in auditing, replaced Zhou Yang as independent director.

In fact, Zhou Yang was not an independent director of yahuilong who voluntarily resigned during his term of office in more than a year.

According to the 21st century economic report, Li Weidong, the former independent director of yahuilong, also submitted his resignation to the board of directors for personal reasons on March 21, 2019. It was not until June 28, 2019, three months later, that the company elected another natural person Liu Dengming as an independent director to replace Li Weidong at the 2018 annual general meeting of shareholders.

So, in the face of doubts about Zhang Shunwen's position as a multiple independent director, how will yahuilong ensure his due performance? Is there a plan to adjust directors as soon as possible after listing?

The 21st century economic reporter sent a telegram to yahuilong on August 26, but no reply has been received up to the time of publication.