LUYAN PHARMA(SZ:002788)2024-12-19 07:51Group 1: Company Overview - The main business of Luyuan Pharmaceutical includes the distribution of pharmaceuticals, traditional Chinese medicine pieces, and medical devices, with a focus on public medical institutions as clients [2]. - The company has expanded into Sichuan, Jiangxi, Hainan, and Hong Kong since 2017, achieving full coverage of secondary medical institutions in these provinces [2]. - The retail module is primarily concentrated in Fujian Province, with a total of 279 direct-operated stores [2]. Group 2: Core Competencies - The company emphasizes compliance in operations, with five consecutive years of accurate information disclosure without corrections or inquiries, which is seen as essential for long-term growth [3]. - The company has a high penetration rate in Fujian, achieving full coverage of medical institutions, which provides a competitive advantage in responding to market demands and customer service [3]. - Future core competencies will focus on three capabilities: pharmaceutical service capability, access capability, and terminal marketing capability [3]. Group 3: Development Strategy - The company is building a new development pattern of "one platform + two drivers," focusing on the Luyuan health business as a platform and modernizing traditional Chinese medicine and new technology industries as drivers [3]. - The modern Chinese medicine production project in Bozhou, which started construction in February 2022, aims to create a high-quality production and sales platform for traditional Chinese medicine [3]. Group 4: Market Trends and Challenges - The traditional Chinese medicine market is currently fragmented, with only a few companies achieving annual sales exceeding 1 billion [4]. - The market is expected to become more standardized and scaled due to increasing regulatory requirements and transparency in procurement [4]. - The company plans to expand retail operations outside Fujian to align with its wholesale business development needs and comply with dual-channel requirements [4]. Group 5: Financial Insights - Differences in gross profit margins across provinces are attributed to varying policies and commercial conditions, with Fujian having lower capital occupation due to better implementation of unified medical insurance settlements [4]. - The net profit margin difference between Fujian and other provinces is not significant, despite variations in gross profit margins [4].