LUYAN PHARMA(SZ:002788)2022-12-04 10:50Company Overview - Lu Yan Pharmaceutical Co., Ltd. has established a leading position in the pharmaceutical distribution market in Fujian Province, responding well to the province's medical reform policies [3] - The company primarily focuses on pure sales, maintaining stable gross margins, with retail pharmacy margins ranging between 20%-30% [4] Market Dynamics - The "Two Invoices System" was piloted in Fujian in 2009 and expanded nationwide by 2018, significantly impacting the competitive landscape of pharmaceutical distribution [3] - The market is expected to consolidate further, with regional and national leaders gaining more terminal resources, thereby squeezing the survival space of smaller distributors [3] Retail Expansion - The company plans to continue expanding its retail pharmacy network in Fujian, with a current total of 221 direct-operated stores, including over 70 DTP pharmacies [4] - Future retail expansion will focus on new store openings and maintaining a "wholesale-retail integration" business model [4] Geographic Expansion - Since 2017, the company has expanded its distribution network outside Fujian, focusing on Sichuan, Jiangxi, and Hainan, with 17 companies in Sichuan and 10 in Jiangxi [5] - Revenue growth in Sichuan and Jiangxi exceeded 50% in 2019, with plans to enhance competitiveness through resource integration and leveraging the "Two Invoices System" [5] Medical Device Sector - The medical device segment is a key growth area, with a 94.11% year-on-year increase in 2019, driven by the nationwide implementation of centralized procurement [6] - The company aims to further expand its market share in this sector [6] Technological Advancements - The company has established the Kangyuan Research Institute to explore the application of artificial intelligence in medical diagnostics, focusing on cardiovascular diseases [6] - Progress has been made in smart decoction and new business models in healthcare [6] Financial Strategies - The company has not engaged in refinancing since its listing and primarily relies on bank financing, with plans to increase direct financing efforts in the future [7] - The company is actively promoting its share placement, which has been delayed due to the pandemic [6] Logistics Development - The pharmaceutical logistics center in Fujian is well-equipped, with centers in Fuzhou and Putian completed, and a modern logistics center in Xiamen expected to be finished by June 2020 [7]