Watson Biotipped "Issued" Subsidiary 1.1 Billion

Zhao Kangjie, author of Hong Cai Finance

The “Shandong Vaccine Case” has been over for more than six months. The listed company Watson Biotech officially resumed trading today (October 12). Although the vaccine case did not cause much selling pressure on the stock price, this shocking national case The impact on the company is still continuing to ferment. Recently, Watson Bio released the "Summary of the Report on the Draft of Major Assets Sale and Related Transactions (Revised Draft)", stating that it is proposed to transfer the "involved" subsidiary to Derun Tianqing and Yuxi Woyun in cash transactions. A total of 85% of Shijie Biotech's shares, the total transaction price was determined to be 697 million yuan, after the completion of the transaction, Shijie Bio will also be removed from the Watson Biological Subsidiary.

In recent years, Watson Bio has been trying to integrate vaccine distribution companies across the country to build a vaccine distribution platform covering the whole country. The Shijie biology, which is a vaccine circulation platform, is an important part of it. According to estimates, Watson Bio has invested more than 1.1 billion yuan after the acquisition of Shijie Bio. Now, the divestiture of Shijie Bio does not only mean that Watson’s plan to build a national vaccine distribution platform has been blocked, and the investment of more than 1.1 billion yuan has been completely ruined, losing the important income source of Shijie Bio. The future development of Mori Bio is full of fog.

Encounter the "vaccine case" black swan

Performance appeared "Waterloo"

On October 11th, Yunnan Watson Biotechnology Co., Ltd. (hereinafter referred to as “Watson Bio”) published a number of announcements on “Summary of Major Assets Sale and Related Party Transactions (Draft) (Revised)”. The announcement shows that Watson Biotech intends to transfer 45% equity of its subsidiary Shandong Shijie Biological Pharmaceutical Co., Ltd. (hereinafter referred to as “Shijie Bio”) to Derun Tianqing in cash, and transfer Shijie Bio 40 to Yuxi Woyun. % equity, the total transaction price was determined to be 697 million yuan.

For the reason for the transfer of Shijie Bio, Watson Bio said in the announcement that there is still some uncertainty about the short-term impact of the “Shandong Vaccine Case” on the vaccine circulation industry. Watson Bio in the announcement of the "Shandong Vaccine Incident" case issued in March this year, the case suspects through the online exchange group and logistics express, the value of 570 million yuan of vaccines sold throughout the country, these vaccines and biological products Although it is produced by regular manufacturers, it is not transported and stored in accordance with relevant national laws. It may even cause side effects after injection. Some vaccines may cause the vaccinator to be disabled or die for life.

On the evening of March 21, the State Food and Drug Administration issued a notice indicating that nine pharmaceutical wholesale companies were the main responsibilities of the case, and the new three-board company Shijie Bio was listed. It is understood that the main business of Shijie Bio is the wholesale sales of vaccines. It was acquired by Watson Biotech, a listed company on the GEM, as early as 2013. Before the divestiture of Shijie Bio, Watson Bio holds 85% of the subsidiary.

After the announcement, Watson Biological suspended its self-examination. However, the "vaccine case" has produced a considerable negative impact on Watson's performance. On August 27, Watson Bio released the semi-annual report for 2016. The semi-annual report showed that Watson Biotech achieved operating income of 293 million yuan in the first half of this year, down 29.19% year-on-year; net profit attributable to shareholders of listed companies was -162 million during the reporting period. Yuan, down 141.19% year-on-year. In this regard, Watson Biology said in the announcement: "Due to the 'Shandong vaccine incident' in March and the country's changes in vaccine circulation policy, the sales of the company's agent vaccine products have been greatly affected during the reporting period."

Listed company stripped hot potato

Create a vaccine circulation platform plan abortion

The reason why Watson Biology is greatly affected by the “Shandong Vaccine Case” is that the “Jie Jie” involved in “the case” is the most profitable part of Watson’s overall profitability. From the perspective of business scale, the operating income of Shijie Bio in 2014 and 2015 was 480 million yuan and 740 million yuan respectively, accounting for 66.9% and 73.7% of the operating income of listed companies in the same period. The main contribution of Sen Bio's performance. This time, the painful divestiture of Shijie Bio, Watson Bio will also lose the most important source of revenue.

Under the influence of the vaccine case, Watson Bio has re-integrated its business, and its vaccine circulation platform built for many years has also been hit hard.

It is understood that Watson Bio has been trying to integrate vaccine circulation companies across the country in the form of acquisitions in recent years to build a vaccine distribution platform covering the whole country. As early as July 2013, Shijie Bio and Watson Bio signed the "Equity Transfer Contract". After Watson Biotech invested 300 million yuan to acquire Shijie Bio, it was regarded as the key company of the company's development of the vaccine platform business. At that time, the net assets of Shijie Bio was only 31.67 million yuan, and the purchase price was 8.47 times. This also shows that Watson Biotech has determined that it will become the core vaccine circulation platform.

After this, Shijie Bio purchased the Watson Biological Subsidiary Chongqing Benin, Ningbo Puno and Shengtai Putian for 350 million yuan, 300 million yuan and 163 million yuan in May last year. After the completion of the acquisition, Wo Mori Bio then injected Ningbo Puno, Shengtai (Putian) and Chongqing Bening into Shijie Bio. In addition, in early March this year, Shijie Bio also acquired 100% equity of Henan Jinding Pharmaceutical Co., Ltd. Accordingly, Watson Bio has invested at least 1.117 billion yuan in real money for the integration of Shijie Bio's vaccines and sales channels and sales capabilities of biological products. Now, with Shijie Biota, Russia’s investment of more than 1.1 billion yuan has been “slashed”.

Reluctantly "broken arms to save themselves"

Move left and right

Today, the behavior of the divestiture subsidiary is interpreted by the outside world as Watson's "broken arm self-help." Watson’s self-disrupting source of revenue is not only because of the short-term fermentation of the short-term event, but also the main reason why Shijie’s “restriction” is shackled.

After the “vaccination case” was revealed, Shijie Biotech and its subsidiary Shengtai Pharmaceutical were successively revoked by the food and drug supervision department for the “Pharmaceutical Management Quality Management Certificate” (GSP certificate), and subsequently revoked. The Pharmaceutical Business License has terminated its listing in the National SME Share Transfer System.

It is understood that GSP certification is a means for the drug supervision and management department to supervise and inspect the quality management of drug management enterprises in accordance with the law. It is to check and evaluate the implementation of the "Quality Management Standards for Pharmaceutical Products" by pharmaceutical companies and decide whether to issue them. The supervision and management process of the certificate. After the GSP certification certificate of the drug management enterprise is revoked, it shall not continue to engage in drug business activities; the enterprise that has been revoked the GSP certificate may apply for certification again after half a year according to relevant state regulations. On the other hand, this also means that Shijie is at least half a year. It is necessary to stop the pharmaceutical business activities.

On the one hand, Shijie Bio has contributed a lot to Watson's performance; on the other hand, the revoked license now also makes Shijie's biological stagnation. Perhaps it is also based on avoiding the impact on this year's full-year performance, so that Watson's creatures are screaming at the real-life creatures involved in the case.

After the stripping of Shijie creatures, where will Watson's biology go in the future? In the announcement, the company stated that after the transfer of Shijie Bio-equity, it will focus on and highlight the strategic focus of R&D and industrialization of “heavy products” such as the company's new recombinant vaccines and monoclonal antibodies. However, the long cycle of new drug development and the uncertainty of the results have cast a shadow over Watson’s future performance. For Watson Bio's future business adjustment plan, the Red Journal financial reporter sent a letter to the company's official mailbox as an investor. However, as of press time, the company did not receive a reply.

It is worth noting that even if Watson has divested the problem assets, the final takeover is “owner”. According to the announcement, one of the counterparties to sell the assets is Yuxi Woyun, which is actually controlled by the chairman of Watson Biological, Li Yunchun. The transaction is a connected transaction. In addition, Derun Tianqing's executive partner is Wang Wenhua, who is also the chairman and general manager of Shijie Bio.

Nonelastic Webbing

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