Keeping Pace with Time and Making Reasonable Decisions
Keeping Pace with Time and Making Reasonable Decisions
Although the investment industry seems to be prosperous, it has a long return cycle and a low income. It's not easy for young people at the crossroads. Yifan Zhao is an investment expert who always keeps calm and composed in front of various investment hotspots. Despite of the overwhelming anxiety of the time and the industry, he still persists.
Grasping the Trend and Hitting the Target Accurately
During the 13th Five Year Plan period, China's pharmaceutical industry vigorously implemented the innovation driven strategy. The 14th Five Year plan period is the key period of China's medical reform, and it is also an important stage for the pharmaceutical industry to change its development mode and establish a modern circulation system.
The medical industry is known as the eternal sunrise industry. Yifan Zhao believes that in the long run, the return is very good. Biomedicine is the closest industry to human nature and capital. The rapid development of China's biomedical industry in recent years is inseparable from a large number of excellent scientists and researchers, and also inseparable from investors' insight and talent mining projects. Now, the Buchang Asset Management Center led by Yifan Zhao has invested in more than 80 projects around the world, covering most of the head projects, VC and PE Institutions and securities funds. In addition, he has directly invested in more than 290 projects, especially in the medical and health industry.
Finding the Correct Project and Making Steady Profit
The COVID-19 pandemic has created unprecedented social and economic challenges, and has also brought unprecedented opportunities. In the field of health care, online medical consultation has increased by 350% at the peak of the epidemic.
“The vaccine is for healthy people. It has a large base, so it can be very fast. However, one disadvantage of fast volume is that once the permeability reaches a certain level, the growth rate will slow down. So, for vaccine companies, the best time to invest is when a new product is being developed.” Mr. Zhao made the above comment on investment in epidemic vaccine.
He has made a quick hit in the investment in COVID-19 vaccine. In 2020, after the global outbreak of COVID-19, he quickly increased capital to Nanjing Huapai. Nanjing Huapai is a biopharmaceutical enterprise specializing in vaccine research, development, production and sales. It has a mature and complete vaccine research and production industry chain, including Zhejiang Tianyuan Biopharmaceutical Co., Ltd., a wholly-owned subsidiary, Taizhou Saihua Biotechnology Co., Ltd. and Wuxi huapai Biotechnology Co., Ltd., a wholly-owned subsidiary. This investment has realized the strategic planning of entering the vaccine industry and further enhanced the market competitiveness of Buchang Pharmaceuticals.
According to Mr. Zhao, from the industry perspective, the vaccine industry has high barriers, but the competition pattern is relatively stable. The four global vaccine giants (GlaxoSmithKline, Sanofi, MSD and Pfizer) account for more than 80% of the global market share. China, as the largest production base, has nearly 40% of vaccine manufacturers in the world. But except the six major biological products research institutes of Sinogen Group, more than half of vaccine enterprises in China only issue one variety each year. From the market point of view, the vaccine is suitable for a wide range of people and has strong attributes of consumer goods, so it is easier to benefit from the upgrading of consumption. From the perspective of pricing, vaccine pricing is not affected by medical insurance control fees. The new circulation rules implemented for the market can make more profits retained in the upstream production enterprises. From the production level, the vaccine production cycle is short. The average gross profit rate of enterprises is more than 90%. Therefore, it is advisable to invest in vaccines this year.
Improving the Industry and Realizing Multiple Development
Every crisis means the coexistence of danger and opportunity. The COVID-19 pandemic is expected to have a profound impact on the national and global economic and industrial development pattern, and to give birth to new industrial models and development opportunities. Among them, the health needs of people are bound to become the urgent needs of the whole population. It's a wise decision for the company to invest in the big health industry in recent years.
The society will pay more attention to people’s health. Mr. Zhao believes that it will be a progress of the medical industry in China. Now, people, especially people in rural areas, go to hospital only when they are ill. Mr. Zhao describes the situation as an olive. The 60% of the population are in the middle, which means that they focus on disease treatment. But in the US and European countries, the shape is more like a dumbbell, with the treatment part accounting for only 30% to 40%. The majority of the population pay more attention to the prevention of diseases. Then transformation from illness treatment to illness prevention is the way which China will definitely pass.
Based on the aforementioned understanding, in December 2018, Buchang Pharmaceutical invested 100 million Yuan in Hubei Pharmaceutical Co., Ltd. of Jiuzhoutong Pharmaceutical Group, and signed the strategic cooperation agreement with Jiuzhoutong. It is estimated that the company will invest in 50 pharmacies. At present, the investment has begun to take a stable shape, and started to make profit.
Making Continuous Progress and Stable Profit
The company makes continuous progress and the profit keeps grow under his leadership. The company invests in the research and development of pharmaceuticals. In the field of securities investment, this industry has both defensive and offensive characteristics. Overall, it does not have the characteristics of large fluctuations. Therefore, the company's performance is quite stable.
Under the leadership of Mr. Zhao, in 2020, Buchang Pharmaceutical achieved a revenue of 16.007 billion Yuan and a net profit of 1.861 billion Yuan attributable to the shareholders. Overall, the company's performance is robust. While consolidating the dominant position in the field of traditional Chinese medicine, Buchang Pharmaceutical continuously cultivates new growth points by actively distributing the two fields of chemical medicine and biological medicine. In the first quarter of 2021, the revenue of Buchang Pharmaceutical reached 3.351 billion Yuan, an increase of 26.97% compared with 2.639 billion Yuan in the same period of last year. In addition, Buchang Pharmaceutical continued to improve its operating efficiency, resulting in a net profit growth of 33.39% year-on-year, reaching 406 million Yuan.
Moreover, In the past year, the stock price of Buchang Pharmaceutical has been rising gradually, from 19.56 Yuan per share on April 30, 2020 to more than 30 Yuan per share at the highest. On April 30, 2021, the stock price of Buchang Pharmaceutical closed at 22.84 yuan per share, with a market value of 26.074 billion Yuan.