Yunnan Baiyao loses 700 million by investing in Millet

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On April 28, Yunnan Baiyao (111.060, -3.51, -3.06%) issued a quarterly report, with the operating income of RMB 10.328 billion during the reporting period, an increase of 33.38% year-on-year. The net profit attributable to the parent company was 763million yuan, down 40.48% year on year, mainly due to the loss of 793million yuan in securities investment in the first quarter. The operating cost was 8.576 billion yuan, an increase of 32.24% year-on-year.

In the first quarter, Yunnan Baiyao held a total loss of 793 million yuan in securities assets including stocks and funds. Among them, Xiaomi group shares have the largest loss, reaching 693million yuan. Sina Finance and economics noted that from January 1 to March 31, the share price range of Xiaomi fell 26.95%, and its market value fell by more than 200billion yuan.

In the first quarter, the company completed the reduction of 3.31 million shares for employee incentive, accounting for 0.26% of the total share capital, and the reduction amount reached RMB 440million. Previously, the employee buyback price was 37.07 yuan per share, the first employee shareholding plan in 26 years since Yunnan Baiyao was listed.

On April 29, Yunnan Baiyao shares rose 2.3 percent to close at 114.57 yuan / share, with a total turnover of 1.7 billion yuan.

Operating cash flow fell 125.96% in the first quarter, 60% of revenue came from wholesale and retail

In terms of revenue structure, Yunnan Baiyao's main business includes four parts: medicine, health products, traditional Chinese medicine resources and provincial medicine. According to the products, the revenue of 2018-2020 includes industrial products (self-made), wholesale and retail, agricultural products (5.580, 0.01, 0.18%), technical services, hotel catering and other services.

The income of industrial products (self-made) is 10.823 billion yuan, 11.102 billion yuan and 11.7116 billion yuan respectively, accounting for 40.06%, 37.16% and 35.78% of the total revenue respectively. The wholesale and retail income was 15.923 billion yuan, 11.124 billion yuan and 20.974 billion yuan respectively, accounting for 58.94%, 62.53% and 64.06% of the total revenue respectively. The income of other services such as agricultural products, technical services, hotel catering and other services is less than 1%.

Among the wholesale and retail products, Yunnan Baiyao toothpaste market of health products has ranked the top two in the industry for three consecutive years, and the market share by the end of 2020 is 22.2%. In addition to toothpaste, Yunnan Baiyao has been constantly acting on daily chemical products in recent years. By the end of 2020, Yunnan Baiyao has "Guochao IP Teddy Bear" hot applied steam eye mask, cured tea dazzle CC toothpaste, oral care gargle, floss and other products.

Yunnan Baiyao signed an online contract with Japan pola Huacheng Industrial Co., Ltd. last year to develop skin care cosmetics for plants, and also to develop oil and anti stripping products. In 2020, Yunnan Baiyao established Yunnan Baiyao Group Shanghai Technology Co., Ltd. and Yunnan Baiyao Group Shanghai Health Products Co., Ltd., mainly engaged in AI skin detection and plant safety skin care business.

It is worth noting that the gross margin of Yunnan Baiyao industrial products (self-made) in 2020 is 61.18%, while that of wholesale and retail products is only 9.09%. This means that the profit from expanding wholesale and retail business is far from that of industrial products.

In addition, the net operating cash flow of Yunnan Baiyao in the first quarter was RMB 128million, a sharp drop of 125.96% year-on-year, and a decrease of 621 million yuan in net amount. The net cash flow from financing activities was rmb-1.029 billion, a sharp drop of 189.9% year-on-year, mainly due to the cash paid for debt repayment in the first quarter of RMB 1.05 billion, and the cash borrowed decreased by RMB 1080 million compared with the previous period.

The receivables increased by 120.86% year on year, and 184million credit impairment losses were withdrawn

From 2018 to 2020, the sales cost of Yunnan Baiyao industry was 3.922 billion yuan, 4.301 billion yuan and 4.549 billion yuan respectively, accounting for 21.13%, 20.3% and 19.23% respectively, accounting for 21.13%, 20.3% and 19.23% of the total cost. Nearly nine of the industrial sales costs became direct material costs. The cost of commercial sales and procurement was 14.619 billion yuan, 16.649 billion yuan and 19.968 billion yuan respectively, accounting for 78.7%, 79.51% and 80.6% of the total cost respectively. The proportion of technical service development cost and planting cost in total cost is less than 1%.

In the first quarter of 2018-2020 and 2021, Yunnan Baiyao accounts receivable were 1.853 billion yuan, 2.238 billion yuan, 3.554 billion yuan and 5.919 billion yuan respectively, with a year-on-year growth of 50.22%, 9.93%, 74.4% and 120.86%. The sharp increase in the first quarter was mainly due to the increase of the receivables of provincial pharmaceutical companies.

In the first quarter, the company made a provision of 184million yuan of credit impairment loss. The long-term loan of the same period was RMB 66.6 million, an increase of 81.97% year-on-year, mainly because the subsidiary qingyitan borrowed RMB 30million in the new growth period. According to public data, the main business of Qingyi hall is the production and sales of disposable sanitary products, including sanitary naps and health pads. The loan can continue to add code to the operation of its daily chemical products.

In addition to borrowing and capital increase, Yunnan Baiyao also carried out a equity conversion in the first quarter. On March 3, the board of directors of the company passed the transfer of Yunnan Yunyao, a wholly-owned subsidiary, to Hainan Company, a wholly-owned subsidiary, with a net book value of 418 million yuan. After the transfer, the company will no longer directly hold the shares of Yunyao company, and it will be changed to Hainan Company directly holding 100% of the shares of Yunyao company.

Yunnan Yunyao is an integral part of the company's cannabis industry chain, with a continuous loss of -1374700 yuan and-2568200 yuan in 2019 and 2020, according to the announcement.

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