blacklotuscasino100nodepositbonuscodes2022| Losses widened, sales expenses exceeded 70%. *ST Longjin received annual report inquiry letter, and its share price fell 6 consecutive times

May 13thBlacklotuscasino100nodepositbonuscodes2022The main product is * ST Long John (002750) of breviscapine for injectionBlacklotuscasino100nodepositbonuscodes2022SZ) received an inquiry letter from the Shenzhen Stock Exchange on the 2023 annual report, including the reasons for the company's losses, reasonableness of the acquisition business, sales expenses, R & D capitalization, etc.

In 2023, * ST Long John's operating income was 86.6225 million yuan, deducting non-net profit of-81.1048 million yuan, touching the financial delisting target of "audited net profit of the most recent fiscal year was negative and operating income was less than 100 million yuan". On May 6, the company was delisted by the exchange.

In fact, * ST Long John has lost money for five consecutive years. From 2019 to 2022, the company's net profit after deduction was-39.886 million yuan,-2.5259 million yuan,-10.3045 million yuan and-57.344 million yuan respectively.

Poor performance, * ST Long John share price also underperformed. Recently, the share price of * ST Long John has fallen by its daily limit for six consecutive trading days.

There is doubt about the single sustainable management ability of the product.

* ST Long John is mainly engaged in the R & D, production and sales of modern proprietary Chinese medicines and high-end chemical generics, including proprietary Chinese medicines and chemical generics. Representative products include Long John breviscapine for injection, defibrase for injection, bivalirudin for injection, Qiwei Tangmaishu capsule, somatostatin for injection, etc.

However, it is worth noting that * ST Long John's product structure is single, mainly from breviscapine for injection, a prescription drug for cardiovascular treatment, and the income scale of other listed chemical generic products is relatively small.

Judging from the past financial results, the main reason for the expansion of the company's losses in recent years is that breviscapine for injection entered the collection in 2021, resulting in a fall in volume and price.

In the inquiry letter of the 2023 annual report, the Shenzhen Stock Exchange asked to explain the main reasons for the company's continuous losses and the specific measures taken or to be taken to improve the profitability and sustainability of the main business.

* ST Long John mentioned in the 2023 report that during the reporting period, the company's performance trend was consistent with that of the industry, due to the continuous implementation of centralized procurement of proprietary Chinese medicines, the gradual implementation of collective procurement price linkage policy in non-concentrated provinces, and the continued impact of factors such as medical insurance payment restrictions, hospital prescription restrictions and changes in the market environment. At the same time, breviscapine for injection participated in centralized volume procurement by 67%, and the actual implementation of procurement was also lower than expected. As a result, the downward trend of the company's performance has not been changed.

In order to break the weakness of a single product, * ST Long John has opened up other businesses, such as chemical generics, industrial marijuana cultivation, and large health daily chemical products, but the effect is not obvious so far.

In the industrial marijuana planting sector, in February 2019, * ST Long John acquired a 51% stake in Yunnan Muya Agricultural Technology Co., Ltd. with an additional investment of 15 million yuan, and its main business is large-scale cultivation of industrial marijuana.

From 2019 to 2023, the company's industrial marijuana income was 22.67 million yuan, 22.3693 million yuan, 5.1311 million yuan and 4.4706 million yuan respectively, accounting for about 5% of the total revenue in the past two years.

In the Great Health Daily Chemical sector, in 2023, when the company increased capital to control the operator of the cutting-edge consumer brand "globalism", it mainly engaged in functional cosmetic products.

On June 30th, Yunnan Long John Brahma Biotechnology Co., Ltd., a wholly-owned subsidiary, increased its capital by 30 million yuan to the shareholding company Shanghai soft Biotechnology Co., Ltd. (hereinafter referred to as "soft time"). Its shareholding ratio increased from 10% to 75.61%. In 2023, soft time and soft time (Yunnan) Electronic Commerce Co., Ltd. had a total income of 6.5267 million yuan and a net loss of 7.8534 million yuan.

* according to the 2023 annual report of ST Long John, the company generated a goodwill of 10.0927 million yuan and an investment profit or loss of-7.8534 million yuan as a result of the acquisition of Zoe. The goodwill generated by the acquisition of Zoe was reduced by 7.4498 million yuan in the current period.

However, the Exchange questioned the business relevance of * ST Long John and soft time, and the inquiry letter asked the company to add the background and reasons for the soft investment, the relevance to the company's core business, whether the relevant business has formed a stable business model, and whether the impairment of goodwill is sufficient and reasonable.

Sales expenses account for more than 70% of the stock price falling by the limit.

From the expense point of view, * ST Long John high sales expenses is one of the important reasons for the loss.

From 2019 to 2023, the sales expenses of * ST Long John were 182 million yuan, 158 million yuan, 165 million yuan, 80.3266 million yuan and 64.7292 million yuan respectively, accounting for 66.18%, 62.2%, 23.47%, 65.3% and 74.73% of the current income, respectively. With the exception of 2021, the proportion is more than 60%.

The sales expenses of pharmaceutical enterprises are mainly marketing expenses and staff salaries. Since July last year, the domestic medical anti-corruption storm has swept across the country, which is the deepest, broadest and strongest in history. In the capital market, the sales cost of IPO pharmaceutical companies and listed pharmaceutical companies is an important issue concerned by regulators and investors, especially the market and academic promotion fees have always been the high incidence areas of commercial bribery.

During the inquiry of this annual report, the exchange also noted the situation related to the sales expenses of * ST Long John and asked the company to explain the specific contents of the market fees, whether the market expense rate matched the existing business, and whether there were commercial bribes or facilities for commercial bribes. At the same time, auditors are required to check and express their clear opinions.

Since the beginning of this year, the share price of * ST Long John has been relatively volatile.

On January 12, the company's share price reached the highest point of the year, 11.5 yuan per share, and then began to fall, falling by the limit for five consecutive trading days on January 31, and 5.23 yuan per share on February 5. Then the company's share price rebounded slightly, falling back on March 20.

Since the resumption of trading on May 6th, * ST Long John has once again fallen by the limit for six consecutive trading days, down 22.58 per cent during that period. On the 13th, the share price was at 4.32 yuan per share, with a total market capitalization of 1.73 billion yuan.

As for shareholders, as of May 7, * ST Long John has a total of 53200 shareholders, with 7490 shares outstanding per capita, and the chips are very scattered. At the end of the first quarter of this year, only four institutions held 226.4 million shares, accounting for 56.54 per cent of the total equity.

In addition, time Weekly reporter noted that * ST Long John's second largest shareholder plans to reduce its holdings.

On March 13, * ST Long John announced that Lixing Industrial Co., Ltd., which holds 16.28% of the company, plans to reduce its holdings of * ST Long John shares by centralized bidding and block transactions. Among them, the reduction of no more than 4005000 shares (accounting for 1% of the company's total share capital) by centralized bidding shall be carried out within three months after 15 trading days from the date of disclosure of this announcement.