Cheng Yi Pharmaceutical's launch site. Photographed by Li Bo
Wenzhou Daily Special Correspondent Lin Yingying
On March 15, Zhejiang Cheng Yi Pharmaceutical Co., Ltd. was listed on the main board of the Shanghai Stock Exchange. The company is referred to as "Cheng Yi Pharmaceutical", with the securities code of 603811. The opening price on the first day was 18.91 yuan. There was no doubt that the price was fixed at 22.69 yuan, up 43.97%. The total share capital was 85.2 million shares, and the total market value was 1.93 billion yuan.
With a bang, yesterday morning at 9:30 am, Yan Yiyi, Chairman of Cheng Yi Pharmaceutical, sounded the gong to open the market. After the LED screen trading data in the Shanghai Stock Exchange lobby began to roll, there was a burst of cheers on the scene. Yan Yiyi was extremely excited. As the leader of the company, he summarized the path to going public with "ups and downs".
Cheng Yi Pharmaceutical, as the first main board listed company in the Wenzhou pharmaceutical industry, has made a significant contribution to the history of Wenzhou enterprises rushing towards the capital market.
Zhang Zhenyu, director of Wenzhou Financial Office, believes that Cheng Yi Pharmaceutical is the first main board listed enterprise in Dongtou District, which has boosted confidence in the listing of enterprises in the region. After listing, enterprises will change to a modern enterprise system, achieve multi-channel financing, and attract technical talents. All these changes will bring positive effects to enterprises. The outbreak of the financial crisis has taught a lesson to small and medium-sized enterprises in Wenzhou, awakening the awareness of multi-channel financing, and also telling them that going to the capital market is an imperative path. Going public will bring opportunities for enterprise transformation and upgrading.
Silently Created Medical Kingdom
Compared to some sensational listed companies, Cheng Yi Pharmaceutical appears low-key and stable. Even after the IPO, some people ask, why is Cheng Yi Pharmaceutical suddenly going public?
This is the first mainboard listed company to emerge from Dongtou. The clear blue sky, boundless sea, and fresh air are known as the standard accessories for the happy life of Dongtou people in Wenzhou. Pushing open the door of Cheng Yi Pharmaceutical, the image of the "Kingdom of Medicine" slowly emerges amidst the scent of green grass that has penetrated the nose first.
Cheng Yi Pharmaceutical has gone through 50 years since its predecessor, Tongshan Pharmaceutical Factory. Yan Yiyi, who has been in the factory for 47 years, has been accompanying the growth of this enterprise.
In the early stages of development, this ordinary pharmaceutical enterprise did not bring special development opportunities due to its "special" identity. On the contrary, with the technological changes of each era, it always encountered a crisis that was related to life and death. From a lack of technology, funding, talent, and information, every emergency always comes with Yan Yiyi's dedication to drug quality and willingness to invest in research and development, saving the day and laying the foundation for development through successive crises.
Relying on the sea and eating the sea, Cheng Yi Pharmaceutical prefers to develop high-end small varieties of "marine green drugs" and "drugs for major diseases". In other words, these are high-tech projects that require desperate investment. However, the phrase 'without technological investment, there can be no development' has always been remembered in Yan Yiyi's heart.
Now, the export volume of Cheng Yi Pharmaceutical Azathioprine API ranks first in China, and the export volume of Ribavirin API ranks second in China. Due to the majority of exported raw materials cooperating with high-end customers, the product quality is higher than national pharmacopoeia standards, with a higher premium compared to similar products, and has a high recognition among foreign customers. At present, the sales area covers more than 20 countries and regions such as the United States, Canada, Europe, South Africa, and Southeast Asia.
It is precisely his persistence that at present, Cheng Yi Pharmaceutical has become a renowned international supplier of characteristic raw materials in the industry, and entering the capital market is a natural thing.
Capital Irrigation Big Health Industry
Going public and drinking the water of capital is the voice of enterprises. The reporter learned from the prospectus of Cheng Yi Pharmaceutical that this time, Cheng Yi Pharmaceutical issued 21.3 million shares at a price of 15.76 yuan per share, raising a total of approximately 330 million yuan. Based on the current macroeconomic situation, industry development, and issuer operations of the pharmaceutical industry, the company will continue to operate steadily in the first quarter of 2017. It is expected that the operating revenue range for the first quarter of 2017 will be between 85.5 million yuan and 94 million yuan, with a growth rate of 21% to 33% compared to the same period last year.
The prospectus discloses that before this issuance, Yan Yiyi, the controlling shareholder and actual controller of the company, directly held 25.05 million shares of the issuer, with a value of approximately 568 million yuan based on the stock price on the first day of the opening.
Yan Yiyi revealed that the investment projects raised this time are mainly used for the technical renovation project of the preparation building, marketing network construction project, and R&D center construction project. This will greatly enhance the production capacity of the company's pharmaceutical products, enhance the company's research and development and testing capabilities, and expand the coverage area of the company's marketing network
Yan Yiyi has a clear strategic plan for Cheng Yi Pharmaceutical. To run a high-tech pharmaceutical enterprise well, the key is to focus, look forward with your eyes, and be down-to-earth. In the next five years, the company will continue to move towards the direction of researching and developing marine medicine and biopharmaceuticals, striving to develop traditional Chinese medicine products and marine leisure food, and building a large health industry.
In addition, island pharmaceutical companies have natural resource advantages in developing marine pharmaceuticals. Yan Yiyi revealed that the enterprise is located in Dongtou District, Wenzhou City, which is rich in marine resources, and has outstanding advantages in raw materials. The development of marine pharmaceuticals is also in line with the suggestions put forward in the "Bioindustry Development Plan" previously released by the State Council to strengthen the development and utilization of marine biological resources. In the future, Cheng Yi Pharmaceutical will also use the rich local seaweed resources such as Hijiki to develop anti-tumor, antihypertensive, blood lipid regulating and other drugs, and continue to enrich marine products.
Over 100 billion yuan of direct financing from Wenzhou enterprises in the five-year reform period
The financial reform is about to celebrate its fifth anniversary. Over the past five years, Wenzhou enterprises have changed their traditional financing models, prompting the local capital market to enter a period of rapid development.
As of the end of February, including Cheng Yi Pharmaceutical, there were a total of 20 domestic and foreign listed companies in the city, with a total financing amount of 26.624 billion yuan. The number and financing amount of listed companies have significantly broken through after the implementation of the financial reform pilot zone, increasing by 150% and 91.8% respectively. In addition, there are 4 companies awaiting approval for their IPO reports, 8 companies undergoing guidance on listing applications, and nine batches of 208 reserve companies have been identified for listing.
The listing on the New Third Board remains the first tier in the province, with a total of 68 enterprises listed, and another 5 enterprises reporting to the national stock transfer system. Among the listed enterprises, 10 have obtained market making trading qualifications, and 30 have achieved financing. 977 companies are listed on regional equity trading platforms.
As of the end of February, 715 new limited liability companies have been added in the city, with a total of 838 limited liability companies, providing ample reserves for docking with the multi-level capital market.
Direct financing effectively compensates for the shortage of indirect financing. Since the reform of the financial system, the Municipal Financial Office has actively coordinated with enterprises and various platforms to promote multi-channel financing of the real economy through initial public offerings, targeted issuance, and various bond instruments. From 2012 to 2016, the city's direct financing maintained a sustained and steady increasing trend, with direct financing amounts reaching 9.95 billion yuan, 15.3 billion yuan, 22 billion yuan, 22.7 billion yuan, and 35.7 billion yuan, respectively, and a cumulative breakthrough of 100 billion yuan, Greatly expanded the financing channels for Wenzhou enterprises.
Dialogue with Yan Yiyi
Reporter: What are the feelings of being at the helm of a company with today's listing?
Yan Yiyi: During the process of listing, there were both sour, sweet, bitter, and spicy flavors. In fact, for individuals, what does it matter whether they go public or not? How much can they eat, use, or take away? But after the company goes public, it requires us to lead the company to run forward desperately, and society needs us to make greater contributions.
Today's listing is also a magnificent turn for Cheng Yi Pharmaceutical. Going public is like a ticket. Entering this door requires companies to comply with regulations and laws, but at the same time, capital will also bring greater development space for companies.
Reporter: What is the next goal for a company to open up its listing channels?
Yan Yiyi: For Cheng Yi Pharmaceutical, the next step is to transform its main business from raw materials to formulations. The raw material industry accounted for 90% of its business, and now the formulation industry has accounted for 52%. In the next five years, we must continue to strengthen the proportion of formulations, and to achieve this goal, going public is a necessary path.
Without R&D, there is no support. After going public, our R&D proportion will gradually increase from 4% to 5%, 6%, 7%, 8%
Previously, there was a lack of funds, and preparations needed to be developed externally. Now, raising funds requires increasing research and development investment, producing high-end and high value-added products, and also entering the marine pharmaceutical industry.
This fundraising project has brought opportunities for enterprises to take off, and the injection of capital requires us to "roll up our sleeves and work hard" to continue extending the industrial chain and expanding the scale of the enterprise.
Reporter: What is the experience of Cheng Yi Pharmaceutical's listing?
Yan Yiyi: Firstly, small and medium-sized enterprises should have a plan, and enterprises should have the perseverance to develop. A project cannot go public today and undergo wave like changes. Secondly, the development of enterprises should be standardized, and any process should be carried out in accordance with national regulations. This way, after the company goes public, shareholders will believe in you, society will believe in you, and oneself will believe in you! We do not falsify business performance, quality, and environmental governance, laying the foundation for enterprise development. Thirdly, it is necessary to have foresight, strengthen scientific research capabilities, and improve core competitiveness. How to regulate without money, how to go public with losses, so the development of enterprises needs to have momentum, which requires technical support.