From no name on the list, to the top of a number of rich list, fur fur glitter only used a year.
Low-profile, mysterious, is furtively left to the outside world to protect the color, “lone wolf” “marketing maniac”, is the outside world to his label. Now, the mysterious tycoon is no longer secretive, fur fur glittering business map surfaced.
Under his name, there are more than 70 companies, with businesses spanning a number of industries, including drinking water, health products and biopharmaceuticals. Two of these companies have landed on the capital market, one is the familiar Nongfu Mountain Spring, the other is the astonishing Wantai Biological.
Wantai Bio is a veteran in vitro diagnostic company, after the listing of the capital feverishly pursued, once 26 consecutive stops, known as the “demon stock”. Behind the demon stock is the rise of the company’s HPV vaccine business, but at the same time, there is also a hidden crisis.
As of April 22, 2021, the market value of Nongfushanquan 470.7 billion Hong Kong dollars, Wantai biological market value of 132.3 billion yuan. According to the Forbes real-time ranking, Zhong Fur fur furtively ranked first in China’s rich list and second in Asia’s rich list with a fortune of $67.9 billion (about 440.2 billion yuan), to which Wantai Bio alone contributed more than 99 billion yuan.
From a mason to the richest man in China, Glittering’s fortune story has had its ups and downs.
The wealth story of China’s richest man
Born in 1954 in Hangzhou, Zhejiang Province, Glittering Zhong did not have a good life as a teenager. Because of the Cultural Revolution, he dropped out of school in the fifth grade, and then worked as a mason and a carpenter.
In order to improve his situation, Zhong furtively studied day and night in 1977 before the resumption of the college entrance examination, trying to change his fate with knowledge. However, he took the college entrance exam twice, both due to a gap of 20 or so points, and the university of his choice missed. Finally, he followed his parents’ advice and went to Zhejiang Radio and Television University (“TVU”), the predecessor of Zhejiang Open University.
Zhong furtively once said: that era, failed to enter the university are to go to the University. Although there is a reluctance, but Zhong furtively began to “transit”.
After graduating from the university, he enrolled in Zhejiang Daily and worked as a reporter in the rural department. In five years, he traveled to more than eighty counties and cities in Zhejiang, interviewing more than 500 entrepreneurs.
Hundreds of wealthy stories sparked Zhong’s business sense.
(furtively glance)
In 1988, Hainan Special Economic Zone was officially established, the country set off a gold rush in Hainan. Seeing the business opportunities, Glitter decided to suspend his salary and run to Hainan to start his own business.
Zhong furtively tried to run newspapers, mushrooms, selling curtains, shrimp farming, during the profit and loss, the overall did not make much money. Until 1991, with his contacts as a journalist, Zhong furtively became the general agent of Wahaha oral liquid in Hainan and Guangxi at the same time.
At that time, Wahaha oral liquid in the children’s nutrition market is unusually hot, furtively glance Zhong will enjoy the Hainan Special Zone dividends of low-priced Wahaha, sold to Guangxi to earn the price difference, quickly accumulated the first bucket of gold.
But his speculative “fleeing” behavior was soon discovered, furtively glittering Zhong was disqualified as an agent. At this time, he tasted the sweetness of the health care industry, found another business opportunity, the wealth story officially kicked off.
In 1993, furtively glance at the establishment of Hainan Health Hall Pharmaceutical Co., Ltd. in Haikou, by turning the whole turtle into powder, developed a “health turtle pill”, once launched, was snapped up. In just one year, Zhong furtively earned the first 10 million.
In 1995, Wahaha began to enter the drinking water industry. In the next year, with the capital around, glittering Zhong also looked at the industry, back to Hangzhou, founded Zhejiang Qiandao Lake Health Hall Drinking Water Co.
With “Nongfu Mountain Spring is a little sweet” “we are just nature’s porters” and other popular advertising and marketing, Nongfu Mountain Spring in the market share of bottled water, in 2001 over Wahaha, after years ranked first.
Although Nongfu Mountain Spring is in the limelight, but in addition to being good at marketing, the outside world does not know much about Zhong Fur Furao. He does not like to entertain and attend meetings, seemingly mysterious and low-key. It was not until 2016, when Wantai Bio first submitted its prospectus, that people realized that Glittering Zhong’s business map had crossed over into the pharmaceutical industry, and the layout for many years.
As early as 2000, Yang Sheng Tang and Xiamen University established a joint biological laboratory, and Yang Sheng Tang was mainly responsible for transforming each other’s research results into products for industrialization and development. A year later, Zhong furtively met with the same cooperation with Xiamen University, Wantai Biological, at this time, the actual controller of Wantai Biological, due to the long return on investment in pharmaceutical research and development cycle, the market is not perfect, etc., the intention to withdraw, is looking for a new buyer.
Wantai Bio, a high-tech enterprise developing bio-diagnostic reagents, was established in 1991, and has changed three real controllers in ten years because of management discord and capital shortage.
Confident of the future prospects of the pharmaceutical industry, Glittering Zhong contributed 17.1 million yuan to acquire 95% of the shares and became the fourth person in control of Wantai Bio.
In the following 20 years, Wantai Bio has been deeply tied with Xiamen University and has been transforming university research results into products. The prospectus shows that Wantai Bio has 88 patents in its territory, 59 of which are shared with Xiamen University. Among 101 patents in Hong Kong, China and abroad, 83 of them are shared with Xiamen University.
Unlike Nongfushanquan, which had been determined not to go public, Wantai Bio has been seeking to go public since 2016, but submitted its listing application twice, both of which were suspended. It was not until 2019 when the third listing application was submitted that it passed the audit and landed on the A-share market at the end of April 2020. In September of the same year, Nongfu Mountain Spring landed on the Hong Kong stock market.
As the share prices of the two companies continue to grow, the secretive tycoon furtively glittering Zhong is no longer secretive and has repeatedly been in the hot seat for being the richest man in the world.
As of April 22, 2021, according to Forbes’ real-time ranking, Zhong wrap is ranked first on the list of China’s richest people with a fortune of $67.9 billion.
The Uncertainty Behind the Surge
Compared to Nongfushanquan, Wantai Bio is not as well known. However, on the first day of listing, its share price rose 44%, and 26 consecutive stops, was sealed as a “demon stock”, and quickly became popular. In just three months, the company’s market value exceeded the 100 billion mark.
As of April 22, the market value of Wantai Bio is 132.3 billion yuan. According to Eastern Fortune Choice data, among 74 companies in the biopharmaceutical sector, Wantai Bio ranks third after Jiffy Bio and Changchun High-tech.
However, in terms of performance scale, Wantai Bio is not outstanding.
From 2013 to 2020, the company’s revenue rose from 499 million yuan to 2.354 billion yuan, and net profit rose from 0.8 billion yuan to 680 million yuan, which has been ranked outside of 20 in the biopharmaceutical sector. It is worth mentioning that government subsidies also contributed a lot to the company’s net profit, and in the past two years, government subsidies accounted for an average of more than 15% of net profit.
Wantai Bio is an enterprise engaged in the research, development, production and sales of in vitro diagnostic reagents, instruments and vaccines. It is the HPV vaccine in its vaccine business that has attracted the attention of the capital market.
HPV vaccine, a vaccine against cervical cancer, is the only vaccine against cancer in the world so far. Since the first HPV vaccine was approved in 2006, it has quickly become a global phenomenon and is now the second largest vaccine in the world by sales.
In May 2020, two days after entering the capital market, the bivalent HPV vaccine, which has been researched for 18 years, was launched for sale. This was the first domestic HPV vaccine, which exploded in the capital market and boosted the company’s performance.
Prior to that, there was only one vaccine on sale, namely the world’s only marketed hepatitis E vaccine. However, due to low domestic awareness, the sales of the vaccine were not satisfactory, and the cumulative revenue was less than 100 million yuan in the eight years since its launch, with the vaccine business accounting for only 1% of the revenue on average.
In 2020, the company’s vaccine business revenue rose to 711 million yuan, soaring 4640% year-on-year and accounting for 30% of revenue. Net profit for the year was 682 million yuan, up 224% year-on-year.
Part of the reason for Wantai Bio’s rapid market capture is its lower selling price.
This is mainly because the company has an original “E. coli prokaryotic expression system platform”, breaking through the traditional understanding of the international pharmaceutical industry that only eukaryotic expression methods can be used, with high efficiency, easy to scale up, high safety characteristics, while the prokaryotic expression method is suitable for mass production of vaccines, the price is cheaper.
At present, the only domestic sellers of the bivalent HPV vaccine are Vantaa Bio and GSK (GlaxoSmithKline), one of the global pharmaceutical giants, with GSK’s vaccination costing about 1,800 yuan and Vantaa Bio costing only 987 yuan, about half of the former.
However, it should be mentioned that in the field of HPV vaccine, bivalent HPV vaccine is not the mainstream of the market.
The HPV vaccine currently on sale is divided into bivalent, quadrivalent and nine-valent, with the higher the number, the higher the effectiveness of cancer prevention. According to the Foresight Industry Research Institute, in 2020, the quadrivalent and nine-valent HPV vaccines will have a market share of 81%, while the bivalent HPV vaccine will have a combined market share of only 19%.
In addition, the market share of quadrivalent and nine-valent HPV vaccines may be even higher after November 2020, when the age of vaccination is relaxed for the Merck Sharp & Dohme quadrivalent HPV vaccine.
The capital market is also looking at the nine-valent HPV vaccine, which is the main reason for the capital market to look at it. In addition, it is also working with GSK on a new generation HPV vaccine with higher efficiency, which is said to be 99% more effective than the 9-valent HPV vaccine by 4 percentage points.
However, compared to the 11-valent HPV vaccine developed by China Biosciences, which is already in clinical phase 2, and the 16-valent HPV vaccine developed by Zhejiang Pukang, which is also in clinical phase 1, the advanced HPV vaccine of Wantai Biologicals is still in preclinical research, and the advantages of product development are not outstanding.
At present, the quadrivalent and nine-valent HPV vaccines on sale are monopolized by the global pharmaceutical giant Merck Sharp & Dohme, and sold by Jiffy Biologicals in China. The nine-valent HPV vaccine has at least eight companies in research, of which four are in phase III clinical trials, including Merck Sharp & Dohme (to expand new age groups), Wantai Biological, Shanghai Bovis Biological and Wellness, of which Shanghai Bovis Biological is the first to enter phase III trials.
In the face of the oversupplied HPV vaccine market, “speed” has become an essential and powerful tool for each company. Although the layout of HPV vaccine production line of Wantai Biologicals is clear, its speed advantage is not obvious and there are multiple uncertainties in the future.
The main source of revenue is in a bottleneck
Compared with the “far concern” of uncertainty, the “near concern” of Wantai Bio seems to be more difficult.
Before the rise of vaccine business, more than 95% of Wantai Bio’s revenue came from in vitro diagnostic reagents and its related business.
In vitro diagnostics is the in vitro testing of human samples such as body fluids, blood and cells. According to the principle or method of testing, there are various segments of in vitro diagnostic reagents, and at present, the mainstream methods in China are immunodiagnosis, biochemical diagnosis and molecular diagnostic reagents. Among them, immunodiagnostics has the highest market share, about 39% in 2019.
Wantai Bio’s diagnostic reagents are immunodiagnostic-based, with core products such as HIV diagnostic reagents and viral hepatitis series diagnostic reagents.
In order to rapidly expand its business, the company adopts a combination of distribution and direct sales, of which the revenue generated by distribution method accounts for more than 60%. from 2013 to 2019, Wantai Bio’s in vitro diagnostic reagents revenue CAGR is 16%.
Immunodiagnosis is further subdivided into enzyme-linked immune, chemiluminescence and other methods. More than half of Wantai Bio’s reagent revenue comes from the traditional enzyme-linked immunoassay reagents.
The market share of enzyme immunoassay mainstream products of Wantai Bio is over 30%, ranking first in the industry. All domestic blood screening reagents are currently used in enzyme-linked immunoassay, and Wantai Bio products have covered more than 95% of domestic blood stations, with the first market share of blood stations for more than ten years.
Behind the seeming prosperity, there are also hidden worries.
First, since 2017, the growth rate of enzyme immunoassay reagents, the main force of the company’s reagent revenue, has slowed down significantly, with an average growth rate of only 3%, and seems to have entered a bottleneck.
The reason for this is that the technology wind in the field of immunodiagnostics has changed.
Previously, in the field of immunodiagnosis, enzyme immunoassay reagents developed rapidly, but chemiluminescent reagents have been developing more and more rapidly in recent years.
According to data from the Foresight Industry Research Institute, the market share of chemiluminescent reagents in immunodiagnostics has reached 78% in 2018. With the cost reduction brought by the large-scale production of chemiluminescent reagents and technological iteration, coupled with the decrease in the price of luminescent tests due to the policy of medical insurance fee reduction, chemiluminescence is expected to gradually replace other paths such as enzyme immunoassay, and the final market share is expected to reach more than 90%.
From 2016 to 2019, Wantai biology chemiluminescence reagent revenue rose from 6 million to 229 million yuan, with an average growth rate of more than 100%, but accounted for less than 30% of the company’s overall reagent revenue.
In order to accelerate the development, nearly half of the 382 million yuan of funds raised by the company’s 2020 IPO is for chemiluminescent reagent projects. However, the situation is not optimistic.
According to the Founder Securities Institute report, the domestic chemiluminescence reagent market size in 2019 is about 27.7 billion yuan, of which 82% of the market share is occupied by the four multinational giants Roche, Abbott, Beckman and Siemens; another 12% or so is occupied by New Industries, Antu Bio and Myriad Medical. Among the remaining less than 10% share, Wantai Biologics accounted for only 0.6%.
Tan Yadi, an independent commentator in the pharmaceutical industry, told the market that although Wantai Bio has already occupied a place in the in vitro diagnostic market, the mature market formed over the years is generally more stable. To expand, Wantai Bio needs to fight with dozens of companies, the difficulty can be imagined.
On January 13, 2021, Wantai Biologicals announced that Zhong furtively resigned from the position of director and chairman of the board of directors for personal reasons. After his resignation, he will no longer hold any position in the company, but will remain as the actual controller.
The new chairman, Qiu Zixin, graduated from Xiamen University with a degree in chemistry and has served in Wantai Biotech for more than 20 years.
For the past 20 years, Zhong Fur Furao and Qiu Zixin have worked together to bring a small, unknown company to a market value of 100 billion. Now that the richest man has resigned, leaving Qiu Zixin alone, how to turn “crisis” into “opportunity” will be an important lesson for the new helmsman to face.
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