ST Analysis of Medicines restructuring road network _ to write papers

Write papers Network: Summary: Many of China's listed companies is special treatment (ST, face the risk of delisting, these companies must take immediate measures to turn around, thus "Uncap." Sinopharm case by ST, for the losses of its Uncap and reorganization strategy was fully explored, a reference to other information users.

Keywords: ST Medicines; financial crisis; restructuring

1 ST Sinopharm restructuring background
1.1 From the perspective of the pharmaceutical Industry macro environment
Number of pharmaceutical companies in China more than the overall size of the small, big but not strong, the majority of species did not form a professional, large-scale production, pharmaceutical distribution structure is irrational, manufacturing costs, distribution costs, raw material costs and transformation (GMP rising business and backward, making the medicine classification management medicine retail business being squeezed, many countries reduced the price pressure corporate profit margins, the relative decline in the purchasing power of the yuan, the State can bear fruit remains to be seen to stimulate domestic demand, retail pharmacy business in the dual policy and economic environment compression, the day will be more sad, expensive original drug market share may be low-cost generic drugs are gradually taking, foreign involvement is growing, making the market more competitive, according to Industry is highly fragmented and competitive nature and low level of competition in the pharmaceutical Industry of heightened conflict, governments reduce medical costs and drug prices on the urgency of desire and the high cost of drug production and circulation of the conflict, we can see that the pharmaceutical Industry survival of the fittest situation is grim, corporate shuffling and reorganization will be the Development of the Industry and changes in the main event.

1.2 From microscopic point of view, combining ST Sinopharm view the annual report
In 2005, the company's initial business integration, has formed the backbone of business the following two aspects: First, pharmaceutical production, the second is drug retail chain, however, the reporting period, the company achieved sales of 19,689 main million dropped by more than 2% over the same period last year, net profit of 1,637 million, down from last year by 40% due to lower drug prices during the reporting period, coupled with rising raw material prices, the main business costs have risen sharply, corporate profit margins decrease, resulting in the company net profit margin greater than the same period last year. see, the initial portfolio of programs do not make the ST Medicines in the pharmaceutical industry as a whole survived the downward trend in profits.

In 2006, ST Sinopharm further integrate the company's existing business, to promote "Huoxuetongmai capsule" and other advantages of the brand during the reporting period, the company's main business income of 298.18 million yuan, with 51.44% increase compared to same period last year, but net profit of 15.31 million yuan, a year earlier, compared with 6.44 percent decline which occurred this year, the number of main business income of 101.28 million yuan more than last year, an increase of 51.44%, mainly due to the scope of the consolidated income statement for the year increased over last year. Shanxi cloud Pharmaceutical Co., Ltd., is not the company's operating performance improved.

In 2007, in order to overcome the financial problem faced by the company's efforts to tap existing resources, an inventory of existing assets and increase shareholder occupied by the company's funds and other receivables clear close to the actual price of 71.3 million yuan, Hainan Xingyuan limited to company to sell its subsidiary, Hubei spring pharmaceutical Co., Ltd. Although the company's management to maintain the basic stability, added the company's short-term lack of liquidity, to some extent, the company's money dried up temporarily resolve the situation, but the loss did not change the fate of ST Medicines - 2007 net profit -44 802 million, and the 2007 Annual Report was unable to express an opinion issued by the audit report, it was put on the hat ST.

In 2008, the company except under the Pharmaceutical Chain Co., Ltd. Wuhan Yekaitai normal operation, other business almost at a standstill. The Board actively adjust their thinking in order to reduce losses during the reporting period, the subsidiary of the Company under the Hubei Spring Pharmacy Chain Co., Ltd. and Wuhan National Pharmaceutical Pharmaceutical Co., Ltd. for sale, but the company continues to lose money - 2008 net profit -27 876 million.

In summary, although ST Medicines hope business integration, the company's assets to clean up your collection to improve the company in financial difficulties, but the fact that only through their own efforts will not completely solve the problem of continuing viability of the company only through the implementation of the strategic reorganization of assets to the company The fundamental change in the business and assets, improve the company's quality, save the listed company at home and less abroad, under, ST Medicines launched in August 2007 restructuring plan assets, the purpose is very clear: the original set of medical assets, and to listed companies into the "fresh blood."
2 An Introduction to the restructuring process and
2.1 ST Media Group Medicines and Hubei Daily
Wuhan, the controlling shareholder in the company's efforts of the new generation Technology Co., Ltd., October 26, 2010, the company and controlling shareholder of a new generation of science and Technology Co., Ltd. and Wuhan Hubei Daily Media Group on matters relating to restructuring of the Company signed a <<asset restructuring Letter of Intent> >: The asset restructuring and private placement intended to be, Hubei Daily core media assets to subscribe for the private placement of shares, the company's main business will change to newspaper publishing and media operations, controlling shareholder of Wuhan Science and Technology Co., Ltd. intends to assume a new generation of the Company all liabilities, and cash in the acquisition of all assets available, Hubei Province, Wuhan Science and Technology Investment Co., Ltd. to support the next generation Technology Co., Ltd. to fulfill the repayment of the company's liabilities and assets the acquisition of the Company's medical obligations to provide financing to support $ 200 million.

2.2 ST Sinopharm with China Sanjiang Space Industry Group
According to ST Sinopharm December 9, 2008 disclosure, when a new generation of technology has reached a preliminary cooperation with the Sanjiang Space intention the Sanjiang Aerospace industry as a whole is not the main market, but to its real estate assets into the listed company in December .2008 15, ST Medicines released the latest announcement, saying the company has been hired under the relevant provisions of the agency are preliminary due diligence on the companies work, the Board of Directors, controlling shareholders will be the agency with the preparation of the major asset restructuring "plan>> but ST Medicines of this restructuring, the prospects are very cautious: "The restructuring program is still under discussion, specifically the state of progress is still uncertain."
2.3 ST and Yang Fan Sinopharm Investment (Shanghai Co., Ltd.

Then a new generation of ST Sinopharm Technology Co., Ltd. Wuhan informed shareholders that the company intends to re-ST Medicines
Major reorganization of assets in this transaction primarily by major asset sales and issue shares to buy assets of two parts. Major asset sales: The sale of asset-based trading company to be held Yekaitai chain of 100% equity, 98 percent of spring sales equity, Ezhou plant machinery and equipment (including stocks and corporate headquarters of the accounts receivable and other receivables. payment: a new generation of technology should be <<Asset Transfer Agreement and the Supplemental Agreement>> force from the date sixty working days to pay in cash to the asset transfer price ST Sinopharm about 428.45 million yuan. issued shares to buy assets: the transaction to buy shares of listed company intends to invest for the Yang Fan, Xu Jin natural persons together hold 100% equity interest in Shanghai Kaidi . Payment: Yang Fan Shanghai Kaidi its Investment to be 90% of the shares on March 31, 2009 assessed value of net assets of approximately 2.07666 billion yuan to subscribe ST Medicines its ordinary shares issued 458 424 shares. Xu Jin in their Shanghai Kaidi 10% of the shares on March 31, 2009 assessed value of net assets of approximately 230.74 million yuan to subscribe ST Medicines its ordinary shares issued 50,936 shares of the above-mentioned major asset sale and purchase of assets shares each condition, synchronized implementation of this transaction is completed, Yang Fan Investment will change the Company's controlling shareholder, while the company's main business is real estate Development and management changes.

Three pairs of the above analysis of recombination events
3.1 ST Media Group Medicines and Hubei Daily
According to the plan of reorganization, the controlling shareholder of a new generation of technology to bear ST Sinopharm all debt, and cash to buy the original from the Medicines pharmaceutical science and technology assets, then re-side injection of quality assets for re-side, select the shell resource In addition to the plate right, but as soon as possible through a mutually acceptable solution to the problem of debts is important, however, ST Medicines guarantees and shareholder accounting section is surprisingly serious issues such as: before restructuring plan as early as July 2007, ST Medicines has issued an apology announcement, acknowledged that the company funds from operations, after a few days, due to shareholder funds used, security breaches and other reasons, ST Sinopharm was SFC investigation. These adverse events would be hampered ST Sinopharm a major factor in promoting the restructuring plan.

ST Medicines for disputed land ownership issues, took over the reorganization of the Hubei Daily Media Group hoped to be coordinated by government departments, but was not successful. Meanwhile, after several months delay, 200 million yuan financing through several rounds of consultations has not yet finalized, the higher authorities to communicate the progress has been slow, resulting in the restructuring more difficult. After half a year to discuss, ST Medicines that restructuring conditions are not ripe, terminated with the Hubei Daily restructuring dream. Links to free download http://www.hi138.com 3.2 ST Medicines and China Sanjiang Space Industry Group
As of the end of 2008, ST Medicines major operating assets of 69,159,500 yuan (book value was closed and secured, the amount of lawsuits involving debts of more than $ 300 million, while the main has been basically stagnant since the company, its net cumulative loss amount is huge. The most The key is in the planning of the reorganization of assets during the ST Medicines, banks and other creditors due to their inability to repay loans, the company held by the controlling shareholder of a new generation of science and technology ST Sinopharm 28.12% had equity in a frozen state on 25 November .2008 re-disclosure of a new ST Medicines warranty litigation matters. intention to win re-side, even a controlling stake in ST Sinopharm no avail, only to pay off the debt for shares to thaw before re-backdoor, it will increase the complexity of the reorganization of December 8, .2008 Day, ST Sinopharm announcement confirmed that the restructuring of the Sanjiang Space failed again because conditions are not ripe.

3.3 ST and Yang Fan Sinopharm Investment (Shanghai Co., Ltd.

The purpose of this restructuring is to enhance the trading company's capital strength, standardized operation, remodeling market image, the path of sustained Development path, and is committed to reward investors and create value for shareholders. Expected to produce the following effects: (1 relisting the company's continued viability: through this major asset restructuring, Shanghai Kaidi will become a wholly-owned subsidiary of the company's main business will be transformed into real estate Development and business in Shanghai Kaidi excellent asset quality and profitability will significantly improve the company's operating condition, to restore the company's continued viability, (2 to expand the size and assets of listed companies to improve profitability: through this reorganization of assets to 2009. March 31, consolidated financial statements of comparison, the company's total assets of 78.04 million yuan rose to 29,067,920,000 yuan, net assets of -255 302 ten thousand yuan rose to 1.24359 billion yuan, (3 regulate corporate governance of listed companies: Through this transaction The company will be established on the corporate governance structure and rules of procedure of the charter or work rules be revised to ensure the operation of the corporate governance structure more in line with the company after the transaction is completed the actual situation, then the history of illegal operation to eliminate the adverse effects of the Company In 2009 August 6, ST Medicines considered and adopted the "<Wuhan National Pharmaceutical Technology Co., Ltd. a major asset sale and issue of shares to buy assets 暨关联交易 Report (Draft>> Summary of motion and .

Through analysis we can see, the situation had not improved ST Medicines management, corporate profit is still a loss, the company's main business at a standstill period, in an extremely severe operating conditions, the company must actively promote the asset restructuring, efforts to resolve historical issues through reorganization of assets radical transformation of the real estate industry to improve asset quality and profitability of the company, thus ensuring the company's continued good Development. So Yang ST Sinopharm only to be expected with the smooth progress of the reorganization of assets invested sail, successful transformation of the real estate industry, in order to save the listed company.

4 ST Sinopharm further reflection by
(1 to establish good corporate public image: The first is the leader's influence, the so-called "Bear one soldier, the flaming nest." Development of an enterprise based on business-oriented leadership, the time when companies move forward , leaders must complete some duties, such as attention and check their own behavior and the resulting sense, pay attention to their influence, both positive and negative. ST Medicines chairman Lim Hong, general manager Zhou Xuehua, chief financial officer Huizhong, former chairman of the board for Lee Yan, the former director Zhang Yuewei, etc., in the information disclosure and specification, including funds, there are serious irregularities in the operation, was multi-condemnation, followed by corporate culture to guide and constraint, ST Medicines used to be, Hubei pharmaceutical market quality to ensure corporate integrity, but are listed, illegal operation of a serious problem, inadequate information disclosure, contrary to encourage Innovation, adhere to the business philosophy of honesty and integrity, a serious deviation from the original corporate culture, undermining its public image, resulting in a continuous loss of business trouble.

(2 focus on business Innovation: Innovation is a business survival and development of the soul, but ST Medicines in the management system, the main business of production technology, lack of Innovation, inadequate Investment in research and development, many new projects run aground, leading to a lack of profit growth.

(3 raise awareness of the law: the current major problems of our internal controls, corporate governance, inefficient one, serious internal control, the second is the management level is low, weak sense of control, control procedures and control measures a mere formality. Many companies most is "their final say" in the market often have non-standard place from the illegal operation of ST Medicines funds up to 2.3 billion phenomenon, the awareness of the law is very weak on the one hand, ST Sinopharm many companies involved in the major issues discussed by the board without consideration, but does not disclose the other hand, some major issues has been disclosed, but not explain why, or even no further. no wonder that many people ask: ST Sinopharm exactly what to sell "medicine "? finally confirmed a" net of justice, but not loose. "Therefore, enterprises are to become bigger and stronger, we must strengthen the legal awareness, standardized operation.

(4 to strengthen the regulatory authorities: the phenomenon of the illegal operation of enterprises, in addition to their own reasons, the relevant regulatory agencies of their responsibility Away In ST Sinopharm illegal operations, disputes continue the case, the existence of the regulatory supervision that an issue worth discussing.

(5 to respond effectively to changes in the environment: the pharmaceutical industry faces intense competition, restructuring and integration around the corner, how to choose the solution? Like China Resources Group and the Beijing Pharmaceutical Group as the powerful combination of asset reorganization, or such as ST for Medicines re-transformation? different companies have different options, and ST Medicines will also be a worthy reference for example. Links to free download http://www.hi138.com