[news] November 11th reporting network in Beijing (China business) after 2015 in income does not increase profits of the vicious circle of Zhejiang Conba pharmaceutical Limited by Share Ltd (hereinafter referred to as "Kangenbei", 600572.SH) had operating income and net profit QoQ fell in trouble.

In October 27th, Conba issued three quarterly, 2016 1~9 month operating income 4 billion 537 million yuan, an increase of 21.07%, the company operating income for the quarter from the previous quarter fell 5.42%; attributable to shareholders of listed companies net profit of 450 million yuan, down 26.83% in the quarter, the company net profit fell 6.97% qoq.

It is understood that in recent years, relying on the epitaxial merger Kangenbei thickening performance at the same time, also need to face the "income does not increase profits" and "endogenous growth" test.

In reply to "Chinese Conba business newspaper" reporter's e-mail said, the company will continue to adhere to the "endogenous and epitaxial wheel drive," over the years the development of the merger and reorganization of enterprises is in the pharmaceutical field of their own needs, but also to meet the requirements of development of pharmaceutical industry and national policy to guide, promote the sustained overall objective look the development of robust conba".

"Income does not increase profits" vicious circle

For the reason, the third quarter revenue fell Conba said, mainly due to a subsidiary of Zhejiang Zhencheng medicine online Limited by Share Ltd (hereinafter referred to as "Zhencheng medicine") income fell 120 million yuan.

Data show that in the first half of 2016, Jane Cheng pharmaceutical net profit fell sharply, net profit of only a major asset restructuring report is expected in the 2016 annual net profit of 82 million 450 thousand yuan of 3.40%.

For the reason, Zhencheng medicine income and net profit of a sharp decline in the Conba said, because of the supply chain financial value-added services business continued to decline in the money market rate under the background of the profit space is further reduced, in order to strengthen risk control, so take the initiative to control the scale of business, in addition, the G20 summit and during the early e-commerce platform the temporary closure leads to Zhencheng medicine revenue decreased greatly.

In addition, Conba said, Zhencheng medicine as an online transaction based medicine wholesale dealers encountered new policy adverse effects, such as the release of the relevant departments of the state Internet drug sales policy to suspend the third party platform, online sales of prescription drugs is not a clear policy of Taiwan, as well as reducing the medicine circulation to be implemented "two drug sales the ticket system" policy, increase the market expansion and difficult part of the downstream part of the loss of customers.

The reporter found out that the beginning of 2014, Conba merger integration into the intensive period, frequent mergers and acquisitions also created the conditions for the thickening of the company's revenue data. In 2015, Conba revenue reached 5 billion 302 million yuan, an increase of 48.03%; the first half of this year, Conba achieved revenues of 3 billion 50 million yuan, an increase of 37.92%.

On the other hand, Conba net profit performance from the beginning of 2015 consecutive decline, experienced no increase in interest income. Annual data show that in 2015, Conba achieved a total net profit of 440 million yuan, compared with 552 million yuan in 2014 fell by 20.34%; the first half of this year, Conba net profit of 307 million yuan, down 30.2%.

The company after the acquisition of "why no increase in interest income situation? A stock market A senior secretaries told reporters analysts said," for the capital market, through mergers and acquisitions, especially the development of large-scale mergers and acquisitions to extension is also a new topic, so speak down in this situation, most of the listed through the acquisition of the company's successful experience and do not too rich, not necessarily bigger and stronger is actually normal."

Another investment staff pointed out that income does not increase profits may have to do with the quality of the subject of mergers and acquisitions and cooperation of the relevant subsidiary companies, mergers and acquisitions in recent years, several times in the announcements appeared in the number of actual earnings and earnings forecast appraisal report number differences may explain the acquisition of the subject itself has some problems more or less.

"Short term fluctuations in the emergence of some of the company's mergers and acquisitions work, there are some need to continue to improve and perfect the place." In response to questions from reporters about the extension of the development, Conba said the pharmaceutical industry and the focus of "endogenous + epitaxial wheel drive is Conba listed basic development strategy in more than and 10 years, the company over the years the development of merger and reorganization of enterprises is in the field of medicine of their own needs, but also to meet the requirements and development of the pharmaceutical industry and the national policy guidance, guest watch on the whole to promote sustained and steady development of kangenbei.