Kangmei Pharmaceutical (600518) late June 6th announcement, the board of directors approved the "on the establishment of a wholly-owned subsidiary in Guangdong city of Shenzhen province" the motion, the company intends to set up a wholly owned subsidiary of Meida Kang health industry Co., Ltd. in Shenzhen City, the investment amounted to 500 million yuan. Its business scope is: Chinese herbal medicine trading services; health science research and development projects; property management services.

Notice that the Future Ltd based on business development, the company set up a wholly-owned subsidiary of Meida Kang health industry Co., Ltd. in Shenzhen, will help the company in Shenzhen deep wisdom + health "ecosystem of strategic planning, to win greater development opportunities for the company and space, further enhance the company's overall competitiveness and market influence, meet company's development needs and long-term planning.

Analysis of the industry, Kang Mei pharmaceutical is the leading enterprise of Chinese medicine industry, the business includes pieces, pharmaceutical circulation, medical services and other five plates. In the context of zero drug addition, pharmacies as cost centers are gradually being stripped of hospitals, pharmacy trusteeship and centralized procurement model is on the rise. With the new model, the company's pharmaceutical circulation sector will maintain a CAGR of 30%. The wisdom pharmacy by prescribing the hospital prescription flow to the company's system, control channel terminal, the company is expected to significantly promote the sales of pieces of herbal medicine, to protect the growth of more than 25% pieces. In direct marketing, the company currently has more than 200 thousand direct sellers, to promote health care products and food sector to maintain high growth of more than 25%. In addition, the company is currently built or merger of 4 hospitals, more cooperation and the provinces and cities in more than 10 project reserves, the next two to three years is expected to through a variety of ways of mergers and acquisitions fund income through the body, management fees and pharmaceutical equipment supply chain mode profit model can be replicated, it is worth focusing on. The 500 million yuan to set up a wholly-owned subsidiary in Shenzhen, is conducive to its expansion in Shenzhen's influence and improve market competitiveness, is conducive to its opening up more room for development.