On October 17, Zhejiang Inter Group issued the "Indicative Announcement on the Change of Controlling Shareholders and Exemption from the Offer for this Transaction". Huachen Investment transferred nearly 122 million shares of Inter Group held by it to Zhejiang Pharmaceutical and Health Industry Group, the controlling shareholder of Huachen Investment, free of charge; at the same time, Zhejiang International Trade Group entrusted the voting rights corresponding to nearly 151 million shares of Inter Group held by it to Zhejiang International Trade's wholly-owned subsidiary Zhejiang Pharmaceutical Group for exercise. After this change of rights and interests, Zhejiang Pharmaceutical Group can actually control the voting rights corresponding to nearly 322 million shares of Inter Group. As of September 30, 2024, it accounts for 61.67% of Inter Group's total share capital.

So far, the controlling shareholder of Inter Group has changed from Zhejiang International Trade to Zhejiang Pharmaceutical Group, and the actual controller of Inter Group has not changed, and is still the State-owned Assets Supervision and Administration Commission of the People's Government of Zhejiang Province.

Zhejiang International Trade and Zhejiang Pharmaceutical Group are both state-owned enterprises. This acquisition is mainly to fully implement Zhejiang International Trade's strategy of "making medicine bigger", promote Zhejiang Pharmaceutical Group to become the main enterprise in Zhejiang's pharmaceutical industry chain, and enhance its market position in the pharmaceutical field. As a key regional pharmaceutical distribution enterprise, Inter Group's main businesses include pharmaceuticals, traditional Chinese medicine, biological products, and medical equipment operations. Its sales network covers Zhejiang, radiates East China, and faces the whole country. Inter Group has five major divisions: pharmaceutical division, equipment division, new retail division, logistics division, and traditional Chinese medicine division. At present, each division is developing rapidly. Taking the traditional Chinese medicine division as an example, its customers are distributed in 11 provinces across the country, achieving 100% coverage of 11 cities in Zhejiang Province, and cooperating with more than 350 provincial and municipal medical institutions.

In the 2023 list of the top 100 wholesale and retail enterprises in the pharmaceutical distribution industry, Inter Group ranks tenth among pharmaceutical wholesale enterprises in terms of main business income. Among local drug dealers, Inter Group's main business scale is second only to Chongqing Pharmaceutical, Nanjing Pharmaceutical, Guangzhou Pharmaceutical, and Haiwang Biological. In recent years, Inter Group has developed well. Its revenue in 2023 and the first half of 2024 were 32.052 billion yuan and 16.611 billion yuan, respectively, up 4.68% and 3.80% year-on-year; its net profit was 489 million yuan and 257 million yuan, up 130.09% and down 7.41% year-on-year.

It is worth noting that the direct reporting system of the pharmaceutical distribution industry of the Ministry of Commerce shows that the total sales of seven categories of pharmaceutical products of 146 direct reporting pharmaceutical distribution companies in Zhejiang Province from January to December 2023 was 162.923 billion yuan. Inter Group's revenue scale in 2023 is close to one-fifth of the total sales of seven categories of pharmaceutical products in Zhejiang Province.

At present, Zhejiang Pharmaceutical Group has a number of wholly-owned or holding subsidiaries, and holds holdings in listed companies Kangenbei Co., Ltd. and Inter Group.
In recent years, there are many pharmaceutical companies that have developed with the support of state-owned assets, and there are more and more cases of state-owned assets entering the market, such as Shanxi state-owned assets entering Guangyuyuan and Taiji Group becoming a company directly under the State-owned Assets Supervision and Administration Commission. Kangenbei is the first enterprise in Zhejiang Province's state-owned assets system to implement a mixed ownership reform plan. In 2022, Kangenbei's mixed reform case was included in the experience exchange case of the three-year action plan for state-owned enterprise reform by the State-owned Assets Supervision and Administration Commission of the State Council. The "Three-Year Action Plan for State-owned Enterprise Reform (2020-2022)" proposes to improve the state-owned assets supervision system, deepen the mixed ownership reform, improve the market-oriented operation mechanism, and enhance core competitiveness. Haitong Securities pointed out in a research report that the reform of pharmaceutical state-owned enterprises focuses on traditional Chinese medicine, blood products and circulation sectors. State-owned enterprises occupy an important position in listed Chinese medicine companies. The actual controllers of 21 A-share listed Chinese medicine companies are state-owned assets. In 2023, the revenue, profit and market value of state-owned Chinese medicine companies accounted for more than 60%.

State-owned assets lead Chinese medicine companies, and they actually see the development potential of related products. For example, Inter Group has a Chinese medicine division with its own brand matrix such as "Qianwang", "Inter" and "Huishan"; China Resources Sanjiu has become the controlling shareholder of Tasly, and Tasly's main products include Compound Danshen Drops, Yangxueqingnao Granules, etc.

With the support of state-owned assets, Chinese medicine enterprises can, on the one hand, obtain more abundant financial support and find new opportunities from the extensive resource integration capabilities of state-owned assets; on the other hand, state-owned enterprises can help Chinese medicine enterprises solve existing compliance issues and regulate corporate behavior.

Driven by state-owned assets, Chinese medicine enterprises have improved their own strength through mergers and acquisitions, restructuring, and focusing on core businesses. For example, enterprises such as Kunming Pharmaceutical Group, Kangenbei, and Taiji Group have achieved good development after relying on state-owned assets.

At present, the development of Chinese medicine enterprises has formed four major formations: the "national team" backed by Sinopharm Group and China Resources Group (Big Health), the "local team" controlled by local state-owned assets, listed specialty pharmaceutical companies, and non-listed Chinese medicine companies with a certain scale and characteristics.

https://mp.weixin.qq.com/