Qizheng Tibetan Medicine: The “Axis-Wing Strategy” Takes Root, Cultivating New Pillars for Growth

　　As the largest Tibetan medicine manufacturer in China, Qizheng Tibetan Medicine has seen its revenue and net profit steadily increase since its debut on the capital market in August 2009, rising from RMB 470 million and RMB 160 million at the time of its IPO to RMB 1.05 billion and RMB 300 million in 2017, respectively. Throughout this period, Qizheng Tibetan Medicine has remained firmly focused on its core Tibetan medicine business, achieving steady progress entirely through organic growth. Its asset-liability ratio has consistently stayed below 20%, making it a prime example of sustained and stable performance growth achieved without any leverage.

　　Data shows that China currently has 18 Tibetan medicine manufacturers, with an average annual industrial output value exceeding 3 billion yuan. Clearly, within the vast Chinese pharmaceutical industry, Tibetan medicine occupies only a relatively small niche. So, how has Qizheng Tibetan Medicine managed to steadily grow its business in this small market? Recently, a reporting team from the Securities Times’ “High-Quality Development in Action” initiative visited the company. On Monday, Zhou Yi, Executive Deputy Editor-in-Chief of the Securities Times, interviewed Lei Jufang, Chairwoman of Qizheng Tibetan Medicine, uncovering the company’s secret to steady growth and exploring its strategic plans for continued sustainable development in the future.

　　If we say that Qizheng Tibetan Medicine’s journey began with the integration and combination of modern technology and traditional Tibetan medicine, then the company’s steady growth in recent years has been closely linked to its management team’s keen responsiveness to market demands and their continuous upgrading of the established strategy. As early as 2014, Qizheng Tibetan Medicine promptly introduced the “One Axis, Two Wings, One Support” strategy in response to industry trends. While continuously strengthening six key capabilities—professionalizing academic marketing, refining brand management, optimizing sales management, systematizing market access, standardizing new-product launch planning, and streamlining production management—it also flexibly adjusted its channel structure and business strategies, rationally allocated market resources, innovated mechanisms to enhance team autonomy, boosted internal team vitality, and reinforced team execution capabilities to meet market challenges. Moreover, the company actively accelerated new-product development efforts, resulting in sustained growth in sales performance.

　　With the establishment of the National Healthcare Security Administration, a series of healthcare reforms have been steadily advancing. Qizheng Tibetan Medicine has once again proposed its business strategic goal of “One Axis, Two Wings, and Three Pillars,” focusing on its pharmaceutical business, strengthening its pain-relief plaster products, enriching its pain-management product line, and optimizing its channel distribution network. By leveraging the synergistic drive of large hospitals, essential drug programs, and retail channels, the company aims to achieve sustained performance growth. Throughout 2018, the company’s operational plans revolved around this strategic initiative, enabling it to maintain its position as the market leader in the topical analgesic category for pain-relief plasters. The company also promoted its “Integrated Pain Management Products + Tibetan Medicine Specialty Solutions,” explored new launch models for the “Shanwei” family of gastrointestinal products, and created pilot markets serving as benchmarks for the successful commercialization of new products.

　　The rapid implementation of the strategic upgrade has enabled the company’s operations to consistently translate into strong financial performance, making this a key factor in the company’s steady growth. As the inaugural year of the “One Axis, Two Wings, Three Supports” strategy in 2018, the company swiftly put its strategy into practice, achieving robust growth in first-tier patch products, with gross margins steadily increasing; second-tier pill products also saw rapid growth, and their gross margins improved significantly.

　　In Lei Jufang’s view, Qizheng Tibetan Medicine will continue to advance its clinical R&D efforts in the future, and its product portfolio will keep expanding: “The company will vigorously expand its pain-management product line, pursuing both the development of new products and the secondary development of existing ones, while further enhancing coverage of second-tier new products. In particular, building a ‘Pain Relief Family’ will serve as a key pillar for the company to cultivate new growth drivers. At the same time, in the future, the company will also focus on M&A targets that can create synergies and support its core Tibetan medicine business.”

　　The continuous upgrading of its strategy and the successful implementation of performance have made Qizheng Tibetan Medicine a quintessential long-term champion among A-share companies. Behind its sustained performance growth, annual cash dividends have become a customary practice for Qizheng Tibetan Medicine. According to Wind data, since its IPO, Qizheng Tibetan Medicine has raised a total of 480 million yuan through direct financing, all of which came from the issuance of new shares. Meanwhile, the company’s cumulative cash dividends have exceeded 1.27 billion yuan—nearly 2.6 times the amount of funds raised. “In the future, as long as an investor-return approach is proven feasible and aligns with market and shareholder needs, the company will be open to exploring it in order to ensure attractive returns for investors,” Lei Jufang told reporters from the Securities Times.

　　Reporting media: Securities Times

　　Report link: http://company.stcn.com/2019/0109/14786604.shtml