Profit Quality Analysis Of Pharmaceutical Industry

The pharmaceutical industry is closely related to national life,and has an unparalleled role in protecting people's lives and health.For the management of pharmaceutical companies,facing current opportunities and challenges,while improving profitability,it is also necessary to improve the quality of profitability in order to seize opportunities and meet challenges.At the same time,the profit quality of the pharmaceutical industry has also attracted the attention of many investors and is the focus of the majority of investors.Therefore,the paper takes the profit quality analysis of the pharmaceutical industry as the research direction.In the pharmaceutical industry,Fosun Pharma is one of the largest and most profitable companies in the industry.Compared with other companies in the industry,Fosun Pharma has a wide business scope and frequent capital activities.Therefore,the paper selects Fosun Pharma as a case to investigate the profit quality.At the same time,its research results will also bring some inspiration for other companies in the industry.Through the study of the relevant theories of profit quality,the thesis proposes to establish a comprehensive analysis system for the profit quality of the pharmaceutical industry,and selects Fosun Pharma----a representative listed company in the pharmaceutical industry as an example,and analyzes the profit quality of Fosun Pharma to identify the problems and put forward suggestions for improvement of the profit quality of Fosun Pharma.First of all,the paper understands the current competitive environment and potential development factors of Fosun Pharma by analyzing the current status of Fosun Pharma's profitability.Research shows that among the competitions in the pharmaceutical industry where Fosun Pharma is located,the competition in the four aspects of competition of new entrants,competition among existing companies,bargaining power of buyers and bargaining power of suppliers is relatively fierce.In terms of its potential development factors,research shows that:(1)Because of the conditions of low macroeconomic impact,convenient capital activity conditions,strong relevance to national life,and new development directions brought by changes in procurement models,Fosun Pharma has some potential development opportunities;(2)Fosun Pharma is faced with multiple difficulties due to factors such as insufficient capital activity conditions,high barriers to entry,lack of high-end talent,poor industry autonomy,and small enterprise size.Then,based on the theoretical basis of profit quality,the paper uses the improved Du Pont analysis system and principal component analysis to analyze the profit quality level of Fosun Pharma.In the analysis process,first use the relevant profit quality indicators in the improved Du Pont analysis system to analyze the profit quality of Fosun Pharma itself.At the same time,select 169 listed companies in the Shanghai and Shenzhen A shares of the pharmaceutical industry as samples,use principal component analysis to obtain a comprehensive score of the profit quality of 169 listed companies in the pharmaceutical industry and analyze the position of Fosun Pharma's profit quality in this industry.Through research,it is found that:(1)Among the 169 listed companies in the pharmaceutical industry,the profit quality of Fosun Pharma is at the upper middle level and has considerable development potential;(2)From the perspective of Fosun Pharma itself,its own profit quality has many problems.Compared with the most profitable company in the industry,there is still a big gap.The main problems are:(1)In the context of medical insurance control fees,the artificially high prices of generic drugs make the income artificially high;(2)The fierce competition in the industry makes the profit margin low;(3)The change in drug procurement model makes the profit diluted;(4)M & A activities increase the financial risks;(5)The asset structure and profit structure are not balanced;(6)Insufficient innovation and R & D.Finally,according to the current profit quality status of Fosun Pharma and the problems of profit quality,the paper puts forward suggestions for improving the profit quality of Fosun Pharma.The suggestions are as follows:(1)Use the advantages of mergers and acquisitions to promote the upgrading of industrial structure;(2)Seek outsourcing to improve the level of operations;(3)Strip off non-core businesses to focus on advantageous businesses;(4)Improve the quality of asset management to reduce corporate risks;(5)Improve innovation capabilities to accelerate the growth of the company.