According to the recent disclosure of the Hong Kong Stock Exchange, Yashibang Co., Ltd. (hereinafter referred to as "Yaoshibang") submitted a form to apply for listing on the main board of the Hong Kong Stock Exchange, and Goldman Sachs and CICC acted as joint sponsors.
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According to Frost & Sullivan, based on the total size of commodity transactions (GMV) in 2021, Pharmacist Gang is the largest digital integrated service platform for China's off-campus pharmaceutical industry. The company is committed to empowering and digitizing players across the value chain, including pharmaceutical companies, pharmaceutical distributors, pharmacies and primary care providers.
The business model of Yakushi Gang is centered on the company's platform business and self-operated business, and is accompanied by a series of other innovative businesses. According to Frost & Sullivan, the company's total GMV reached RMB27.5 billion in 2021, with a compound annual growth rate of 42.9% since 2019, ranking first among China's out-of-hospital digital pharmaceutical industry service platforms.
According to Frost & Sullivan, as of December 31, 2021, the company has established the largest digital pharmaceutical trading and service network, including about 305,000 downstream pharmacies and about 130,000 primary care facilities. In addition, according to Frost & Sullivan, the company had 256,000 months of active buyers in 2021, ranking the highest among China's out-of-hospital digital pharmaceutical industry service platforms.
The revenue sources of Pharmacist Gang mainly include self-operated business, platform business and other innovative businesses, with the gross profit margin of the three major businesses reaching 5.2%, 83.7% and 51% respectively in 2021, of which self-operated business accounted for 95% of the company's total revenue. Pharmacist Help began to develop its own business in 2019 and generate revenue from product sales. Pharmacist has developed a proprietary fulfillment system that centralizes digital management of procurement, warehousing, distribution and working capital management.
According to the prospectus, in 2021, centralized digital management will enable Pharmacist Gang to effectively control the inventory turnover days at 27 days, which is better than the industry average of the pharmaceutical circulation industry. As of December 31, 2021, Yashibang has established 19 smart warehouses in 18 cities and ensured that the warehouses can process orders and issue deliveries within an average of 3.39 hours.
In 2021, Yakushi Gang also significantly shortened the delivery time, especially inter-provincial distribution, 39 hours to the city, 50 hours to the township, faster than the industry average of about 20%. In 2021, the GMV of the self-operated business was RMB10.5 billion, accounting for about 38.1% of the total GMV, with a compound annual growth rate of 81.1% since 2019.
In terms of financial data, in 2019, 2020 and 2021, the revenue of Pharmacist Gang reached 3.251 billion yuan, 6.065 billion yuan and 10.094 billion yuan respectively. Gross profit for the same period was approximately $229 million, $609 million and $914 million respectively.
It is worth noting that Since its inception, Yashibang has completed multiple rounds of financing from angel round to E round, and investors include Baidu, Tiger Global Fund, Pearl River Investment, Shunwei, Fosun, Songhe, DCM, SIG, Sunshine Insurance and other well-known enterprises and investment institutions. The proceeds from the IPO will be used to further build a digital platform for pharmaceuticals, develop innovative businesses, and invest in research and development in data and AI.
China's off-campus digital pharmaceutical circulation service market has grown rapidly in recent years. According to Frost & Sullivan, the market size of China's off-campus digital pharmaceutical circulation services market increased from RMB38.1 billion in 2017 to RMB148.5 billion in 2021 in terms of GMV, representing a compound annual growth rate of 40.5%.
However, the online circulation of out-of-hospital pharmaceutical circulation transactions is still in its early stages, and the penetration rate of China's out-of-hospital digital pharmaceutical circulation service market to the overall out-of-hospital pharmaceutical circulation market size is only 26.9% by GMV as of 2021, compared with the digitization rate of more than 35% in the same period in the United States, and it is expected that there will be considerable room for growth.
According to Frost & Sullivan, the market size of China's out-of-hospital digital pharmaceutical circulation service market is expected to grow to RMB321.3 billion in 2026 in terms of GMV, with a compound annual growth rate of 16.7%, while the penetration rate of China's out-of-hospital digital pharmaceutical circulation service market to the overall out-of-hospital pharmaceutical circulation market will reach 34.7%.
In terms of competition pattern, at present, China's out-of-hospital digital pharmaceutical circulation service market competition is concentrated, and the top five players occupy more than 63.5% of the market share. Among them, in terms of market size in 2021, Pharmacist Gang ranked first, with a market share of 18.5%.