East Ejiao free price or return value

Yesterday, in the “New Wealth Night Talk” program aired on Gansu Satellite TV, financial commentator Ye Tan, Deben Securities Medical Industry Analyst Zheng Yining, He Jun Consultant Pharmaceutical Division partner Lu Ku, Snowball Net’s well-known grassroots researchers Two-tone azaleas discuss the secrets of the price increase of gelatine.

On July 13, Shandong Dong'e Donkey Glue Co., Ltd. announced a paper, raised the ex-factory price of Ejiao by 25%, and adjusted the retail price accordingly. On the same day, the eastern E-Jiao shares rose by 3.67% and then traded sideways for several trading days. Similar to the reasons for the previous price increase, the focus of this announcement is still on raw material prices, and the supply of donkey hides is in short supply. According to industry statistics, from May 2006 to the present, Dong'e Ejiao has accumulated a price increase of 13 times, and the ex-factory price has risen from less than 500 yuan/kg to 1,500 yuan/kg.

Ye Tan: In the end, the donkey skin has risen to what extent?

Two-color azaleas: In 2010, the donkey skin made in China was three to forty thousand yuan a ton, which was a 47% year-on-year rise in 2011. The year-on-year increase of 30% in 2012 was doubled so far in 2013 and is now about 160,000 tons.

Ye Tan: The profits that have doubled are not a good thing for the peasants? I can sell 1,000 bucks for a donkey skin. Then we should see the sight of a donkey in Jiaodong Peninsula or Inner Mongolia. Why did we not see this? What about the situation?

Zheng Yining: The reproduction rate of the donkey is relatively low, the breeding cycle will be relatively long, and the donkey cannot be cultivated on a large scale, because the donkey must be donkey-lined and the monomer breeding is the mainstay. This may have caused the uneconomical nature of raising donkeys and caused the lack of donkey skin.

Lu Ku: The price of a donkey is more than 6,000 yuan, but the price of a donkey is 1,000 yuan. From the perspective of the economic benefits of raising donkeys, donkey skins account for less than 20%, and more income comes from donkeys. However, raising donkeys, raising pigs, or raising cattle and sheep, which is more economical for farmers? The farmers will decide through horizontal comparison.

Ye Tan: Farmers' friends are all rational people. When you look at raising your head and donkey, your temper is still so ambiguous. It's better to raise a few pigs, right? Therefore raising donkeys becomes a particularly uneconomic thing.

In "Tuo", the loveliest donkey-hide of the little maidens recently set off a wave of price increases. Dong'e Ejiao recently announced a price increase of 25%. Why donkey skin prices soared all the way? Ejiao raw materials shortage? Yesterday, Gansu TV broadcast on the "New Wealth Night Talk" program, financial commentator Ye Tan, Deben Securities pharmaceutical industry analyst Zheng Yi Ning, and Jun consulting pharmaceutical business Partners Luku and snowball network grassroots researcher Du Fu Duo together with you to discuss the secret price of gelatin.

On July 13, Shandong Dong'e Donkey Glue Co., Ltd. announced a paper, raised the ex-factory price of Ejiao by 25%, and adjusted the retail price accordingly. On the same day, the eastern E-Jiao shares rose by 3.67% and then traded sideways for several trading days. Similar to the reasons for the previous price increase, the focus of this announcement is still on raw material prices, and the supply of donkey hides is in short supply. According to industry statistics, from May 2006 to the present, Dong'e Ejiao has accumulated a price increase of 13 times, and the ex-factory price has risen from less than 500 yuan/kg to 1,500 yuan/kg.

Ye Tan: In the end, the donkey skin has risen to what extent?

Two-color azaleas: In 2010, the donkey skin made in China was three to forty thousand yuan a ton, which was a 47% year-on-year rise in 2011. The year-on-year increase of 30% in 2012 was doubled so far in 2013 and is now about 160,000 tons.

Ye Tan: The profits that have doubled are not a good thing for the peasants? I can sell 1,000 bucks for a donkey skin. Then we should see the sight of a donkey in Jiaodong Peninsula or Inner Mongolia. Why did we not see this? What about the situation?

Zheng Yining: The reproduction rate of the donkey is relatively low, the breeding cycle will be relatively long, and the donkey cannot be cultivated on a large scale, because the donkey must be donkey-lined and the monomer breeding is the mainstay. This may have caused the uneconomical nature of raising donkeys and caused the lack of donkey skin.

Lu Ku: The price of a donkey is more than 6,000 yuan, but the price of a donkey is 1,000 yuan. From the perspective of the economic benefits of raising donkeys, donkey skins account for less than 20%, and more income comes from donkeys. However, raising donkeys, raising pigs, or raising cattle and sheep, which is more economical for farmers? The farmers will decide through horizontal comparison.

Ye Tan: Farmers' friends are all rational people. When you look at raising your head and donkey, your temper is still so ambiguous. It's better to raise a few pigs, right? Therefore raising donkeys becomes a particularly uneconomic thing.

There is a growing number of large companies involved in the production of donkey-hide gelatin products, and the increasingly tense nature of donkey hides has become an industry consensus. On April 18, 2013, the stock price of Dong'e Epox was close to the daily limit for news that the company’s cost was increased due to the price increase in the market. According to the first quarterly report of Dong'e Ejiao in 2013, the cost of donkey hides was RMB 70/kg to RMB 80/kg in 2012. By April 2013, it had risen to RMB 120/kg to RMB 130/kg, according to a research fellow from the pharmaceutical industry. The current over-expected increase in the price of donkey hides may give the company an annual increase of RMB 300 million in cost. Qin Yufeng, the general manager, once said that Dong Ejiao had established three donkey bases in Kashgar, Hetian, and Yili in Xinjiang, but the donkeys that were cultivated all came out of Xinjiang and eventually let others buy them. The competition for donkey skin resources has become increasingly strong. What is the control of donkey skin resources in Dong'e Ejiao Company?

Luku: Donga Ejiao had proposed a strategy for the entire industry chain in the previous years and hoped to extend it upstream to monopolize the donkey skin resources. It had tried and tried to raise donkeys to form a pasture. But later it discovered that it was not economical and the competition was not with the peasants. Later it changed a train of thought and tactics. It was directly supported by the peasants and it was purchased after it was raised. In that case, it means cooperation with peasant households. Now about 15% of the source of the donkey skin should come from its own upstream culture.

Ye Tan: How much is the cost of raw materials?

Lu Ku: According to the 2012 annual report, the gross margin of Ejiao products is 73%, and it is about 50% before the price increase. Therefore, I think that it is not true that its price hikes will be excused by the increase in the price of donkey hides. Taking Ejiao East as an example, in 2004, 150 kilograms of donkey-hide gelatin cost about 10 times more than 10 years. It should be said that 2010 is a watershed. Before ejiao was used as a drug, the price was controlled by the state. It had been increasing prices and approaching the national maximum retail price. At the end of 2010, the national policy was adjusted, and Ejiao was independently priced by the company as a health care product. In that case, the price ceiling was opened invisibly. Correspondingly, Dong E Ejiao raised the ex-factory price and retail price by 60 at the beginning of 2011. %. At this point in time its capital market performance also reached the highest peak. In the past three years it should be said that its capital market performance is not very satisfactory.

"Value return"

Or free price?

Qin Yufeng, the general manager of Dong'e Ejiao, once compared the donkey-hide gelatin with Cordyceps sinensis and Maotai, and thinks that Ejiao's price is far inferior to Maotai and Cordyceps.

Therefore, he frequently proposed to let Ejiao "value return" and take the high-end luxury goods route. In an interview of China Economic Weekly in June 2011, he quoted: “In the Ming Dynasty, the catalog of commercial history was recorded in detail on the commercial circulation of donkey-hide gelatin. Tax practice, circulation tax accounted for 1/20 of sales, and it is estimated that Ejiao's price is approximately 322 yuan per silver, equivalent to 4,000 yuan to 6,000 yuan per kilogram. This is the current retail price of Dongjia ejiao's official website. For 875 yuan / kg, according to the materials in the 4000-6000 yuan per kilogram of the "value regression" is estimated, at least 4.5 times the price increase. However, on August 3, the equivalent of 19.8 US dollars per ounce of international silver, the price of three pounds of silver and a pound of gelatin is equivalent to 600 yuan/kg, which is equivalent to the ex-factory price before the price increase.

Two-color azaleas: I don't think that considering the current consumption of imports, the issue of scarcity of donkey hides cannot be solved in five to ten years. Ejiao's output is 5,000 to 6,000 tons, and 6,000 tons is its limit. Only 1% of people in the country can eat ejiao.

Lu Ku: According to the annual report, Dong E Ejiao's net profit rate can reach one-third, in fact it is not based on cost, and it is based on its strategy of “returning to value”, including market demand. Overall, I think that the first donkey skin resource is not scarce, and the second one is not a basis for Dongjia e-gum price increase.

Ye Tan: One said that the skin of the donkey was scarce. One said that it was not scarce and the differences were still very big. Can Dong Ejiao make luxury goods?

Zheng Yining: Ejiao has always said that we must return value to build a more high-end brand, so we joked that it wanted to do LV in medicine. It covers a large number of different product levels to cover more people. There are ordinary donkey-hide gelatins, mainly for the hospital's donkey-hide gelatin, and Tao Huaji for young girls. After raising the price by 60% in 2011, its sales revenue did not increase with the increase in its price increase, but decreased. Comparing the price increase rate with the sales revenue over the years, it can be clearly seen that when the price increase rate is less than 30%, it will promote the sales volume, and if it exceeds 30%, it will decline. It is not that the price increases more. Many. So I think that when it is doing its price increase strategy, it may be due to overconfidence or other reasons that do not take into account the loss of consumers.