Chapter 932 To what extent?

After all, in the face of these investigations, once it is verified, GlaxoSmithKline will not only face huge fines from China, the United States, and the United Kingdom, but will also lose a considerable part of the market...

You know, GlaxoSmithKline (China) is one of the largest multinational pharmaceutical companies in China. Before 2000, GlaxoWellcome and SmithKline Beecham merged to form GlaxoSmithKline and established its headquarters in Brunn Before Telford, they entered the Chinese market in the 1980s.

Up to now, GlaxoSmithKline has a commercial presence in more than 250 cities and regions in China, with 5 regional centers, an investment company in Yanjing and the Institute of Infectious Diseases and Public Health, as well as in Shanghai, Tianjin and Shanghai. The joint ventures, R\u0026D centers and national commercial operation centers in Wuhan and Wuhan have a total of more than 4,000 employees.

Therefore, GlaxoSmithKline’s bribery case in China will definitely have an impact on its market in China, especially its two core businesses in China-prescription drugs and vaccines.

In Barron's previous life, affected by this incident, the revenue of these two businesses of GlaxoSmithKline in China plummeted by 61%!

“In fact, GlaxoSmithKline’s current sales in China only account for about 3% of its global sales. Therefore, from a global perspective, even if GlaxoSmithKline completely abandons the Chinese market, the impact on its revenue will be It’s not that big…”

Daisy said to Barron:

"The main reason why their stock prices have suffered such a drop this time, with a drop of more than 30% at one time, is that there are rumors that China will issue a huge fine to GlaxoSmithKline. In addition, the U.S. Department of Justice is involved in the investigation. , is a more direct threat to GlaxoSmithKline, which is also listed on the U.S. stock market. After all, the U.S. market is an important part of it..."

By this time, Barron had returned to London from China.

Indeed, the GlaxoSmithKline bribery case was still a big deal in China at that time, and Barron had heard about it in his previous life. Especially in this case, China offered GlaxoSmithKline the highest price they had ever paid. The fine - a fine of 3 billion Chinese dollars, will indeed be impressive.

"It is impossible for GlaxoSmithKline to give up on the Chinese market. After all, although their current sales in China do not account for a high proportion of the world's sales, the Chinese market is growing rapidly, and GlaxoSmithKline has already laid out and carried out operations in China. A lot of acquisitions..."

In the field of pharmaceutical business, GlaxoSmithKline has always focused on the four core treatment areas of infectious diseases, HIV, tumors and immunology. In recent years, GlaxoSmithKline has repeatedly made large-scale fixed asset investment projects in China. .

This includes GlaxoSmithKline's US$70 million cash acquisition of Jinling Meirui Pharmaceutical Co., Ltd. in December 2010 - Meirui Pharmaceutical Co., Ltd. is the operating entity of Pagoda Pharmaceutical Group in China, and its product lines include urology and allergy product portfolios .

In September 2011, GlaxoSmithKline spent US$39 million to acquire the remaining 51% equity of the joint venture Shenzhen GlaxoSmithKline Neptune Biological Products Co., Ltd. from Shenzhen Neptune Biotechnology Co., Ltd., mainly Engaged in the research, development, production and operation of vaccines.

Therefore, development in China is GlaxoSmithKline’s established strategy and cannot be given up easily.

As for the sharp drop in GlaxoSmithKline's stock price as a result, it also reflects the panic in the market. After all, if Tonghua can complete this case with a fine, it will not be a big deal for GlaxoSmithKline. matter - but relatively speaking, the U.S. Department of Justice is even more difficult to deal with.

GlaxoSmithKline has had similar bribery cases in other countries before. For example, they have been fined heavily for suspected violations in the United States, Italy, New Zealand and other countries.

If the U.S. Department of Justice continues to seize GlaxoSmithKline, it will have disastrous consequences for GlaxoSmithKline, which occupies a higher proportion of the European and American markets.

"Those multinational companies do this in many countries and regions. It's just a matter of whether they will be caught and punished by the regulatory authorities. We have already made good profits from our short selling of GlaxoSmithKline. Next, we need to determine. To what extent?”

Daisy's words are not wrong. For example, in China, the GlaxoSmithKline incident is not an isolated case of foreign companies suspected of bribery in China. Previous ones include Pfizer Pharmaceuticals, Morgan Stanley, IBM, Lucent, Wal-Mart, Depp, Ally Dan Many well-known multinational companies such as Nissen have been involved in commercial bribery in China.

As for her question...

Then Barron's needs to make a decision. This time, whether to short-sell to make a profit and then close the position and leave the market; or to take it a step further and take advantage of GlaxoSmithKline's current troubles to hold a part of the company. Shares of pharmaceutical giants.

In fact, the medical and health industry is also an investment direction that Barron is interested in. For example, he previously invested heavily in Pfizer Pharmaceuticals and became the company's largest shareholder.

GlaxoSmithKline is also a pharmaceutical giant that is similar in size to Pfizer - well, similar in size in terms of their global ranking of pharmaceutical companies.

Currently, Pfizer ranks second among global pharmaceutical companies in terms of market value, with a market value of about US$190 billion, second only to Johnson \u0026 Johnson.

GlaxoSmithKline previously ranked sixth, with a market value of less than US$120 billion.

Just from the perspective of market value, the gap between the two is still quite large.

However, according to Barron's experience in his previous life, GlaxoSmithKline's future development will not be as good as Pfizer.

In the original time and space, until 2015, GlaxoSmithKline has always appeared in the forefront of the global pharmaceutical company rankings, but after that, GlaxoSmithKline was no longer in the top 15 of this ranking.

Well, unlike Pfizer's market value, which continued to expand, GlaxoSmithKline's market value even fell below $100 billion a few years later...

In his previous life, Barron had no experience in the relevant industry, and he was not concerned about the future development of the pharmaceutical industry, so he did not know what caused GlaxoSmithKline to fall behind.

However, he understood that the pharmaceutical industry is an industry with frequent mergers and reorganizations, and for companies like GlaxoSmithKline, drug research and development still has a great impact on the company's revenue.

So he said to Daisy:

"We can keep some of the shares after this. After all, after this incident of GlaxoSmithKline, their stock price will still rebound. If we hold some shares, we can also observe the situation and make the final decision..."

Daisy had no objection to this, and she turned and said:

"Congratulations, the EU has compromised."