Li Wenya looked at the silent An Wuyang, a flicker of helplessness in her eyes, but she continued speaking. "Actually, the group's situation is far worse than what you know. We just never told you."
"For instance, the group's operations haven't been good for the past three years. Sales have been declining year by year, and net profit has dropped even more. If you factor in R&D spending, we've actually been running at a net loss since the year before last," Li Wenya added, detailing the grim reality.
So the family business, which once boasted an annual profit of at least 50 million, was already teetering on the brink?
An Wuyang felt a dazed realization.
"So, are we bankrupt?" An Wuyang looked at his mother.
"That depends on your father's decision." Li Wenya glanced at An Huchun.
"Although Wugengtian Pharmaceutical Group is our family business, and your father is the legal representative, it's also a limited liability company with a registered capital of only 1 million Xia Guo Yuan," Li Wenya explained further.
An Wuyang instantly understood what Li Wenya meant. If their family severed ties with Wugengtian Pharmaceutical Group and put it through bankruptcy liquidation, the group's problems wouldn't affect them personally.
In fact, this was the choice most 'limited liability companies' made—after all, liability was only limited!
An Huchun spoke quietly. "Wugengtian was your grandfather's life's work, and it's the An family's legacy. We've poured so much into it. I..."
"I think..." An Huchun didn't know how to say it.
An Wuyang took the initiative to ask, "Mom, if the group doesn't go for bankruptcy liquidation, what happens?"
"The outcome is pretty bad," Li Wenya summarized first.
"For the group, first, there would be massive layoffs, the new factory would shut down, and we'd sell off the new plant to generate cash flow," Li Wenya explained.
She added, "Actually, the group's current predicament isn't just because your father poured a lot of money into R&D."
"The root cause is that the group lacks core technological competitiveness," Li Wenya pointed out the key issue.
"On top of that, there's the failure in the pharmaceutical centralized procurement competition. On the 2nd of this month, the Fifth Pharmaceutical Centralized Procurement officially launched, covering 62 drugs. Our group bid for the procurement qualification of Sodium Esomeprazole for Injection," Li Wenya detailed.
"In the bidding for the procurement qualification of Sodium Esomeprazole for Injection, we lost to Caimai Pharmaceutical," Li Wenya sighed.
"Caimai Pharmaceutical... our old rival?" An Wuyang frowned.
Caimai Pharmaceutical was also a Shengqing-based pharmaceutical company, a long-time rival of Wugengtian Pharmaceutical Group.
"Yeah." Li Wenya added with some resignation, "They directly quoted 44.3 yuan for a 10-vial pack of 40mg per vial of Sodium Esomeprazole for Injection. We quoted 59.8 yuan."
"Are they crazy?" An Wuyang complained.
Under normal circumstances, a 10-vial pack of 40mg per vial of Sodium Esomeprazole for Injection sold for over 100 yuan, and in some regions, it could even go as high as 200 yuan.
But Caimai Pharmaceutical had dropped their collective procurement price to 44.3 yuan—that was just...
While the government's goal in organizing pharmaceutical centralized procurement was to secure lower drug prices to benefit more ordinary people, for pharmaceutical companies, such ultra-low quotes meant shrinking profits.
Some might think pharmaceutical companies are just profiteering and deserve to have their margins cut.
But the issue wasn't that simple.
Take Wugengtian Pharmaceutical Group and Caimai Pharmaceutical as examples. Wugengtian was a research-driven pharmaceutical company, while Caimai was a generic drug manufacturer.
For Caimai, with no R&D costs, they only needed to replicate drugs whose patents had expired, keeping their overall costs low and giving them more room to negotiate.
Wugengtian Pharmaceutical Group was different. Every year, they poured substantial funds into developing new drugs.
Even if Wugengtian hadn't produced any breakthroughs, they had still invested heavily in R&D.
When Wugengtian's overall profits dropped, their options were either to transform into a generic drug company like Caimai, go straight into bankruptcy liquidation, or slash R&D spending to barely survive.
Were these outcomes a case of bad money driving out good?
"Although the results of the Fifth Pharmaceutical Centralized Procurement won't be announced until three days later, we've already gotten the results early—actually, all the companies have," Li Wenya sighed again.
"This result is the last straw for our group. It's completely crushed us in terms of marginal costs and human resource costs," Li Wenya said with deep regret.
"Given the group's repeated failures in centralized procurement, plus your father's desire to save the group, my rough estimate is that besides selling the new factory's property rights, we'll probably lose most of our family assets," Li Wenya added.
"Also, your father once promised to buy you a sports car after the College Entrance Examination, but under these circumstances, he'll have to break that promise," Li Wenya appended.
If the family business was on the verge of bankruptcy, what sports car could they buy?
An Huchun chimed in, "Now we're faced with two choices."
"First, we liquidate the group. Through this move, we can preserve most of the family's assets. Even though we lose the group, you'll have a worry-free life for the rest of your days," An Huchun explained.
The first option was clearly more favorable to An Wuyang.
"Second, we try to save the group. This path is extremely difficult, and we might even end up deep in debt," An Huchun deliberately made the problem sound worse.
"Your mother and I have discussed it. This time, the choice is yours," An Huchun signaled for An Wuyang to make the final decision.
Ding!
Fate's Choice Activated!
Option A: Choose to liquidate Wugengtian Pharmaceutical Group.
Reward A: The system will assist the host in starting a new business empire.
Plan B: Cooperate with An Huchun to save the family business, Wugengtian Pharmaceutical Group.
Reward B: A comprehensive reward will be granted based on the specific rescue plan and its execution results.
The Happy Life System suddenly sent a notification in An Wuyang's mind. Pretending to be deep in thought, he actually checked the information displayed by the Happy Life System in his head.
The Happy Life System. An Wuyang sighed to himself.
He had originally thought it was a useless little trinket, but now that the family business—earning half a billion a year—had run into trouble, this Happy Life System was starting to become important.
It seemed he would have to work hard!
Otherwise, how could he turn the tide when all was lost, or prop up the building as it toppled?
Before you continue
Explore the wiki