HONG KONG, Aug. 30, 2012 /PRNewswire-Asia/
-- Sihuan Pharmaceutical Holdings Group Ltd.
(HKEx: 0460) ("Sihuan Pharmaceutical" or the "Company"), a leading
pharmaceutical company with the largest cardio-cerebral vascular
drug franchise in China's
prescription drug market, today announced its interim results for
the six months ended 30 June
2012.
Financial Highlights
|
For the Six Months
Ended 30 June
|
Key Income Statement
Items
|
RMB
'000
|
Change
%
|
|
2012
|
2011
|
|
Revenue
|
1,389,297
|
990,568
|
40.3%
|
Gross Profit
|
1,071,419
|
774,730
|
38.3%
|
Operating
Profit
|
533,425
|
446,326
|
19.5%
|
Profit Attributable to
Equity Owners
of the Company
|
461,445
|
380,685
|
21.2%
|
Dividend per Share (RMB
Cents)
|
3.1
|
1.9
|
N/A
|
Special Dividend per
Share (RMB Cents)
|
Nil
|
7.8
|
N/A
|
|
|
|
|
|
During the period under review, the Company continued to
strengthen its cardio-cerebral vascular ("CCV") drug business while
promoting sales of its products in other therapeutic areas. The
Company continued to achieve sustainable growth, with revenue
increasing by 40.3% to RMB1,389.3
million and gross profit rising 38.3% year-on-year to
RMB1,071 million. Net profit
attributable to the Company's equity owners increased by 21.2% to
RMB461.4 million. The Board of
Directors has also recommended an interim dividend of RMB3.1 cents per share (2011: RMB1.9 cents) for the six months ended
30 June 2012.
Dr. Che Fengsheng, Chairman and CEO of the Company, said,
"Despite a challenging operating environment in the first half of
the year, we maintained our growth momentum and this was largely
driven by our diversified and optimized product portfolio and
strengthened sales and marketing strategies. We made significant
progress in deepening penetration in current markets as well as
expanding into new markets, enhancing our sales and marketing
network, and strengthening our R&D and production capabilities.
Further, we effectively promoted the sales of various established
and promising products such that ten major products achieved sales
growth of over 50%, and further strengthened our leading position
as the largest CCV franchise in China. We have also grown to the be the ninth
largest pharmaceutical company in the prescription drug market in
China which positions us to
maximize the immediate and long-term market opportunities."
Robust Growth for Major Products
CCV Products
Benefitting from the broader revenue base from a further
diversified product portfolio, sales of CCV products recorded
satisfactory growth of 46.1% to RMB1,277.4
million, accounting for 91.9% of total revenue.
Sihuan Pharmaceutical has stepped up its efforts to further
penetrate existing markets with its established products while
expanding the presence of its promising products in new markets. As
a result, sales revenue for Qingtong, GM1, Qu'Ao and Chuanqing grew
by 72.2%, 63.0%, 38.4% and 11.0% to RMB29.1
million, RMB96.1 million,
RMB40.8 million and RMB42.8 million, respectively. Sales of various
promising products, such as Aoliankang, Yuanzhijiu, Yimaining and
Yeduojia, also increased significantly by 272.6%, 238.8%, 157.7%
and 76.6%, respectively. Sales volume of Kelinao and Anjieli were
impacted by slower-than-expected progress in the lifting of medical
reimbursement restrictions. As for Oudimei, delays in provincial
drug tendering and the alignment of the Company's distribution
network affected its growth.
Nevertheless, the Company believes that the impact is temporary.
In the second half of the year, outstanding provincial drug tenders
are expected to complete gradually and the mentioned factors are
expected to fade. Further, sales of these products are expected to
gradually improve during the second half of the year. At the same
time, the Company plans to enhance efforts in academic promotions
and expand its sales and marketing team. Taken together, this will
enhance the Company's overall performance in the balance of the
year and going forward.
Non-CCV Products
Despite that sales of anti-infective drugs decreased due to
stricter restrictions on clinical use, the Company avhieved robust
sales growth of its nervous system, respiratory and metabolism
drugs. As a result, sales of these drugs grew by approximately
19.6% to RMB71.0 million compared to
the same period of last year, accounting for approximately 5.1% of
the Company's total revenue. Sales of Ren'Ao, Zhuo'Ao and Bi'Ao
surged 101.3%, 61.8% and 35.8%, respectively.
Sound Progress in Research and Development
("R&D")
To strengthen its industry-leading position, the Company
continued to further its efforts in R&D. Various projects have
made solid progress during the first half of 2012. For example,
Roxatidine Acetate Hydrochloride for Injection, Sihuan
Pharmaceutical's first-to-market generic drug, passed on-site
inspection conducted by the State Food and Drug Administration
("SFDA") in May 2012. With approval
for production expected in the near future, the Company plans to
launch the product in the second half of the year.
In addition, two other drugs, the exclusive Category IV new drug
Cinepazide Mesilate and the Category I innovative drug
L-Phencynonate Hydrochloride, have both progressed into more
advanced phases of clinical trial. Another generic drug, Nalmefene
Hydrochloride, is pending on-site inspection by the SFDA. As of the
end of June 2012, the Company has
obtained eight new patents.
Strengthened Production and Quality Management
The Company has commenced upgrades of its production bases in
Beijing, Jilin and Liaoning in compliance with the new Good
Manufacturing Practice ("GMP") standards. Langfang Sihuan Gaobo
Pharmaceutical Co., Ltd, the Company's active pharmaceutical
ingredient ("API") plant, passed the new GMP standards in 2011 and
commenced production thereafter. During the Period, API plant
produced over 10 APIs with aggregate production exceeding 15
tonnes. In addition, the Company has lowered costs and improved
production yield and capacity of its newly acquired facilities.
Outlook for the Second Half of 2012
Despite the macro policy headwinds brought on by various medical
reform measures, the Company believes that the pharmaceutical
industry will continue to be one of the fastest-growing sectors in
2012. Rising per capita subsidy standards for medical insurance and
the maximum reimbursements for medical treatments are expected to
be catalysts in driving industry growth in 2012 and beyond. Other
favourable factors such as the accelerated pace of urbanization and
the aging population, along with the 12th Five-year Plan stipulated
by the Chinese government, will further fuel robust market growth
over the long-term.
Looking into the second half of the year, the Company will
continue its two-pronged sales and marketing strategy to boost
sales of its established and fast-growing promising products by
furthering its penetration into current provincial markets and
entering new markets. To that end, the Company will increase
marketing efforts by expanding its sales force and stepping up
academic promotion to further brand recognition. It will also
strive to secure tenders for established products at stable price
levels to expand market coverage of promising products.
To diversify its product offering, the Company plans to make
further investments in the R&D of key projects in the pipeline,
particularly for first-to-market generic drugs. The aim is to
shorten the time needed to commercialize the Company's products.
Meanwhile, the Company will seek to explore collaborative
opportunities to maximize sources of new R&D projects, shorten
the product development cycle, further enhance technology
platforms, and strengthen its overall R&D capabilities.
Dr. Che concluded, "2012 is expected to be the most
challenging year thus far for the Company and while it is proving
to be a time of transition and adaptation, we are doing a very good
job navigating through this. Facing intensified market competition
as well as macro headwinds, the Company's strategic internal
alignment and adjustments in 2012 constitute vital groundwork for
our further development in the second half of this year and beyond.
We are confident that by leveraging our highly-diversified product
portfolio and strong R&D capabilities, we will be able to
deliver strong and consistent returns to our shareholders over the
long-term."
About Sihuan Pharmaceutical Holdings Group Ltd.
Founded in 2001, Sihuan Pharmaceutical Holdings Group Ltd. is a
leading pharmaceutical company and the largest cardio-cerebral
vascular drug franchise in China's
prescription drug market by market share. The success of the Group
can be attributed to its differentiated and proven sales and
marketing model, diversified portfolio of market leading drugs,
extensive nationwide distribution network, and strong research and
development capabilities. The company's current products encompass
the top five medical therapeutic areas in China: cardio cerebral vascular system,
central nervous system, metabolism, oncology and anti-infectives.
Their major products such as Kelinao, Anjieli, Chuanqing, Qu'Ao GM1
and Oudimei are widely used in the treatment of various
cardio-cerebral vascular diseases.
SOURCE Sihuan Pharmaceutical Holdings Group Ltd.