Chinese Drug Makers Post Higher 2008 Earnings
Year:2009 ISSUE:12
COLUMN:M & A, BUSINESS & TRADE
Click:200    DateTime:Apr.27,2009
Chinese Drug Makers Post Higher 2008 Earnings     

Sanjiu Medical & Pharmaceutical Co., Ltd. (SZ: 000999)'s sales rose 24.12% to RMB4.32 billion in 2008, according to its annual results released on March 18th. Net profit jumped 77.41% to RMB500 million, and earnings per share gained 75.86% to RMB0.51.
    Sales in Sanjiu's drug business rose 18.8%. Among them, OTC sales climbed 13.4% while Traditional Chinese Medicine (TCM, prescription) gained 37%. Although sales for antibiotics remained fast growth, the combined sales for the antibiotics and general drugs segment rose only 16.8% as active pharmaceutical ingredients sales fell.
   Shenzhen, Guangdong province-based Sanjiu principally engages in the research, development, manufacture and sale of pharmaceutical products (mainly TCM products), healthcare products and medical appliance. The company also provides package, printing and other medical services.

Jiangsu Kanion Pharmaceutical Co., Ltd. (SH: 600557)'s 2008 sales rose 13.36% to RMB1.13 billion. Net profit jumped 47.31% to RMB141.9 million, or RMB0.533 per share, the company reported on March 18th.
   Profit margin at the drug manufacturing segment rose 3.81 percentage points from a year earlier, but fell 0.42 percentage points and 2 percentage points for the drug marketing segment and export business. The company's cash flow stood at RMB58.39 million at the end of 2008, down 37.04% from a year earlier.
   Jiangsu Kanion attributed the fast earnings growth to the gains in its main business, as the company lowered production costs and benefited preferential tax.
   The Lianyungang, Jiangsu province-based company engages in modernizing Traditional Chinese Medicine, by introducing new techniques, and assistant materials into TCM.

Tonghua Golden-Horse Pharmaceutical Industry Co., Ltd. (SZ: 000766) said its core business revenue rose 5.45% to RMB159.86 million in 2008. Net income fell 8.76% to RMB17.18 million or RMB0.04 per share.
   The revenue gained as the company expanded sales. Its net income fell as the company received less government subsidies compared with a year earlier.
    Based in Tonghua, Jilin province, the company engages in the manufacture and sale of TCM and healthcare products.

Shenzhen Accord Pharmaceutical Co., Ltd. (SZ: 000028) increased sales by 21.55% to RMB8.36 billion in 2008. Net income increased 23.93% to RMB155 million, or RMB0.537 per share, the company reported on March 20th.
   The company actively expanded overseas markets, securing international certification and seeking international cooperation projects, which contributed to its business increase.
    Shenzhen Accord is an integrated pharmaceutical company, engaging in research and development, production and logistics.

Huadong Medicine Co., Ltd. (SZ: 000963)'s sales rose 23.96% to RMB6.016 billion in 2008. Total profit fell 2.6% to RMB282 million, the Hangzhou, Zhejiang province-based company reported on March 17th. The drop in net profit is due to the poor operation in its non-core business.
   In its medicine business, there were 62 products with sales of over RMB10 million, doubling the number in 2007. The gross margin in the segment soared 486% to RMB137 million from RMB23 million in 2007. TCM and medical device sectors also had stable growth.
    Blood products, for which Huadong Medicine is a selling agent, is a main cash cow for its commercial business, the company said. Huadong Medicine is actively seeking agent business for other medical products to develop more cooperation partnership with suppliers. The sales of outside-sourced medicine products rose 28.7% to RMB4.93 billion in 2008.
   The commercial sector of the pharmaceutical industry in China is set to brace for a wave of consolidation with the progress made in medical reform, adding pressure on small and mid-sized companies. Huadong Medicine aims to become a leader in Zhejiang province in this field.

Shanghai Pharmaceutical Co., Ltd. (SH: 600849), an integrated drug maker, increased sales by 18.88% to RMB16.55 billion. Net income gained 23.70% to RMB81.98 million or RMB0.144 per share.
   Its Shanghai Pesticide Plant saw sales decline 0.63% in 2008 and was unprofitable after authorities ordered the plant stop producing pesticides because it failed environmental assessment.

Northeast Pharmaceutical Group Co., Ltd. (SZ: 000597)'s sales from core business in 2008 increased 24.38% to RMB4.61 billion. Net income soared 653.15% to RMB358 million, or RMB1.16 per share, due to higher sales and prices for VC.
   The company engages in the manufacture and sales of chemical raw medicines, as well as in bio-fermentation, micro-ecological modulator and pharmaceutical preparations.

Sales in Shanxi Yabao Pharmaceutical Group Co., Ltd. (SH: 600351) rose 27.24% to RMB1.25 billion. Net profit gained 63.07% to RMB85.5 million. Earnings per share increased 48.72% to RMB0.58. The company, based in Ruicheng, Shanxi province, produces more than 300 products ranging from TCM, biological drugs and chemical drugs, as well as health care products, animal feed additives and medical packaging materials.

Zhejiang NHU Co., Ltd. (SZ: 002001)'s sales rose 89.6% to RMB3.3 billion in 2008. Net profit totaled RMB1.3 billion, jumping 1 701%, thanks to higher sales prices for main products and lower income tax, which was cut to 15% from 33%.

Chengdu, Sichuan province-based Sichuan Dikang Sci & Tech Pharmaceutical Co., Ltd. (SH: 600466) successfully overcame the negative impact by Wenchuan, Sichuan earthquake last May, posting sales of RMB238.1 million in 2008, up 15.24%. Net profit jumped 84.30% to RMB10.2 million.
   The company is an integrated drug maker with products ranging from chemical medicine, biopharmaceuticals, TCM and biomedical materials.

Southwest Synthetic Pharmaceutical Corp., Ltd.(SZ: 000788), based in Chongqing, is the largest chemical synthetic drugs maker in western China. The company provides products in 12 categories including sulfa drugs, antibiotics, vitamins and anti-infective drugs, with more than 100 pharmaceutical ingredients and preparations. The firm's sales added 0.91% to RMB552.5 million, while net profit jumped 211% to RMB9.48 million

Zhejiang Medicine Co., Ltd.(SH: 600216), a producer of vitamins and antibiotics, boosted sales by 70.27% to RMB3.76 billion in 2008. Net profit was RMB973 million, surging 1 618.27%, and earnings per share was up 1561.54% to RMB2.16.
   The earnings growth comes as the company was officially identified as a high-tech enterprise in October in 2008 which means it could enjoy preferential tax and after prices jumped for its fatsoluble vitamin products and while production grew steadily.
   The selling prices and volume for the company's main products VE, VH and VA have dropped sharply since October in 2008 amid the financial crisis and economic slowdown. Zhejiang Medicine set a sales target of RMB3 billion this year.

Shandong Lukang Pharmaceutical Group Co., Ltd. (SH: 600789), China's leading antibiotics maker, posted a 13.58% growth in 2008 sales to RMB1.79 billion. Net income gained 66.31% to RMB38.8 million or RMB0.06 per share.

Zhejiang Hisun Pharmaceutical Co., Ltd. (SH: 600267), based in Taizhou, Zhejiang province, said sales revenue from its core business rose 12.09% to RMB3.18 billion. Net income gained 39.84% to RMB195 million, or RMB0.435 a share.
   The company is China's leading active pharmaceutical ingredient maker and one of China's biggest manufacture base for antibiotics and antitumor drugs. The c