China’s Pharmaceutical Firms Estimate 2016 Performance

By February 8, 183 Chinese pharmaceutical enterprises had released 2016 performance estimates, with average operating revenue up around 7.5% and average net profit rising approximately 10% from a year earlier.
Of the 123 enterprises reporting increased net profit, 38 companies estimate year-on-year explosions exceeding 100%, including Guangyuyuan Chinese Herbal Medicine Co., Ltd. (SH: 600771), Shenzhen Cau Technology Co., Ltd. (SZ: 000004), Yihua Healthcare Co., Ltd. (SZ: 000150), Hubei Guangji Pharmaceutical Co., Ltd. (SZ: 000952), Chongqing Taiji Industry (Group) Co., Ltd. (SH: 600129). Their profit growth is attributed mainly to increases in scale of sales, launches of new products and intensive expansion in company scales.
Andon Health Co., Ltd. (SZ: 002432) and Northeast Pharmaceutical Group Co., Ltd. (SZ: 000597) estimate that they turned from losses to gains in 2015, while the 2016 net profit of Guangyuyuan Chinese Herbal Medicine Co., Ltd. (SH: 600771) is estimated to have reached RMB98 million.
Thirty companies estimate year-on-year growth of 30% to 100% in 2016 net profit. They include Hunan Er-kang Pharmaceutical Co., Ltd. (SZ: 300267), Jiangsu Bicon Pharmaceutical Listed Company (SZ: 002411), Guizhou Xinbang Pharmaceutical Co., Ltd. (SZ: 002390), Porton Fine Chemicals, Ltd. (SZ: 300363), Zhuzhou Qianjin Pharmaceutical Company Limited (SH: 600479), Yantai Dongcheng Biochemicals Co., Ltd. (SZ: 002675). Most of them rely on asset acquisition or sale scale expansion to boost net profit.
Furthermore, 50 firms estimate decreased net profit; among them are Guangdong Jiaying Pharmaceutical Co., Ltd. (SZ: 002198), Beijing SL Pharmaceutical Co., Ltd. (SZ: 002038), Jianmin Pharmaceutical Group Co., Ltd. (SH: 600976), Shanghai Tofflon Science and Technology Co., Ltd. (SZ: 300171), Shenzhen Hepalink Pharmaceutical Co., Ltd. (SZ: 002399).
Revenue of China’s pharmaceuticals industry grew 8.76% in the first half of 2015, the slowest pace in the last 15 years, according to the Chinese Pharmaceutical Enterprises Association. However, the rate got back to double-digit growth, reaching 10% in the first half of 2016.
Nantong Jinghua Pharmaceutical Co., Ltd. (SZ: 002349) posted operating revenue of RMB881 million in 2016, up 12.96% YoY, and achieved RMB165 million in net profit, surging 111.36% from the previous year. The company is engaged mainly in R&D, production and sales of traditional Chinese patent medicine formulations, bulk pharmaceutical chemicals & medical intermediates, traditional Chinese medicinal materials/decoction pieces and bio-pharmaceuticals.