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| Operating Revenue Surged 14.9% to RMB78.223 Billion; Reached a Growth of 15.16% after Deducting Non-recurring Profit or Loss |
HONG KONG, Mar 31, 2014 - (ACN Newswire) - Shanghai Pharmaceuticals Holding Co. Ltd. recorded operating revenue of RMB78.223 billion, up by 14.90% on a YOY basis. Net profit attributable to the equity holders of the listed Company was RMB2.243 billion, up by 9.26% on a YOY basis, and reached a growth of 15.16% after deducting non-recurring profit or loss.
Continuous Increase in R&D Investment
In 2013, the Company introduced antibody-drug conjugates T-DM1 and CD30-DM1, which were under R&D, by acquisition of the entire equity interest in Shanghai Jiaolian Drug Development Co. Ltd to further enhance R&D capabilities of the Company in bio-pharmaceuticals. The Company also entered into a co-operation agreement, "Translational Medicine Alliance", with the People's Liberation Army Second Military Medical University, pursuant to which the Company planned to invest RMB10 million annually for conducting research projects such as innovation of new drugs with the People's Liberation Army Second Military Medical University. Meanwhile, the Group has established the Chinese Medicine Research Institute to conduct secondary development of existing Chinese medicine products and development of new Chinese medicine products.
According to the annual results, the total research and development expenditure amounted to RMB478.3 million, up 2.26% on a YOY basis and the expenditure on research and development fees represented approximately 4.25% of the Company's manufacturing sales income. Sales revenue from the Company's new products launched recently through R&D amounted to RMB1.019 billion, representing 9.51% of the Company's manufacturing sales revenue. The Company was granted 4 clinical approvals for 2 new drugs and 7 manufacturing approvals for 5 drugs.
Steady Growth of Principal Businesses
In 2013, the Company's sales revenue from the Pharmaceuticals business was RMB10.709 billion, representing a growth of 8.04% as compared with the corresponding period of last year, while gross profit margin was 48.07%, rose by 1.76 percentage points as compared with the same period last year. The Company continued to implement its strategy to focus on key products and adjust its product portfolio, therefore improving the gross profit margin of products and further optimizing its product portfolio. The Company realized sales revenue of RMB6.392 billion from its 64 key products, an increase by 15.71% compared to the corresponding period of last year and accounting for 59.69% of the revenue from sales of pharmaceutical products with an average gross profit margin of 62.99%. Key products with annual sales revenue of exceeding RMB100 million amounted to 21.
With respect to Pharmaceuticals services, the sales revenue from Pharmaceuticals distribution business was RMB68.01 billion, up by 15.42% as compared with the corresponding period of last year, with a gross profit margin of 6.05%. The Company held to the three notions of "expanding sales, reducing costs while optimizing efficiency, streamlining and strengthening coordination" close to its heart, innovated and spared no efforts in pushing forward with the trustee business represented by the pharmacy outsourcing service of the "5+3+1" hospitals in Shanghai. Currently, the Company is entrusted with 54 hospital pharmacies. Meanwhile, the logistics capability of the Company was significantly enhanced, with the addition of nearly 50,000 square meters of warehousing area, the growth of the Company's distribution of its own business received strong support. New businesses such as high value medicines direct to patients (DTP), vaccines and high value consumables kept expanding rapidly and recorded sales revenue of RMB4.4 billion, representing a YOY increase of 26.15%.
Two-pronged Strategy with Equal Emphasis on External and Internal Initiatives
In order to further perk up the operating efficiency of the manufacturing segment, in October 2013, Shanghai Pharmaceuticals established a new marketing center in order to realize a standardized planning, service, instruction and supervision of subsidiaries by the Company. At present, the Company has formulated annual marketing plans for 64 key products (excluding heathcare products) on a product-by-product basis. In the future, the Company will further explore the market potential of existing key products and strengthen the consolidation of internal marketing resources.
As one of our key products, Babaodan delivered sales of over RMB80 million in 2013. Such product has successfully ventured into the retail market in Fujian at the end of October 2013, marking the first step of opening the retail sales channel of Babaodan.
In order to successfully implement the Company's three-year development plan and raise the managerial standards, the Company has piloted the Lean Six Sigma model at the Logistics Center of its subsidiary Shanghai Pharmaceuticals Co., Ltd., and focused on 7 carefully-selected items. In 2014, the Company will further promote lean management in the Group.
In 2013, the Company will carry out acquisition and merger and accelerate the development of market layout. In the area of Pharmaceutical manufacturing, the Company acquired 89% shareholdings of Dong Ying (Jiangsu) Pharmaceuticals Co., Ltd., completed the acquisition of Shandong Ping Yuan Pharmaceuticals Factory and completed the additional purchase of 20% shareholdings of Chiatai Qingchun Bao Pharmaceuticals Co., Ltd. In the area of Pharmaceutical services, the Company completed the acquisition of Shandong Guolin Pharmaceuticals Co., Ltd. and founded Xinrenxiang Pharmacy in Hangzhou, Eastern Hongen Pharmacy in Shanghai, San Yuan Pharmacy and others. In addition, the Company also completed the project of setting up a branch of SPH Keyuan Xinhai Hubei Pharmaceuticals Co., Ltd. in Wuhan.
Changes in Commitment
In order to effectively protect the legal interests of medium and small investors and respond to the notice of the China Securities Regulatory Commission on the fulfillment of promise by listed companies, the Company resolved to change its relevant promise in a market-oriented approach.
Shanghai Pharmaceuticals is committed to continue the acquisition of 10.5% shareholdings of Employee Share Ownership Committee of Shanghai Sine Wanxiang Pharmaceuticals Co. Ltd. and complete by 2016. Shanghai Pharmaceuticals will not pursue the acquisition of 15.45% shareholdings of of Employee Share Ownership Committee of Shanghai Yunhu Medicine & Medicinal Materials Co., Ltd. but will keep the door of communication open in order to found out the solutions in a proactive manner.
With a view to protecting the interests of listed company and ensuring the continuous operation and asset integrity of listed company, Shanghai Pharmaceuticals will not pursue the acquisition of lands with defects in cash. Meanwhile, Shanghai Pharmaceuticals guarantees that the relevant units can continue to use the buildings under the existing condition. Shanghai Pharmaceuticals (Group) indemnifies any additional cost, fee, loss arising from operation and manufacturing suspension (if any) of the relevant units due to title defects.
Optimization of Financing Channel and Reducing Financing Risk
In order to optimize the financial management, increase the capital utilization efficiency, reduce financial cost and mitigate financing risk of the Company, Shanghai Pharmaceuticals Holding Co., Ltd. decided to enter into a "Finance Services Framework Agreement" with Shanghai SIIC Finance Company Limited (in the process of establishment, hereinafter referred to as the "Finance Company") and Shanghai Shangshi (Group) Co., Ltd., pursuant to which, the Finance Company will provide deposit, loan, settlement and other finance services approved by the China Banking Regulatory Commission to Shanghai Pharmaceuticals Holding Co., Ltd and its holding subsidiaries and other affiliates.
Topic: Press release summary
Source: Shanghai Pharmaceuticals
Sectors: Daily Finance, Daily News
https://www.acnnewswire.com
From the Asia Corporate News Network
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