Sino Biopharmaceutical profit up 16.8% to HK$320mln

The company strengthens its quality control and product development to enhance the competitiveness of its products and brand.

Leading modernised Chinese medicine producer Sino Biopharmaceutical Limited (“Sino Biopharmaceutical” or the “Group”) on Tuesday announced its unaudited results for the nine months ended 30 Sept 2010.

Results
For the nine months ended 30 Sept 2010, the Group posted a turnover of HK$3,011,443,000, representing a 21.7% increase from the previous corresponding period. Profit attributable to the Group grew by 16.8% to approximately HK$320,144,000. Basic earnings per share rose by 11.6% to 6.75 HK cents. The Group maintained a strong financial position with cash and bank balances reaching approximately HK$2,580,638,000 (2009: approximately HK$1,888,025,000).

The Board of Directors declared a quarterly dividend of 2 HK cents per share. Plus the first and interim dividends totaling 4 HK cents already paid, the total dividend per share for the first three quarters of the year would amount to 6 HK cents. (2009: 4.5 HK cents)., according to a Sino Biopharmaceutical report

Mr. Tse Ping, Chairman of Sino Biopharmaceutical, said, “In light of various measures undertaken by Chinese Government, including the adjustment to the price of pharmaceuticals and the introduction of the tender scheme for group procurement of pharmaceuticals at the provincial level, we have launched a series of counter strategies during the review period. We have also continued to strengthen our quality control in order to enhance the competitiveness of our products and brand. Together with our focus on new product development, we have achieved continued revenue and profit growth for the first three quarters.”

Business Performance
Leveraging its existing medicine series for treating cardio-cerebral diseases and hepatitis, the Group has also actively developed other medicines, including but not limited to, oncology medicines, analgesic medicines, diabetic medicines, respiratory system medicines and digestive system medicines. Sales of the Group’s major medicine types for the nine months ended 30 September 2010 are outlined below:

Cardio-cerebral medicines

Cardio-cerebral medicines accounted for approximately 20.7% of the Group’s revenue during the period under review. Performance of this segment’s major products was as follows:

• Sales of Kaishi injections increased by about 42.5% to approximately HK$ 808,970,000;
• Sales of Tianqingganan injections slightly grew by about 0.4% to approximately HK$38,620,000 when compared with the same period last year;
• Tianqingning injections reported sales of approximately HK$119,590,000, a significant increase of about 53.9%; and
• Yilunping tablets recorded sales of approximately HK$109,350,000, representing a noted growth of about 51.7% against the same period last year.

Hepatitis medicines
Sales of hepatitis medicines amounted to approximately HK$1,288,900,000 during the review period, representing about 42.8% of the Group’s revenue. Performance of the segment’s major products was as follows:

• Tianqingganping enteric capsules recorded sales of approximately HK$149,620,000, a year-on-year growth of about 7.6%;
• Tianqingganmei injections reported sales of approximately HK$304,250,000, representing a growth of about 22.4% against the same period last year;
• Sales of Mingzheng capsules slightly increased by about 0.2% to approximately HK$483,350,000; and
• The new medicine Runzhong (Entecavir) dispersible tablets has recorded sales of approximately HK$79,860,000 since its launch in March 2010.

Oncology medicines
Sales of Oncology medicines, including Tianqingyitai injections, Tianqingrian injections and Renyi injections, amounted to approximately HK$199,700,000, a growth of approximately 40.9% against the same period last year.

Analgesic medicines
The principal product – Kaifen injections – recorded sales of approximately HK$207,380,000 during the review period, a substantial growth of about 43.2% when compared with the same period last year.

Diabetic medicines
The main product in this category – Taibai sustained release tablets – reported sales of approximately HK$27,260,000 for the nine months ended 30 September 2010, representing a year-on-year growth of about 11.9%.

Research & development (“R&D”)
The Group continued to focus on the R&D of new products. During the period under review, the Group received 6 new product and production approvals and 2 clinical approvals. A total of 49 cases had undergone and completed clinical research, or were in clinical trial or in the process of applying for production approval. Out of these, there were 8 cardio-cerebral medicines, 9 hepatitis medicines, 8 oncology medicines, 4 respiratory system medicines, 1 diabetic medicine and 19 other medicines. In addition, the Group has filed applications for 23 invention patents and received 2 invention patent rights during the review period. Altogether, the Group has 216 invention patent rights, 3 utility model patent rights and 21 apparel design patent rights.

Prospects
Mr. Tse concluded, “Looking forward, we believe the PRC Government will escalate its investment in the healthcare industry, spurring its faster growth. However, with the increasingly stringent supervision on the industry, the operating costs for pharmaceutical enterprises are expected to rise.

Together with the implementation of a series of measures such as essential medicine systems and a tender mechanism for group procurement of pharmaceuticals at the provincial level, the profit margin of pharmaceutical manufacturers is expected to be squeezed further. This may likely to accelerate the consolidation of pharmaceutical industry through mergers and acquisitions. We will continue to strengthen our product quality management and cost control to further enhance operational efficiency, thereby achieving greater returns for our shareholders.”