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Shanghai Pharmaceuticals Shows Strong Momentum in Both Revenue and Net Profit in First Quarter, Off to a Good Start in 2015

    (29 April 2015) Shanghai Pharmaceuticals Holding Co. Ltd., (“Shanghai Pharmaceuticals” or the “Company” and, together with its subsidiaries, the “Group”; stock code: 601607.SH; 02607.HK), the integrated pharmaceutical company in the PRC that has leading positions in both pharmaceutical manufacture and distribution markets, today announced its first quarterly results. The Group recorded operating revenue of RMB25.125 billion, with an increase of 18.10% on a year-on-year basis. The net profit attributable to the shareholders of listed company was RMB733 million, with an increase of 25.08%. The net profit attributable to the shareholders of listed company after deduction of non-recurring items was RMB708 million, with an increase of 21.12% on a year-on-year basis. Revenues and profits soared significantly as compared with the same period of last year.

    For the aspect of pharmaceutical research and development, the Company has newly obtained 4 clinical approval documents for two categories of Sitafloxacin Axetil and Agomelatine, and 1 production approval document for a category of Flurbiprofen, 1 clinical approval documents of declaration for a category of Rivaroxaban. Looking into the future perspective, through optimizing its R&D management control system, Shanghai Pharmaceuticals will continue to accelerate its development of industrialization pilot bases, standardize its R&D project management, and continually enhance the contribution rate of new products. 

    For the aspect of pharmaceutical manufacturing, Shanghai Pharmaceuticals achieved the operating revenue of RMB3.077 billion, representing a year-on-year growth of 9.24%. The Company has completed its budget target in the first quarter of 2015 and achieved a gross profit margin of 48.59%. The Company recorded 13.03% operating margin after deduction of SG&A Expenses, with an increase of 1.33 percentage point as compared with the same period of last year. 60 optimized key products of the Company achieved sales revenue of RMB1.518 billion with an increase of 10.88% on a year-on-year basis, representing 49.33% of the manufacture sales revenue, and an average gross profit margin of 65.92%. The number of key products with expected annual sales revenue exceeding RMB100 million will be 24. Shanghai Pharmaceuticals will continue to optimize its operational models at marketing & sales center, further focusing on its strategies and key products, and implementation and execution of “one strategy for one product” so as to ensure the increasing of sales revenue of industrial product significantly. Meanwhile, the Company strives to optimize its production layout by promoting the Lean Six Sigma management comprehensively and accelerates the upgrade of manufacturing level.

    In the aspect of pharmaceutical services, Shanghai Pharmaceuticals achieved the sales revenue of RMB 22.274 billion for the pharmaceutical distribution business, with an increase of 20.38% on a year-on-year basis. Gross profit margin dropped slightly to 6.11% compared with the same period last year, but  rose slightly  compared to the record of 2014 annual results. Through the lean management on distribution comprehensively to improve operation capability, SG&A Expenses fell 0.05 percentage point on a year-on-year basis. The Company recorded 2.73% operating margin after deduction of SG&A Expenses, with a decrease of 0.14 percentage point as compare with the same period of last year, but sequentially increased compared to FY2014. For the aspect of pharmaceutical retail, Shanghai Pharmaceuticals achieved sales revenue of RMB867 million, an increase of 7.74% on a year-on-year basis; with gross profit margin of 18.73%. Shanghai Pharmaceuticals will accelerate M&A and logistics construction to improve the network layouts. Through innovation of distribution service pattern, the Company will further improve operation quality and customer service so as to increase its market share. The Company will also make strategic layout in advance by establishment of E-commerce company to speed up O2O sales of prescription drugs. Besides, market participants believe that, since this year, the prospection of political advantages, such as the intention of releasing drug price control, releasing “Internet plus drug sales”, and promoting market-oriented health care reform, etc., will let pharmaceutical industry draw sustained attention in the market. 

 

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