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Shanghai Pharmaceuticals Grew Steady in 2017 Q1

Manufacturing Business Achieved Rapid Growth

Distribution Business Steadily Scaled Up

 

(27 April 2017, Hong Kong) Shanghai Pharmaceuticals Holding Co., Ltd. (“Shanghai Pharmaceuticals” or the “Company” and, together with its subsidiaries, the “Group”; stock code: 601607.SH; 2607.HK), the integrated pharmaceutical company in the PRC that has leading positions in both pharmaceutical products and service markets, released its first quarterly report of 2017 on the night of 27 April, 2017. Data showed that During the Reporting Period, Shanghai Pharmaceuticals recorded operation revenue of RMB33.129 billion (Unit: RMB, following the same), representing an increase of 13.16% on a YOY basis. Net profit attributable to the equity holders of the listed company was RMB0.999 billion, representing a YOY increase of 12.37%. Net profit attributable to the equity holders of the listed company after deduction of non-recurring profit or loss was RMB0.939 billion, representing a YOY increase of 20.82%, achieved earnings per share RMB0.3717, earnings per share after deduction of non-recurring profit or loss was RMB0.3491. During the Reporting Period, the Company’s net cash flow from operating activities was RMB0.376 billion, representing a YOY increase of 14.81%, fulfilling the budget target for the first quarter of 2017.

In respect of pharmaceutical manufacturing business, Shanghai Pharmaceuticals achieved operating revenue of RMB3.794 billion in the first quarter of 2017, representing a YOY increase of 19.94% and a gross profit margin of 50.61%, representing a decrease of 0.34 percentage point as compared with the corresponding period of last year. The operating profit margin after deducting the costs was 14.14%, representing a YOY increase of 1.33 percentage points. In particular, sales revenue generated from its 60 key products increased by 15.07% on a YOY basis to RMB1.893 billion, accounting for 49.90% of the manufacturing sales. Average gross profit margin of key products was 69.82%, representing a YOY increase of 1.81 percentage points. Among the key products, there are 26 categories were expected to record sales revenue of more than RMB100 million over the year.

In respect of pharmaceutical service, the Company achieved operating revenue of RMB29.485 billion in its pharmaceutical distribution business, representing a YOY increase of 12.93% and a gross profit margin of 6.15%, representing an increase of 0.16 percentage point as compared with the corresponding period of last year. The operating profit margin after deducting the costs of sales and administration was 2.64%, representing a YOY increase of 0.02 percentage point. During the Reporting Period, the operating revenue from the pharmaceutical retail business amounted to RMB1.280 billion, representing a YOY increase of 4.30% and a gross profit margin of 15.88%, representing a YOY increase of 0.34 percentage point. The operating profit margin after deducting the costs of sales and administration was 0.26%, representing a YOY decrease of 1.1 percentage points. The implementation of “two-invoice” policy will benefice large pharmaceutical distribution enterprises in expanding market share in the next three to five years. The Company’s direct sales proportion in those provinces is thus expected to further enhance, which, in the long term, will strengthen the Company’s profitability in distribution business.

During the Reporting Period, Shanghai Pharmaceuticals Co., Ltd. (上藥控股有限公司),the subsidiary of the Company, basically completed the layout of market in North Jiangsu through merger and acquisition of Xuzhou Pharmaceutical Co., Ltd. (徐州醫藥股份有限公司)and Xuzhou Huaihai Pharmaceutical Co., Ltd. (徐州淮海藥業有限公司). The Company continued to manage the stock equity and enhance its competitiveness in Guangdong region through acquiring 31.593% equity of Guangzhou Z.S.Y Pharmaceutical Co., Ltd(廣東中山醫醫藥有限公司) held by Guangzhou Zhongda Industry Group Co., Ltd(廣州中大產業集團有限公司). Shanghai Pharmaceuticals also remarks that, as the integrated industrial company in the PRC that has leading positions in pharmaceutical manufacturing and business, the Company will ride on the industry reforms and actively grasp the industry trends to accelerate its transformation and development, and put more efforts in M&A activities, so as to maintain its leading status in the industry.

 

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