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Third Quarter Financial Statement And Dividend Announcement 2017

Financials Archive

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UNAUDITED THIRD QUARTER FINANCIAL STATEMENT AND DIVIDEND ANNOUNCEMENT FOR THE PERIOD ENDED 30 SEPTEMBER 2017

Profit and Loss

Income Statement 3Q2017

Consolidation statement of Comprehensive Income for the period

Comprehensive Income

Balance Sheet

Balance Sheet 1Q2017

Review of Performance

Overview

In 3Q2017 the Group achieved net profit attributable to equity holders of RMB2.6 million and on revenue of RMB20.1 million.

Revenue

Group revenue increased 27% from RMB15.8 million in 3Q2016 to RMB20.1 million in 3Q2017 resulted by better sales of Antibiotics, Cardiovasular drugs and Cerebovasular drugs and Other specialized drugs.

Revenue

Antibiotics sales increased 30% to RMB5.7 million in 3Q2017 due to higher sales of Azithromycin Aspartate for Injection and Cefoxitin Sodium for Injection. Antibiotics accounted for 29% of Group revenue in 3Q2017 as the second largest revenue contributor to the Group.

Cardiovascular drugs and cerebrovascular drugs sales increased 23% to RMB1.1 million due to better sales of Vinpocetine for Injection. Cardiovascular drugs and cerebrovascular drugs represented 6% of Group revenue in 3Q2017.

Other specialized drug increased 26% to RMB13.2 million in 3Q2017 mainly casused by higher sales of Potassium Sodium Dehydroandrographolide Succinate for Injection and Amoxicillin and Dicloxacillin Sodium Tablets. Other specialized drugs was continue the largest revenue contributor, accounting for 65% of Group revenue in 3Q2017.

Profitability

Gross profit increased 26% to RMB8.7 million in 3Q2017 due to better sales revenues.

Other operating income increased to RMB1.2 million in 3Q2017 mainly caused by a government subsidy received in 3Q2017.

Selling and distribution expenses dropped 12% to RMB1.3 million in 3Q2017 was the result of better control the selling and distribution costs of the Group.

Administrative expenses decreased 19% to RMB3.6 million in 3Q2017 due to lower scraped inventories expensed in this quarter.

Other expenses increased 10 times to RMB1.6 million in 3Q2017 mainly due to foreign exchange loss incurred in 3Q2017.

Finance income declined 86% to RMB0.02 million mainly due to lower the gain on available for sale financial assets in 3Q2017 compared with 3Q2016.

Finance expenses decreased slightly to RMB0.01 million in 3Q2017 compared with 3Q2016.

As a result, the Group posted a net profit attributable to equity holders of RMB2.6 million in 3Q2017 compared with RMB0.7 million in 3Q2016.

Financial Position
(30 September 2017 vs. 31 December 2016)

Non-current assets dropped from RMB86.6 million to RMB81.1 million. Property, plant and equipment decreased from RMB54.0 million to RMB43.5 million due to depreciation and reclassified the Construction in Progress of RMB10.2 million to Investment Property after the construction was completed. Refundable deposits decreased from RMB22.2 million to RMB17.2 million mainly caused by a RMB5.0 million refundable deposit received from a R&D vendor.

Current assets increased from RMB104.9 million to RMB106.2 million. Inventories level reduced from RMB22.3 million to RMB20.8 million. Trade & bills receivables increased from RMB2.2 million to RMB4.0 million. Other receivables, prepayments and deposits decreased from RMB10.7 million to RMB4.3 million was mainly due to RMB7.0 million refundable deposits received in 1Q2017. Available-for-sale financial assets increased RMB12.0 million. Cash and bank balances decreased from RMB69.7 million to RMB65.1 million in 3Q2017.

The deferred tax liabilities was fully expensed in 3Q2017.

Current liabilities dropped from RMB35.8 million to RMB23.9 million. Trade and other payables increased slightly to RMB23.9 million. Short term borrowing was fully settled.

Cash Flow Statement

The Group's net cash inflow from operating activities in 3Q2017 was RMB4.9 million. This mainly came from the operating profit of the Group's usual business.

Net cash used in investing activities in 3Q2017 amounted to RMB7.1 million. This was mainly caused by the purchase of available-for-sale financial assets of RMB10.5 million and offsetted partially by RMB5.0 million refundable deposits received during 3Q2017.

Net cash used in financing activities in 3Q2017 was RMB0.1 million that was used for purchase of treasury shares of the Company.

Finally, the net decrease in cash and cash equivalent in 3Q2017 was RMB2.3 million.

Commentary

The Pharmaceutical market in China will remain challenging and competitive. The Group will continue look close to our sales strategies, operation efficiency and new product development together with the market environment in order to fulfill the target of further growth and expansion of our business.