Note: Files are in Adobe (PDF) format.
Please download the free Adobe Acrobat Reader to view these documents.
UNAUDITED FIRST QUARTER FINANCIAL STATEMENT AND DIVIDEND ANNOUNCEMENT FOR THE PERIOD ENDED 31 MARCH 2018
In 1Q2018 the Group achieved net profit attributable to equity holders of RMB6.9 million and on revenue of RMB67.5 million respectively.
Group revenue increased 239% from RMB19.9 million in 1Q2017 to RMB67.5 million in 1Q2018 due to higher revenue of antibiotics, Cardiovasular drugs and Cerebovascular drugs and other specialized drugs.
Antibiotics sales increased 103% to RMB12.8 million in 1Q2018 due to increase in the revenue of Azithromycin Aspartate for Injection, Cefoxitin Sodium for Injection and Sultamicillin Tosilate Tablets which partially offset with the decrease of sales of Aztreonam for Injection. Antibiotics accounted for 19% of Group revenue in 1Q2018.
Cardiovascular drugs and cerebrovascular drugs revenue increased 215% to RMB1.5 million due to higher sales of Vinpocetine for Injection. Cardiovascular drugs and cerebrovascular drugs represented 2% of Group revenue in 1Q2018.
Sales of the Group's major products, other specialized drugs, increased 306% to RMB53.2 million in 1Q2018 mainly casused by higher revenue of Potassium Sodium Dehydroandrographolide Succinate for Injection, Amoxicillin and Dicloxacillin Sodium Tablets and Bocobal Mecobalamin Injection. Other specialized drugs remained the largest revenue contributor, accounting for 79% of Group revenue in 1Q2018.
Gross profit increased 443% to RMB51.9 million in 1Q2018 mainly due to higher sales revenues of drugs.
Other operating income increased 117% from RMB0.2 million in 1Q2017 to RMB0.4 million in 1Q2018 due to increase of subcontracting service income and rental income.
Selling and distribution expenses increased by 39.5 times to RMB38.7 million in 1Q2018 due to mainly by the selling and marketing expenses to those distributors that taken active roles to assist the Group to facilitate the sales to hospitals.
Administrative expenses increased 15% to RMB4.1 million mainly caused by increase of staff cost and general increase of operating costs in China.
Other expenses decreased 27% from RMB0.25 million in 1Q2017 to RMB0.19 million in 1Q2018.
Finance income increased from RMB0.01 million in 1Q2017 to RMB0.08 million in 1Q2018 mainly caused by the interest received from available-for-sale financial assets during the period.
Finance expenses increased 443% to RMB2.0 million in 1Q2018 mainly due to exchange loss increased during 1Q2018.
Tax expenses decreased from RMB0.7 million in 1Q2017 to RMB0.6 million in 1Q2018.
As a result, the Group posted net profit attributable to equity holders of RMB6.9 million in 1Q2018 compared with RMB3.9 million in 1Q2017.
(31 March 2018 vs. 31 December 2017)
Non-current assets increased from RMB79.3 million to RMB87.7 million. Property, plant and equipment decreased from RMB42.5 million to RMB41.2 million mainly due to depreciation charge for the period. Intangibles assets increased from RMB5.8 million to RMB7.7 million caused by increase of deferred development cost of RMB1.9 million. Refundable deposits increased to RMB21.3 million due to new prepayment of RMB8.0 million to third party R&D vendors to develop new drugs during the period.
Current assets increased from RMB112.2 million to RMB115.6 million. Inventories dropped by RMB1.5 million to RMB25.9 million. Trade & bills receivables increased from RMB9.0 million to RMB13.9million due to higher sales and longer credit term given to the customers during 1Q2018. Other receivables, prepayments and deposits increased from RMB5.5 million to RMB9.7 million results from general increase of other receivable during 1Q2018. Cash and bank balances decreased from RMB69.0 million to RMB59.8 million mainly due to the purchase in available-for-sale financial assets of RMB5.0 million and increased the refundable deposits of RMB8.0 million which offset partially by cash generated from operating profit.
Current liabilities increased from RMB56.8 million to RMB61.7 million. Trade payables decreased from RMB12.5 million to RMB11.0 million due to less raw materials purchased. Other payables increased from RMB44.3 million to RMB50.7 million was mainly caused by the amount due to distributors for selling and distribution expenses under the "Two-invoice system".
Cash Flow Statement
The Group's net cash inflow from operating activities in 1Q2018 was RMB5.7 million. This was mainly due to the operating profit from Group's usual operating business for 1Q2018.
Net cash used in investing activities in 1Q2018 amounted to RMB14.9 million. These were caused by the new prepayment to third party R&D vendors for new drugs development, purchase of available-for-sale financial assets and increased the deferred development cost during 1Q2018.
No net cash used in financing activities in 1Q2018.
As a result, the new cash outflow in 1Q2018 amounted to RMB9.2 million
The operating pressures came from policy changes of china pharmaceutical industry are continue to affect the Group's business included Consistency evaluation policy for drugs injections, Medical insurance reform and Two-invoice system. Even the business conditions remain challenging in 2018, the Group is still confident to cope with those challenges by increasing our new drugs and adjusting the sales and marketing network of the Group.