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UNAUDITED FIRST QUARTER FINANCIAL STATEMENT AND DIVIDEND ANNOUNCEMENT FOR THE PERIOD ENDED 31 MARCH 2017
In 1Q2017 the Group achieved net profit attributable to equity holders of RMB3.9 million and on revenue of RMB19.9 million.
Group revenue increased 28% from RMB15.6 million in 1Q2016 to RMB19.9 million in 1Q2017 due to higher sales of antibiotics, Cardiovasular drugs and Cerebovascular drugs and other specialized drugs.
Antibiotics sales increased 14% to RMB6.3 million in 1Q2017 on higher demand for Azithromycin Aspartate for Injection and Aztreonam for Injection. Antibiotics accounted for 32% of Group revenue in 1Q2017, making it the second largest revenue contributor.
Cardiovascular drugs and cerebrovascular drugs sales increased 18% to RMB0.5 million due to higher sales of Vinpocetine for Injection. Cardiovascular drugs and cerebrovascular drugs represented 2% of Group revenue in 1Q2017.
Sales of the Group's major products, other specialized drugs, increased 36% to RMB13.1 million in 1Q2017 mainly casused by better sales of Potassium Sodium Dehydroandrographolide Succinate for Injection, Ropivacaine Mesilate Injection and Cobamamide for Injection. Other specialized drugs remained the largest revenue contributor, accounting for 66% of Group revenue in 1Q2017.
Gross profit increased 120% to RMB9.6 million in 1Q2017 mainly due to higher sales revenues.
Other operating income kept at RMB0.2 million similar to 1Q2016.
Selling and distribution expenses dropped 22% to RMB1.0 million due to the Group managed to consolidate the selling and distribution networks during 1Q2017.
Administrative expenses increased 14% to RMB3.6 million mainly caused by increase of staff cost.
Other expenses raised 20 times to RMB0.5 million in 1Q2017 due to foreign exchange loss of RMB0.3 million incurred in 1Q2017.
Finance income dropped 99% to RMB0.01 million due to no foreign exchange gain in 1Q2017 compared with 1Q2016.
Finance expenses declined 56% to RMB0.1 million in 1Q2017 compared with 1Q2016.
As a result, the Group posted net profit attributable to equity holders of RMB3.9 million in 1Q2017 compared with RMB0.2 million in 1Q2016.
(31 March 2017 vs. 31 December 2016)
Non-current assets rose from RMB86.6 million to RMB87.9 million. Property, plant and equipment increased from RMB54.0 million to RMB55.4 million due to purchase the addition property and equipments in 1Q2017. Intangibles assets remained at approximately RMB6.1 million level.
Current assets decreased from RMB104.9 million to RMB99.4 million. Inventories level dropped slightly and kept at RMB22.3 million. Trade & bills receivables increased from RMB2.2 million to RMB2.9 million. Other receivables, prepayments and deposits dropped from RMB10.7 million to RMB4.0 million results from received of RMB7 million refundable deposits in 1Q2017 due to a R&D agreement termination. Cash and bank balances decreased from RMB69.7 million to RMB64.7 million mainly due to the purchase of available-for-sale financial assets in 1Q2017.
Non-current liabilities comprise of deferred tax liabilities declined to RMB0.02 million.
Current liabilities dropped from RMB35.8 million to RMB27.7 million. Trade and other payables fell from RMB23.8 million to RMB21.7 million due to settlement of some debts of raw material vendors in 1Q2017. Short term borrowings decreased from RMB12.0 million to RMB6.0 million.
Cash Flow Statement
The Group's net cash inflow from operating activities in 1Q2017 was RMB9.3 million. This was mainly due to the operating profit of RMB4.6 million from Group's usual operating business and received the refundable deposits during the reported financial period.
Net cash used in investing activities in 1Q2017 amounted to RMB8.3 million. These were caused by the purchases of property, equipment and available for sale financial assets during 1Q2017.
Net cash used in financing activities in 1Q2017 amounted to RMB6.0 million. This was primarily due to the repayment of the short term loan.
The Group remains cautious about its business prospects for the rest of 2017 due to the challenging economic outlook and regulatory uncertainty of pharmaceutical industrial in China.
In order to drive revenue expansion, the Group will continue to focus on diversifying sales strategies and improve its operations as well as continuous investments to ensure roll out of new products for long term growth.