Sihuan Pharmaceutical Announces 2012 Annual Results

             Sihuan Pharmaceutical Announces 2012 Annual Results

- Revenue and Net Profit Surged 35.7% and 9.8%, Respectively -

- Further Diversified and Balanced Product Portfolio -

- R&D Breakthroughs to Enrich Product Pipeline -

- Higher Final Dividend Payout Ratio -

PR Newswire

HONG KONG, March 25, 2013

HONG KONG, March 25,2013 /PRNewswire/ --Sihuan Pharmaceutical Holdings Group
Ltd. (HKEx: 0460) ("Sihuan Pharmaceutical" or the "Company"), a leading
pharmaceutical company with the largest cardio-cerebral vascular ("CCV") drug
franchise in China's prescription drug market, today announced its annual
results for the year ended 31 December 2012.

Financial Highlights
For the Year Ended 31 December
Key Income Statement Items                    RMB '000            Change %
                                              2012      2011
Revenue                                       3,042,531 2,242,063 35.7%
Gross Profit                                  2,289,415 1,714,464 33.5%
Profit Attributable to Owners of the Company  904,402   824,048   9.8%
Proposed Final Dividend per Share (RMB Cents) 5.8       2.5

In 2012, leveraging its leading position in the CCV prescription drug market,
Sihuan Pharmaceutical achieved satisfactory results amidst regulatory pressure
affecting the pharmaceutical industry. Revenue surged by 35.7% to RMB3,042.5
million, while gross profit rose 33.5% to RMB2,289.4 million. Profit
attributable to owners of the Company grew by 9.8% to RMB904.4 million. The
Board of Directors recommended a final dividend of RMB5.8 cents per share
(2011: RMB2.5 cents) for the year ended 31 December 2012. Together with
interim dividend of RMB3.1 cents per share, total dividend for the year ended
31 December 2012 will be RMB8.9 cents per share. The dividend ratio will be
approximately 50.9%.

Dr. Che Fengsheng, Chairman and CEO of the Company,  said, "The year 2012 was
a challenging year for the Company, yet it was also a turning point in our
business development. We have completed integration of our distribution
network that significantly enhanced our operational efficiency. We have
completely ended its reliance on individual products and built a more balanced
revenue stream, as the sales contribution from its 9 major products now
exceeds half of its total sales revenue. In addition, we have accomplished an
important milestone forging a collaborations with international players. Our
continuous R&D efforts have started to bear fruit as several projects achieved
breakthroughs during the year. We have has further strengthened our leading
position in the CCV prescription drug market and become the eighth largest
pharmaceutical company in the Chinese prescription drug market in 2012."

Sustained Growth Momentum via Diversified Product Portfolio

CCV Products

In 2012, the CCV business remained the Company's largest revenue contributor.
Driven by a broadened revenue base, sales of CCV products soared 38.8% to
RMB2,803.9 million, accounting for 92.2% of the Company's total revenue.

Sihuan Pharmaceutical's continuous efforts in product diversification were
evident in the impressive growth in sales of its promising products. The
Company has strengthened its academic promotion and grew sales of Danshen
Chuanxiongqin injection, Yuanzhijiu, Yimaining and Yeduojia, Guhong injection
significantly by 776.6%, 334.0%, 101.7%, 188.4%, 118.9% to RMB 73.1 million,
RMB 361.2 million, RMB 125.9 million, RMB 73.5 million, and RMB 205.5 million,
respectively. Building on stronger operational efficiency after integration of
its distribution network, sales of Oudimei improved in the second half of 2012
and increased 6.3% to RMB696.1 million for the year.

The Company's established products also maintained steady growth with a
deepened market penetration, especially into low-end markets. Sales of
Kelinao, GM1, Qu'Ao, Qingtong and Chuanqing for the year grew by 22.7%, 51.2%,
35.6%, 46.6% and 12.5% to RMB649.6 million, RMB217.1 million, RMB 92.5
million, RMB67.0 million and RMB93.0 million, respectively.

Non-CCV Products

In view of building a further diversified product portfolio, the Company
stepped up its efforts in promoting key non-CCV products during the year under
review. Thanks to the Company's effective sales and marketing strategy, sales
of Ren'Ao, Zhuo'Ao, Bi'Ao and Luoanming rose 67.8%, 58.4%, 28.8% and 64.6% to
RMB13.7 million, RMB14.4 million, RMB52.8 million and RMB58.2 million,
respectively.

Enhanced Sales and Marketing Efforts

To achieve a more balanced and diversified product portfolio, the Company rode
on the expansion in medical insurance coverage to step up its marketing
efforts for both its promising products and established products. During the
year, the Company focused in strengthening the academic promotion for its
promising products, boosting recognition of its key products through clinical
trials, expanding the coverage of its established products in low-end market,
as well as expanding its sales and marketing team. The Company also completed
the integration of the sales team and distribution network of companies
acquired after its listing into that of the Company.

Breakthroughs in Research and Development Projects ("R&D")

With its unremitting efforts in R&D over the years, the achieved significant
breakthroughs in a number of major projects during the year. For its generic
drugs, Roxatidine Acetate Hydrochloride for Injection, an exclusive
first-to-market generic drug, and Nalmefene Hydrochloride Injection, a
Category 3.1 generic drug, obtained approval for production; for its
innovative drugs, Benapenem and Imigliptin Dihydrochloride, Category 1.1
innovative drugs, received Approval for Clinical Studies in January and
February 2013 respectively.

In a bid to enhance its R&D efficiency, the Company completed the
restructuring of its innovative drug R&D team Xuanzhu Pharma Co., Ltd
("Xuanzhu Pharma", or known as KBP BioSciences Co., Ltd.) which made it a
wholly-owned subsidiary of the Company. Under the Company's overall
development strategy, Xuanzhu Pharma will focus its resources on developing
innovative drugs in major therapeutic areas such as CCV, metabolism and
oncology.

Forged Collaboration with International Player

In 2012, the Company entered into a collaborative agreement with NeuroVive
Pharmaceutical AB, a leading international mitochondrial pharmaceutical
development company based and listed in Sweden. The collaborative agreement
focused on the development of two innovative products, CicloMulsion® and
NeuroSTAT®, which are used for the treatment of heart reperfusion injuries and
traumatic brain injuries, respectively. This collaborative agreement marked an
important milestone in the Company's overseas business development and
enriched its product pipeline. 

Outlook for 2013

Looking ahead, the Company will continue to adapt to the evolving operating
environment by strengthening its capabilities in sales and marketing while
ramping up investment in R&D to build a further diversified product portfolio.

By adhering to its two-pronged strategy of promoting its established and
promising products, Sihuan Pharmaceutical will endeavour to tap the rising
demand brought by wider medical insurance coverage. To this end, the Company
will boost its marketing efforts by enhancing academic promotion for its fast
growing products and extending market coverage for its established products
into third- and fourth-tier cities. The Company will also strive to secure
tenders for the development of new markets for newly launched products.

To strengthen its overall R&D capabilities, the Company will optimize return
on its investment through higher incentives and improvements in project
management to shorten the time-to-market cycle. Furthermore, Sihuan
Pharmaceutical will continue to identify opportunities for collaboration and
M&A, and will exercise flexibility in collaboration, especially with
international pharmaceutical companies.

Dr. Che concluded, "Amid the challenges ahead arising from the anticipated
market and policy changes, various favourable factors such as wider medical
insurance coverage across the country, the rise in per capita funding
standards for medical insurance, the acceleration in urbanization and the
ageing of China's population are expected to spark a rise in the demand for
pharmaceutical products. Leveraging its outstanding sales and marketing
capabilities, optimized and high quality product mix, strong R&D capabilities,
Sihuan Pharmaceutical is confident in its future development and is poised to
seize the opportunities up ahead. "

About Sihuan Pharmaceutical Holdings Group Ltd.

Founded in 2001, Sihuan Pharmaceutical Holdings Group Ltd. is a leading
pharmaceutical company and the largest cardio-cerebral vascular drug franchise
in China's prescription drug market by market share. The Company also became
the eighth largest pharmaceutical company in terms of hospital purchase in the
Chinese prescription drug market in 2012. The success of the Group can be
attributed to its differentiated and proven sales and marketing model,
diversified portfolio of market leading drugs, extensive nationwide
distribution network, and strong research and development capabilities. The
company's current products encompass the top five medical therapeutic areas in
China: cardio cerebral vascular system, central nervous system, metabolism,
oncology and anti-infectives. Their major products such as Kelinao, Anjieli,
Chuanqing, Qu'Ao, GM1 and Oudimei are widely used in the treatment of various
cardio-cerebral vascular diseases.

SOURCE Sihuan Pharmaceutical Holdings Group Ltd.

Contact: Angela Kung, +852-2894-6374 / +852-6017-7030,
angela.kung@hkstrategies.com; Crystal Yip, +852-2894-6211 / +852-9720-6445,
crystal.yip@hkstrategies.com
 
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