Sihuan Pharmaceutical Announces 2013 Annual Results

             Sihuan Pharmaceutical Announces 2013 Annual Results

Revenue and Profit Attributable to Owners of the Company Up by 55.6% and 44.1%
Respectively

Rapid Growth Trajectory Attributable to Successful Internal Integration

Continued to Tap Potential of a Prestige and Diversified Product Portfolio

PR Newswire

HONG KONG, March 11, 2014

HONG KONG, March 11, 2014 /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 2013 ("2013" or the "Year").

Financial Highlights

                        For the Year Ended 31 Dec 2013
Key Income Statement Items                    RMB Million     Change
                                              2013    2012
Revenue                                       4,732.7 3,042.5 +55.6%
Gross Profit                                  3,699.7 2,289.4 +61.6%
Profit Attributable to Owners of the Company  1,303.0 904.4   +44.1%
Proposed Final Dividend per Share (RMB Cents) 2.1     5.8     N/A

In 2013, the Company not only achieved a sharp sales rebound for its two key
products, Kelinao and Oudimei, but also recorded rapid growth of its
fast-growing promising products such as Yuanzhijiu, Yeduojia, and Danshen
Chuangxionqin. With the increase of sales growth of our CCV drugs, the
Company's revenue surged 55.6% to RMB4,732.7 million. Overall gross profit
increased by 61.6% from RMB2,289.4 million in 2012 to RMB3,699.7 million in
2013 due to an increase in the sales of products with higher gross profit
margins, while profit attributable to owners of the Company jumped 44.1% to
RMB1,303 million. A final dividend of RMB2.1 cents per share (2012: RMB5.8
cents) was recommended by the Board together with a bonus issue of 1 bonus
ordinary share at par value of HK$0.01 each for every 1 existing ordinary
share in return for shareholders' support and are subject to the approval of
the shareholders at the annual general meeting of the Company to be held on 30
May 2014. 

Dr. Che Fengsheng, Chairman and CEO of the Company,  said, "Backed by our
industry-leading capabilities in integration and sales and marketing, we not
only completed integrating of the acquired companies, but also grew bigger and
stronger in the increasingly fierce pharmaceutical market. In 2013, we reaped
the fruits of our labor and achieved rapid financial growth and outstanding
operational results. This reflected the success of our previous expansion,
which brought us a more diversified product portfolio, further balanced
revenue stream and strengthened market leadership. On top of that, we achieved
breakthroughs in our research and development for new drugs, ensuring that our
strong growth momentum will be sustained by an enhanced product pipeline in
the long run. As a result, we become the fourth largest pharmaceutical company
in the Chinese hospital market and kept our lead in China's cardio-cerebral
vascular ("CCV") prescription drug market."

Sharp Rebounds of Key CCV Products and Rapid Growth of Fast-growing Promising
Products Boosted Strong Growth in Sales

CCV Products

Thanks to a young and diversified product portfolio, sales of CCV products
grew 60.7% to RMB4,505.0 million, which accounted for 95.2% of the Company's
total revenue, continuing to be the Company's largest revenue contributor. The
significant growth was mainly attributable to the exciting rebound in sales
for its two key products, Kelinao and Oudimei, and the rapid growth of its
promising products. The Company stepped up its support to Kelinao's
distributors for academic promotion and deepened its penetration into low-end
markets, sales of Kelinao increased by 71.7% year-on-year to RMB1,115.3
million. As for Oudimei, the successful integration of its distribution
network boosted its sales and marketing efficiency. As a result, sales of
Oudimei jumped 93.1% to RMB 1,343.9 million during the Year. Promising
products such as Yeoduojia, Danshen Chuanxiongqin, Guhong, Yimaining and
Yuanzhijiu maintained strong growth in sales, which were up significantly by
225.7%, 83.9%, 59.8%, 54.9% and 19.7% respectively.

Non-CCV Products

The Company's non-CCV products maintained stable growth in sales volume. The
Company launched its first non-CCV exclusive first-to-market generic drug
Roxatidine, which has expanded its market by tender wins in two provinces and
supplementary tender submissions in another province. In addition, it entered
drug reimbursement list ("DRL") of one province. The product is expected to
generate significantly more revenue with more extensive marketing and after
winning tenders and entering provincial DRL in more provinces.

Clear Sales and Tendering Strategies Achieved Promising Results

During the Year, the Company stepped up its academic promotion work and
boosted incentives to distributors for Kelinao and Oudimei, to motivate
distributors to promote the Company's products. In the meantime, the Company
devised clear tendering strategies for its products, i.e. horizontal expansion
to increase market coverage of its products by provincial tender wins and
supplementary tender submissions, as well as vertical expansion into low-end
markets with provincial Essential Drug List ("EDL") tender wins and provincial
New Rural Cooperative Medical Scheme List ("NRCMSL").

Positive Results from New Products Development

The Company has intensified efforts on innovative drug projects and achieved
promising results by leveraging its effective resources integration. To date,
the Company has submitted investigational new drug ("IND") applications for
seven Category 1.1 innovative drugs and has obtained Approval for Clinical
Trial for five Category 1 innovative drugs from the China State Food and Drug
Administration ("CFDA"). Among them, Category 1.1 innovative drug Benapenem
and Imigliptin Dihydrochloride have been awarded as The National Major
Innovative Drug Projects.

As for generic drugs, after securing production licenses for the exclusive
first-to-market generic drug Roxatidine and Category 3.1 new drug Nalmefene
Hydrochloride Injection at the end of 2012 and start of 2013 respectively, the
products have successfully passed on-site inspections and were officially
launched. In total, the Company has 17 Category 3.1 first-to-market generic
drug projects under development. By the end of 2013, production license
applications of 22 generic drugs were filed in total and these products are
expected to be launched progressively in the coming years.

Production and Quality Management

The Company completed the construction of its main production and R&D base in
Tongzhou, Beijing and the upgrade of all its other production bases. In
compliance with the new Good Manufacturing Practice standard, these
constructions projects cover a total of over 300,000 square meters which mark
the largest constructions in the Company's history. The Company's Active
Pharmaceutical Ingredients production base, Langfang Gaobo Jingband, received
certification from the Food and Drug Administration of United States during
the Year.

Future Prospects

Looking forward, the development of China's pharmaceutical industry will
continue to be driven by market potential released from expanded national
medical insurance coverage, accelerated urbanization and ageing population,
enabling it to maintain fast growth in 2014. The management believes that
companies such as Sihuan Pharmaceutical will reap benefits from the
government's policies for encouraging innovation and industry consolidation,
being an innovative company with strong integrated capabilities, in R&D,
production and sales and marketing, with its focus on exclusive and patented
drugs.

Looking ahead, the Company plans to continue to tap potential of its strong
existing product resources, with all six key and potential blockbusters being
exclusive products, coupled with over ten products with exclusive formulations
or dosages. In addition, many of its products have been included in the
national or provincial EDL or were recently added to NRCMSL of many provinces
to further market penetration. This is a prestigious product mix which helps
the Company to differentiate itself amidst fierce market competition, and is
expected to sustain business growth in the coming years. Also, the Company
will continue to reinforce its nationwide distribution network and optimize
its unique sales and marketing system. Moreover, the Company will continue to
enriching its product resources through R&D, acquisitions and product
collaboration. The Company's long-term growth momentum will be supported by a
variety of patented drugs and first-to-market generic drugs under development.
These products are expected to launch from 2015.

Dr. Che concluded, "I have full confidence in Sihuan Pharmaceutical's future
development, as we have established an effective operating system and a solid
business foundation. I firmly believe that we are poised to seize
opportunities arising from the industry consolidation and will be able to
achieve stable and sustainable growth. We are making strides towards achieving
our goal of becoming the most competitive Chinese pharmaceutical company and
developing a global reputation for excellence."

About Sihuan Pharmaceutical Holdings Group Ltd.

Founded in 2001, Sihuan Pharmaceutical Holdings Group Ltd. is a leading
Chinese pharmaceutical corporation and the largest cardio-cerebral vascular
drug franchise in China's prescription drug market by market share. The
Company also became the fourth largest pharmaceutical company in terms of
hospital purchase in China's hospital market by the end of 2013. The success
of the Company can be attributed to its differentiated and proven sales and
marketing model, extensive nationwide distribution network, young and
diversified product portfolio, and strong R&D 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. Its major products such as Kelinao, Oudimei, Yuanzhijiu,
Yeduojia and Guhong are widely used in the treatment of various
cardio-cerebral vascular diseases.

SOURCE Sihuan Pharmaceutical Holdings Group Ltd.

Contact: Agnes Suen, (852) 2894 6258 / 9050 5406, agnes.suen@hkstrategies.com;
Vivienne Leung, (852) 2894 6262 / 9167 9871, vivienne.leung@hkstrategies.com
 
Press spacebar to pause and continue. Press esc to stop.