Pharmas deliver mixed results

Business | Stella Zhai 20 Aug 2019

Sihuan Pharmaceutical (0460) yesterday reported an interim loss of 2 billion yuan (HK$2.2 billion) while declaring an interim dividend of 0.4 fen.

Revenues increased by 30.0 percent year-on-year to 1.67 billion yuan, while gross profit margins rose 82.3 percent from 80.2 percent for the same period of last year, mainly attributable to higher sales from products with better profit margin and continuous implementation of production cost control procedures, said Sihuan Pharma.

Expenditure for research and development and relevant activities increased by 25.5 percent year-on-year to 297 million yuan, accounting for 17.9 percent of the total revenue of the company.

Meanwhile, CSPC Pharmaceutical (1093), another mainland-based firm, reported its net profit for the first half of this year rose by 24.8 percent year-on-year to 1.88 billion yuan.

The company has lowered its profit target with sales costs rising 45 percent, and no interim dividend was declared.

Revenue for the drug developer went up by 27.6 percent from a year ago to 11.18 billion yuan, while revenue generated from finished drugs grew 36.8 percent to 8.77 billion yuan compared with the same period of last year.

However, prices of the company's vitamin C products continued to be under pressure due to excessive market supply during the period, and market demand for antibiotics remained low due to the restricted use for antibiotics policy in the end-user market, said the company.

Revenue generated from the company's vitamin C products rose by 10.1 percent year-on-year to 1.16 billion yuan, while revenue for its antibiotics business dropped by 15.2 percent to 531 million yuan during the first half this year.

CSPC's R&D expenses in the first half of 2019 amounted to 942 million yuan, representing a 68.5 percent increase year-on-year and accounting for approximately 10.7 percent of finished drug business revenue, said the company.

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