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Public company info - China Shineway Pharmaceutical Group Ltd. , 02877.HK
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China Shineway Pharmaceutical Group Ltd., 02877.HK - Company Profile
Chairman LI Zhenjiang
Share Issued (share) 827,000,000
Par Currency Hong Kong Dollar
Par Value 0.1
Industry Medicine
Corporate Profile Business Summary: The principal activities of the Company are research and development, manufacturing and trading of modern Chinese medicines. Performance for the year: For the year ended 31 December 2019, the operating results of the Group were as follows: • Turnover amounted to RMB2,705,996,000, an increase of 5.3% as compared to last year; • Gross profit margin was 73.2% as compared to 73.0% of last year; • Profit for the year amounted to RMB503,150,000, a decrease of 0.5% as compared to last year; • Earnings per share amounted to RMB64 cents . BUSINESS REVIEW: Business environment in 2019 was extremely challenging. Intensive promulgation of healthcare regulatory policies made development of Chinese medicine industry difficult during the year. Yet, toward the end of the year the national government clearly expressed its strong support for the development and inheritance of Chinese medicine, followed by issuing a number of favorable national policies that benefit the Chinese medicine industry, and these have created an important turning point for Chinese medicine in the forthcoming years. In 2019, the Group continued to focus on nurturing the market for oral products. Sales of oral products increased by 20.8% as compared to last year. Nonetheless, healthcare policies continued to impact injection products, and attributing to the relatively high comparison base of certain injection products, the Group’s overall sales of injection products had declined by 8.8% as compared to last year, resulting only a 5.3% growth of the overall business. Also, due to the impairment charge of deposit for intangible assets for terminating a patent development project and provisions for bank deposits and trade receivables based on credit risk assessments required by the International Accounting Standards, net profit for the year was 0.5% lower than that of 2018. Earnings per share had increased by 3.2% as compared to last year. Without the above impairment expenses and provisions, net profit for the year should have risen by 8.3% over the last year. After four years of effort spent on cultivating the market, the traditional Chinese medicine (“TCM”) formula granule business of the Group has become the main driving force of our strategic business, maintaining a high growth rate with sales exceeding RMB500 million in 2019. The Group’s quality control and standard research and industrialization project of TCM formula granules also won the Hebei Province Technology Advancement First Grade Award, further highlighting the quality and technological advantages of the Group’s TCM formula granules. In October 2019, approval process for the Group’s TCM formula granules production facilities in Yunnan Province was completed. The Group was the first TCM formula granule enterprise to obtain such approval in Yunnan Province. TCM formula granules produced by the Group are also now included in the drugs reimbursement list of Yunnan Province, setting a solid foundation for the Group to penetrate the market in the southwest region of the country. The Group is actively positioning our entrance into the markets of TCM formula granules of other provinces. We are currently preparing to establish production facilities in a coastal province in Northern China, and the expected completion date is in mid-2021. During the year, the Group continued to gradually migrate our core sales and marketing directives toward establishing terminal customers, academic-led marketing and evidence-based medical researches. In 2019, coverage of medical terminals had increased noticeably, resulting in growth of the grass-root terminal academic products. The Group continuously implemented win-win value strategy with retail drugstores operated by national and regional renowned chains to expand coverage of our key products. Retail medications’ sales volume increased as compared to last year. As for refining evidence-based medical researches on TCM injections, Shen Mai Injection and Shu Xie Ning Injection are now listed in the National Guideline for Chinese Medicine Diagnosis and Treatment in Viral Myocarditis. Also, Qing Kai Ling Injection and Shu Xie Ning Injection are now listed and ranked among the top ten in Chinese Medicine Clinical Evidence Evaluation Index, demonstrating the clinical value of the Group’s TCM injections. The country’s pharmaceutical policy is now in the direction of favoring the Chinese medicine industry, prompting medical reimbursements to cover more Chinese medications. The Group’s two exclusive products, Shujin Tongluo Granule and Huamoyan Capsule, along with our key strategic product Xiesaitong Dripping Pill were admitted in the new edition of national drugs reimbursement list during the year. Another exclusive product, Qihuang Tongmi Soft Capsule, also entered into the national drugs reimbursement list through drug reimbursement negotiations. The admissions to the national drugs reimbursement list have solidified these medications’ market potential in the next few years. The year of 2019 marks the Group’s first year of digitalization strategy reform. Our goal is to advance as an enterprise fully digitalized in sales and marketing and operation management. During the year, an internet digital marketing business department was formed to establish strategic cooperative relationship with the country’s mainstream e-commerce platforms and had already commenced online sales. At the time of writing, the outbreak of coronavirus continues. Various provinces and cities across the country have issued a number of diagnostic and treatment plans. A total of eight medications of the Group have been included in the recommended medicine lists of the “Coronavirus Infected Pneumonia Diagnosis and Treatment Scheme” issued by various provinces and cities. The treatment scheme issued by the National Health Commission also has included two medications of the Group as Chinese medicine therapy for medical observation period and immunosuppression. In addition, the Hebei Provincial Drug Administration also issued a notice agreeing that two of the three traditional Chinese medicine decoction formulas used by the Shijiazhuang TCM Hospital for the treatment of coronavirus pneumonia in Hebei Province are to be formulated by the Group. Two wholly-owned subsidiaries of the Group have also been named by the Ministry of Industry and Information Technology in its Lists of Key Manufacturers for the Prevention and Control of Novel Coronavirus Infected Pneumonia Epidemic of Hebei and Yunnan Province. We are keen to work with the community to fight against the epidemic. Since the outbreak of the epidemic, the Group has worked overtime to ensure adequate drug supply, and also shouldered social responsibilities and obligations by continuously donating medications to many areas across the country for preventing and treating the epidemic disease. In addition, to ease the public inconvenience in seeking medical consultation during the epidemic, with strong support of the government, the Group together with the Shijiazhuang TCM Hospital and other institutions, jointly developed the nation’s first “Shijiazhuang TCM Health Service Mobile Cabin Vehicle”. This mobile cabin vehicle uses a 5G network and is equipped with provincial and municipal medical insurance reimbursement platforms. It integrates clinical consultation, health inspection, and medication dispensing to provide mobile medical services to the public. At the same time, the Group has joined hands with chunyuyisheng.com, health.jd.com, wy.guahao.com, miaoshou.net and other medical internet portals to create a free online volunteer consultation platform for fighting against the coronavirus pneumonia. The public can utilize various medical consultation platforms through the Group’s official WeChat subscription account and receive online medical consultation without leaving home. Prospects: At present, the pharmaceutical industry has entered into a new stage of vast reshuffling and integration. Facing with new way of doing business, new kinds of standards and new challenges, the year of 2020 is an important juncture for the Group to increase its innovation and to strengthen its core competitiveness. The Group will continue to advance our core business through strategic implementation of multiproducts, multi-channels and multi-business models to drive business growth. We will continue to expand the advantageous regions of our TCM formula granules business as well as its competitive advantages nationwide. We will actively pursue digital transformation and advance our strategic plan on intelligent manufacturing to foster the Group as an enterprise with digitalized operation management and digitalized sales and marketing. The year of 2019 was the 35th anniversary of the reform and development of Shineway Pharmaceutical. On behalf of the Board, I would like to once again convey my heartfelt thanks to shareholders, customers and strategic partners for their continuous support and trust to the Group, and our management team and entire staff for their hard work in the challenging business environment over the last year. Let’s join hands and make concerted effort towards the essential goal of Shineway’s sustainable development.

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