CCM: CSPC Pharmaceutical: VC business improves in H1 2016

  
•     Total revenue: USD792.54 million (HKD6.15 billion), up 7.30% YoY (up 12.70% YoY on a constant currency basis)   

  
•     Net profit: USD133.21 million (HKD1.03 billion), up 25.60% YoY (up 32.1% on a constant currency basis)   

  
•     Earnings per share: USD0.02 (HKD0.17), up 25.60% YoY   

  
* Exchange rate: USD1.00=HKD7.7548 on 27 Sept., 2016, sourced from the People's Bank of China. Results stated on a constant currency basis are calculated by applying the average exchange rate of the same period in 2015.

  
- Vitamin C (VC)

  
Despite the intense industrial competition in H1 2016, CSPC Pharmaceutical generated a revenue of USD87.56 million (HKD679.00 million) from VC (categorized into the bulk drug business), up 11.30% YoY (17.00% YoY on a constant currency basis).

  
"H1 2016 saw ongoing overcapacity and low price in the VC market. In this context, we focused on market development and production technology upgrade, thus achieving an increase in sales volume and a continued decrease in production costs. As a result, the overall business performance improved over the same period last year,' explained the company.

  
According to CCM's price monitoring, the domestic VC price continued staying record low from Jan. to June 2016, placing great business pressure on most domestic producers. Yet, CSPC Pharmaceutical, as a leading VC producer in the domestic market (30,000+ t/a), stood out with good performance.

  
In H2, the Chinese VC market is likely to recover, given the fact that some producers suspended production due to the stringent environmental regulations, possibly easing the current serious overcapacity. Therefore, the VC price may rebound in the coming period, booting producers' profitability.

   - Innovative drugs

  
CSPC Pharmaceutical's finished drug business also performed well in H1: revenue reached USD564.81 million (HKD4.38 billion), up 15.30% YoY (21.20% YoY on a constant currency basis).

  
In particular, its innovative drugs were a strong contributor: a revenue of USD292.46 million (HKD2.27 billion), up 28.30% YoY (34.90% YoY on a constant currency basis). Leading products included "NBP' (butylphthalide soft capsule), "Oulaining' (oxiracetam capsule) and "Xuanning' (maleate levamlodipine, available in dosage form of tablet and dispersible tablet).

  
"The innovative drug business has maintained strong growth in recent years, with continuous expansion of market share and increasingly presence and coverage in the public,' disclosed CSPC Pharmaceutical.

  CSPC Pharmaceutical's revenue by product, H1 2016

  With the promulgation of new policies on drug tender & procurement, medical reimbursement and drug approval, gradual deepening of the medical reform has asserted high pressure on the entire Chinese pharmaceutical industry. In this context, CSPC Pharmaceutical took product-oriented measures to maximize the benefits with consideration of market share and prices, and continued increasing its efforts in product promotion, market development and sale channel building.

  In the coming period, as drug tenders in every province and city are to be completed progressively, CSPC Pharmaceutical will strive to ensure that its innovative drug products can win the tenders at reasonable prices in order to expand market coverage and drive rapid and sustainable growth. Moreover, the group will also further improve its expert network and strengthen academic-based promotion so as to consolidate the market position of its innovative drugs.

  This article comes from Vitamin China E-News 1609, CCM

  About CCM:

  CCM is the leading market intelligence provider for China's agriculture, chemicals, food & ingredients and life science markets. Founded in 2001, CCM offers a range of data and content solutions, from price and trade data to industry newsletters and customized market research reports. Our clients include Monsanto, DuPont, Shell, Bayer, and Syngenta. CCM is a brand of Kcomber Inc.

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  Tag: vitamin