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20171H Profit Attributable to Owners of the Company Increased 10.1% to RMB22.1 Million

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Source: Kingworld medicine
Date:2017.09.04

 

20171H Profit Attributable to Owners of the Company Increased       10.1% to RMB22.1 Million

Basic Earnings per Share Surged by approximately 20%

*    *    *

Continues to Diversify Product Mix and

Expand Coverage of Health Business Segment

 

Financial Highlights (unaudited)

(RMB’000)

For the six months ended 30 June

2017

2016

Change

Revenue

509,111

417,467

+22.0%

Gross profit

148,601

136,552

+8.8%

Profit Attributable to Owners of the Company

22,137

20,115

+10.1%

Basic earnings per share (RMB cents)

3.56

3.00

+18.7%

 

(29 August 2017, Hong Kong) – Kingworld Medicines Group Limited (“Kingworld Medicines” or the “Group”, stock code: 1110), a distributor of renowned branded imported pharmaceutical and healthcare products in the PRC, has announced its unaudited interim results for the six months ended 30 June 2017(the “Period”).

 

During the period, benefiting from the increase in sales of its core products including Nin Jiom Chuan Bei Pei Pa Koa (京都念慈菴蜜煉川貝枇杷膏) and Nin Jiom Chuan Bei Pei Pa Candies (京都念慈菴枇杷糖) series and Culturelle probiotic(康萃樂益生菌) series, together with the Group continuously strengthened network expansion both online and offline, revenue increased by approximately 22.0% to RMB509.1 million and gross profit increased by 8.8% to RMB149 million. Profit attributable to owners of the company increased by 10.1% to approximately RMB22.1 million and basic earnings per share increased by 18.7% to approximately RMB3.56 cents.  

Mr. Zhao Li Sheng (趙利生) , Chairman and Executive Director of Kingworld Medicines, said, “the rising healthcare awareness among the public and the change in spectrum of disease have led to an increasing attention to the healthcare industry. Meanwhile, factors such as the acceleration of urbanization across the world and the continuous improvement of healthcare system in different countries have shown a trend of continuous growth. Pharmaceutical industry is a strategic emerging industry in the PRC with promising future, and is also one of the focuses in the “Made in China 2025”initiative. With the PRC’s unprecedented emphasis, the position of pharmaceutical industry has been strengthening continuously. These positive factors have brought more favourable opportunities to the development of Kingworld Medicines.” During the period, the Group persistently deepened distribution network with diversity and enhanced brand influence. Thus, both sales revenue and profits of the Group increased.”

 

The Group is steadfastly executing the strategy of maintaining a diversified product mix, and managed a portfolio of over 60 branded products which are manufactured in different places in the world. Leading products include Nin Jiom Chuan Bei Pei Pa Koa (京都念慈菴蜜煉川貝枇杷膏) and Nin Jiom Chuan Bei Pei Pa Candies (京都念慈菴枇杷糖); Taiko Seirogan (喇叭牌正露丸); the “External Use Medication Categories,” which includes Kingworld Imada Red Flower Oil (金活依馬打正紅花油), Flying Eagle Wood Lok Medicated Oil (飛鷹活絡油), Hoe Hin White Flower Embrocation (和興白花油) and Mentholatum Ointment (曼秀雷敦薄荷膏); and the ”New Mother & Child Wellness Product” , such as the Culturelle probiotic series from the USA (美國康萃樂益生菌), BRAINSTRONG Prenatal DHA (BRAINSTRONG孕婦DHA), FATBLASTER slimming coconut water from Australia (澳洲菲拉思德椰子水), BLACKMORES fish oil (澳佳寶魚油), FUYUNHON (膚潤康) body care products from Australia and Lifeline Care serial products of maternal and infant fish oil nutrients from Norway (挪威Lifeline Care母嬰魚油營養素系列). Through developing diversified sales channels and platforms, the Group has consolidated its market share of products and achieved good sales growth. Among the different products, Nin Jiom Chuan Bei Pei Pa Koa remained to be the focus business of the Group, accounted for 42.6% of the total sales of the Group, while the Culturelle probiotic products from USA and Taiko Seirogan accounted for 19.8% and 9.6% respectively.

 

During the period, the Group’s business focus continued to be sales and marketing of Nin Jiom Chuan Bei Pei Pa Koa and Nin Jiom Chuan Bei Pei Pa Candies series. The Group  strengthened cooperation with regional chains, reached young consumer groups using new media, held various public welfare activities such as campus singing contests and product tasting, in doing so consolidated restorative growth of sales in first and second tier cities and accelerated sales coverage in third and fourth tier cities in China, restored to normal supply of products to meet huge market demand, and all those efforts led to resumption of growth in product sales during the period.

 

Regarding the Group’s online and offline marketing strategy and adherence to the terminal market strategy, the Culturelle probiotic series from the USA became the second largest product series of the Group. During the period, sales of the Culturelle probiotic series approximately doubled as compared with the corresponding period last year. During the period, the Group further enhanced its products and sales networks, with 24 subsidiaries and 17 branch offices in 34 provincial administrative regions (Hong Kong and Macau), availing products to customers in more than 341 cities.

 

As for Taiko Seirogan, the Group organized different charitable events and sales events during the review period to promote the product line to target consumers to enhance their recognition and influence of the brand. At the same time, by carrying out diversified on-site promotional campaigns, combined with donation of supplies and sponsorship of city marathon, community events, charitable events, etc., the Group developed and enhanced brand recognition of external use medicines such as Kingworld Imada Red Flower Oil, Flying Eagle Wood Lok Medicated Oil, Hoe Hin White Flower Embrocation and Mentholatum Ointment. During the period, sales of Taiko Seirogan surged by 71.9% as compared with the corresponding period last year, and the 100-pill package recorded a growth of 93.1% in sales revenue.

The Group’s other products such as “Maternal and child product series”, FATBLASTER coconut
 water, BRAINSTRONG Prenatal DHA and FUYUNHON body care products, also recorded positive sales.
 Moreover, thanks to effective marketing and promotion and product operation strategies, 
rapid sales growth was achieved for Lifeline Care fish oil nutrients from Norway, 
of which the Group secured the exclusive agency right in Greater China last year. 
Brand promotion efforts and interactive consumer activities mounted during the reporting period
 boosted sales of the Group’s new product Hoe Hin White Flower Embrocation, with sales up 
by 54.7% as compared with the corresponding period last year. The latest addition has  enhanced
 the External Use Medication Series that included such as Kingworld Imada Red Flower Oil 
and Flying Eagle Wood Lok Medicated Oil, boosting the Group’s product combination and
 giving consumers more choices of health brands.

In recent years, the global pharmaceutical industry has been booming at the support of national policy and advancing Internet technology changing consumption habits. In China, for example, the Internet+ pharmaceutical industry and cross-border e-commerce platforms have grown rapidly and consistently. Boasting a diverse health products portfolio, an expanding online sales network, and strengthened control and sales promotion efforts, sales of the cross-border e-commerce business increased by 92.4% during the period under review. The Group commenced the development of new Qianhai cross-border e-commerce platform during the period and will launch the Qianhai cross-border e-commerce platform for Kingworld Health Family products in the future.

 

For the six months ended 30 June 2017, the business and revenue of experienced steady growth
 and for over two years the results undertaking as agreed by the Group and Dong Di Xin(東迪欣).
About the Group’s acquisition in 2015 of equity interest of Dong Hua Tong Investments Limited (東華通投資有限公司) 
at a consideration of HK50.0 million to hold indirect interest in Miquel Alimentació (西班牙米蓋爾公司)
 (a leading corporation in Spain in food distribution and wholesale, brand operation and   
 management of supply chain) and Manassen Foods Australia (澳大利亞大型食品公司瑪納森) 
(a large food company). The projects operated smoothly during the period under review. 
Furthermore, other investment projects of the Group made good progress during the period, 
helping the Group enrich its investment portfolio, expanding revenue sources and 
achieving the goals of its multi-domain operations strategy.

Looking ahead, capitalising on its rich supplier resources overseas and strong distribution and promotion capabilities in the Greater China region, the Group will continue to accelerate procurement and development of quality new products and advance business development to consolidate its advantageous position in the macro-health segment. Also, it will continue to carry out the strategy of integrated operation and regional market management to increase  market penetration of its products. It will also optimise and integrate sales channels to promote  growth of both its traditional products and new health products. In addition, the Group will continue to push forward with investment and M&A projects guided by its macro-health concept and forge closer strategic cooperation with associated companies.

 

Mr. Zhao Li Sheng said, “The first half year marked the kick off the Group’s 
“fourth five-year strategy," to help the Group perfect its industrial layout, 
optimise channel management and boost sales, in particular, speed up omni-channel layout and 
sales of new products in the Culturelle probiotics series. The Group will strengthen internal 
data establishment, commence a data platform management model and continue to build a self-operated e-commerce 
platform to meet the increasing demand of e-commerce business. On top of developing 
its business, the Group will also adhere to its ‘to serve the community and to heal 
the souls’ motto in promoting charity in China, helping to establish a ‘Healthy China’ by
 applying our strengths and taking actions and making everybody healthy.” 
 

About Kingworld Medicines Group Limited

Kingworld Medicines Group Limited is principally engaged in the distribution of branded imported pharmaceutical and healthcare products in the Greater China. The Group ranked among the top 100 importers of its kind in China in 2010 to 2014 based on imported value. The Group manages a portfolio of over 60 products under which are manufactured in Hong Kong, Japan, the USA, Australia, Canada, Singapore and Mainland China etc. Many of these products are renowned brand names including Nin Jiom Chuan Bei Pei Pa Koa, Taiko Seirogan, Flying Eagle Wood Lok Medicated Oil, Kingworld Imada Red Flower Oil, Kyushin Pill, Mentholatum series, Culturelle probiotic series products from USA and Lifeline Care fish oil series from Norway. The Group’s existing distribution network covers mainland China, Hong Kong and Macau, with more than 200,000 retail stores.

For further information, please visit http://www.kingworld.com.cn/.