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CHINA DAILY:Kingworld looks to boost margins to retain edge

Source: Kingworld medicine

Kingworld Medicines Group Ltd, a mainland-based importer of pharmaceutical and healthcare products, said Tuesday that it plans to double the number of the sales counters it operates on the mainland to 3,000 by the end of 2011. Meanwhile, the company also announced its plans to launch new products later this year, a move expected to boost its margins in a competitive sector.
Some of the products distributed by Kingworld are hot-sellers in the pharmaceutical market in China, including Nin Jiom Pei Pa Koa and Flying Eagle Wood Lok Medicated Oil. Strong sales of the two products helped to boost the company’s 2010 revenue by 14.7 percent from 2009 to approximately 638 million yuan. Nin Jiom Pei Pa Koa, the best-selling cough relieving product in China, generated revenue of 458.6 million yuan, up 22.7 percent year-on-year.
However, to maintain its lead in the pharmaceutical distribution sector, Kingworld will remain committed to bringing its branded products to the less tapped second and third-tier cities in China, with more retail booths to be opened throughout the rest of this year.
“We plan to add over 1,000 sales counters this year,” Zhao Lisheng, chairman of Kingworld, said at a media briefing held after its annual general meeting Tuesday.
“We hope to operate a total of 3,000 sales counters by the end of this year,” said Zhao. The company had been running a total of 1,500 sales counters in retail pharmacies and commercial supermarkets in 12 provinces on the mainland, supplying products to more than 17,000 retail outlets.
Competition in the pharmaceutical industry will remain keen, according to the chairman, and a wider distribution network will give the firm a better chance of standing out in a crowded market.
The demand for pharmaceutical and healthcare products is huge in China given its large population and is growing at a respectable rate as its increasingly affluent population become more interested in living longer and healthier lives. Statistics from the National Bureau of Statistics show that combined sales revenue of Chinese and Western medicines amounted to 298 billion yuan in 2010, a marked year-on-year rise of 23.5 percent. Besides, medical insurance expenses per capita among urban residents in China has been growing at an annual rate of 11 percent.
Apart from an extended sales network, Kingworld is also betting it future growth on a wider selection of products, with new offerings such as organic and anti-radiation food products to be launched soon.
“We will continue to enrich our product mix,” said Zhao. And what the company has been looking at are products that will be able to boost its profit margins, Zhao noted.

reported a net profit of 42.9 million yuan for 2010, up 15.1 percent from 2009. The board proposed a final dividend of 3.71 HK cents. The company didn’t pay any dividends for 2009.