Press Releases

Home News> Press Releases

Expands Coverage of Great Health Business Segment

Views:
Source: Kingworld medicine
Date:2018.03.30

Expands Coverage of Great Health Business Segment

Strengthens Omni-Channel Distribution Online and Offline

2017 Annual Profit Attributable to Owners of the Company

Up 8.7% to RMB51.06 Million

Basic Earnings per Share Increased 12.9%

Dividend Distribution Surged 16.3%

Financial Highlights(Audited)

(RMB’000)

For the Year Ended 31 December

2017

2016

Change

Turnover

1,031,488

1,053,527

-2.1%

Gross profit margin

31.3%

30.7%

+0.6ppt

Profit attributable to owners of the Company

51,060

46,966

+8.7%

Basic earnings per share

(RMB cents)

8.20

7.26

+12.9%

(28 March 2018, Hong Kong) – Kingworld Medicines Group Limited (“Kingworld Medicines” or the “Group”, stock code: 01110), a leading and renowned great health service provider in China, today announced its audited annual results for the year ended 31 December 2017 (the Year Under Review).

During the Year Under Review, the Group continued to monitor changes in the industry, actively adjusted its operating strategy, and strengthened online and offline business expansion to consolidate its leading position in the country as a globally leading and renowned great heath service provider. The Group achieved total annual turnover of RMB1,031,488,000, annual profit attributable to owners of the Company increased by 8.7% to RMB51,060,000. Basic earnings per share were up by 12.9% to approximately RMB8.20 cents. The Board has proposed to pay a final dividend of HKD3.43 cents per share for the year ended 31 December 2017, an increase of 16.3% as compared with same period last year.

Mr. Zhao Li Sheng, Chairman and Executive Director of Kingworld Medicines, said, “There were both opportunities and challenges in the pharmaceutical industry during the Year Under Review. The Chinese economy was moving steady on the positive trend and policies conducive to the development of the pharmaceutical industry were in place. The ‘Two-invoice System’, zero margin for drugs, control

on medical insurance fee, however, brought challenges to the industry and speeded up its consolidation. The Group, boasting excellent quality products and effective marketing and promotion strategies, has been able to maintain its leading position amid the healthcare reform, and is looking at a bright future with unlimited development opportunities. In addition, prompted by the country's two-child policy, mother and child e-commerce and healthcare and other related markets are growing rather impressively. Numerous mother and child products distributed by the Group, such as the Culturelle probiotics product series (康萃樂益生菌) and Lifeline Care maternal and infant fish oil nutrient series  (Lifeline Care母嬰魚油營養素)  from Norway are benefiting from this consumption structure upgrade. ”

Nin Jiom Chuan Bei Pei Pa Koa (京都念慈菴蜜煉川貝枇杷膏) have been one of the major source of revenue in the Group’s drug segment. In 2017, with the supply-side reform continuing and the gradual roll out of the“Two-invoice System”, growth of the pharmaceutical industry slowed down. During the year, the Group actively adjusted its operational strategy, implemented “Optimization of channels, boosted efficiencies”. The group cooperated with 32 distributors in China by signing provincial and regional distribution agreements and as well as beginning cooperation with more than 70 major regional pharmacy chain operators. The influence of Nin Jiom brand equity increased and product coverage expanded, which brought sales at terminals improved. As at 31 December 2017, the sales revenue of Nin Jiom Chuan Bei Pei Pa Koa amounted to approximately RMB542.6 million a decrease of 13.6% as compared with the same period last year. The channel reform, while slowed down sales growth for the year, is expected to help downstream distributors and cooperative partners boost efficiency in the long run. In addition, sales of Taiko Seirogan, another key product distributed by the Group, continued to climb by 8.4%, when compared with the same period last year.

With consumers in China become more and more health conscious and have growing consumption power, the health products market in the mainland has been growing fast. During the Year Under Review, the Group continued to expand and optimize on and offline channels, aiming for omni-channel presence, and promotion and publicity, helping enhance market penetration of products. Such efforts saw its star product of Culturelle probiotics product series record market growth in sales offline as well as on e-commerce platforms. In the Year Under Review, sales revenue of the Culturelle probiotics product series amounted to approximately RMB210.3 million, up by 32% year-on-year.

In 2016, the Group introduced the Norway Lifeline Care maternal and infant fish oil nutrient series. Supported by tailored brand operation plan and benefiting from the full implementation of the “two-child policy” in mainland China, sales revenue from the product series increased 2.7 folds when compared with the same period last year. In the past two years, the Group continued to introduce slimming products including the Fat Blaster Coconut Water from Australia(菲拉思德椰子水), the Tilman Plant Diet Tea series (Tilman減肥茶系列) from Belgium, and Zuccari Slimming Series, the concentrated slimming 100% pineapple juice, from Italy to enrich its product portfolio.

In addition, the Group actively promoted development of online platforms, expanded e-commerce  channels, aroused brand awareness and enhanced its corporate image. During the Year Under Review,

the Group set up an e-commerce center and integrated multiple online channel businesses, developed its own e-commerce platform “Kingworld Health Family’ with Hybris System, and the platform was launched successfully, allowing it to carry out unified management of all channel orders.

During the year, the Group continued to enhance resources integration of Shenzhen Dong Di Xin Technology Company Limited (Dong Di Xin) (深圳市東迪欣科技股份有限公司) in areas including corporate governance and development strategies. Effort enabled it to move closer to realizing a complete, systematic and diversified industrial chain that cover from R&D to manufacturing to sales to channel to end-users. 

2017 was the first year of implementation of the Group’s “fourth five-year strategy”. The Group came up with an overall macro development strategy, continued to improve its nationwide distribution network, strengthened and expanded its e-commerce platform, upheld its “to serve the community and heal the souls”, speeded up internationalization, forged on with management system building and enhanced its core competitiveness. The Group will also keep optimizing its capital operation system and management mechanism, so as to consolidate its leadership in China as a globally leading and renowned great health service provider.

 

Mr. Zhao concluded, “The Group will continue to perfect and strengthen its great health product portfolio and service quality, take full advantage of its diverse channels and rich resources, hasten bringing in medicines and supplements that fit into its great health service provider positioning and the demand of consumers, and for each product segment build its leader brand, so as to strengthen its industry status as a leading agent of leading health product brands. The Group will also keep taking part in and helping foster various charitable activities, actively work with major charity organizations in the mainland, putting in practice the spirit of ‘Taking from society, give back to society’, so that the ‘Kingworld Care and Health Foundation’ will enjoy greater influence nationwide.”

 

About Kingworld Medicines Group Limited

Kingworld Medicines Group is a great health service provider leading in China and internationally renowned. The Group’s for great health operations include: (1) agency and distribution of overseas quality and well-known drugs, including the star product series of Nin Jiom (京都念慈菴), Taiko Seirogan (喇叭牌正露丸) and medicated oil for external use; (2) actively introduce into the China market with high-quality and well-known healthcare products from overseas, such as the star product Culturelle probiotics product series (康萃樂益生菌) from the US, the Lifeline Care maternal and infant fish oil series (Lifeline Care母嬰魚油營養素) from Norway and the “Global Slimming” product series (全球瘦), and (3) R&D and manufacturing of medical device. In terms of total import value, the Group is among the top 100 importers of Chinese medicines and health products between 2010 and 2014. The Group manages a portfolio of over 60 kinds of medicines and healthcare products manufactured in Hong Kong, Japan, the United States, Australia, Canada, Singapore and Mainland China, and has a sales network comprising over 200,000 OTC retail pharmacies in China. Kingworld Medicines has set up 24 subsidiaries and 17 branch offices in 34 provincial-level administrative units across the country (including Hong Kong and Macau regions) and distributes products to more than 341 cities.