| By Linda Yao, Asia Manufacturing Pharma |
| Tuesday, 16 September 2008 |
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Shandong Pharmaceutical Glass Co., Ltd recently reported its interim results. The company recorded a year-over-year increase of 16.3% in core business revenues to RMB553.3 million (approximately US$80.9 million), with net profits of RMB66.4 million (approximately US$9.7 million), up 17.6% from a year earlier. Earnings per share (EPS) reached RMB0.26 (approximately US$0.038), slightly higher than expectations. The revenue growth can be attributed to the expanded production and sale |
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and the enhanced international market exploitation of amber bottles as well as the expanded sale of butyl rubber stoppers. Due to such adverse factors as soaring prices for crude oil and raw materials worldwide, prices for raw materials and fuels, which are necessary for the company’s manufacturing process, increased diversely, and the gross margin for the company’s leading products decreased, with that
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of moulded vials down five percentage points and that of amber bottles down 3.9 percentage points.
Looking into the second half of this year, continued growth is still expected to remain focused on the company’s moulded vial and amber bottle businesses. With increasingly wider range of applications for moulded vials, the company is planning to pump up production of infusion and cosmetic bottles. Revenue for the moulded vial business is forecast to increase by 12% to RMB580 million (approximately US$84.7 million). As for the amber bottle business, the company added two new production lines in the past year, with an increased production capacity of over 600 million bottles per year. The business is expected to see a revenue increase of more than 40% to RMB190 million (approximately US$27.8 million), owing to strong overseas demand.
Although Shandong Pharmaceutical Glass is the first domestic Chinese company to have put in place the Class I water-fast pharmaceutical |
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glass technology, revenue for this product is forecast to be less than RMB20 million (approximately US$2.9 million). The company will add a new production line by the end of this year. Once the line is put into full production, the annual revenue for this product is expected to reach RMB300 million (approximately US$43.8 million). Thanks to the steep barrier for entry due to the high level of the technology, the product is expected to generate a gross margin of 60% and to become a driver of the company’s future performance growth.
Looking into the future, the company’s ESP is forecast to reach RMB0.51 and RMB0.63 for 2008 and 2009, respectively.
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