| By Cindy Wu, Asia Manufacturing Pharma |
| Wednesday, 03 June 2009 |
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Publicly traded Shanxi Yabao Pharmaceutical Group, a fast growing company principally engaged in the manufacture and distribution of traditional Chinese and western pharmaceutical preparations and chemical synthesis active pharmaceutical ingredients (APIs), is forecast to record earning per share of RMB0.38 (approx. US$0.06), RMB 0.48 (approx. US$0.07) and RMB 0.60 (approx. US$0.09),
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respectively for the three years from 2009 to 2011, according to Analyst Online service part of the Chinese-language investment website Investoday. Dynamic P/E ratio is expected to respectively hit 27 times, 21 times and 17 times earnings during the three years.
For the first quarter of this year, Yabao Pharmaceutical registered operating revenue of RMB335 million (approx. US$49 million), a rise of 16.5 per cent over the same period of last year. Net profit surged 57.1 per cent from a year earlier to over RMB31 million (approx. US$4.5
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million). Earning per share and operating cash flow per share respectively reached RMB0.098 (approx. US$0.014) and RMB0.162 (approx. US$0.024).
According to BOC International (China), the company’s first quarter results was slightly better than analysts’ expectation due to a reduced income tax rate. The income tax rate dropped to 12 per cent from 31 per cent for the first quarter of last year.
The continuous improvement of Yabao Pharmaceutical's results reflected its increased operating revenue and declined loan rate. For the whole year of 2009, the company is expected to see a 25 per cent year-on-year revenue growth.
Dinggui Erqi Tie, a traditional Chinese medicine for the pediatric market that provides relief from stomach aches and one of the company’s main competitive products, is expected to post sales of RMB270 million (approx.US$39.6 million) for the year, up 20 per cent from the previous year. |
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With increased investment in the research and development of new drugs, Yabao Pharmaceutical obtained production licenses for 13 new products last year and has received six new drug certifications so far this year.
In addition, several projects with capital raised by issuing additional shares in May 2008 are scheduled to be put into production in the near future. All of these factors are combining to offer the company a huge potential for development during the next several years. Furthermore, the new medical reform scheme is expected to give a boost to the company’s market share and sales.
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