China Resources Pharmaceutical Group Co., Ltd (HKG: 3320) has published its 2022 interim financial report, revealing a strong performance despite disruptions caused by COVID-19. During the period, the company generated revenues of HKD 12.57 billion ($1.6 billion), up 9.8% year-on-year (YOY), and net profits of HKD 6.168 billion ($785.7 million), up 26.2% YOY. Growth in the company’s pharmaceuticals, distribution, and retailing business segments accounted for 16.0%, 80.8%, and 3.2% of revenues, respectively.
Pharmaceuticals Business
China Resources Pharma (CR Pharma) continued to invest in research and development (R&D) and partnerships, with the pharmaceuticals business generating HKD 22.177 billion ($2.8 billion) in revenues, up 18.0% YOY. Sales of traditional Chinese medicines, chemical drugs, biological products, and nutrition and other health products were HKD 10.375 billion ($1.32 billion, +9.4%), RMB 9.186 billion ($1.2 billion, +15.4%), RMB 1.195 billion ($167 million, +1,545%), and RMB 1.419 billion ($198.3 million, +10.6%), respectively. The gross profit margin was 58.2%, down 1.1 percentage points compared to the same period last year, due to volume-based procurement (VBP) and product structural changes. The company manufactures 600 drugs, with 327 included in the National Reimbursement Drug List (NRDL) and 146 on the Essential Drug List (EDL).
Product R&D
CR Pharma invested HKD 1.004 billion ($127.9 million) in R&D during the period, up 34.5% YOY. The company is developing nearly 300 drugs, including 100 novel products, covering cancer, autoimmune diseases, metabolic and endocrine system diseases, respiratory system, blood, cardiovascular, traditional Chinese medicines (TCMs), and more. Four products were approved for clinical trials: NIP003, a Category 1 chemical antithrombotic; NIP001, a Category 1 chemical drug for renal anemia; DC05F01, a Category 1 chemical drug for solid tumors; and ginger stone granules, a Category 1.1 TCM for irritable bowel syndrome with weak spleen and stomach. A total of 26 products are currently awaiting regulatory decisions. Olopatadine, acarbose, zoledronic acid, ticagrelor, levofloxacin, nifedipine, valsartan, fumaric acid tenofovir alafenamide (TAF), and mitoxantrone gained market approvals during the period.
Distribution Business
The distribution segment recorded HKD 104.4 billion ($13.3 billion) in revenues, up 8.4% YOY. The gross profit margin was 6.3%, up 0.1 percentage point compared to the same period last year, driven by the medical device business.
Retailing Business
The retailing segment generated HKD 4.061 billion ($517.2 million) in revenues, up 13.0% YOY, driven by the high-value Direct to Patient (DTP) business, which brought in RMB 2.42 billion ($388.3 million), up 15% YOY. The gross profit margin was 8.4%, down 0.6 percentage points compared to the same period last year, due to increasing low-profit margin DTP business revenues.-Fineline Info & Tech
