Sihuan Pharmaceutical Holdings Group Ltd. · HKEX:460
Sihuan Pharmaceutical — H1 2012 Earnings Presentation
38 slides from Sihuan Pharmaceutical's earnings presentation, 2012
Slide 1: 2012 Interim Results Presentation
Sihuan Pharmaceutical Holdings Group Ltd. 四環醫藥控股集團有限公司 2012 Interim Results Presentation Stock Code : 0460
Slide 2: Disclaimer
Disclaimer The sole purpose of this Presentation (the “Presentation”) is to assist the recipient in deciding whether it wishes to proceed with a further investigation of Sihuan Pharmaceutical Holdings Group Ltd. (the “Company”) and it is not intended to form the basis of any decision to purchase sec
Slide 3: Agenda
Agenda Results Highlights I Business Review II Financial Review III Growth Strategy IV Q&A V 2
Slide 4: Results Highlights
Section 1 Results Highlights
Slide 5: Market Overview in 1H2012
Market Overview in 1H2012 Favourable factors: Challenges: ♦ Pharmaceutical industry maintained to be ♦ Impact of healthcare reform measures in one of the fastest growing industries in 2011, such as: China ♦ Price adjustments for drugs in certain therapeutic areas ♦ Rising demand driven by increased
Slide 6: 1H2012 Major Achievements
1H2012 Major Achievements 1 ♦ Satisfactory revenue growth of 40.3%. Net profit up 21.2% ♦ Continued to be the largest CCV franchise and 9th largest pharmaceutical company in China’s prescription drug market 2 ♦ Further the growth of a diversified portfolio of high-margin products ♦ Over 50% growth o
Slide 7: Key Highlights for 1H2012
Key Highlights for 1H2012 Satisfactory Growth Bolstered by a More Sales Strategies Execution 3 ♦Diverse and Optimized Product Portfolio Capabilities Enhanced ♦ Over 50% growth of 10 major products ♦ Completed alignment of distribution network ♦ Robust growth of several established CCV products, ♦ Ex
Slide 8: Business Review
& COM BR 29 SihuanPharm Section 2 Business Review
Slide 9: Market Overview
Market Overview China’s Hospital Pharmaceutical Purchases of China’s Hospital Pharmaceutical Purchases (RMB Bln) CCV Drugs (RMB Bln) ♦ Growth of CCV drugs outpaced industry growth rate 366 46.3 313 37.9 257 35.2 214 30.4 203 26.8 175 23.4 152 17.2 2007 2008 2009 2010 2011 1H2011 1H2012 2007 2008 200
Slide 10: Market Share in China's Pharmaceutical Market
Market Share in China’s Pharmaceutical Market Shares in hospital market Rank Top 20 Corporations in 1H2012 (%)* 1 PFIZER GROUP 2.27 2 ASTRAZENECA GROUP 1.78 3 SANOFI GROUP 1.67 4 BHC GROUP 1.65 5 JS.YANGZIJIANG FTY 1.54 6 SHANDONG QILU FTY 1.42 7 KE LUN GROUP 1.50 8 ROCHE GROUP 1.43 9 SIHUAN PHARMAC
Slide 11: CCV Product Sales Contribution Breakdown
CCV Product Sales Contribution Breakdown For the six months ended 30 June Others Yuanzhijiu* 1.5% 5.7% Chuanqing Kelinao 6.4% 22.3% Qu’Ao 7.2% Qingtong 7.5% Oudimei* Yimaining* 18.8% 8.6% Anjieli 8.9% GM1 * Promising Product 13.1% Remarks: The percentage contribution are based on sales of the produc
Slide 12: Market Overview: Key Non-exclusive Sihuan Product
Market Overview: Key Non-exclusive Sihuan Product Share of Sihuan’s Qu’Ao Share of Sihuan’s GM1 in Cerebroprotein Hydrolysate in GM1 market in 1H2012 market in 1H2012 Beijing SaiSheng Sihuan* (北京赛生制药) 15% 4.7% Others (2011: GD Baike Pharm Others Sihuan* 8.4% 16.3%) (广东百科制药) 12.3% 24.3% 7.6% (2011:26
Slide 13: Market Overview: Key Non-exclusive Sihuan Product
Market Overview: Key Non-exclusive Sihuan Product Share of Sihuan’s Chuanqing Share of Sihuan’s Qingtong Share of Sihuan’s Yimaining in Ligustrazine market in 1H2012 in Edaravone market in 1H2012 in Alprostadil market in 1H2012 Fujian Mindong Changchun Jiexun Guoao (福建闽东捷讯) (长春国奥药业) 3.2% 1.9% Others
Slide 14: Highly-diversified Revenue Stream to Support Stable Growth
Highly-diversified Revenue Stream to Support Stable Growth Revenue of CCV Products For the six months ended 30 June For the six months Contribution (RMB million) ended 30 June 2012 to Sales of 1,600 (RMB ‘000) CCV Products Kelinao* 440,921 34.5% 1,400 1,277.4 Oudimei# 286,118 22.4% 1,200 GM1 96,061
Slide 15: Highly-diversified Revenue Stream to Support Stable Growth
Highly-diversified Revenue Stream to Support Stable Growth Revenue of Non-CCV Products (RMB million) 120 111.8 For the six months ended 30 June 103.4 For the six Contribution 100 Product months ended 30 to Sales of 52.3 32.4 June 2012 Non-CCV (RMB ‘000) Products 80 Central nervous Ren’Ao 6,597 6.4%
Slide 16: Strengthened Unique Sales and Marketing Model
Strengthened Unique Sales and Marketing Model Our Group ♦ Aligned distribution network and expanded sales and marketing force – Recruited over 100 sales staff in 1H2012 Product managers Sales managers Product and marketing support Select and manage distributors – Operated more than 60 sales offices
Slide 17: Improved Product Quality and Productivity
Improved Product Quality and Productivity ♦ Enhanced product quality standards and maximize cost efficiency of newly acquired facilities ♦ Production yield of Yimaining improved by 10% with a lowered production costs, and also doubled its production volume in 1H2012 ♦ Achieved a breakthrough in stud
Slide 18: Research & Development Achievements in 1H2012
Research & Development Achievements in 1H2012 Overview Leading R&D capabilities and ♦ Applied for 4 major drug awards for their innovations, 2 for strong product pipeline drive innovative drugs and 2 for first-to-market generic drugs sustainable growth ♦ Granted 8 new patent rights Project Product C
Slide 19: Financial Review
& COM BR 29 SihuanPharm Section 3 Financial Review
Slide 20: Financial Highlights
Financial Highlights For the six months ended 30 June Key Income Statement Items 2012 2011 Change (RMB’000) (RMB’000) Revenue 1,389,297 990,568 +40.3% Gross Profit 1,071,419 774,730 +38.3% Operating Profit 533,425 446,326 +19.5% Profit Attributable to Equity Holders of the Company 461,445 380,685 +2
Slide 21: Stable and Sustained Growth
Stable and Sustained Growth Revenue (RMB million) 1,600 0.7% 1,389 7.4% CCV Non-CCV 1,200 Others 991 91.9% 800 400 Revenue by Segment: 0 CCV: RMB 1,277.4 million 2011 2012 Non-CCV: RMB 103.4 million For the six months ended 30 June ♦ Revenue grew by a record 40.3% to RMB1,389 million ♦ Over 50% grow
Slide 22: Cost Breakdown
Cost Breakdown Distribution Costs Administrative Expenses (RMB million) (RMB million) 700 635 60% 140 6 125 600 588 120 50% 42.3% 500 100 40% 400 29.7% 80 78 30% 300 294 60 20% 200 40 100 10% 20 0 0% 0 2011 2012 2011 2012 Distribu tio n Costs % of Revenue For the six months ended 30 June For the six
Slide 23: Capital Expenditure
Capital Expenditure (RMB million) 250 205.7 200 101.9 Land use rights 150 114.4 Intangible Assets 7.8 100 6.2 Property, Plant & 80.4 Equipment 50 97.6 26.2 0 2011 2012 For the six months ended 30 June 22
Slide 24: Growth Strategy
& COM BR 29 SihuanPharm Section 4 Growth Strategy
Slide 25: Market Overview in 1H2012
Market Overview in 1H2012 Favourable factors: Challenges: ♦ Pharmaceutical industry will continue to be one ♦ Various medical reform measures, including: of the fastest growing industries in China : ♦ Separation of dispensing and prescribing ♦ Growing medical insurance coverage in drugs China (95% b
Slide 26: Effective Strategies Supporting Stable and Sustained Growth
Effective Strategies Supporting Stable and Sustained Growth ♦ Maintain steady growth of established products − Expand market coverage in first-to-second tier cities and make inroads into third-to-fourth tier cities − Seek removal of Kelinao and Anjieli’s insurance reimbursement coverage restrictions
Slide 27: Appendix
Section 5 Appendix 26
Slide 28: Our History
Our History Acquired Jilin Sihuan/Dupromise which owns three exclusive CCV drugs 2011 Acquired 80% interest in Changchun Xiangtong which owns GM1 injection and API manufacturing facility Acquired Jilin Sichan/Vinise Pharmaceutical which owns 4 TCM CCV products 2010 Listed on the Hong Kong
Slide 29: Management team
Management team Our senior management has an average of 15-years experience in the Chinese pharmaceutical industry Proven entrepreneurial success Deep understanding of China's pharmaceutical industry Expertise in operating high growth companies Proven R&D and drug acquisition track record
Slide 30: Management team
Management team Ms. Gu Jin Ms. Yuan Tingjun Mr. Frank Wu Dr. Huo Caixia Deputy General Vice President CSO Director of our R&D Manager (Production and (Drug Innovation) Management Center (Administration and Quality Control) and General Manager Human Resources) of Beijing Ao He Research Institute Co.
Slide 31: Continuous Diversification of Product Portfolio
Continuous Diversification of Product Portfolio Breviscapine Sodium Chloride Kelinao Ren’Ao Injection Anjiejian Qingtong Pojia Yimaining 2003 2005 2007 2009 2011 2003 2004 2005 2006 2007 2008 2009 2010 2011 Chuanqing 2004Kanglixin Zhuo’Ao / 2006Anjieli 2008 Aogan 2010 Oudimei Bi’Ao Salvia Miltiorrhi
Slide 32: Established CCV Products
Established CCV Products Product Product Characteristics Kelinao (Cinepazide Maleate Injection) (80 mg) For improving ischemic tissue blood supply and protecting ischemic tissue. Widely used in the treatments of cardiovascular and Anjieli cerebrovascular and peripheral vascular diseases. (Cinepazide
Slide 33: Promising CCV Products
Promising CCV Products Product Product Characteristics Oudimei For promoting metabolism of the heart, brain tissues, and neurons of the brain (Cerebroside-Kinin Injection) tissue regeneration process, improving cerebral metabolic functions; clinically used for the treatment of dysfunctions caused by
Slide 34: Research and Development Strategy
Research and Development Strategy Optimized Te m p l a t e for Microsoft PowerPoint 2003 Overview Primarily focuses in Innovative Patent Drugs ♦ Continuous investments in R&D and First-to-market Generic Drugs ♦ One of the largest drug R&D teams in China ♦ Currently over 70 drugs under various develo
Slide 35: Jilin Sihuan, Changchun Xiangtong Plants in Jilin Province
Jilin Sihuan, Changchun Xiaongtong Plants in Jilin Province • Other products production base 34
Slide 36: Improving Product Quality and Productivity (cont.)
Improving Product Quality and Productivity (cont.) New Production and R&D Centre in Beijing 35
Slide 37: Improving Product Quality and Productivity (cont.)
Improving Product Quality and Productivity (cont.) New Production and R&D Centre in Beijing 36
Slide 38: Improving Product Quality and Productivity (cont.)
Improving Product Quality and Productivity (cont.) Other Products Production Base in North China 37
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