We recently held a conf call with Hua Han mgmt, here are the major takeaways.
Four exclusive NMIC drugs will continue to drive fast growth of prescription drugs Four exclusive NMIC drugs (Qijiao Shengbai Capsules, Zhisou Huatan Pills, Yi Fu&Yi Bei) have been major profit contributors since FY10, accounting for >60% of annual sales addition. The mgmt indicates promotion will continue to focus on those four drugs to deliver fast growth. Based on mgmt’s estimate, sales of those four drugs will grow by ~84%/38%/18% respectively in FY13, accounting for ~43%/5%/15% of sales addition respectively in FY13. Qijiao Shengbai Capsules will receive stronger promotion in light of its huge growth potential. The Veteran Cadre Dept is becoming a new growth driver.
OTC drug will continue to be another growth driver The company is expanding promotion to more provinces, targeting to add 12 new provinces by the end of 2012. Aggressive advertising targeting consumers will be a major measure for promotion with total cost of sales reaching HK$250M in FY13. Sales growth will mainly come from increase of pharmacy store coverage, sales team is expected to add another 200 people. Based on mgmt’s estimate, sales growth of OTC drug will reach ~30%, accounting for ~20% of sales addition in FY13.
Golden peptides to become a new growth driver The company is applying for approval for its new product Golden Peptides and is expected to receive it in Oct. The production line is expected to be completed by the end of Oct. This product will target mid-to-old aged people with relatively high income, human test has shown satisfactory results. Mgmt is optimistic on the product and