Tianjin Zhong Xin Pharma Q3 net profit up 7%

TIANJIN Zhong Xin Pharmaceutical Group Corp saw earnings improve in the third quarter on a sharp rise in revenue, although a lower share of associates' profits eroded some of the gains.

Net profit was up 7 per cent year-on-year to 87.4 million yuan (S$17.4 million) for the three months to Sept 30, according to unaudited results released on Tuesday.

Revenue grew 21 per cent to 1.58 billion yuan.

But while gross profit was in line with the increase in turnover, share of profits from associates declined 83 per cent, nosediving from 19.3 million yuan to 3.37 million yuan.

Tianjin Zhong Xin did not give a reason in its financial statements for the drop.

It had previously disclosed the disposal of three associates in FY2017.

The group sold its 20 per cent stake in Tianjin Sinobioway Biomedicine for 47.8 million yuan, its 50.4 per cent stake in Zigong Zhong Xin Pharmaceutical Chain for one yuan, and its 20 per cent stake in Chengdu Zhong Xin Pharmaceutical Zigong for 2.54 million yuan, according to its earlier annual report.

Earnings per share for the third quarter came in flat at 0.11 yuan, while net asset value rose to 6.12 yuan a share from 5.82 yuan as at Dec 31, 2017.

"The pharmaceutical industry is presented with new opportunities and challenges from continuing reforms, two-invoice system, no additional mark-up on drugs, consistent evaluation and drug registration," Tianjin Zhong Xin said in its outlook statement.

"The company promotes healthy and sustainable development through market-oriented and innovation-driven transformation and upgrading."

Net profit rose 13 per cent for the nine months to 402.9 million yuan, while group revenue was up 9 per cent to 4.69 billion yuan.

No dividend was recommended for the quarter, unchanged from the year before.

Tianjin Zhong Xin closed flat at US$0.895 before the results were released.