Shanghai Pharmaceuticals Achieves Rapid Business Growth for 3Q2014; Realized Double-Digit Growth of Revenue and Profit

HONG KONG, Oct. 29, 2014 /PRNewswire/ --Shanghai Pharmaceuticals Holding Co., Ltd. ("Shanghai Pharmaceuticals" or the "Company" and, together with its subsidiaries, the "Group; stock code: 601607.SH; 2607.HK), the integrated pharmaceutical company in the PRC that has leading positions in both pharmaceutical product and distribution markets, today announced its third quarterly results of 2014. For the first nine months of 2014, the Company's operating revenue was RMB68.716 billion, up by 18.36% as compared with the corresponding period of last year. Net profit attributable to the equity holders of the parent Company was RMB1.913 billion, representing an increase of 16.00% as compared with the corresponding period of last year. Net profit attributable to equity holders of the parent Company after deduction of non-recurring profit or loss was RMB1.706 billion, increased by 8.09% as compared with the corresponding period of last year, aligning with the target of third quarter of 2014.

For the pharmaceutical research and development, company's project in research was in normal progress. Application for pharmaceutical clinical trial of materials and tablets of Type 3.1 New Lurasidone was accepted by China Food and Drug Administration in October 2014. Phase I clinical trial of "Recombinant fusion protein of human tumor necrosis factor receptor mutant-Fc fragment injection", which is jointly developed with Fudan Zhangjiang, was activated. During the Reporting Period, Company underwent re-arrangement and evaluation on all in research and new chemical drugs projects and approved the on-going research of 129 chemical drugs projects. Four projects, including the "Research of the technical improvement and clinical effects of the research of the working mechanism of Babao Dan's capsule and Chanwu Babu Gao", were officially selected as the jointly cooperation programme of 2014 biological and pharmaceutical industry in Shanghai.

In respect of pharmaceutical manufacturing business, the company achieved operating revenue of RMB8.308 billion, representing a year-on-year increase of 2.72% and a gross profit margin of 47.85%. In particular, sales revenue generated from its 64 key products increased by 4.15% on a year-on-year basis to RMB4.908 billion, accounting for 59.08% of the manufacturing sales and representing an average gross profit margin of 65.65%. 24 major categories of key products were expected to record sales revenue of more than RMB 100 million over the year. In particular, the average growth rate of the top five fastest growing products was 45.95%.The company will continue to impel in key product focusing strategy, optimize the product structure adjustment, and carry the marketing integration forward, implement the "one product, one strategy" of key products, gradually increase the comprehensive ability of pharmaceutical manufacturing.

In respect of medical services business, from January to September 2014, the Company achieved operating revenue of RMB60.813 billion, representing a year-on year increase of 20.98% and a gross profit margin of 5.98%; the operating revenue from the pharmaceutical retail business amounted to RMB2.456 billion, representing a year-on-year increase of 9.25% and a gross profit margin of 18.87%. The company will further maintain the distribution profitability through measures consisting of maintaining reasonable direct sale proportion, strictly regulating the sales and administration costs and strongly developing new business.

About Shanghai Pharmaceuticals Holding Co., Ltd.

Shanghai Pharmaceuticals is the only integrated pharmaceutical company in the PRC that has leading positions in both pharmaceutical product and distribution markets with top-three scale in China, providing solutions in pharmaceutical manufacturing, distribution, logistics storage and retail. The Group currently offers more than 800 pharmaceutical products to more than 11,000 hospitals and medical institutions in China. The Group also operates approximately more than 1,700 self-operated and franchise stores nationwide.

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