China Medicine (CHME.OB), a developer and distributor of prescription pharmaceuticals and traditional Chinese medicines in the People’s Republic of China, today reported solid first quarter 2008 results. Revenues increased 39% year over year, rising to $7.1 million, in what is seasonally the company’s slowest quarter. Net income improved 54% to $1.2 million or 8 cents per share vs. prior year results.
Chairman and CEO Senshan Yang said, “We are very pleased with the healthy performance of our sales of prescription and over-the-counter medicines as well as our traditional Chinese medicines. This increase in revenues was attributed to the expansion of our distribution network to rural areas in Guangdong Province and the increase in provincial distribution rights through the online bidding system last quarter.”
Sales actually declined 55% sequentially from $16.1 million in the fourth quarter of 2007. Hospitals and pharmaceutical companies in China generally beef up their inventories at year-end ahead of the Chinese New Year holidays, so the company’s first quarter revenues are typically the lowest of the fiscal year.
The company offered full-year 2008 guidance, predicting a 25-35% increase in revenues over 2007 ($42.1 million) and a 20-22% increase in net income over last year ($6.9 million). Shares of CHME.OB closed 11.3% lower at $2.60 and have traded in a range of $1.55 – $4.48 during the past year. With 15.3 million shares outstanding, CHME.OB has a market cap of $40 million.
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