LONDON (Alliance News) - Cathay International Holdings Ltd Friday reported a higher pretax profit for the first half of the year as strong sales of its specialty drugs and nutrient inositol offset price pressure in the Chinese healthcare market.
The company said it expects the pricing situation in China to continue in the second half of the year, but it expects to continue to grow.
The China focused healthcare investment company posted a pretax profit of USD6.4 million for the six months to June 20, up from USD1.8 million a year earlier, as revenue rose to USD74.7 million, from USD53.7 million.
Revenue growth was driven by a good performance from its Lansen subsidiary's speciality drugs and sales of its Haizi subsidiary's nutrient inositol.
The company said it remains cautious about the second half as it expects continued price volatility in the inositol market, and price pressures on one of Lansen's drugs, in addition to increased marketing expenses at Lansen for the launch of corticosteroid cream Sicorten Plus and collagen dressing product Kefumei.
It plans to complete the expansion of its subsidiary Botai's facilities by the end of the year, and said it's exploring possibilities to use Lansen's infrastructure to distribute collagen fillers. Lansen will initially build a small production facility and obtain licenses for a couple of bilberry and ginseng related products.
"The group is well positioned for strong revenue growth in the coming years. Our challenge still remains in the declining trend of our product prices. As well as reducing our production costs and managing down our expenses, we will continue to build the efficiencies, scale and synergies in order to maintain healthy margins," the company said in a statement.
Shares in Cathay were trading down 2.7% at 35.50 pence Friday afternoon.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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