(Alliance News) - Cathay International Holdings Ltd said Thursday its sales and profit in the first half will be lower than the year before.
The healthcare investor focused on China said 50%-owned subsidiary Lansen Pharmaceutical Holdings Ltd's results will have an adverse impact on its own results.
On Thursday, Lansen announced in Hong Kong it expects to have a "noticeable decrease" in net profits in the first half compared to the year before.
"Lansen has implemented a number of new strategic initiatives in its pharmaceutical business, in response to the challenging regulatory environment in China, by developing its own products such as Pafulin, Sicorten Plus, and certain featured pharmaceuticals; and reducing reliance on agency products," Cathay International explained.
As a result of these initiatives, Lansen's sales in the period are below the year before.
Lansen also suffered from "a number" of provisions and write-offs against its "old and slow moving" inventory.
Cathay International added: "Despite the short term impact on Lansen's results from the new strategic initiatives, Lansen sees improvement in its pharmaceutical segment and expects this segment's profit to be higher than that in same period last year, and looks forward to continuing improvement in the second half."
Cathay International said investee Haizi was "adversely impacted" by a decrease in market price for inositol, which means its results are expected to be below 2018.
Investee firms Natural Dailyhealth and Botai are both trading broadly in line with expectations, Cathay International said.
Shares in Cathay International were untraded at 6.50 pence each.