Kingworld Medicines' 20181H Revenue Improved Steadily by 9.3%; Profit Attributable to Owners of the Company Increased 24.4% to RMB27.55 Million

Building a New Retail Ecosystem Integrating Online and Offline Operations; Providing Complete Omni-channel Operation Services;
Continuously Optimising Product Portfolio; Expands Coverage of Medicine and Greater Health Industry

HONG KONG, Aug 29, 2018 - (ACN Newswire) - Kingworld Medicines Group Limited ("Kingworld Medicines" or the "Group", stock code: 01110.HK), a globally leading and well-known omni-channel enterprise offering a complete supply chain spanning the greater health products and services industry, has announced its unaudited interim results for the six months ended 30 June 2018 (the "Period").

During the period, as the main products have actively optimised product channels, sales grew steadily, and the Group continues to adjust its operating strategy and strengthened its online and offline business network, revenue has increased by 9.3% to approximately RMB556.5 million and gross profit increased by 17.3% to approximately RMB174.3 million with gross profit margin to 31.3%, improved by 2.1 percentage point. Profit attributable to owners of the Company increased by 24.4% to approximately RMB27.5 million and basic earnings per share increased by 24.4% to approximately RMB4.43 cents. As for the three major businesses of the Group: revenue from the pharmaceutical products segment amounted to approximately RMB361.7 million, representing an increase of 29.5% against the same period last year and accounting for 65.0% of the Group's total revenue; revenue from the healthcare products segment was approximately RMB105.4 million, accounting for 18.9% of the total revenue, and revenue from the medical devices segment amounted to approximately RMB89.4 million, accounting for 16.1% of the Group's total revenue.

Mr. Zhao Li Sheng, Chairman of the Board and Executive Director of Kingworld Medicines, said, "China has been actively implementing "Healthy China" strategy to ensure the safety and quality of consumer products, and with the establishment of the Medical Insurance Administration to coordinate the promotion of the medical treatment, medical insurance and pharmaceutical arenas, the strategic importance of the pharmaceutical industry continues to rise. At the same time, consumers are paying more attention to their own health, and healthcare consumption per capita continues to rise, driving the market's huge demand for greater health products. A range of macroeconomic and demographic factors are conducive to the overall growth of the pharmaceutical sectors and the greater health industry in general and greater opportunities for Kingworld Medicines. The Group continues to build a new retail ecosystem integrating online and offline operations of Kingworld Medicines, providing an omni-channel sales network spanning supply chain operation services. At the same time, it has actively introduced high-quality health products from overseas, and strives to bring long-term and considerable returns to shareholders."

As the flu raged worldwide in the first half year, Nin Jiom Chuan Bei Pei Pa Koa gained recognition on the social media in the United States, and was popular in North America, as well as in China, Hong Kong, Macau, Taiwan and Chinese communities all over the world, becoming a topic of discussion. In addition, the news attracted the attention of Mr. Wang Guoqiang, Head of the State Administration of Traditional Chinese Medicine. During the period, effective channel optimisation since second half of last year boosted the sales of Nin Jiom Chuan Bei Pei Pa Koa. The Group has carried out various major promotional activities to attract more younger consumers, and has set up Nin Jiom flagship stores at major sales terminal sites. Benefiting from the successful channel reform and promotional strategy, the revenue from Nin Jiom Chuan Bei Pei Pa Koa grew significantly to approximately RMB282.1 million in the first half-year, representing an increase of 37.5% as compared with the same period last year.

Another well-known brand of Kingworld Medicines, the Culturelle probiotics product series from the United States, achieved an outstanding performance in the Hong Kong and Macau market, with an increase of 63.7% year-on-year. The Group is constantly expanding this brand's market potential in Hong Kong and Macau, an additional distribution channel, which is now available in "SaSa", the large cosmetic retail chain. For the ZUCCARI slimming products series from Italy, its concentrated slimming 100% pineapple juice is now available in "SaSa", Kissbaby, Mannings and other retail stores in Hong Kong. The Group has tailored and carried out diverse and interactive marketing activities for Lifeline Care maternal and infant fish oil nutrient product series from Norway and the "Global Slimming" product series in online and offline channels, accessing tens of millions of fans through KOLs. The new mode of innovative consumption has been a main driving force sending the economy into a new phase of growth, as more consumers are changing their shopping habits from offline to online. Alert to the trend, in order to actively seize market opportunities, the Group has been aggressively pursuing OMO resources integration, and building a new retail ecosystem integrating online and offline operations through the Kingworld Health Family Qianhai e-commerce platform.

The Group has actively optimised the channel layout of another star product Taiko Seirogan, optimising the channel layout, standardising channel management to facilitate orderly sales and maintaining the channel price structure. Optimisation efforts here will enable our downstream distributors and cooperative partners to enjoy greater efficiency. The Group acts as the agency and distributor of various well-known external use medicated oil products including the Mentholatum series, Flying Eagle Wood Lok Medicated Oil, Hoe Hin White Flower Embrocation and Kingworld Imada Red Flower Oil. During the reporting period, the Group formulated targeted market strategies for each external use medicated oil product, forged ties with online merchants in order to extend the sales of medicine to greater depth, sponsored various sports events as well as hastened work on boosting the coverage of products to customers and end users.

The Group has continued to introduce overseas best-selling products, and in the second quarter of this year, introduced the widely popular CARMEX healing lip balm series,a globally leading with over 80-year-old brand of lip balm from the United States, and became its exclusive distributor in the Greater China Region (excluding Taiwan). The CARMEX healing lip balm series will be restocked in the third quarter of this year in conjunction with a series of brand promotion activities, covering various channels that have been extended to various regional cities in China and large retail chain stores such as Watsons, and will continue to expand into cosmetic and convenience stores in the future.

In the first half of this year, Hong Kong Yuen Tai Pharmaceuticals Limited, a related company of the Group, successfully obtained the Certificate for Manufacturer (Good Manufacturing Practice in respect of Proprietary Chinese Medicines), and products include "Fengbao Jianfu Capsules", and "Pu Ji Kang Gan Granules," certifying that it follows the Good Manufacturing Practices (GMP) in manufacturing and quality control of Chinese patent medicines. As of now, only 18 pharmaceutical companies in Hong Kong have obtained the certification as a licensed manufacturer of Chinese patent medicines and the Group is the agent of the medicines manufactured by four of these pharmaceutical companies. With years of in-depth promotion, these products have become widely-known high quality healthcare products, which reflects the Group's effective selection of quality products to create a healthy lifestyle for consumers.

During the period, Shenzhen Dong Di Xin Technology Company Limited ("Dong Di Xin"), a non-wholly owned subsidiary of the Group, continued to promote the medical devices business. Dong Di Xin is an innovator and driving force in the global medical devices for physical rehabilitation and treatment industry and a National High and New Tech Enterprise. Dong Di Xin was recognised as an AAA Grade Enterprise in terms of Quality Reputation in Guangdong Province for three consecutive years. In addition to ODM research and development, manufacturing and production of medical devices, Dong Di Xin has also developed its own brand "NU-TEK", which is a globally renowned brand of medical devices for physical rehabilitation with products covering various physical therapies such as low-, medium- and high-frequency electrotherapy, ultrasound therapy, short wave electrotherapy, magnetic therapy, laser therapy and biofeedback therapy.
In the first half of 2018, the Group continued to promote the development of the medical service industry through investment projects, grasping the development opportunity within the greater health services industry. A notable example is Shenzhen Kingworld Medicine Company Limited, a wholly-owned subsidiary of the Group, invested in the "Shenzhen Zhiyuan Healthcare Technology Innovation Center", a greater health services project in the Lok Ma Chau Loop. The project is committed to establishing a greater health services platform in the Lok Ma Chau Loop in order to better serve the Mainland China market by utilising the excellent pharmaceutical and healthcare resources in Hong Kong.

Looking ahead, the Group will continue to seize the development opportunity under the "Healthy China" strategic initiative by actively seeking quality plant-based medicine and healthcare products from overseas, and also actively promote in-depth strategic cooperation with time-honored brands in China. The Group will also gradually establish a comprehensive supply chain system extending both upstream and downstream across the healthcare industry, and build an intelligent information management service system that covers the entire supply chain. Under the consumer-oriented concept, the Group will strengthen the integration with offline channels and sales terminals, and boost sales and enhance brand recognition by leveraging advantages in both its brand and product portfolio.

Mr. Zhao commented, "The Group will continue to seize the opportunities presented by the favorable medical national policy and actively introduce quality medicines and healthcare products to consumers and optimise its greater health product portfolio. At the same time, the Group will continue to build a sound upstream and downstream supply chain system and strengthen integration with offline channels and sales terminals in the second half of the year to build a new retail ecosystem. Kingworld Medicines remains true to our original aspiration and continues to adhere to our corporate mission of "offer help to people, benefit the world," utilise its brand advantages, upgrade and diversify its product portfolio, enhance its sales performance and create social value, building a comprehensive greater health products and services enterprise."


 
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