News blog
Taihua
- BY: Andrew Hore |
- POSTED: 16/11/2010 |
Chinese natural medicine ingredients supplier Taihua has appointed Xi’an Zaolutang Pharmaceutical Group as the distributor of Biantong Pian, a new medicine product which could be a major revenue generator.
This deal sparked a 1.25p rise in the share price to 10.5p, which values Taihua at £8.57m.
The new distributor has undertaken to distribute RMB10.4m worth of Biantong Pian in the first year and 20% more than that in the second year. A deposit of RMB500,000 has been paid to Taihua and it can terminate the agreement and keep the deposit if sales fall significantly short of expectations.
This new product could be significant for Taihua. Group revenues were RMB21.4m in 2009. They rose from RMB8.11m to RMB13.9m in the first half of 2010. Interim profit jumped from RMB518,000 to RMB14.7m, but most of that rise was due to a RMB13m gain on the revaluation of the company’s biological assets – the Chinese yew trees from which it produces medicine ingredients. Taihua hopes to be self sufficient in these raw materials by 2016 but the trees are still growing and that is why their value is increasing.
There was cash in the bank of RMB86.3m at the end of June 2010.
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