HONG KONG, April 1, 2015 /PRNewswire/ — Jintian Pharmaceutical Group Limited (“Jintian Pharmaceutical” or the “Company”; stock code: 2211) announced that Mr. Jin Dongtao, chairman and executive director purchased 40,000,000 ordinary shares (the “shares”) of the Company, representing 2% of the existing entire issued share capital of the Company from AMG Holdings Limited, at HK$2.82 per share with the total amount of approximately HK$113 million. Upon the completion of the transaction, Mr. Jin Dongtao’s shareholding will increase from 45.17% to 47.17%.
Mr. Jin Dongtao, with over 20 years’ experience of pharmaceutical industry, enjoying great influence in China’s pharmaceuticals industry. In addition to focus on the Company’s business development, as the leader of the Group, Mr. Jin Dongtao also pays close attention to the market and industry trend, actively promotes the industry concept of MacroHealth (Holistic wellness which includes healthcare and medical industry), develops the market of e-commerce, aiming at building up Jintian Pharmaceutical into a leader in international MacroHealth brand management.
Mr. Jin Dongtao’s explanation of the increase of shareholding will better interpret the Company’s strategic conception:
First, Mr. Jin Dongtao has great confidence in the development of China’s MacroHealth industry.
With China entering aging society, MacroHealth industry, strongly supported by the nation, enjoys huge development potential. Jintian Pharmaceutical, as the forerunner in the pharmaceutical distribution industry, takes the lead in implementing layout of MacroHealth industry with its extraordinary healthcare entity network.
Second, Mr. Jin Dongtao has great confidence in the development of cross-border trading.
By the international perspective resulted from listing in Hong Kong, on one hand, through distributing and selling international MacroHealth brands’ products, the Company achieved strategic cooperation with multiple world-renowned manufactures, expanded the market for the products, and improved profitability and competitiveness among domestic peers; on the other hand, the Company follows closely with the development of free trade zones in China and arrange its business accordingly, in the future the Company will enter the international market to cooperate with famous enterprises from Asia and even from Europe and the United States, so as to establish overseas MacroHealth brand operation and management enterprise.
Third, Mr. Jin Dongtao has great confidence in the establishment of mobile internet platforms.
The Chinese government revealed “Internet Plus” strategy recently, which brought huge development potential for the industry. During 2014, after cooperation with Ali Health, the Company introduced elite teams from the Internet field to actively develop retail and distribution network, and to establish competitive O2O platform. The Company combines with advantages of its entity network to promote fast implementation of our e-commerce strategy to best leverage our leading real economy advantage. The Golden Rules of Marketing and professional training of Jintian Institute make contribution to promoting the Company’s high-margin products. In the meantime, under the thinking mode of platform cooperation, the Company established crossover in e-commerce business in a great extent and depth with dozens of MacroHealth industry-related enterprises at home and abroad.
Mr. Jin Dongtao mentioned, “CVC Capital Partners, as one of our main pre-ipo private fund investors, their lock-up period has expired after three and a half years’ holding period. This transaction is a win-win investment decision. The Company and I maintain a good relationship with CVC. We hereby gratitude to CVC for their years of support.”
Strong FY14 Results. MS maintain their Valuation “Attractive”
In 2014, the revenue and gross profit of the Group increased by 31.1% and 35.4% respectively as compared with 2013. Over gross profit margin increased to 29.1%. Earnings per share for the Reporting Period was RMB23.77 cents.
As at 31 December 2014, the Group acquired 157 retail pharmacies and opened 2 new retail pharmacies. The Group had 953 self-operated pharmacies in total, of which 4 are located in Hong Kong. The Group has established a nationwide distribution network covering approximately 6,500 customers. Meanwhile, the Group now has a total of six logistics centres in Shijiazhuang, Harbin, Jiamusi and other places, which further strengthened our advantages of nationwide distribution network. During the Reporting Period, the Group cooperated with Alibaba Health to launch online prescription drug business in Northeast China.
The Group has high net profit margin which benefits from the focus on branded premium products portfolio, the unique direct supply model, central procurement platform and low operating costs. Jintian Training Institute provides professional training service to employees and customers representing strong abilities of execution and acquisitions integration. In this way, the product portfolio and advanced business model can be applied into the acquisition business. The Group has established a unique business model and strong core competitiveness. In addition, e-commerce and mobile Internet services and MacroHealth has been brought into the Group’s strategy.
Based on FY14 results, Morgan Stanley maintains their bear-case valuation of “Attractive”. And they expect the price target can be HK$4.50 and the stock will bullish on the Group’s accelerating sales growth through offline distribution and retail channels and online platforms.
About JINTIAN PHARMACEUTICAL GROUP LIMITED
Jintian Pharmaceutical Group Limited (“Jintian Pharmaceutical” or the “Company”, stock code: 2211) is one of the leading pharmaceutical retailers and distributors in China, and certified as the Top 10 of 2013-2014 China chain pharmacy stores by the State Food and Drug administration. As at 31 December 2014, the Company has 953 retail pharmacies in including four stores in Hong Kong and approximately 6,500 distribution customers. The Company has high net profit margin, which is attributable to the product mix with a focus on high-gross-margin products, the effective direct-supply model, the centralized procurement platform and low operation costs. The Company provides training programs to its employees and customers through Jintian Institute. The Company also has strong execution capability for acquisitions and integration which enables it to implement its product mix, advanced business model and sophisticated operation procedures in the acquired businesses. The Company has formed distinctive business model and core competitive strengths.
This press release is issued by Wonderful Sky Financial Group Holdings Limited on behalf of JINTIAN PHARMACEUTICAL GROUP LIMITED.
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