Zhitong Finance App learned that on the evening of March 26, Xing Kerong Pharmaceutical (06833) announced its 2023 annual results, with revenue growth of 11.8% to RMB 2,540.1 million. Among them, sales revenue of human albumin injections increased by about RMB 249.8 million, and revenue from the medical and aesthetic business increased by RMB 13.7 million. During the reporting period, the company's gross profit increased by RMB 17.4 million to RMB 323.3 million. The increase in gross profit was mainly due to increased revenue from human albumin sales and medical and aesthetic services. At the same time, to return long-term shareholders' support, the company's board of directors recommended declaring a final dividend of HK$0.39 per common share, totaling HK$8,000,000.

Core product performance is excellent, future demand remains optimistic

As the largest selling variety in the Chinese blood products market, human blood albumin is currently the only blood product that can be imported. Every year, the volume of imported and domestic products issued in batches has maintained rapid growth. The number of batches issued in 2023 was 78.1 million bottles (2022:67.7 million bottles), of which imported and domestic products accounted for 66.3% and 33.7%, respectively.

In 2023, the company's sales of human albumin injections were RMB 2,507.1 million, an increase of about RMB 249.8 million compared with 2022, an increase of 11.1%, while revenue from medical and aesthetic services was approximately RMB 25.9 million. With the approval of new indications and the increase in diagnosis and treatment rates, the International Plasma Protein Therapy Association (PPTA) anticipates that the global blood products market demand will continue to grow at a high rate in the future. As the largest selling variety in the Chinese blood products market, human blood albumin is currently the only blood product that can be imported. Every year, the volume of imported and domestic products issued in batches has maintained rapid growth, and demand is expected to remain strong for a long time.

The dual track layout continues to be deepened to promote the successful implementation of product supply chain configurations

In September 2021, the company cooperated with Beijing Norconda to develop injectable polycaprolactone fillers, or acupuncture needles for girls. As of the reporting period, all the plants, production equipment and facilities related to the project have been completed and put into use after being tested and passed by the Sichuan Drug Inspection Research Institute (Sichuan Medical Device Testing Center). The Juvenile Acupuncture S material completed the registration of the main document of the Medical Device Technical Evaluation Center of the State Drug Administration in October 2023; the Adolescent Needle S completed pilot testing, verification and clinical sample production in June 2023. The registration test passed the registration test by the Sichuan Drug Inspection Research Institute (Sichuan Medical Device Testing Center). The clinical plan has been determined, and preparations for clinical trials are ongoing. In November 2022, Xing Kerong Pharmaceutical cooperated with Beijing Norconda to develop intimate needles and polycaprolactone filling materials for intimate injections. The intimate needle and its polycaprolactone filling material project have completed preliminary laboratory research, animal pre-testing is ongoing, and the project is underway.

In response to the high demand for the pharmaceutical cold chain, Xingkerong Pharmaceutical invested in the construction of a cold chain storage facility in Shuangliu District, Chengdu City, Sichuan Province. The first cold chain warehouse that has been built so far (15,000 square meters) fully meets the company's storage needs and can effectively ensure the quality and safety of blood products in the company's product portfolio. The second phase of the construction project will commence in 2024. Once completed, the company will be able to provide high-quality pharmaceutical cold chain storage services to other third parties, which will also become a new business division of the company.

Optimize and expand marketing and promotion networks, and the overall operating efficiency of the network continues to improve

Xingkerong Pharmaceutical is committed to continuously optimizing and expanding the company's marketing network, which has become a key component of the company's development strategy. The company has built a strong and refined internal sales team, and also maintains close cooperation with many professional third-party promotion service providers. Facing rapid changes in the market, Xingkerong Pharmaceutical takes “flexibility” and “professionalism and efficiency” as the core principles to focus on building a marketing team that can respond quickly to market changes and execute strategies efficiently. The company has comprehensively optimized the team structure, and attached importance to the discovery and cultivation of talents to ensure that team members can continue to improve and adapt to future market needs. At the same time, Xing Kerong Pharmaceutical has also further improved the team's performance management system. Through scientific and rational allocation of sales resources, each product line can receive proper attention and investment, and improve the team's overall business operation efficiency.

Recently, Xing Kerong Pharmaceutical has meticulously optimized its existing sales partner network. Through in-depth cooperation with distributors in various regions and coordination with internal sales teams, the company is accelerating the expansion of sales channels to a wider range of end markets. For example, the company's marketing strategy changed from the original regional distribution to a specific layout for hospitals in each region and their corresponding promotion service providers to ensure that the sales network can directly reach market terminals. In addition, Xingkerong Pharmaceutical's market coverage has also been expanded from major third-class A hospitals to include provincial, municipal and county-level hospitals, thereby strengthening market penetration. The ultimate goal of the company is to establish an accurate and effective promotion service system for each partner hospital to maximize the effectiveness of marketing.

In addition, Xingkerong Pharmaceutical is further strengthening the active role of the internal marketing team in product marketing activities. This includes regularly providing training on product knowledge to third party promotion service providers, and actively participating in organizing or attending medical and pharmaceutical-related conferences, symposiums, and product seminars to directly promote the academic promotion of products. The purpose of this move is to expand the network of opinion leaders in the main treatment areas of the company's products and ensure that doctors can receive product information accurately and in a timely manner. In addition to product promotion, the company also takes the initiative to discuss and interpret the important impact of national policies with third-party promotion service providers across the country to enhance the value and appeal of the company's training.

The board of directors of Xingkerong Pharmaceutical said, “On the one hand, in 2023, with the gradual decline of the COVID-19 epidemic and major adjustments in prevention and control policies, the company ushered in industry recovery and new development opportunities. Facing the new pattern and challenges in the post-pandemic era, the company firmly believes that the healthcare industry will continue to show strong growth momentum and long-term market demand, driven by an aging population, increased health awareness, changes in the disease spectrum and application of new technologies. Facing this new market environment, the company will continue to adhere to the core values of innovation and development, continuously explore and expand new business areas, strengthen internal management, improve risk control capabilities, and ensure the sustainable and healthy development of the enterprise. Xingkerong Pharmaceutical is firmly committed to creating value for shareholders, providing a good career development platform for employees, and actively fulfilling corporate social responsibilities.”