SSY Group Limited announces 2020 interim results

• Net profits drop 55% to HK$247 million with interim
  dividend HK$0.05/share
• Keep composure facing outbreak of the novel
  coronavirus
• Strive to make new innovative breakthroughs

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Results summary:

• Total revenue HK$1,783 million for first half year, representing a decrease
  of 23.3% y-o-y
• Net profit HK$247 million, representing a decrease of 54.9% y-o-y
• The Board resolved to pay interim dividend of HK$0.05 /share,
  unchanged from last year

 

HONG KONG, CHINA - Media OutReach - 25 August 2020 - SSY Group Limited (“SSY”
or the “Company”; Stock Code: 2005.HK) and its subsidiaries (together, the
“Group”) presents the interim results of the Company for the six months ended
30 June 2020 (“first half of the year” or the “period”).

 

During the first half year, the Group achieved a revenue of HK$1,783
million, representing a decrease of 23.3% and the gross profit margin remained at 64%. The Group
achieved a net profit of HK$247
million, representing a decrease of 54.9% compared to the corresponding period
of last year. During the first half year, the operational activities of various
sizes of hospitals and various types of clinics in the PRC were severely
disrupted by the epidemic and thus the number of patients substantially
decreased. The sales volume of the intravenous infusion solutions, being the major
products of the Group, dropped considerably. The Group extended sales &
marketing and supply services through “cloud services” and other means. During the period, the Group developed
new businesses in more than 80 hospitals to further secure and stabilize its
market, laying a solid market foundation for the rapid business recovery of the
Company after the epidemic.

 

The Board
of directors proposed to pay an
interim dividend of HK$0.05 per share for year 2020, which is unchanged
from the corresponding period of last year. The total amount of interim dividend this year to be paid
is approximately HK$151 million.

 

During
the first half of the year, sales volume of intravenous infusion solutions
reached approximately 482 million bottles/bags, representing a decrease of
approximately 38% year-on-year, of which the proportion of therapeutic infusion
solutions among the intravenous infusion solutions increased to 31.6%,
representing an increase of 1.1 percentage points year-on-year. The Group
increased its effort in promoting the sales of new products in different
provinces, among which the online tender of Moxifloxacin Hydrochloride and
Sodium Chloride Injection has been completed in 31 provinces and municipalities
and has resulted in sales in 22 provinces, achieving sales of RMB127 million
during the first half of year 2020. As a broad-spectrum antiviral drug, the
Group’s Abidol Hydrochloride
capsule has played a positive role in this fight against the epidemic, and was
included in “Diagnosis and Treatment Program for Novel Coronavirus Infected
Pneumonia”, “Guidelines for the Rational Use of Antiviral Drugs in Children with
Viral Infectious Respiratory Diseases” and National
Medical Insurance Catalogue 2019. Its revenues for the first half year amounted
to RMB50.64 million, representing a significant increase of 19 times compared
to the corresponding period of last year. Export sales to foreign countries
achieved a growth despite the unfavourable market trend, with increases in
export revenue of 14.9% and export volume of infusion solution of 15.4% during
the first half year as compared to corresponding period of last year. We
completed the registration procedures and obtained registration certificates for
26 product specifications overseas, and increased 2 new countries for export.

 

For both existing and potential markets, the
Group further pushed forward the progress of research and development of
innovative drugs and generic drugs as well as the consistency evaluation of
generic drugs, and achieved results as expected. The Group obtained approvals
for production of Doxofylline Injection and Ropivacaine Hydrochloride Injection
being two items under newly classified Type 4 chemical drug. In year 2020, it obtained approval for Cefdinir capsule and
Prucalopride Succinate tablet, being newly classified Type 4 oral formulation.
All of them were regarded as one of the first three enterprises that had passed
through consistency evaluation in the PRC. Doxofylline Injection has a new type
of packaging in PP ampoule instead of the original glass ampoule for better
convenience and safety. Ropivacaine Hydrochloride Injection is a new type of
local anesthetic drug being the first one that passed through consistency
evaluation. Cefdinir capsule and Prucalopride Succinate tablet were both
awarded the first place in the tender results of National Centralised Medicines
Procurement. The approval for Rosuvastatin Calcium Tablet, a newly classified
Type 4 chemical drug, was also obtained. It is used for treatment of primary
hypercholesterolemia or mixed dyslipidemia. In addition, 72 research and
development projects were submitted for approval, including clinical trial
application of NP-01 under Type I new drug, 4 items under Type 4 chemical
drugs, 1 item under Type 3 chemical drugs and 3 items for consistency
evaluation.

 

Regarding
development of projects, through product process
optimization as well as equipment modification and upgrades, Hebei Guangxiang
Pharmaceutical Co., Ltd. is rapidly releasing its production capacity of bulk
pharmaceuticals, thus beginning to show the advantage of production cost. The
Company has planned for a spin-off and separate listing of its integrated
business of bulk pharmaceuticals on a stock exchange in the PRC.

 

Looking ahead in the
second half year, domestic and international economy will be more complex and
dynamic. As the novel coronavirus epidemic may become normalised, the pressure
arising from external factors may persist and bring new challenges to the Group’s
operation and sales. Facing numerous uncertainties, the Group will continue to
keep its composure, uphold its development focus and do its best in maintaining
the momentum in sustainable and stable development of the Group. The Group will
promote development by innovation, and improve efficiency by management. The
Group will maintain our major products in the leading position of intravenous
infusion solution market. At the same time, the Group will strengthen the
marketing efforts of major products, such as therapeutic infusion solution
products and small volume injection products, as well as newly approved drug
types and will also expand the sales proportion of high-value-added preparation
products. On the other hand, the Group will actively utilize the production
capacity of bulk pharmaceuticals and improve capacity utilization to lay a
solid foundation for the listing in the PRC. Moreover, the Group will continue
to make progress on implementation of innovative drug evaluations and
consistency evaluations. We will adhere to the new product development idea of “combination of generic and innovative drugs” with development of as injections the basis. At the same time, we
will take into consideration of research and development of new types of oral
solid preparation, bulk pharmaceuticals and medical materials. At the same
time, the Group strives to make new breakthroughs in the research and
development of innovative drugs.

 

Mr. Qu Jiguang, Chairman and CEO of SSY Group Limited said, “We
will not be discouraged by the disappointing result in the first half year. We
are full of confidence on the future development of the Group. Leveraging on
the competitive edges on our scale, quality, lean management and branding in
the industry, we will firmly grasp development initiatives, keep innovative
vitality and push forward high-quality development of the Group. We will
deliver more solid development results to bring satisfactory returns to our
investors. I would like to take this opportunity to express our gratitude to
our investors and all staff of the Group for their support to the development
of the Company.”

 

About SSY Group Limited

SSY Group Limited is one of the leading pharmaceutical manufacturers in China with
nearly 7 decades of operation history and a well-established brand name. The
Group went public on the Hong Kong Stock Exchange in December 2005 with stock
code 2005. The group has become a component stock of Morgan Stanley Capital
International Index (MSCI) China Index from June 2018. The Group is principally
engaged in the research, development, manufacture and sale of a wide range of
pharmaceutical products, including OTC drugs, bulk medicine and medical
materials, mainly intravenous infusion solution to hospital and distributors.
The manufacturing plants of the Group locates in Hebei Province and Jiangsu
Province in China, its products take leading position in the high-end hospital
market in China.