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| 1. |
How easy will it be to grow your business in China? |
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The pharmaceutical market in China is growing. From 1999 to 2004 it grew at a compound annual rate of 20% from US$ 15.1 billion to US$37.2 billion. We believe this presents Chi-Med with significant opportunities to grow its China healthcare business rapidly and to market new treatments. To achieve our goal of becoming a leading manufacturer and supplier of TCM pharmaceuticals and health supplements, our main objective is further establish economies of large scale production and an extensive sales and distribution network. From 2002 to 2005 our established healthcare businesses have grown at 51% CAGR and we expect these businesses to grow at a faster rate than the industry average.
We also intend to seek out new opportunities for acquisitions and joint ventures to consolidate our presence in existing markets and extend into other regions of China allowing us to leverage our established sales and distribution channels.
Furthermore, through our continued relationship with HWL we expect to have a significant advantage in identifying and securing opportunities arising from the Chinese Government's developing policy on PRC state-owned enterprise share reform and the policy of nine Southern China Provincial Governments to attract Hong Kong investment. |
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| 2. |
You say the companies are high growth and cash generative? Can you give us numbers? |
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Revenues for the China Healthcare businesses were US$ 13.6m in 2003, US$ 17.5m in 2004 and US$ 37.2m in 2005. |
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| 3. |
Are the businesses profitable? |
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Our China healthcare business became profitable during 2005. |
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| 4. |
What is your M&A strategy? |
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We intend to continue to seek out new opportunities for acquisitions and strategic joint ventures that can consolidate Chi-Med's presence in existing markets in China and extend its presence into other regions of China, enabling us to leverage our established sales and distribution channels. We also believe that the Group's continued relationship with the HWL Group with its reputation and experience in China should give the Group a significant advantage in identifying and securing these opportunities. |
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