Yiling Pharmaceutical: Revenue and Net Profit Attributable to the Parent Company for the First Three Quarters Already Exceeded the Full Year 2019

SHIJIAZHUANG,China,Oct. 28,2020 -- On October 27,Yiling Pharmaceutical (002603.SZ) released its 2020 third quarter report. In the first three quarters of the year,Yiling Pharmaceutical achieved the total operating revenue of 6.447 billion yuan (about US$962 million),a 48.31% year-on-year increase; net profit attributable to shareholders of its parent company of 1.016 billion yuan (about US$152 million),a 76.74% year-on-year increase; net profit attributable to shareholders of its parent company after deducting non-recurring gains and losses of 982 million yuan (about US$147 million),an 81.95% year-on-year increase. On this basis,Yiling Pharmaceutical's total operating revenue and net profit attributable to its parent company for the first three quarters have exceeded the full year 2019.

Analysis shows that one of the drivers of Yiling Pharmaceutical's growth in the first three quarters came from increased sales of Lianhua Qingwen Capsules. On one hand,during the epidemic,Lianhua Qingwen Capsules have been recommended in China's national and more than 20 local versions of diagnosis and treatment schemes,and acted as one of the effective drugs screened by Chinese medicine for the COVID-19 treatment; on the other hand,with the enhancement in brand awareness,Lianhua Qingwen Capsules have gradually been becoming a common medicine for families. According to Sinohealth data,Lianhua Qingwen Capsules ranked No. 4 in China's OTC terminal proprietary Chinese patent medicines for cold medicine category in 2019 and leaped to No. 1 in the first quarter of this year,with a 10% market share. Meanwhile,Lianhua Qingwen's visibility in the global market has been further improved. According to Yiling Pharmaceutical's announcement,Lianhua Qingwen Capsules have obtained registration approvals in nearly 20 countries and regions,including Brazil,Singapore,the Philippines and Kuwait.

Growth in sales of cardiovascular and cerebrovascular products is another important driver for Yiling Pharmaceutical's growth. According to Yiling Pharmaceutical's announcement,in January this year,the "Construction of TCM Collaterals Theory and Its Guidance in the Prevention and Treatment of Microvascular Diseases" program,completed by Hebei Yiling Medical Research Institute,Yiling Pharmaceutical's subsidiary,as the first principal research unit,won the 2019 First Prize of China National Science and Technology Progress Awards. It is understood that this is the only First Prize of National Science and Technology Progress Awards in the medical and health industry this year,which has played a significant role in enhancing the market influence of Yiling Pharmaceutical's cardiovascular and cerebrovascular products.

Some securities dealers said that Yiling Pharmaceutical's full-year growth is still expected to continue to accelerate,given that the fall and winter seasons are high-incidence seasons for respiratory and cardiovascular diseases,and the social and academic brands of Lianhua Qingwen Capsules and cardiovascular products have been greatly enhanced.

In addition to traditional Chinese medicine segment,Yiling Pharmaceutical accelerated the layout of the chemical and biological medicine and massive health segment. It is understood that Yiling Pharmaceutical has 4 Class-I new drugs in the clinical stage and more than 10 Class-I new drugs in the pre-clinical research stage in the field of chemical and biological medicine; in the field of massive health,Yiling Health,has developed hand sanitizer,hand cream,anti-bacterial spray,oral spray,air purification gel and other products under the brand of Lianhua series. Continuous R&D and technological innovation,together with the layout of multiple business segments,will provide impetus for Yiling Pharmaceutical's sustainable development in the future.

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