Qizheng Tibetan Medicine’s net profit excluding non-recurring items rose by 44%, and its core pharmaceutical business continued to grow steadily.

　　According to a report from Hexun.com, Qizheng Tibetan Medicine (002287, stock forum) recently released its semiannual report, which showed that both its revenue and net profit achieved double-digit growth. Specifically, its operating revenue reached 451 million yuan, up 15% year-on-year, while its net profit came in at 152 million yuan, an increase of 16.5% over the same period last year. Excluding non-recurring items, net profit rose by 44%. Moreover, the company forecasts that its net profit for the first three quarters could reach as much as 224 million yuan, representing a year-on-year increase of 30%.

　　In fact, Qizheng Tibetan Medicine’s performance growth is no accident—last year, the company achieved remarkably strong results in its key financial indicators. In 2014, Qizheng Tibetan Medicine’s sales revenue reached 950 million yuan, and at the same time, its profitability continued to improve, with net profit reaching 238 million yuan, an increase of 11.32% over 2013.

　　Moreover, Qizheng Tibetan Medicine has also delivered impressive performance in the secondary market. This year marks the 20th anniversary of Qizheng Tibetan Medicine’s establishment, as well as the 50th anniversary of the founding of the Tibet Autonomous Region. The Tibet-themed sector as a whole has shown strong momentum, and Tibetan medicine—being one of the pillar industries of the Tibet Autonomous Region—plays a crucial role in the region’s economic and social development.

　　At the same time, this has shown capital markets the tremendous potential for sustained growth in this type of enterprise. Since the beginning of this year, the company’s stock price has surged by as much as 130%. Even amid the severe downturn in A-shares, its share price has still risen by more than 30% compared to the start of the year, delivering substantial returns to investors.

　　Lei Jufang, founder and chairperson of Qizheng Tibetan Medicine, stated that only by embarking on the path of modern scientific and technological innovation can we accelerate our development, align with the ever-changing consumer demands of the mainstream market, and thus expand beyond our respective ethnic regions—from a niche audience to the broader public, benefiting an even larger segment of the population. For example, today everyone is concerned about the prevention and treatment of chronic diseases, the “three highs,” and age-related illnesses. In fact, Tibetan medicine foresaw this era as early as 1,300 years ago and developed exceptionally effective diagnostic and therapeutic protocols.

　　Liu Kailie, Director and President of Qizheng Tibetan Medicine, believes that the vitality of traditional inheritance lies in leveraging technological innovation to ensure that traditional Tibetan medicine secures a place within the modern medical system and fosters the integration of regional ethnic medicines with the broader Chinese pharmaceutical market. Innovation not only involves continuously improving the quality of modern Tibetan medicinal products and confirming their clinical safety and efficacy, but also entails ongoing secondary development of time-tested Tibetan medicinal formulas—particularly those addressing challenging therapeutic issues—to meet the expectations of both the market and patients.

　　According to a review by Hexun.com, in the past three years, Qizheng Tibetan Medicine’s R&D investment and its proportion of operating revenue have continued to rise. In 2014, R&D expenses approached 40 million yuan, accounting for more than 2.5% of net assets and over 4% of revenue.

　　The reason Qizheng Tibetan Medicine has stood out among numerous Tibetan medicine companies is that, since its establishment, the company has consistently pursued the modernization and marketization of traditional Tibetan medicine, achieving several industry firsts in the field of Tibetan medicine. Among these achievements are: being the first to obtain an international invention patent; being the first to receive the Second Prize for National Scientific and Technological Progress; and, as the only ethnic medicine enterprise, being included in the nation’s first batch of innovative enterprises.

　　In 2014, Qizheng Tibetan Medicine formulated a three-year development strategy for the period 2015-2017. It closely aligned all its efforts with the established strategy of “one axis, two wings, and one support,” focusing on the pharmaceutical business, strengthening efficient execution, and driving growth through specialized academic marketing, precise brand management, and refined sales management. By leveraging the synergistic momentum of large hospitals, grassroots healthcare facilities, and retail outlets, the company achieved robust growth in terminal sales, further realizing its operational goals of deepening engagement with large hospitals, expanding reach to grassroots levels, and scaling up retail operations, thereby sustaining the company’s overall performance growth.

　　It is understood that Qizheng Tibetan Medicine is currently building an innovative R&D platform and promoting the establishment of a research institute without physical walls. In 2014, Qizheng Tibetan Medicine further initiated the creation of a socially engaged and open R&D platform—the Gansu Province Modern Chinese Medicine Pharmaceutical Engineering Research Institute—drawing on the R&D model and high-end talent from national engineering technology centers, thereby propelling the company’s innovation toward a new stage of socially driven innovation.

　　In addition, what has drawn attention from the capital markets is that Qizheng Tibetan Medicine has now established a specialized marketing system driven by three pillars—large hospitals, retail outlets, and primary-level medical institutions—through a “brand-driven + academic-driven” model. The company has built the largest domestically-owned sales team dedicated to Tibetan medicine, with coverage extending to 1,700 hospitals, 23,000 primary-level medical institutions, 22,000 pharmacies, and nearly 100 chain drugstores nationwide.

　　Thanks to the enhanced development of its marketing system and the further strengthening of both its brand marketing capabilities and academic marketing expertise, the company’s pharmaceutical business achieved sales revenue of 811 million yuan last year, representing a 16.06% increase over the same period the previous year. In the first half of this year, pharmaceutical business revenue continued to grow, rising by 17.25% year-on-year.

　　Reporting media: Hexun.com

　　Report link: http://news.hexun.com/2015-08-27/178669656.html