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During the Year, the pharmaceutical industry in China has been growing steadily. This has laid a cornerstone for the sustainable and rapid development of the pharmaceutical sector. The domestic pharmaceutical market is expected to post over a double-digit growth per annum for the coming three years. Compared with other pharmaceutical industry segments, the Chinese medicine segment remains a sector with stronger industry edges, more distinct core competitiveness and relatively stable growth prospect. The Directors believe the focuses of the future pharmaceutical industry will be product varieties, distribution channels and enhancing corporate strength through rapid M&A. The Group will adhere to its strategic goal of becoming "a leading manufacturer of gynecological pharmaceutical products and feminine medicinal healthcare products". In light of the prosperous developments in China, by identifying M&A opportunities with pharmaceutical enterprises possessing the potential to make significant contributions to the Group in terms of brand building, product varieties and marketing network and implementing effective integration, the Group will enhance its management quality, competitiveness, operation and efficiency. In the present year, the Group will continue to strengthen its internal consolidation through internal restructuring and asset reorganization in order to form an integrated operational platform. By constantly optimizing business flow and internal control systems, as well as tightening cost controls, the Group has improved its mode of operation and risk management ability in order to react promptly to the changing market conditions. The Group has expedited the launch and sales of a category one new medicine, namely Human Nerve Growing Factor（人神經生長因子）, a product which has been granted an exclusive intellectual property right and a national patent right. Human Nerve Growing Factor（人神經生長因子）applies a biotechnological separation process to the Chinese medicine "Placenta（紫河車）", thereby obtaining a high purity cell factor which could be used for replenishing nutrition to human nerve cells and re-conditioning damaged nerve cells. The Directors are confident that the sales and introduction of the Human Nerve Growing Factor（人神經生長因子）will definitely enhance the Group's brand recognition in the prescription drugs market and strengthen its competitiveness, thus further improving its profitability in the field of prescription drugs. In addition, the separation process of "Placenta（紫河車）" will produce other products, which could be developed into various anti-ageing beauty products through further R&D. In that event, our medicinal healthcare product mix will certainly be enriched and our competitiveness will be further enhanced. Being the most significantly growing business sector of the Group, medicinal healthcare products under "Magic 美即" series are becoming the focuses for the Group's future development. The product series of "Magic 美即" has established a nationwide coverage of approximately 700 hyper-markets. The Group will keep abreast of the consumer market trend in order to rapidly respond to changing market demands. The Group will take great leaps in establishing closer connections with large chain hyper-markets and supermarkets with a view to broadening our geographical coverage. The Group will devote more promotional efforts on media advertisement in focused regions in order to further build up the competitive strengths of the "Magic 美即" brand. Moreover, in reaction to market changes, and by capitalizing on the fruits of modern scientific research, the "Magic 美即" series products will be diversified and refined in terms of product varieties and functions. Our product varieties have been extended to a variety of feminine skin care segments. To consolidate our sales performance and network in Eastern China, Southern China and Northern China, we will also tap into cities in these regions in order to build up brand influence and boost sales of our "Magic 美即" series of products in the national market. To cope with the robust growth of the "Magic 美即" brand, the Group is planning to invest in the construction of a new plant in Guangzhou. Furthermore, the Group will take great steps in flourishing high-margin agency business through acquiring exclusive operational rights. Meanwhile, with the development of new rural infrastructure and the implementation of new rural cooperative medical systems, the rural pharmaceutical market is expected to have tremendous growing potentials in the foreseeable future. The rural pharmaceutical market is expected to become a driving momentum for the pharmaceutical industry. With over a hundred types of medicines, pharmaceutical companies within the Group, namely DCX and GHMM, will both become the Group's gateway to its rapid expansion into the rural pharmaceutical market. The Group will take advantage of the expanding rural pharmaceutical market to sharply increase the Group's sales in the rural market and enlarge the Group's sales in order to yield higher profit return. The Group is confident of the future outlook. In the present year, as before, the Group will continue to actively carry out product R&D, enhance production quality management and explore new business opportunities. Meanwhile, the Group will implement marketing and channel penetration strategies with a view to consolidating and reinforcing its prominent position in the market. |
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