1 annual results 2005 march 2006. 2 content major accomplishments in 2005 financial highlights...
TRANSCRIPT
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Annual Results 2005March 2006
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Content
Major Accomplishments in 2005
Financial Highlights
Business Review
Future Plans and Strategies
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Major Accomplishments in 2005
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Major Accomplishments in 2005
Trademark “ ” recognised as a “Well-Known Trademark”, the ONLY medical device company with the recognition
Formed Weigao Bone for R&D, production and sale of orthopedic products. Orthopedic products launched in 4Q well received by the market
Weigao Blood formed Weigao Huading to produce dialysis products
Successfully developed world class drug eluting heart stent and obtained product registration certificate in Dec 2005
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Major Accomplishments in 2005 (Cont’d)
Weigao became the 1st company to obtain both patent for pre-filled syringes in the PRC and registration certificate in Nov 2005
Successfully developed non-PVC based materials which is classified as “2005 State Torch Plan – Hi-tech Industry Model Project” by the Ministry of Science and Technology
Needle production capacity reached 3 billion pcs per annum
Placement of 52,900,000 new H shares in Nov 2005
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Shareholders of H shares**
59.88% 32.87%
Latest Group Structure
* Weigao Holding is held by 14 holders and the largest shareholder is Mr. Chen Xue Li who holds 30% shares of Weigao Holding
** Including over 10 well-known investment funds
Senior Management
7.25%
4%96%
JieruiSubsidiary
JW Medical
50%
Weigao Jinbao
51%70%
Weigao Bone
Weigao Mould
Weigao Huading
53% 90%
51.6%
The Company
Weigao Blood
Weigao Holding*
Fuzhou Fanzhun
95%
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Financial Highlights
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Results Summary
Gross margin and net margin improved: Increased in the proportion of high value added products Enhanced operation efficiency
For the year ended 31 Dec 2005
For the year ended 31 Dec 2004
Change
RMB m RMB m
Turnover 570.0 407.8 +39.8%
Gross profit 234.3 163.0 +43.7%
- Conventional products 144.8 110.5 + 31.1%
- High value added products 89.4 52.5 + 70.3%
Gross profit margin 41.1% 40.0% + 1.1 pts
- Conventional products 33.2% 33.6% - 0.4 pts
- High value added products 67.1% 66.2% + 0.9 pts
Operating profit 121.6 81.7 + 48.8%
- Operating profit margin 21.3% 20.0% + 1.3 pts
Net profit 101.2 65.9 + 53.6%
- Net profit margin 17.8% 16.2% + 1.6 pts
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High Growth in Turnover and Net Profit
02 – 05 CAGR of Turnover: 27.0%02 – 05 CAGR of Net Profit: 32.5%
0
100
200
300
400
500
600
2002 2003 2004 2005
Turnover
Net Profit
278.2
43.5
317.9
50.5
407.8
65.9
570.0
101.2
RMB million
For the year ended 31 December
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Turnover Breakdown by Products- High Value-added Products/Conventional Products
2002 2003 2004 2005
16.5
261.7
37.8
280.1
79.3
328.5
133.3
436.7
0
100
200
300
400
500
600
0%
20%
40%
60%
80%
100%
2002 2003 2004 2005
High value-added products
Turnover Gross Profit Margins
36.8
38.9
33.6
61.2 62.2 66.2
Conventional products
67.1
33.2
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Turnover Breakdown by Products
For the year ended 31 Dec
2005 2004
Products RMB m % to turnover RMB m % to turnover Change
Self-produced products
Infusion sets 187.7 32.9 150.4 36.9 + 24.9%
Syringes 156.8 27.5 135.4 33.2 + 15.8%
Blood bags 73.6 12.9 43.0 10.5 + 71.1%
Dental & anaesthetic products 9.9 1.7 7.7 1.9 + 28.6%
Blood sampling products 10.2 1.8 5.6 1.4 + 82.0%
PVC granules 49.6 8.7 36.7 9.0 + 35.1%
Needles 18.0 3.2 4.2 1.0 +326.4%
Other products 33.3 5.8 24.8 6.1 + 34.4%
Trading
Medical instruments 29.6 5.2 0.0 0.0 --
Other products 1.2 0.3 0.1 0.0 --
Total 570.0 100.0 407.8 100.0 +39.8%
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Turnover Breakdown by Geographical Regions
For the year ended 31 Dec
2005 2004
Regions RMB m % to turnover RMB m % to turnover Change
Northeastern China 118.8 20.9 80.3 19.7 + 47.9%
Northern China 144.2 25.3 116.1 28.5 + 24.2%
Eastern and Central China
147.1 25.8 110.9 27.2 + 32.7%
Southwestern China 30.4 5.3 20.6 5.0 + 47.6%
Northwestern China 20.3 3.6 15.5 3.8 + 30.5%
Southern China 73.6 12.9 47.3 11.6 + 55.7%
Overseas* 35.6 6.2 17.1 4.2 + 108.2%
Total 570.0 100.0 407.8 100.0 + 39.8%
* Over 30 countries including US, Germany, Romania, Australia and UK
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Cost Analysis
For the year ended 31 Dec
% to turnover
2005 2004 % change 2005 2004
RMB m RMB m
Raw materials
- PVC/PP/PE/ABS 86.3 72.5 +19.0 15.1 17.8
- Others 135.2 88.9 +52.1 23.7 21.8
Staff costs 73.4 56.3 +30.4 12.9 13.8
Depreciation 23.9 14.9 +59.8 4.2 3.7
Other operating expenses 144.4 102.5 +40.9 25.3 25.1
- Distribution cost* 63.9 44.7 +43.1 11.2 10.9
- Administration cost* 23.6 18.2 +29.7 4.1 4.5
- Others (Production cost) 56.9 39.6 +43.7 10.0 9.7
463.2 335.1 +38.2
*excluding staff costs and depreciation
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Balance Sheet
As at 31 Dec 2005
As at 31 Dec 2004 Change
RMB m RMB m
Non-current assets* 584.9 375.2 + 55.9%
Current assets** 547.3 360.8 + 51.7%
Cash and bank balances 171.6 111.7 + 53.6%
Capital and reserves 566.4 368.6 + 53.7%
Bank and other borrowing*** 337.9 253.3 + 33.4%
* The increase in non-current assets was mainly resulted from the increase of the Group’s new investment in machinery and production facilities** The increase in current assets was mainly resulted from the proceeds received for the placing of new H shares and the significant increase in the Group’s turnover in 2005*** The increase in the bank and other loans was mainly resulted from the expansion of the Company’s production and operation
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Other Financial Figures
As at 31 Dec 2005 As at 31 Dec 2004
Current ratio 1.69 1.71
Net debts to equity ratio 29.4% 38.4%
Acid ratio 1.32 1.39
ROE 17.9% 17.9%
For the year ended 31 Dec 2005
For the year ended 31 Dec 2004
Inventory turnover (days)* 102 92
Account receivable (days) 106 105
Final dividend (RMB/share) 2 cents 1.3 cents
Total Dividend for the year (RMB/share) 3 cents 2 cents
* The increase of the inventory turnover days was mainly due to the Company’s more stringent quality control procedures, its expansion in its sales network and the increase in the total number of products it carries
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Business Review
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Product Diversification to High-end Area
Major Products
Orthopedic Products
- Medulla nail- Steel plate- Bone
connecting screw
- Spine fixing products
BloodPurification
i) Products- Dialyzers- Adsorption columnii) Service- To establish blood purification centers
Consumables
- Syringes- Blood bags- Infusion sets- Needles- Dentals
Medication Package Material- Pre-filled syringes
Stents
- Drug eluting heart stent
- Catheters - Other stents (under development)
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Increasing Production Scale
For the year ended 31 Dec
Products Unit 2005 2004 % Change
Infusion sets Pieces 209,110,000 183,500,000 + 14.0
Blood transfusion consumables Sets 10,440,000 8,610,000 + 21.3
Syringes Pieces 310,690,000 281,240,000 + 10.5
Dental & anaesthetic products Sets 1,820,000 1,630,000 + 11.7
Blood sampling products Pieces 35,470,000 18,480,000 + 91.9
PVC granules Tons 9,476 7,607 + 24.6
- PVC granules for medical uses Tons 3,702 3,279 + 12.9
Needle products Pieces 951,980,000 487,170,000 + 95.4
Other products Sets 48,830,000 34,140,000 + 43.0
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Expanding Customer Base
Category Total no. in
the PRC
No. of customers
as at 31 Dec 2004
No. of new customers in
2005
No. of customers
as at 31 Dec 2005
% Change Current coverage
Hospital- Grade 3 (Top tier)- Grade 2 >=100 beds- Grade 1 >=20 beds
9345,1732,673
2,373712
1,145293
35671
183102
2,729783
1,328395
+ 15.0+ 10.0 + 16.0+ 34.8
84%26%15%
Blood centre 576 365 35 400 + 9.6 69%
Other medical units 9,614 611 112 723 + 18.3 8%
Trading company 1,273 255 1,528 + 20.0
Total 4,622 758 5,380 + 16.4
Source: <醫院大全 > and Weigao
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Expanding Sales Network
As at 31 Dec 2005
As at 31 Dec 2004
% Change
Sales office 15 12 +25
Customer service centre 20 18 +11
No. of cities with sales representatives 105 74 +42
No. of sales staff (note 1) 636 345 +84.3
Note 1: Increase in sales staff due to launching new projects and enlarging sales network
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New Product Development
Category No. of products as at 31 Dec 2005
New products
With patents 58 9
Under application for relevant patents
16 16
With registration certificates 110 31
Under application for registration certificates
17 17
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Future Plans and Strategies
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Corporate Strategies – “3 Enhancement and 1 Expansion”
3 Enhancement:-
Strive to develop high-tech products
Increase the proportion of high value-added products
Strengthen services to high-end customers
1 Expansion:-
Expansion in market share of conventional products
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Future Plans and Strategies
High-end MarketOrthopedic Products PRC market size: RMB8.8 billion Intensive marketing in 2006
Pre-filled syringes PRC market size: over 30 million pcs World market size: 3 billion to 3.5 billio
n pcs
Blood purification To establish dialysis centre in the PRC
Drug eluting stent PRC market size: approx. 100,000 pcs
per annum Expand overseas market in SE Asia
Consumable Market Pursue M&A opportunities
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Future Plans and Strategies
Pursue Strategic Alliance with International leading industry players:-
What Weigao can do:- OEM for partner Sales of partner’s product through Wei
gao’s nationwide sales network
What partner can do:- Sales of Weigao’s products overseas
Objective: Leading medical device manufacturer in Asia