The Straits Times / The Business Times News on AsiaPharm

AsiaPharm riding high on its strong R&D capability

By Ven Sreenivasan - Jul 16, 2004
The Business Times

It is not often that a China-based Singapore listing gets strong favourable ratings from analysts and fund managers.

But AsiaPharm seems to have done just that.

The company, which was listed on the Singapore Exchange two months ago, counts Temasek Holdings and other savvy institutional investors on its shareholders' roll.

Based in Yantai, Shandong province, AsiaPharm researches, develops, produces and sells natural and chemical drugs with new formulations.

Its flagship product is sodium aescinate, an anti-inflammatory and anti-swelling prescription injection used mainly in orthopaedics and neurology.

Launched in 1995, the drug - marketed under the trademark, Maitongna - has a
77 per cent market share in China and accounted for 42 per cent of the company's sales last year.

Analysts believe AsiaPharm's strong research and development capability – it has an R&D team of over 100 scientists - will not only help the product gain further market strength, but also stand the company in good stead in introducing new products.

AsiaPharm also distributes third-party pharmaceutical products and processes and sells active ingredients such as chondroitin sulphate.

The company has just received approval from China's drug regulator for clinical trials of a medicine that is expected to come on the market by 2005.

AsiaPharm's financial performance has been impressive. For the three months to March 31, 2004, net profit surged 171 per cent to $2.1 million on revenue growth of 36 per cent. Analysts believe that the company's bottomline compound annual growth will be about 60 per cent over the next three years. Given such growth prospects, 12-month price targets for the stock range between 65 cents and 70 cents.