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focusing on shareholder returns is not just empty talk!

on the evening of september 19, cspc pharmaceutical group, a hong kong-listed company, announced that the board of directors has further resolved to repurchase up to hk$5 billion of shares in the market within 24 months from the date of this announcement, at the time and frequency determined by the board of directors from time to time, based on market conditions. as of the close of trading on september 19, the total market value of cspc pharmaceutical group was hk$55.6 billion.

continued large-scale repurchase

cspc pharmaceutical group has already carried out several large-scale repurchases this year. the company previously disclosed in its semi-annual report that it had completed share repurchases totaling hk$387 million in the first half of 2024.

at the same time, the company's board of directors has approved a further share repurchase plan with a total amount of up to hk$1 billion, of which approximately hk$773 million has been used to repurchase a total of 163,860,000 shares of the company before the announcement on september 19. the repurchased shares will be cancelled.

in its latest announcement, cspc pharmaceutical group stated that the board of directors has further resolved to repurchase shares in the market for a total of up to hk$5 billion (in addition to the above hk$1 billion) within 24 months from the date of this announcement, at a time and frequency determined by the board of directors, based on market conditions. the company will fund the share repurchase from its available cash reserves. the repurchased shares will be cancelled.

cspc pharmaceutical group said that the board of directors is confident in the business development and prospects of the group and believes that the company's current share price is lower than its actual value. the implementation of the share repurchase plan is intended to demonstrate the company's confidence in its business prospects and increase shareholder returns. the board of directors believes that the implementation of the share repurchase plan is in the best interests of the company and its shareholders as a whole.

in its semi-annual report, cspc pharmaceutical group also stated that the board of directors announced a 2024 interim dividend of 0.16 hong kong cents per share, an increase of 14.3% over the same period last year.

from a financial perspective, as of june 30, 2024, shijiazhuang pharmaceutical group had bank deposits, balances and cash of rmb 9.885 billion, structured bank deposits of rmb 2.442 billion, bank loans of rmb 203 million, and an asset-liability ratio of 0.6%.

stock prices under pressure due to centralized procurement

shijiazhuang pharmaceutical group's stock price has performed poorly recently, with its share price falling for four consecutive months, from around hk$7 per share to the current hk$4.69 per share.

in fact, the company's performance did not meet market expectations. the semi-annual report shows that cspc pharmaceutical group's revenue in the first half of 2024 was rmb 16.284 billion, an increase of 1.3% over the same period last year. basic profit attributable to shareholders was rmb 3.217 billion, an increase of 1.7% over the same period last year. profit attributable to shareholders was rmb 3.020 billion, an increase of 1.8% over the same period last year.

founded in 1992 and listed on the hong kong stock exchange in 1994, cspc pharmaceutical group is a large-scale and established pharmaceutical company in china. in terms of business segments, cspc pharmaceutical group mainly consists of three major businesses: finished drug business, raw material product business, functional food and other businesses. among them, finished drug business is the core business of cspc pharmaceutical group, and the products of this business segment cover key treatment areas such as anti-tumor, psychoneurology, cardiovascular, immune and respiratory, digestive metabolism and anti-infection.

the neurological and anti-tumor fields have many major products and are the business focus of shijiazhuang pharmaceutical group. in the first half of 2024, the revenue of these two fields was 5.232 billion yuan and 2.683 billion yuan respectively.

however, the market generally believes that the company's performance is mainly affected by the centralized procurement in these areas. in the semi-annual report, cspc pharmaceutical group mentioned that due to the centralized procurement of drugs by the beijing-tianjin-hebei "3+n" alliance, the sales of jinyouli and duomesu fell during the period.

jinyouli and duomeisu are both star products of cspc pharmaceutical group's oncology drug business. jinyouli is china's first independently developed long-acting white blood cell-enhancing drug, and duomeisu is the first anti-tumor liposome new drug independently developed by cspc pharmaceutical group.

in its 2023 annual report, cspc pharmaceutical group stated that the price of the centralized procurement renewal was gradually implemented in various provinces, resulting in a significant reduction in sales revenue. ke'erli is a new generation of paclitaxel chemotherapy drugs, which has been unanimously recommended by domestic and foreign guidelines and expert consensus in the fields of breast cancer, lung cancer, ovarian cancer, gastric cancer, pancreatic cancer and esophageal cancer.

"the group continues to adopt strategies such as hospital development, market penetration, retail channel expansion, clinical application scope expansion and professional academic promotion to promote the growth of finished pharmaceutical products. during the period, the market development work of newly launched products was carried out in an orderly manner, bringing new growth momentum." shijiazhuang pharmaceutical group stated in its semiannual report.