About a year ago Kim Eng Securities maintained its ''buy'' recommendation on mainland pharmaceutical company Tong Ren Tang, which was trading at about 40 per cent discount to its fair valuation of HK$16.69. The counter closed at $10 on March 21 last year.

In 2002 turnover increased 33 per cent to 663 million yuan, with net profit increasing 48 per cent, in spite of a disappointing fourth quarter when year-on-year sales declined. Turnover of flagship products increased strongly for the year and gross margins improved from 51.5 per cent to 53.7 per cent.

In April last year the Beijing-based company, which has manufactured and sold Chinese medicine for 300 years, said its first-quarter profit jumped 35.62 per cent to $48.34 million, partly boosted by demand for its anti-virus products during the Sars outbreak in China.