China Shineway Pharmaceutical Group, a mainland traditional Chinese medicine producer, said it would spend 170 million yuan (HK$194 million) over the next two years to boost production capacity and research capability after reporting a 35.4 per cent growth in first-half net profit.
Executive director Randy Hung King-kuen said the capital investment was useful as traditional Chinese medicine, which is generally cheaper than western medicine, was benefiting from the health-care reform that provided cheaper medicine to more people on the mainland.
Shineway makes about 180 types of drugs treating diseases ranging from colds to cardiovascular diseases in the form of injectable, soft capsule and granule. Its best-selling product is an antiviral injectable, which accounted for about 20 per cent of sales in the first half.
Traditional Chinese medicine is often regarded as a complementary and alternative therapy that has not always enjoyed equal status with western medicine. But Mr Hung said with the support from the government, this would change.
The firm plans to increase by 1,800 tonnes its capacity in extraction from 5,400 tonnes and have additional 400 million bags in granule production capacity. It has 1.5 billion bags in annual production capacity of granules, 20 billion vials in injectable form and 3.5 billion capsules.
Net profit for the six months to June rose to 268.45 million yuan or 32 fen a share from 198.3 million yuan or 24 fen a share in the previous year. Turnover jumped 39.2 per cent year on year to 642.4 million yuan. An interim dividend of 12 fen and a special dividend of 1 fen was declared yesterday.