Friday, March 29, 2024
 
Columnist
Martin Hennecke
 
JIWA BIO-PHARM
HKEx Stock Code : 02327 
 
Corporate Profile
The principal activities include trading pharmaceutical and health care products, research and development of chemical and biological products and investment and treasury function.

Business Review - For the year ended March 31, 2013

Trading Business

During the Period, turnover from the trading business was HK$35,648,000, representing a decrease of 82.5% from the previous year; the segmental results amounted to HK$8,101,000, representing a decrease of 72.0% from the previous year. Trading product sales of the Company mainly include import prescription drugs sold indirectly to Kunming Jida Pharmaceutical Company Limited (¡§KJP¡¨, a 49% owned associated company of the Group) via an authorised and independent import and export company and a small portion of health care products manufactured in the People's Republic of China (¡§PRC¡¨). After completion of the reorganization, KJP has established a subsidiary in Hong Kong, which is specifically responsible for KJP's new trading business and direct procurement from suppliers in Europe to strengthen its competitive edges. With the gradual expansion of scale of KJP, the pharmaceutical trading business of the Group has been significantly downsized. However, the Group is ardently looking at trading opportunities in different regions and industries, building on its market network in Europe, ASEAN and China, as well as the extensive experience of its management in trading business.

R&D and Project Management

The Group has commenced joint effort chemical and biological researches with R&D institution in Hong Kong since 2007. During the Period, segment results of HK$21,739,000 were recorded. The management is optimistic towards this business and continuously propelling the existing projects as well as putting continuous efforts in identifying R&D projects with potentials.

During the Period, one of the Group's R&D projects of pharmaceutical products has attained phasal achievement. On 23 July 2012, the Group entered into a technology transfer agreement with Jiwa Biotech, pursuant to which an aggregate consideration of RMB111,000,000 was payable by Jiwa Biotech upon satisfaction of the pre-condition stipulated for each of the following three phases of construction, production and registration.

At phase 1, the Group will transfer the technical documents of the product production technology to Jiwa Biotech within six months upon signing the Technology Transfer Agreement; at phase 2, the Group has to assist Jiwa Biotech to construct a production plant and ancillary facilities for the production of the pharmaceutical bulk materials products to be qualified by the Group and Jiwa Biotech within a specific construction budget; and at phase 3, the Group has to assist Jiwa Biotech to commence (i) full scale of production of such pharmaceutical bulk materials products at a specific production capacity and ensuring the production cost of such bulk materials relating thereto not exceeding the specific unit cost, and (ii) obtaining the registration certificates of such products as well as the certification of ¡§Good Manufacturing Practice¡¨ by the State Food and Drug Administration of the PRC by no later than 31 December 2016.

According to the Technology Transfer Agreement, RMB40,000,000, RMB20,000,000 and RMB51,000,000 will be invoiced upon satisfaction of the pre-conditions set for phase 1, phase 2 and phase 3 respectively as mentioned above. The above payment schedule may be extended by mutual agreement between the contracting parties to the Technology Transfer Agreement, while the maximum consideration will be subject to adjustment(s) if certain of the above terms and conditions cannot be fulfilled in full. As ancillary to the Technology Transfer Agreement, the Company (being the Guarantor) and Jiwa Biotech further entered into a guarantee agreement on 23 July 2012, pursuant to which Jiwa Biotech has been guaranteed by the Company for the implementation of all the pre-conditions as set out therein. In case of Jiwa Biotech's failure of obtaining the requisite registration certificates of such products as well as the certification of Good Manufacturing Practice by the State Food and Drug Administration of the PRC by 31 December 2016, the Purchaser may request the vendor and/or the Company to repurchase the technology that had already been transferred to Jiwa Biotech; while the vendor and/or the Company has to repay the full consideration that had already been paid to Kunming Jida up to that time. Based on the Group's current estimate, failure of fulfilling the above pre-conditions under the Technology Transfer Agreement so as leading to the vendor's and/or the Company's obligations for making repayment to the Purchaser is remote.

Business Outlook - For the year ended March 31, 2013

Over the past year, the management of the Group has ardently explored investment projects and deployed professional teams for analysis of potential return and risks in a number of industries. The Company has consistently upheld the practice of meticulous management as it progressed on the route of business diversification.

Looking into the future, the Company will continuously seek business development and opportunities in the three major areas of trading, R&D project management and investment. Given the co-existence of risk and opportunity, the Group will continue to strengthen its corporate governance, excel in risk management efforts, and balance the investment risks of different industries and projects as it strives for optimization of its industry value and continued enhancement of shareholder's return.



Source: Jiwa Bio-Pharm (02327) Annual Results Announcement
Chairman Lau Yau Bor Issued Capital (shares) 1,640M
Par Value HKD 0.01 Market Capitalisation (HKD) 1,673M
 
Login
Password
Register  Forget Password
Advanced Search
© 2024 The Standard, The Standard Newspapers Publishing Ltd.
Home | Business | Metro | Focus | Opinion | Markets | World | Sports | Entertainment | Monday Money | Property | Macau | Weekend