PROSPECTS

China's pharmaceutical and healthcare industry continues on an uptrend, thanks to strong fundamentals such as buoyant economic growth, rising affluence, an ageing and increasingly health conscious population, and the PRC government's ongoing efforts to improve market dynamics. Although the ongoing industry reform will continue to pose new challenges to all pharmaceutical companies, we are well prepared to meet these challenges head on given the strong foundation which we have built over the years. We have become more resilient, having developed a healthy product mix, robust R&D pipeline, and an extensive distribution network. We have also been delivering an improved balance sheet and consistently strong gross margins.

We envisage our future growth to be driven by the following trends:

  • increasing consumer spending power induced by strong economic growth;
  • greater awareness of the need for healthy living;
  • ageing population in China;
  • strong interests of overseas pharmaceutical companies to enter the PRC market due to market potential;
  • growing trend of overseas pharmaceutical companies to outsource R&D and manufacturing activities to third parties in China; and
  • increasing government expenditure in healthcare and widening subsidized medical coverage to stimulate market demand.

CORPORATE STRATEGIES

Moving ahead, our strategy is to continually enhance our core competencies, expand our distribution network, increase efficiency in our manufacturing operations, as well as boost our R&D capability via organic growth and strategic alliances. The road ahead remains bright for C&O, and barring unforeseen circumstances, we are confident of achieving steady growth.

Expand portfolio of C&O branded products

While we continue with the development of generic drugs, our focus will be placed on producing drugs of higher value that target the mid to high end markets as competition is less keen in these segments with prices remaining relatively stable, unlike the low end market that experiences constant downward pricing pressure.

Apart from strengthening our product portfolio via R&D internally, we are also stepping up efforts to expand our Exclusive products segment by exploring collaboration opportunities with overseas pharmaceutical companies to distribute foreign drugs in the PRC market.

Contract Research and Contract Manufacturing

C&O has been providing contract research and contract manufacturing services to pharmaceutical companies both in China and outside of China. With our state-of-the-art R&D facilities and expertise, sophisticated manufacturing plant, and most importantly, our familiarity with the PRC market, we believe we are a strong contender for partnerships with the multinational pharmaceutical companies.

Distribution and Marketing

We will continue to expand our distribution network. We will also launch more marketing campaigns to boost sales of C&O branded and third party products and increase our market penetration.



Page Updated as at 13/10/10