HONG KONG -- Shares of China Traditional Chinese Medicine Holdings rebounded sharply Wednesday on the Hong Kong market after the company's net profit more than doubled for the fiscal first half, with an October acquisition contributing significantly.
The major drugmaker's shares at one point touched 3.63 Hong Kong dollars, up HK$0.25, or 7.4%, from the previous day's close, its first rebound in the past four trading days.
The upturn came after the company announced in the morning that it booked 3.19 billion yuan ($481 million) in revenue in the January-June half, up 125% from a year earlier on a continuing operations basis, and 490 million yuan in profit attributable to equity shareholders, a 102% leap.
A big contributor was Jiangyin Tianjiang Pharmaceutical, which the company acquired in October 2015. The subsidiary's sales of granulated traditional Chinese medicine products totaled 2.05 billion yuan, representing nearly two-thirds of consolidated sales.
On the other hand, sales of existing products, including Western medications, decreased 20% to 1.14 billion yuan.
China Traditional Chinese Medicine has decided to focus on traditional Chinese drugs, which it expects will be less affected than Western drugs by Beijing's medical system reform plans.
Under the plans, sales of drugs will be capped at about 30% of total sales at public hospitals in specified cities by the end of 2017. The idea is to reduce patients' out-of-pocket expenses.
On Wednesday, pharmaceutical shares generally traded briskly on the Hong Kong market, including Shanghai Fosun Pharmaceutical (Group), which at one point rose over 8% on Tuesday's announcement that its revenue and bottom line both improved in the six months through June.