The total product value of the mainland pharmaceutical industry surged from 178.2 billion yuan in 2001 to 1,071.7 billion yuan in 2012, with a compound annual growth rate of about 17.7%. Xinyuan Pharmaceutical (8180) was listed on the Founding Board in the form of an introduction today; it is mainly engaged in pharmaceutical distribution business, covering 19 provinces in mainland China through a distribution network composed of 117 distributor customers, with the only focus being Zhejiang Province, accounting for 80% of total sales.

The group mainly distributes 55 types of drugs, 42 of which have been included in the medical insurance catalogue; 5 of these drugs ranked first in sales in Zhejiang Province, with related sales accounting for 47.5% of total revenue. The group's turnover in the first half of the year was 83.67 million yuan, with injectable drugs accounting for 84.4%. The rest came from tablet drugs, capsule drugs, and other drugs. Overall gross margin fell 1 percentage point to 22.1% during the period. As of the end of June, the number of inventory turnover days was 45 days.

This time, 280 million shares were placed at an allotment price of 0.25 yuan per share. Excluding listing costs, the net capital raised was 41 million yuan, of which 62.4% is 25.6 million yuan, to expand exclusive and provincial distribution rights for new drugs across the country; the group plans to obtain exclusive nationwide distribution rights for 2 new pharmaceutical products from this year to 2015, and will focus on evaluating, seeking and obtaining exclusive provincial distribution rights for 1 to 2 new pharmaceutical products in Zhejiang Province and East China in the second half of 2015. In addition, 12.9% of the proceeds, or $5.3 million, were used to expand and strengthen the distribution network and market promotion; the rest was used for bank loan loans and general working capital. Note: The price-earnings ratio is estimated at 13.2 times, and the valuation is reasonable. Demand for pharmaceuticals in the mainland continues. Coupled with the group's listing in the form of placement, retail investors have no choice but to draw, supply sources are relatively concentrated, and there is still room for speculation in stock prices.