Question 1: does the company have any plans to move upstream so that its business covers the entire industry chain?
Answer: considering that the cultivation of some Chinese herbal medicines is intermittent and requires rotation (for example, ginseng and Panax notoginseng cannot be planted continuously, and crops usually need to be planted at intervals), this makes it more difficult to invest upstream. Therefore, the company has no specific plans to further enter the upstream Chinese herbal medicine planting industry. At present, the company directly purchases raw materials through the plantation, can pick good quality medicinal materials in the appropriate climate, and the company monitors the local Chinese herbal medicine planting land in place. Therefore, the management believes that this model is more suitable for the company.
Question2: how does the company do its sales?
Answer: in the pharmaceutical sector, the company's downstream sales channels can be divided into four categories, including Zhong Chi drugstores, other independent chain drugstores, contract distributors and non-contract distributors. Among them, contract distributors and non-contract distributors are mainly responsible for the logistics and sales of proprietary Chinese medicines, while Zhong Chi drugstores and other independent chain drugstores are mainly responsible for the logistics and sales of their new prepared slices. In 2014, the company's sales and distribution expenses accounted for about 25% of revenue, and the company expects the proportion to remain at a similar level in 2015.
Question 3: can the company's plant wall-breaking technology be used in all Chinese herbal medicines?
Answer: not all Chinese herbal medicines are suitable for wall-breaking techniques, such as those with toxic ingredients and animal medicines. At present, the company has 62 new types of prepared slices that have reached the standards issued by the Guangdong Food and Drug Administration Bureau, of which 22 have been put on the market. In view of other higher requirements such as regulatory requirements for the quality control of traditional Chinese medicine, CIIC will gradually introduce wall-breaking slices of other kinds of traditional Chinese medicine in the future.
Question 4: how does the company view the main bottlenecks restricting the development of the company?
Answer: the company believes that the current bottleneck restricting the company's development is that the market for wall-broken pieces of traditional Chinese medicine has not been fully developed, and the value of wall-breaking Chinese medicine has not been fully tapped. At present, the company is also committed to the development of the broken wall market of traditional Chinese medicine, and if there is a breakthrough in the future, it can bring a catalyst for the future business development of the company.
Question 5: based on the current business situation, what will the company's performance be in 2015?
Answer: the management said that the current operation of the company is stable and there are no unexpected incidents for the time being. I believe that the development of the company this year will be as expected.