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China Biologic Products Reports Record Third Quarter 2007 Results

Net Income increased 225.7% year-over-year to $2.3 million or 11 cents per


TAI'AN CITY, Shandong, China, Nov. 15 /Xinhua-PRNewswire-FirstCall/ -- China Biologic Products, Inc. (Pink Sheets: CBPO) ("CBP", "the Company"), one of the leading plasma-based pharmaceutical companies in the People's Republic of China ("PRC"), today reported record financial results for the third quarter ended on September 30, 2007.

Third Quarter 2007 Highlights

-- Revenues increased 48.8% year-over-year to a record $8.9 million

-- Gross profits increased 79.7% to $6.7 million over the third quarter of


-- Operating income totaled $3.6 million, up 106.9% over the third quarter

of 2006

-- Net income was up 225.7% year-over-year to $2.3 million or $0.11 per


"During the quarter we continued to see strong demand for our plasma based products due to increased purchasing power and health consciousness of Chinese consumers although unit prices have increased greatly," said Mr. Stanley Wong, CEO of China Biologic Products, "In addition, we have taken advantage of the favorable industry environment to improve our production facilities and to accelerate the pace of developing new drugs."

Third Quarter 2007 Results

Revenues for the three months ended September 30, 2007 were $8.9 million, up 48.8% as compared to $6.0 million for the same period of 2006. The increase was primarily due to the rise in unit prices of plasma based products, although the Company's unit sales volumes declined. During the third quarter of 2007, unit prices of the Company's main products experienced growth ranging from 8.1% to 424.5% year over year. The situation of unit prices rising combined with the drop in volumes was a result of the PRC government's stringent controls on quality in the plasma based production industry. The Company is expected to adjust its production plans and to utiliz -- 2,728,612

Payments on short term loans -

shareholders -- (735,523)

Payments on long term debt (261,280) (499,921)

Dividend paid to minority

shareholder (476,597) --

Net cash (used in) provided by

financing activities (2,038,877) 3,370,568


CASH 284,751 208,678

INCREASE IN CASH 1,855,493 2,404,930

CASH, beginning of period 4,268,220 607,376

CASH, end of period $6,123,713 $3,012,306

For more information, please contact:

Company Contact:

Mr. Stanley Wong


China Biologic Products, Inc.

Tel: +86-538-6202608


Investor Relations Contact:

Mr. Crocker Coulson


CCG Elite Investor Relations

Tel: +1-646-213-1915 (NY office)


e all plasma resources that are available to provide products with higher profit margins.

Human albumin, Human Immunoglobulin for Intravenous Injection and Human Rabies Immunoglobulin contributed 61.9%, 11.1% and 15.2% to the revenues, respectively.

Cost of revenues for the three months ended September 30, 2007 remained unchanged and stood at $2.3 million, accounting for 25.5% of the revenues, compared to 38.3% for the comparable period of 2006.

Gross profit was up 79.7% to $6.7 million with gross margins of 74.5% for the third quarter of 2007 compared with approximately $3.7 million and 61.7% in the third quarter of 2006, respectively. The increase of gross margin was mainly due to the rapid growth in unit sale prices.

Total operating expenses for the three months ended September 30, 2007 were $3.1 million, up 55.9% from the same period in 2006, which was primarily attributable to increased selling expenses. During this quarter, the Company incurred more marketing and sales expenses, including bonuses to salespersons, holding sales conferences, and travel related expenses. Research and development expenses were $0.2 million for the third quarter of 2007, representing 2.4% of the revenues.

Income from operations grew 106.9% to $3.6 million in the third quarter of 2007, representing operating margins of 40.0%, as compared to $1.7 million and 28.7% in the same period of 2006.

In the third quarter of 2007, the Company recorded $0.56 million and $0.61 million for provision for income taxes and minority interest, respectively.

Net income for the third quarter of 2007 was $2.3 million or $0.11 per basic and diluted share, an increase of 225.7% and 219.1% from $0.7 million and $0.03 per share, respectively for the comparable period of 2006.

Nine Months Results

Revenue for the first nine months of 2007 increased 68.8% over the comparable period in 2006 to $25.4 million. Gross profits rose 99.7% in the same period to $17.1 million, representing gross margins of 67.4%. Operating expenses in the first nine months of 2007 increased 85.0% to $5.7 million as a result of the increased selling expenses. Operating profits in the first nine months of 2007 rose 107.9% over the comparable period in 2006 to $11.4 million, representing operating margins of 44.9%. Net income for the nine months ended September 30, 2007 was $7.6 million or $0.35 per basic and diluted share, up 124.7% and 107.9% respectively.

Cash flow from operations for the nine months ended September 30, 2007 totaled $10.8 million, a huge increase compared to $0.02 million in the comparable period in 2006. Net cash used in investing activities in the first nine months of 2007 totaled $7.2 million, most of which was incurred to build the new production line.

Financial Condition

As of September 30, 2007, CBP had $6.1 million in cash, approximately $9.6 million in working capital. Shareholder's equity at the end of the third quarter stood at $21.1 million compared to $12.7 million at the end of 2006.

Business Outlook

In recent years, the biopharmaceutical industry and the plasma-based product market have outperformed the pharmaceutical industry. According to, sales of blood and plasma-based drugs in China had an average growth rate of 15% in the last 5 years, reaching $372 million in 2005, and accounting for 11.7% of prescription drug sales. China's plasma- based products market remains underserved with limited availability of products, offering substantial opportunities for China Biologic to grow its business.

The PRC government is limiting the number of companies in this industry and is not expected to issue new licenses in the foreseeable future. Besides, import of foreign plasma-based products is severely restricted, creating a relatively closed market for domestic suppliers. The overall effect of recent government regulatory reform has been to reduce competition and increase the barriers to entry, creating a favorable industry structure for China Biologic Products.

"We are very pleased to be operating in a more regulated market for plasma based products after recent reforms launched by the government," said Mr. Stanley Wong, CEO of China Biologic Products. "We are going to continue our efforts to achieve more market share and improve our products mix."

About China Biologic Products, Inc.

China Biologic Products, Inc., through its indirect majority-owned subsidiary Shandong Taibang, is currently the only plasma-based biopharmaceutical company approved by the government of Shandong Province, the second largest province with a population of 93 million. The company is engaged primarily in research, manufacturing, and sale of plasma-based biopharmaceutical products to hospitals and other health care facilities in China. Plasma-based Human Albumin is used mainly to increase blood volume while Immunoglobulin is used for disease prevention and treatment.

Safe Harbor Statement

This release contains certain "forward-looking statements" relating to the business of the Company and its subsidiary companies. These forward-looking statements are often identified by the use of forward-looking terminology such as "believes, expects" or similar expressions. Such forward looking statements involve known and unknown risks and uncertainties that may cause actual results to be materially different from those described herein as anticipated, believed, estimated or expected. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on its website ( All forward-looking statements attributable to the Company or to persons acting on its behalf are expressly qualified in their entirety by these factors other than as required under the securities laws. The Company does not assume a duty to update these forward-looking statements.


China Biologic Products, Inc. and Subsidiaries


(US$ - Unaudited)

Three months ended Nine months ended

30-Sep 30-Sep

2007 2006 2007 2006

REVENUES $8,938,186 $6,006,917 $25,442,097 $15,074,618

COST OF SALES 2,281,280 2,301,768 8,293,628 6,487,373

GROSS PROFIT 6,656,906 3,705,149 17,148,469 8,587,245


Selling expenses 1,741,829 397,226 2,444,297 689,895

General and


expenses 1,129,785 1,322,509 2,838,126 1,960,169

Research and

development expenses 213,865 259,506 435,500 440,140

TOTAL OPERATING EXPENSES 3,085,479 1,979,241 5,717,923 3,090,204

INCOME FROM OPERATIONS 3,571,427 1,725,908 11,430,546 5,497,041


Finance expense 66,413 34,652 112,637 130,154

Other expense 72,556 30,118 95,598 60,323

TOTAL OTHER EXPENSES 138,969 64,770 208,235 190,477



MINORITY INTEREST 3,432,458 1,661,138 11,222,311 5,306,564


TAXES 560,030 470,907 1,858,992 954,538


MINORITY INTEREST 2,872,428 1,190,231 9,363,319 4,352,026

LESS MINORITY INTEREST 613,914 496,691 1,762,462 969,167

NET INCOME 2,258,514 693,540 7,600,857 3,382,859


TRANSLATION GAIN 336,137 116,354 799,229 323,132


INCOME $2,594,651 $809,894 $8,400,086 $3,705,991



DILUTED 21,434,942 21,004,507 21,434,942 19,831,279


AND DILUTED $0.11 $0.03 $0.35 $0.17

China Biologic Products, Inc. and Subsidiaries




30-Sep 31-Dec

2007 2006

(Unaudited) (Audited)


Cash $6,123,713 $4,268,220

Accounts receivable, net of

allowance for doubtful accounts of

$1,177,093 and $1,131,209 as of

September 30, 2007 and December

31, 2006, respectively 2,405,173 3,775,387

Notes receivable 6,670 81,407

Other receivables 1,225,748 584,931

Other receivables - shareholders 136,928 -

Inventories 8,068,122 6,117,361

Advances on inventory purchases 511,217 713,194

Deferred expense 3,945 -

Total current assets 18,481,516 15,540,500

PLANT AND EQUIPMENT, net 13,610,736 7,437,768


Advances on equipment purchases 1,444,668 778,364

Intangible assets 920,083 718,011

Long term deferred assets 727 -

Total other assets 2,365,478 1,496,375

Total assets $34,457,730 $24,474,643

L I A B I L I T I E S A N D S H A R E H O L D E R S' E Q U I T Y


Accounts payable $2,793,333 $2,412,440

Other payables and accrued

liabilities 2,062,683 1,874,973

Short term loans - bank 1,334,000 2,564,000

Short term loan - minority

shareholder 703,171 675,761

Other payable - land use right 297,672 287,045

Distributions to minority

shareholder 212,719 476,597

Customer deposits 590,392 370,297

Taxes payable 884,783 138,203

Total current liabilities 8,878,753 8,799,316

Long term liabilities 400,200 641,000

Total liabilities 9,278,953 9,440,316


MINORITY INTEREST 3,977,258 2,308,487


Common stock, $0.0001 par value,

100,000,000 shares authorized,

21,434,942 shares issued and

outstanding at September 30, 2007

and December 31, 2006,

respectively 2,143 2,143

Paid-in-capital 9,388,305 9,388,305

Statutory reserves 4,301,940 2,199,580

Retained earnings 5,515,924 17,427

Accumulated other comprehensive

income 1,917,614 1,118,385

Total shareholders' equity 21,125,926 12,725,840

Total liabilities and

shareholders' equity $34,457,730 $24,474,643

China Biologic Products, Inc. and Subsidiaries


(US$ - Unaudited)


2007 2006


Net income $7,600,857 $3,382,859

Adjustments to reconcile net income

to cash provided by operating


Minority interest 1,762,462 969,167

Depreciation 611,020 313,436

Amortization 64,168 34,890

Loss on disposal of equipment 6,077 --

Change in operating assets and


Accounts receivable 1,491,832 (1,285,459)

Notes receivable 76,424 (136,899)

Other receivables (604,324) (1,482,103)

Other receivables -

shareholders (134,095) --

Inventories (1,667,404) (1,701,492)

Advance on inventory purchase 226,128 341,315

Deferred expenses (3,863) --

Long term deferred expenses (712) --

Accounts payable 277,185 51,932

Other payables and accruals 183,946 (317,413)

Customer deposits 200,832 (304,606)

Taxes payable 725,644 158,892

Net cash provided

by operating

activities 10,816,177 24,519


Additions to plant and equipment (6,377,620) (594,927)

Additions to intangible assets (233,537) (30,674)

Proceeds from sale of equipment 26,199 -

Advances on equipment and

intangible assets purchases (621,600) (573,234)

Net cash used in investing

activities (7,206,558) (1,198,835)


Restricted cash -- 1,874,700

Proceeds from stock issuance -- 3,752,100

Payments on notes payable - banks -- (1,874,700)

Proceeds from short term loans -

bank 1,292,000 624,900

Payments on short term loans -

banks (2,593,000) (2,499,600)

Proceeds from short term loans -


SOURCE China Biologic Products, Inc.
Copyright©2007 PR Newswire.
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