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In China, Tiens sells its products to Tianjin Engineering, an affiliated Chinese company. In order to qualify for a direct selling license in China, Tianshi Engineering is required to produce a part of the products that it sells in China. As a result, in 2006, Tiens began to sell semi-finished products to Tianshi Engineering, which jointly shares licenses with Tiens to produce, manufacture and sell the products. The semi-finished products, which Tiens is now exclusively selling in China, have lower sales prices than the finished products Tiens had previously sold to Tianshi Engineering.
The application of Tianshi Engineering for a direct selling license in China is still pending.
Other Highlights
Cost of sales for the second quarter of 2008 increased 39.3% to $6.2 million, compared to $4.5 million for the same period in 2007. The rise in cost of sales reflects increases in both sales and the value of the renminbi against the dollar. For the six months ended June 30, 2008, cost of sales increased 15.2% to $10.2 million, compared to $8.9 million for the same period in 2007. Cost of sales for the period reflects greater raw materials costs.
Gross profit for the second quarter of 2008 increased 36.3% to $13.5
million, compared to $9.9 million for the same period in 2007. For the six
months ended June 30, 2008, gross profit increased 2.6% to $22.2 million,
compared to $21.7 million for the same period in 2007. The gross profit
margin for the second quarter of 2008 was 68.4%, compared to 68.9% for the
same period in 2007.
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| SOURCE Tiens Biotech Group (USA), Inc. Copyright©2008 PR Newswire. All rights reserved |