30 March 2017

Cathay International Holdings Limited: Annual Results for the Year Ended 31 December 2016

Annual Results for the Year Ended 31 December 2016

Hong Kong, 30 March 2017 - Cathay International Holdings Limited (LSE: CTI.L), a leading operator and investor in the growing healthcare sector in the People's Republic of China (the “PRC”), today announces its Annual Results for the year ended 31 December 2016.

Group Financial Highlights

  • The Company and its subsidiaries (collectively the “Group”) were impacted by the devaluation of Renminbi (“RMB”) by 6.5% over the period
  • Group revenue increased by 4.4% in RMB constant currency
  • Reported revenue down 2.1% to USD118.4 million (2015: USD120.9 million)
  • Gross profit increased by 15.2% to USD57.3 million (2015: USD49.7 million)
  • Gross profit margin increased to 48.4% (2015: 41.1%)
  • Operating profit decreased to USD1.1 million (2015: USD4.1 million)
  • Net loss reduced to USD10.2 million (2015: USD12.6 million)
  • Loss attributable to owners of the parent was USD11.8 million (2015: USD13.6 million)


  • Revenue increased to USD94.8 million (2015: USD93.3 million)
  • Revenue from pharmaceuticals increased by 8.9% to USD64.5 million (2015: USD59.2 million), mainly due to increased sales of Sicorten-Plus cream
  • Revenue from medical cosmetics products increased by 109.3% to USD18.0 million (2015: USD8.6 million) due to commencement of sales of collagen injectable fillers and growth of Comfy Collagen Dressing mask (Kefumei) and Yuze brand skincare products
  • Revenue of plant extracts for healthcare products decreased by 51.8% to USD12.3 million (2015: USD25.5 million) because of realignment of business into Natural Dailyhealth, which Lansen subscribed a 30% interest and is the Group’s sole platform for developing the plant extract and healthcare business
  • Gross profit increased by 12.1% to USD53.8 million (2015: USD48.0 million)
  • Gross profit margin increased by 5.3% to 56.7% (2015: 51.4%)
  • Profit after income tax increased by 65.5% to USD4.4 million (2015: USD2.6 million).


  • Revenue down 28.1% to USD8.3 million (2015: USD11.5 million) due to the low average market price of inositol
  • Net loss was USD5.7 million (2015: USD5.7 million)
  • Improving quality of di-calcium phosphate (“DCP”) and processing techniques to achieve cost competitiveness
  • Completed pilot scale production of food grade DCP and is working on the modification of its production line

Natural Dailyhealth

  • Revenue increased by 51.2% to USD6.2 million (2015: USD4.1 million)
  • Gross profit increased by 32.4% to USD1.3 million (2015: USD1.0 million)
  • Operating loss decreased to USD1.0 million (2015: USD1.2 million)
  • Working closely with Lansen on creating business synergies in health supplement and plant extract products
  • Completed the expansion of the bilberry extract production line and GMP filing of the ginkgo extract production line with China Food and Drug Administration


  • Revenue of USD2.4 million (2015: USD0.4 million)
  • Gross profit increased to USD1.9 million (2015: USD0.3 million)
  • Operating profit of USD0.3 million before one time write-off of intangible assets; and, after such write-off, operating loss of USD0.5 million (2015: USD1.1 million);
  • Lansen, Botai’s appointed distribution agent, started market development and has been actively promoting sales of Fillderm
  • Also beginning Botai’s own sales effort to accelerate and widen market coverage of Fillderm, a joint sales force approach for Fillderm
  • Developing its own collagen based cosmeceutical products for the China market

Starry (Lansen’s associated company)

  • Zhejiang Starry Pharmaceutical Co. Limited ("Starry") successfully listed on the Shanghai Stock Exchange on 9 March 2016
  • Based on the closing price as at 31 December 2016, the market value of Lansen’s investment in Starry was approximately USD133.6 million
  • Lansen’s share of profits from Starry were approximately USD1.7 million (2015: USD2.2 million)
  • Post-period end Lansen initiated a share reduction plan and disposed of 4.175 million Starry shares on 15 March 2017 with gross proceeds of USD26.0 million. Net pre-tax gains on the disposal attributable to the Group were USD9.7 million
  • The Group’s holding in Starry reduced to 12.6% after the disposal


  • Room occupancy remained steady at 69.4% (2015: 69.5%)
  • Revenue down by 8.9% to USD12.8 million (2015: USD14.0 million) resulting from RMB devaluation and decrease in room rates and food and beverage revenue

“Despite the difficulties in the Chinese market in 2016, we are now starting to see the benefits of our diversification strategy as evidenced by our increase in Group revenue on a constant currency basis. Certain parts of the business, including Lansen’s pharmaceutical and cosmeceutical businesses, have performed well over the period. The Chinese market will continue to be affected by a slowing economy and international politicaluncertainties. The Group will strive for stable growth whilst proactively managing its business risks, including compliance and foreign exchange fluctuation and continue to implement its business diversification strategy.”

Mr. Lee Jin-Yi

CEO of Cathay International Holdings Limited

For further enquiries, please contact:

Cathay International Holdings Limited
Eric Siu (Finance Director)
Patrick Sung (Director and Controller)
Tel: +852 2828 9289

N+1 Singer
Aubrey Powell / Lauren Kettle – Corporate Finance           
Brough Ransom – Sales
Tel: +44 (0) 20 7496 3000

Consilium Strategic Communications Limited
Mary-Jane Elliott / Matthew Neal / Lindsey Neville
Tel: +44 (0) 20 3709 5702

About Cathay

Cathay International Holdings Limited (LSE: CTI.L) is a Main Market, London-listed investment holding company and a leading operator and investor in the growing healthcare sector in the People’s Republic of China.

The Company and its subsidiaries (collectively the “Group”) aim to leverage on growth opportunities in the strong and growing domestic demand for high quality healthcare products in the PRC and build its portfolio companies into market sector leaders with competitive edge.  Cathay has already demonstrated a strong track record of identifying high-growth potential investment opportunities in this area including: Lansen, a leading specialty pharmaceutical company focused on rheumatology and dermatology in the PRC; Haizi, a company engaged in the manufacture, marketing and sale of inositol and its by-product, di-calcium phosphate; Natural Dailyhealth, a company engaged in production and sales of plant extracts for use as key active ingredients in health products; and Botai, a company engaged in production and sales of collagen injectable fillers.

The Group employs approximately 2,000 people across the PRC, including over 30 specialist corporate and business development staff based at the holding company’s offices in Hong Kong and Shenzhen.  Cathay also has a hotel investment.

For more information please visit the Company’s website: www.cathay-intl.com.hk 

***  Please see attached pdf document for the full results statement ***

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