China Medical System Holdings Limited (“CMS”, together with its subsidiaries, the "Group") is a pharmaceutical services provider based in China, focusing on marketing promotion and sales of prescription drugs to all therapeutic departments in hospitals. The Group was established in 1995, and was listed on AIM in London (ticker: CMSH) in June 2007, the Group was listed on Main Board Market in Hong Kong on 28 September 2010 while it was delisted on AIM at the same time.
The Group follows two business models which can be commonly found in the pharmaceutical industry in China, the Direct Academic Orientated Promotion Model and Agency Promotion Model, and with two distinct third party promotion networks, the Direct Academic Orientated Promotion Network (the “Direct Network”) and the Agency Promotion Network (the “Agency Network”), both of which hold leading positions in the Chinese market. On the 3 April 2011, the Group successfully acquired Great Move Enterprise Limited (“Great Move”) and its subsidiaries, the main wholly subsidiary of Great Move is Tianjin Precede Medical Trade Development Co., Ltd.（which has been officially renamed Tianjin Kangzhe Pharmaceutical Technology Development Co., Ltd.on 24 October 2011）, which mainly engages in the marketing, promotion and sales of prescription pharmaceutical products manufactured by domestic pharmaceutical companies via Agency Network in China. After the acquisition, the Group` business model evolved from simply depending on internal marketing and promotion team to promote and sell products directly to physicians (Direct Academic Orientated Promotion Model) to a new integrated development model that incorporates the independent third party sales representatives and distributors to sale and promote products (Agency Promotion Model) in China. On the 31 May 2011, the Group successfully acquired 51% equity interests of Guangming Pharmaceutical Co., Ltd. (which has been officially renamed Guangxi Kangzhe Guangming Pharmaceutical Co., Ltd. on 10 October 2011) via cash investment for capital and stock increase to gain the permanent China market rights of a type of enteral nutrition drug-“Protein Hydrolysate”. The speedy introduction of this product is the result of the combination of the professional academic ability from our Direct Network and the rapid market coverage ability of our Agency Network.
We introduce drugs that prove to be competitive and focus on providing marketing, promotion and sales services to specialty pharmaceutical companies by leveraging our successful product selection system and the insights in Chinese pharmaceutical market. As at 31 December 2011, the Direct Network of the Group had close to 1,200 sales, marketing and promotion professionals; the Agency Network had close to 1,000 independent third party sales representatives or distributors and around a hundred of senior regional and marketing managers. The Group`s sales coverage spanned over 14,600 hospitals throughout China, of which almost 8,600 hospitals were covered by the Direct Network and over 7,800 hospitals were covered by the Agency Network.
The Group follows a market-oriented product selection strategy and introduces prescription drugs with high growth potential under its Direct Academic Orientated Promotion Model. We formulate appropriate marketing strategies for each drug, leveraging the insights in the Chinese pharmaceutical market, prevailing treatment protocols of physicians, demographic profile of the relevant patient pool in China and potential competitive advantages of drugs. Meanwhile, in order to help drive demand for pharmaceutical products, our professional, stable and experienced marketing, promotion and sales team conducts various physician-oriented academic promotion activities such as one-on-one physician visits, medical symposia and industry conferences, and via our proprietary information management system to keep track of these activities and review operations in a timely manner, enabling us to manage our overall business effectively and efficiently. In addition, the Group also provides other ancillary services needed by pharmaceutical companies to introduce their products to China, including handling product registration, clinical trials, and bidding in collective tender processes.
With appropriate product positioning, strategic planning and execution, the Group gained remarkable performance. From 2007 to 2011, the compound annual growth rate (CAGR) of revenue was 42.0%, and the CAGR of net profit achieved 63.7%. We also received a number of recognitions, including the Group was ranked in the list of Forbes “Asia’s Best 200 Enterprises Under a Billion” in 2008 and “Top 100 Enterprises in Shenzhen” in 2009, 2010 and 2011, and we also gained Forbes “China’s Best Up-and-Coming Business” three times in 2010, 2011 and 2012.
As a leading China-based pharmaceutical services company, the Group established long-term business partnership with specialty pharmaceutical companies from Germany, Denmark, Ireland, France, Ukraine, Japan and China. We will continuously introduce new products and extend marketing, promotion and sales network to strengthen our leading position in Chinese pharmaceutical service market, and through the professional and quality service to catch opportunities from the enormous growth of Chinese pharmaceutical market and strives to become the preferred partner for overseas and domestic pharmaceutical companies who target at Chinese market.