Listing Date:	7 March 2001
Offer Price:	HK$0.6 per share
Par Value:	HK$0.10 each
No. of Shares under the offer :	60,000,000 Shares
No. of Shares under Placing:	50,000,000 Placing Shares
No. of Shares under Public Offer:	10,000,000 Shares
Market Capitalization:	HK$276.0 million
Sponsor:	Kingston Corporation Finance Ltd
Chairman:	Mr. Wong Cheah Foo
Fund Raising	HK$36.0 million

Major Shareholder:

Ms. Leung Oi Wah ¡V 43.652% interest
SRI - 11.304% interest
Mr. Cheung Choi - 10.656% interest

Company Subsidiary:

Wondergold (100%): Operation of retail business in Hong Kong
NCMHK (100%): Operation of Internet business
New Chinese Medicine (Website) Ltd (100%): Owner of the registered domain name of www.newchinesemedic.com.
KNCM Biotech Pharma Ltd (100%): Research and development marketing and distribution of self-developed proprietary Chinese medicine

COMPANY OVERVIEW

The Group is principally engaged in the marketing and distribution of proprietary Chinese medicine. It is also engaged in the research and development and the manufacture of proprietary Chinese medicine. The Group obtains assistance from the SRI, an Initail Management Shareholder, for its research and development work.

The Group's business is founded on its longstanding and close relationship with the SRI which supports the Group's research and development of proprietary Chinese medicine as well as its own strong marketing capability. The production of the Group's proprietary Chinese medicine products is currently outsourced to Hu Qing Yu Tang, a GMP compliant pharmaceutical manufacturer in the PRC and an Independent Third party.

The Group's products focus primarily on certain common illnesses and symptoms expe4rienced by the Japanese such as Chronic Hepatitis, chronic nephritis, prostatomegaly, arteriosclerosis, endometritis and pollinosis. The Directors believe that the Group's strong marketing capability and knowledge of the requirements of Japanese customer give it a competitive advantage.

MARKET POTENTIAL

The Group's products, which primarily focus on some selected common illness and symptoms, experienced by the Japanese, currently target Japanese tourists visiting Hong Kong. The Directors envisage that Japanese tourists in the PRC will have similar demands for the Group's products and extend the Group's distribution channels into the PRC.

Apart from targeting at its customary Japanese clients, the Group expects there will be a rising global demand for Chinese medicine and is considering promoting and marketing its products to overseas markets, such as North America, Korea, Australia and New Zealand.

Furthermore, the Group also plans to expand its product range into Chinese health supplement products. The Directors believe that the aging population in Japan and other developed countries, and the increasing health consciousness of the general public, will result in an increasing demand for health supplement products.

COMPETITIVE ADVANTAGES

The Directors believe that the Group has the following competitive advantages:

Its track record in the sale of 14 proprietary Chinese medicine, which are all researched and developed by the Group with the assistance of the SRI with whom the Group has formed a close alliance;
Its strong research and development support form the SRI;
Its close relationship with Japanese tour agencies;
Its extensive marketing experience in the Japanese tourist market;
Its strong in-house advisory board comprising 16 academics and professionals with different backgrounds possessing advanced knowledge in a wide variety of discipline.

RISK FACTORS

Free float in the market is about 13.1% after excluding Share subject to lock up
Reliance on the SRI
Reliance on in-house advisory board
Reliance on sub-contracting manufacturer
Reliance on the Japanese market and the tourist industry, and Japanese tour agencies
Limited operating history

FINANCIAL RECORD

¡@	Year ended 31 Mar 2000 (HK$'000)	Year ended 31 Mar 2001 (HK$'000)	4 months ended 31 July 2001 (HK$'000)
Turnover	37,196	34,096	10,167
Profit before tax	16,905	6,218	1,838
Net profit	14,305	5,11	1,691
Total Assets	37,395	44,84	37,114
Total Liabilities	14,316	26,661	25,242
Total equities	13,079	18,179	11,872

FUTURE PLANS

Leveraging on its experience in the field of proprietary Chinese medicine, its marketing capability, and its strong research and development support from its longstanding and close relationship with the SRI together with the support from its in-house advisory board, the Group aims to become a leading provider of proprietary Chinese medicine and health supplement products in the global market, and a global hub of information on Chinese and herbal medicine through its multi-language health portal, www.newchinesemedic.com.

In accomplishing the above stated business objectives, the Group adopts the following business strategies:

to expand its research and development capability and its product lines on proprietary Chinese medicine and health supplement products;
to pursue geographical expansion of its distribution network in the PRC and its customer base;
to extend its business into e-commerce and to utilize the Internet as a marketing medium; and
to provide on-line platform for education and information on Chinese and herbal medicine.

USE OF PROCEEDS

The net proceeds from the Placing, after deducting the related expenses, are estimated to amount to approximately HK$27 million (based on the offer price HK$0.6 per share). The Group at present intends to apply the net proceeds as follows:

For expansion of its research and development capability and it product lines	24.1%
For expansion of distribution outlets in the PRC	53.7%
For extension of the business into e-commerce	18.5%
Expansion of Hong Kong office	1.9%
Working capital	1.8%

Stock Information Provided by Infocast Limited [ Disclaimer ]

| Disclaimer | Privacy Policy | Useful Links |