China Medical System Holdings Ltd.

China Medical System Holdings Ltd.

China Medical System Holdings Ltd.

Overview
Date Founded

1995

Headquarters

6th and 8th Floor, Building A,Tongfang Information Harbor,No. 11 Langshan Road,Shenzhen, Shanghai 518057

Type of Company

Public

Employees (Worldwide)

4,052

Industries

Pharmaceuticals
Wholesale: Consumer Non-Durables/Sundries

Company Description

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.

Executives & Employees

Executive Chairman of the Board, President & Chief Executive Officer

Executive Director, Vice President & Chief Operating Officer

Executive Director, Vice President & Chief Financial Officer

Executive Director

Executive Director

Company Secretary

Chief Technical Officer

Board of Directors

Executive Chairman of the Board, President & Chief Executive Officer at China Medical System Holdings Ltd.

Executive Director, Vice President & Chief Financial Officer at China Medical System Holdings Ltd.

Executive Director, Vice President & Chief Operating Officer at China Medical System Holdings Ltd.

Associate at Hong Kong Institute of Certified Public Accountants

Managing Director at Baring Asset Management (Asia) Ltd.

Partner at Woo, Kwan, Lee & Lo.

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Owners & Shareholders
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MIP is a long-term, team-based, value-oriented manager with an active style and a defensive philosophy. They invest in global equity and debt across market-caps. The firm uses a fundamental value-oriented defensive management style across its two principal methodological groups, Equity and Fixed Income as well as Systematic Equity. With respect to its International and Global Equity advisory services, Mondrian Investment Partners will follow an approach which incorporates a macroeconomic or Top-Down analysis as well as an individual security selection or Bottom Up valuation. Stocks are normally held for a long period of time and portfolio turnover is expected to approximate 10-20 percent annually. With respect to its fixed income advisory services, Mondrian Investment Partners invests in global bond markets that offer high income in real (inflation-adjusted) terms, measured by a market’s Prospective Real Yield (PRY). The firm manages strategies for both developed and emerging bond markets.

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Denker Capital is an active, research-based, benchmark insensitive manager which optimizes portfolio investments to maximize long-term growth. Their investment philosophy is based on the belief that the price at which an asset trades is often not a true reflection of its long-term value and they aim to exploit opportunities to achieve superior long-term returns.The firm is attracted to high-quality assets that are out of favor with most of the market. They apply a disciplined, unemotional investment process to determine the true value of an asset and identify underpriced assets with promising growth prospects.To identify investment opportunities, they utilize exclusive or outsourced quantitative screening tools. They also attend conferences, conduct research and regularly communicate with their network of industry contacts. Once they identify investment opportunities, they do an initial analysis to create a shortlist, then perform due diligence on the shortlisted companies to assess their worth, focusing on understanding their competitive positioning within their industry, the quality and earning power of the business and what qualifies as a sustainable cash flow level.Denker Capital works closely with company management throughout the process. To determine how much to own of each business, they consider the potential returns, the level of conviction they have in the business, the liquidity of the overall portfolio and the potential loss of capital. They sell when the reasons why they initially invested have changed, when the return and growth prospects are no longer as attractive, or when they identify better opportunities.

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CATAM’s traditional asset management identifies the risk tolerance and investment horizon through an in-depth discussion. The focus of their entrepreneurial principles is on personalized counsel and a spirit of partnership. In an ongoing process, they monitor the development of the invested assets, always in compliance with applicable investment and risk guidelines. CATAM’s alternative asset management services emphasize capital preservation based on market-neutral investment methods. Their focus is on the stability, consistency and solid performance.

Recent Transactions
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China Medical System Holdings Ltd. purchases Luqa Pharmaceuticals Co. Ltd. from Morningside Group Ltd.

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China Medical System Holdings Ltd. purchases Sinopharm Traditional Chinese Med Lengshuijiang Pharm Co. Ltd. from Sinopharm Traditional Chinese Medicine Co., Ltd.

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China Medical System Holdings Ltd. issued HKD Ordinary Shares

Transaction Advisors
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Advised onChina Medical System Holdings Ltd. issued HKD Ordinary Shares

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Advised onChina Medical System Holdings Ltd. issued HKD Ordinary Shares

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Advised onChina Medical System Holdings Ltd. issued HKD Ordinary Shares

Clients

Cadila Healthcare Ltd. engages in the discovery, development, and manufacture of pharmaceutical products under Zydus brand. It offers therapeutic proteins, monoclonal antibodies, and antibody-drug conjugates. It operates through the following geographical segments: India, US, and Others. The company was founded by Ramanbhai B. Patel in 1952 and is headquartered in Ahmedabad, India.

Navamedic ASA is a medical technology company, which engages in the delivery and marketing of pharmaceutical products to patients, hospitals, and pharmacies. It operates through Pharma and Healthcare Products, and Medtech segments. The company was founded in October 2002 and is headquartered in Lysaker, Norway.

Key Stats and Financials As of 2019
Market Capitalization
$3.85B
Total Enterprise Value
$3.47B
Earnings Per Share
$0.11
EBITDAMargin
42.15%
Enterprise Value / Sales
3.94x
Enterprise Value EBITDAOperating
9.35x
TEVNet Income
12.21x
Debt TEV
0.03x
Three Year Compounded Annual Growth Rate Of Revenue
7.41%
Five Year Compounded Annual Growth Rate Of Revenue
15.58%
Revenue
$880M
Net Profit
$284M
EBITDA
$371M
Total Debt
$102M
Total Equity
$1.36B
Investments
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Vaximm AG provides active immunotherapies for patients suffering from cancer. It develops and provides vaccines for patients suffering from cancer. The firmalso provides research, development, manufacture, marketing and sale of pharmaceutical products. The company was founded in September 2008 and is headquartered in Basel, Switzerland.

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Blueberry Therapeutics Ltd. engages in the development of innovative medicines. It offers nanomedicine, anti infection and anti microbial, anti inflammatory bowel diseases, acne, dermatitis and wound medicines. The company was founded by John Ridden and Mike Davies and is headquartered in Macclesfield, the United Kingdom.

Suppliers
Dr. Falk Pharma GmbH Hospitals & Patient Services | Freiburg, Germany

Dr. Falk Pharma GmbH engages in the development and sale of medication for indications in hematology and gastroenterology in Germany and internationally. The company principally offers prescription drugs that are used in treating inflammatory bowel diseases, cholestatic liver diseases, irritable bowel syndromes, and constipation, as well as for colon cleansing prior to colonoscopies. It also organizes and sponsors medical education events; and offers publications for healthcare professionals, as well as for patients and their families. The company was formerly known as Dr. Falk Arzneimittel GmbH & Co KG and changed its name to Dr. Falk Pharma GmbH in 1989. Dr. Falk Pharma GmbH was founded in 1960 and is headquartered in Freiburg, Germany

Pharma Stulln Gmbh Wholesale: Consumer Non-Durables/Sundries | Stulln, Germany

Pharma Stulln GmbH engages in manufacturing eye drops. Its portfolio includes production of sterile multi-dose containers for pharmaceuticals and medical device products. The company was founded in 1984 and is headquartered in Stulln, Germany.

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