Tongjitang Chinese Medicines Comments On Storm Impact In Central And Southern China

Main Category: Public Health
Article Date: 06 Feb 2008 - 3:00 PDT

email to a friend   printer friendly   view / write opinions   rate article

Tongjitang Chinese Medicines Company (NYSE: TCM), a leading specialty pharmaceutical company focusing on the development, manufacturing, marketing and selling of modernized traditional Chinese medicine in China, stated that the snow storms in Central and Southern China will negatively impact its first quarter 2008 financial results.

Since the middle of January, the worst snow storms in over 50 years have impacted most areas of Central and Southern China. The city of Guiyang, in China's Guizhou Province, is one of the worst hit areas. Tongjitang's subsidiaries, including Guizhou Tongjitang Pharmaceutical and Guizhou LLF Pharmaceutical, are located in Guiyang.

Xiaochun Wang, Tongjitang's chief executive officer and chairman of its board of directors, stated, "The extreme weather conditions are creating widespread power shortages and interrupting our manufacturing and product transportation. We halted manufacturing and product delivery from Guizhou Tongjitang Pharmaceutical and Guizhou LLF Pharmaceutical, and we are working diligently to assess the impact the extreme weather will have on our first quarter 2008 results. We also believe that our sales and promotional efforts are temporarily waning in the Central and Southern areas of China, as businesses remain closed and salespeople are unable to effectively travel. While all of these issues are short-term in nature, we anticipate that our first quarter results will reflect at least two weeks of weather-related sales disruption."

Mr. Wang continued, "Tongjitang will resume normal operations as soon as conditions allow, and we expect to update investors with any material developments as we deem appropriate. One certainty is that we remain confident in our long-term growth prospects."

About Tongjitang Chinese Medicines Company

Tongjitang Chinese Medicines Company, through its operating subsidiaries Tongjitang Pharmaceutical, Guizhou LLF Pharmaceutical, Tongjitang Distribution, Tongjitang Chain Stores, and Tongjitang Planting, is a vertically integrated and profitable specialty pharmaceutical company focusing on the development, manufacturing, marketing and selling of modernized traditional Chinese medicine in China. Tongjitang's principal executive offices are located in Shenzhen, China.

Tongjitang's flagship product, Xianling Gubao, is the leading traditional Chinese medicine for the treatment of osteoporosis in China as measured by sales in Renminbi amounts. In addition to Xianling Gubao, the company manufactures and markets 10 other modernized traditional Chinese medicine products and 37 western medicines. Visit http://www.tongjitang.com for more information.

Safe Harbor Statement

This press release contains forward-looking statements that are made pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995. Although the Company believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, such statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, they cannot assure you that their expectations will turn out to be correct, and investors are cautioned that actual results may differ materially from those described in the forward -looking statements in this press release.

A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: our growth strategy; our future business development, results of operations and financial condition; our heavy dependence on the success of Xianling Gubao; our ability to market Xianling Gubao to hospitals and to retail pharmacies; the retail prices of our principal products' being subject to price control by the government authorities in China; our products' inclusion in national and provincial medical catalogs of the National Medical Insurance Program in China; our ability to obtain approval from the State Food and Drug Administration in China to convert a provisional national production standard of our principal products to a national final production standard; our ability to continue having the exclusive production rights for our products; our ability to further improve our barrenwort extraction efficiency; our ability to obtain manufacturing or marketing approval for our future products; our dependence on a limited number of distributors for a significant portion of our net revenues; our ability to protect our intellectual property rights and defend infringement or misappropriation claims by third parties; intense competition in the pharmaceutical market in China; the supply of quality medicinal raw materials; and uncertainties with respect to the legal system in China.

Further information regarding these and other risks is and will be included in our registration statement on Form F-1 and other documents filed and to be filed with the U.S. Securities and Exchange Commission. The Company does not undertake any obligation to update any forward-looking statement, except as required under applicable law. All information provided in this press release is as of the date of this press release, and the Company undertakes no duty to update such information, except as required under applicable law.

Tongjitang Chinese Medicines Company