Beijing Hanmi Pharmaceutical, the Chinese subsidiary of Hanmi Pharmaceutical (128940.KS), surpassed 400 billion won in annual revenue for the first time last year. After establishing itself in the Chinese market through a localization strategy, the unit has also expanded dividend income, strengthening its role as a source of research and development funding for Hanmi Pharmaceutical.
Hanmi Pharmaceutical said Wednesday that Beijing Hanmi Pharmaceutical posted revenue of 402.4 billion won and operating profit of 77.7 billion won last year. It was the first time Beijing Hanmi's annual revenue had exceeded 400 billion won since its establishment in 1996.
Beijing Hanmi is a joint venture that Hanmi Pharmaceutical established in Beijing, China, in 1996. Hanmi Pharmaceutical currently holds a 73.68% stake in Beijing Hanmi.
The company said its locally tailored strategy and product competitiveness drove the earnings growth. "This is an achievement that bears the fruit of the localization strategy and product competitiveness accumulated over about 30 years since our establishment," a Hanmi Pharmaceutical official said. "It carries great significance in that the growth was achieved by responding flexibly to changes in policy and market conditions."
Beijing Hanmi's improved performance also boosted dividends. Hanmi Pharmaceutical earned about 9 billion won in dividend income from Beijing Hanmi last year. Cumulative dividends since 2009 stand at about 138 billion won.
This year's regular dividend was set at about 38.5 billion won, applying a 50% payout ratio based on net profit. Of this, about 28.4 billion won will be attributed to Hanmi Pharmaceutical.
Hanmi Pharmaceutical plans to use the dividend funds secured from Beijing Hanmi for new drug development and global business expansion. Within the industry, observers say Beijing Hanmi continues to serve as a stable revenue base, at a time when domestic pharmaceutical companies are struggling with sluggish China operations.
