LuyePharma

Operations Review & Development

FY2008 was a year of challenges and strategically important developments for Luye Pharma Group Ltd. (formerly known as Asiapharm Group Ltd.) as we continued to build on our successful business strategies and seek to further enhance our position as a leading specialty drugs manufacturer within the PRC pharmaceutical industry.

Following our successful acquisitions in FY2007, we continued our efforts to amalgamate the acquired assets with our existing operations. Reflecting the success of our efforts, Group revenue rose 27.9% to RMB 651.0 million in FY2008 from RMB 509.0 million in FY2007, bolstered by sales of its proprietary pharmaceutical products such as Lipusu, Nuosen, Lutingnuo, CMNa and maiden contributions from recently acquired product Hypocol'.

In line with the continued revenue growth, selling and distribution expenses grew by 47.6% to RMB 364.3 million mainly attributable to the recruitment of a larger sales force and traveling and meeting expenses. Other expenses increased by 55.0% to RMB 45.6 million due mainly to an increase in R&D expenses as the Group continued to increase its focus on its own product development and a fair value adjustment of an available-for-sale investment of RMB 4.3 million as a result of a decrease in the value of our investments. Despite higher expenses and an increase in taxation due mainly to a deferred tax of RMB 8.4 million for withholding tax on retained profits of the PRC subsidiaries, the Group's FY2008 net profit attributable to equity holders of the parent grew 6.8% to RMB 62.1 million from RMB 58.1 million in FY2007.

Our financial position remains strong. As at 31 D ecember 2008, our cash and cash equivalent balance stood at RMB 118.5 million.

IR Contact

Singapore

Address

133 Cecil Street #12-02
Keck Seng Tower
Singapore 069535

Tel

+65 6220 0119

Fax

+65 6220 0282

Email

info@asiapharm.biz

Shanghai

Address

Unit DEF, 3rd Floor, Hongqiao Business Center,
No. 2272 Hongqiao Road, Shanghai, PRC. 200336

Tel

+86-21-62376352

Fax

+86-21-62376269