CPHI China Pharma Holdings, Inc.

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China Pharma Holdings, Inc. Reports Record 2008 Year End Financial Results and Corporate Updates
Tuesday, March 17 2009 - 16:59


HAIKOU CITY, China, March 17 /PRNewswire-Asia-FirstCall/ -- China Pharma
Holdings, Inc. ("China Pharma") (OTC Bulletin Board: CPHI), which develops,
manufactures, and markets specialty pharmaceutical products in China, today
announced financial results for the year ended December 31, 2008.



For the 12 months up to December 31 2008, the Company continuously
demonstrated consistent top and bottom line growth and improved financial
performance. The increase in company revenue exceeded 53.9%, reaching
approximately $50.97 million, compared with $33.19 million of 2007. This rapid
growth was accounted for by increases in sales of existing products, and
increases in the share of sales by new products. China Pharma is working
closely with several pharmaceutical research institutions to develop and
further launch more products to meet our customers' needs. Our focus is to
create a steady increase to the bottom line. We have seen in the past that the
diversified portfolio and distribution channels are keys to company operation.
Diligent exploration of potential innovations of the pharmaceutical industry
and of the domestic market is essential to create value for our shareholders.



For the year ended December 31 2008, sales of the Company's flag-ship
product PuSen OK increased by 76.6%, and the sales of other products also
improved dramatically: year-on-year Alginic Sodium Diester increased by 75.5%,
Granisetron increased by 60.47%, Clarithromycin increased by 57.4%.



The financial operational performance for the 12 months ended December 31,
2008 was clearly improved compared to the 12 months ended December 31, 2007.
Gross profit for 2007 was approximately $15.57 million, and the gross profit
margin was 46.9%, while the 2008 gross profit was $25.29 million and the gross
profit margin increased to reach 49.6%. The gross profit increased by
approximately $9.72 million, or 62.5% from 2007 to 2008, which was mainly due
to the continued revenue growth in 2008 and increased cost control, and also
to the continued launch of new products.

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The operating income for the year ended December 31, 2008 was $19,730,304,
compared to $12,251,229 for the same period of 2007, an increase of $7.48
million, or 61.1%. The operating gross margin was 38.7% and 36.9%, for fiscal
year 2008 and fiscal year 2007, respectively.



Due to substantial increases in sales revenue and gross profit, and
effective cost control in 2008, the net income for the year ended December 31,
2008, excluding the effect of foreign exchange transactions, increased to
approximately $17.83 million, which was 39.1% higher than the $12.82 million
for the year ended December 31, 2007. The net profit margins were 35.0% and
38.6% respectively in fiscal year 2008 and fiscal year 2007. The decrease in
net profit margin was due to the effect of the increasing income tax from 0%
to 9%. The Company did not have any income tax in 2007, when the Company was
still in the preferential tax period of 0%, while in 2008, due to the
Company's location in the special economic zone of Hainan, the Company was
granted a favorable rate of 9%. Excluding the effect of the increasing income
tax, net income increased 54.4%.



Earnings per common share for the 12 months ended December 31, 2008,
increased 28.0% reaching $0.44 per share compared to $0.35 per share for the
12 months ended December 31, 2007.



Analysis of balance sheet and cash flow statement



As of December 31, 2008, the Company possessed cash and cash equivalents
of $6,927,149, which represented 9.2% of total assets; compared with
$1,830,335 in the same period for 2007, which represented 4.2% of the total
assets. Compared with the position of December 31, 2007, this was an increase
of $5,096,814, or 278.5%. This was a combined result of an improvement in net
cash generated from operating activities and an increase in net cash proceeds
from financing activities.



In the year ended December 31, 2008, the operating activity cash flow
increased to $6.54 million, a substantial increase of 222.6%, compared to
$2.03 million for the same period in 2007. The main reason was the increase in
revenue and net income, and improvement in accounts receivable collection.



China Pharma's President and CEO, Ms. Zhilin Li said, "We achieved the
successes stated above, despite the global economic crisis and challenges
within the Chinese Pharmaceutical industry. The Chinese Health Care Reform
will be implemented in 2009. The build up of a national basic healthcare
system will have a deep impact on the entire Chinese society and on the
healthcare industry. We will continue to launch strong innovative products,
and adapt to the changing policy environment with our operating model and
diversified portfolio. We will explore the opportunities in this environment
and work for a better future!"



Conference Call Details



The Company will hold a conference call on Wednesday 18 March at 8:30 a.m.
EDT. To participate in the conference call, please dial +1 866-277-1181 (Toll
Free) ten minutes prior to the scheduled conference call time. International
callers should dial +1 617-597-5358. The conference pass code is 24632342. If
you are unable to participate in the call at this time, a replay will be
available on Wednesday March 18, 2009 at 12:00 p.m. EDT, through Wednesday
March 25, 2009. To access the replay, please dial +1 888-286-8010.
International callers should dial 1-617-801-6888. The conference pass code is
43849468. This conference call will be broadcast live over the Internet and
can be accessed by clicking this link:
Webcast Registration .