China Botanic Pharmaceutical Receives a Tax Exemption in 2011
March 14, 2011 | PR Newswire Association LLC
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HARBIN, China, March 14, 2011 /PRNewswire-Asia-FirstCall/ -- China Botanic Pharmaceutical Inc. (AMEX: CBP) (formerly Renhuang Pharmaceuticals, Inc.) ("China Botanic" or the "Company"), a developer, manufacturer and distributor of botanical products, bio-pharmaceuticals and traditional Chinese medicines ("TCM") in China, today announced that the Company has passed the annual High-Tech Enterprise assessment, and that as a result, China Botanic will continue to enjoy a 10 percent tax exemption and will be entitled to a preferential tax rate of 15 percent in 2011 which is notably lower than the statutory income tax rate of 25 percent.
As previously disclosed on March 30, 2010, China Botanic has been awarded the State High-Technology Enterprise certificate. As a Certificate recipient, China Botanic will have access to a series of national and local government support programs, including favorable tax treatment. While the certificate is valid for three years, China Botanic must successfully complete an annual assessment to remain eligible for the tax benefits.
For fiscal 2011, the Company expects to see revenue in the range of $70.6 million to $71.7 million, and after-tax net income of $22.9 million to $23.2 million. These figures represent a 28% to 30% increase from fiscal 2010 revenue of $55.2 million and net income of $17.9 million. The Company's 2011 guidance does not take into account the impact of any potential acquisitions.
To achieve its guidance, the Company will focus on increasing average selling prices, introducing new products, expanding its marketing efforts to gain additional market share, continuing to develop a larger distribution network and expanding into overseas markets. China Botanic also anticipates that it will benefit from the burgeoning Chinese national health insurance program.
"Looking into 2011, we are optimistic about our growth outlook and the market prospects for our all-natural plant based remedies. As people learn more about depression in China, the market potential for China Botanic's scientifically-verified depression and anxiety fighters will continue to increase. The Company will capitalize on opportunities provided by health care reform, as well," said Mr. Shaoming Li, the Company's Chairman and Chief Executive Officer. "Our thorough market research shows that China Botanic has a stable customer base and our previous average selling prices were below the market price. We anticipate attractive revenue and net income growth to be largely driven by an increase in average selling prices of our key products, sales and distribution expansion, and the Chinese government's healthcare reform. We also expect increased sales contribution from our latest new products introduced in 2010."
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