HANGZHOU, China, December 15, 2014 /PRNewswire/ — China Jo-Jo Drugstores, Inc. (NASDAQ CM: CJJD) (the "Company" or "China Jo-Jo"), a leading China-based retail and wholesale distributor of pharmaceutical and health care products through its own online and retail pharmacies, today announce that it has completed the acquisition of Hangzhou Sanhao Grand Pharmacy Chain Co., Ltd. ("Sanhao Drugstores"), a Hangzhou–based pharmacy chain with 11 stores.
Founded in 2006, Sanhao Drugstores is a well-known local drugstore chain and owns 11 drugstores in Hangzhou. Among the 11 stores, four have the qualification of "Designated Medical Institutions for Social Health Insurance ("SHI")," and four others have passed the qualification tests. SHI Program is China’s national health insurance plan aimed to provide universal health insurance coverage to Chinese citizens. Only pharmacies with SHI qualification can serve SHI participants, thus acquiring SHI qualification would substantially enhance a pharmacy’s revenue and profitability. For example, the sales related to SHI accounted for about 55% of China Jo-Jo’s total sales in fiscal 2014.
The Company plans to relocate or remodel the majority of the acquired pharmacies in the upcoming months. After the restructuring of Sanhao Drugstores, the management expects it to generate about RMB 30 million (or $4.8 million) revenue in the calendar year of 2015.
Mr. Lei Liu, Chairman of the Company, stated, "The synergistic acquisition of Sanhao Drugstores will increase our total store count to over 60, from our current level of 51 drugstores. We also set our eyes on some key geographic locations in Hangzhou which allow us to expand our store penetration. We believe the investment will bring satisfactory economic benefits to our shareholders in the coming years."About China Jo-Jo Drugstores, Inc.
China Jo-Jo Drugstores, Inc., through its own retail drugstores, wholesale distributor and online pharmacy, is a leading retailer and wholesale distributor of pharmaceutical and health care products in China. As of September 30, 2014, the Company had 51 retail pharmacies in Hangzhou. The Company’s wholesale subsidiary not only supplies its retail stores, but also distributes drug and other health care products to other drugstores and drug vendors. The Company routinely posts important information on its corporate websites at www.jiuzhou-drugstore.com (Chinese) and www.chinajojodrugstores.com (English).
Forward Looking Statement
Statements in this press release regarding the Company that are not historical facts are forward-looking statements and are subject to risks and uncertainties that could cause actual future events or results to differ materially from such statements. Any such forward-looking statements, including, but not limited to, financial guidance, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the use of forward-looking terminology such as "believe," "expect," "may," "will," "should," "project," "plan," "seek," "intend," "anticipate," the negatives thereof, or comparable terminology. Such statements typically involve risks and uncertainties and may include financial projections or information regarding the progress of new product development. It is routine for the Company’s internal projections and expectations to change as the quarter and year progresses, and therefore it should be clearly understood that the internal projections and beliefs upon which the Company bases its expectations may change. Although these expectations may change, the Company is under no obligation to inform you if they do. Actual results could differ materially from the expectations reflected in such forward-looking statements as a result of numerous factors, including the risks associated with the effect of changing economic conditions in the People’s Republic of China, variations in cash flow, reliance on collaborative retail partners and on new product development, variations in new product development, risks associated with rapid technological change, and the potential of introduced or undetected flaws and defects in products. Readers are referred to the reports and documents filed from time to time by the Company with the Securities and Exchange Commission for a discussion of these and other important risk factors that could cause actual results to differ from those discussed in forward-looking statements.
China Jo-Jo Drugstores, Inc.
Chief Financial Officer
Tel: (561) 372-5555
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/china-jo-jo-drugstores-completed-the-acquisition-of-hangzhou-sanhao-grand-pharmacy-300009574.html