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Qilian International Holding Group Ltd (NASDAQ: QLI) is a China-based pharmaceutical and chemical company headquartered in Gansu. The company is engaged in the development, manufacture, marketing, and sale of various products such as licorice products, oxytetracycline products, traditional Chinese medicine derivatives, heparin products, sausage casings, and fertilizers. These products are distributed across more than 20 provinces in China.
Core Business Segments
- Oxytetracycline and Licorice Products and TCMD: This segment generates the majority of the company's revenue. Oxytetracycline is an antibiotic, while licorice products are used in traditional Chinese medicine.
- Fertilizer: Qilian produces chemical fertilizers which support agricultural productivity.
- Heparin Products and Sausage Casings: Heparin is a critical biomedical raw material used for its anticoagulant properties. This segment also includes the production of sausage casings used in the food industry.
Recent Developments
In July 2023, Qilian received a Notification Letter from Nasdaq indicating non-compliance with the minimum bid price requirement. The company has until January 9, 2024, to regain compliance by achieving a closing bid price of at least US$1.00 for 10 consecutive business days. In January 2024, Nasdaq granted the company an additional 180 days to meet the bid price requirement, extending the deadline to July 8, 2024.
In response to market challenges such as declining demand and increased operational costs for oxytetracycline, Qilian has announced a strategic shift. The company plans to reduce investments in oxytetracycline and focus more on heparin sodium, licorice products, and ventures in the financial and software development sectors.
Financial Health and Future Plans
The company's business operations remain unaffected by the Nasdaq notifications, and it continues to focus on growth and efficiency. To regain compliance, Qilian is considering options such as a reverse share split. Additionally, by bolstering investments in heparin sodium and licorice products, and exploring new growth areas like financial products and software development, Qilian aims to enhance overall competitiveness and profitability to create greater value for shareholders.
Qilian International Holding Group Limited (Nasdaq: QLI) reported fiscal year 2021 results with revenue growth of 14% to $57.1 million, driven by increased sales in heparin products and sausage casings. However, gross profit fell 25% to $5.6 million, with a gross margin decline to 9.9%. Operating income decreased 50% to $2.4 million, and net income was $3.1 million, down 37%. The company plans to enhance production capabilities and R&D efforts while navigating ongoing challenges posed by the COVID-19 pandemic.
Qilian International Holding Group Limited (Nasdaq: QLI) reported receiving approval from Gansu Provincial Drug Administration for the sale of its nitrofurantoin enteric-coated tablets on January 14, 2022. This marks Qilian as the first company in Gansu Province to gain such approval. Nitrofurantoin is included in China's National Reimbursement Drug List, indicating strong market demand. The tablets are used to treat urinary tract infections and have met national drug standards following thorough inspections. The company anticipates this product will enhance its market competitiveness and revenue.
Qilian International Holding Group Limited (Nasdaq: QLI), a China-based pharmaceutical and chemical manufacturer, commemorates its first anniversary on Nasdaq and thanks shareholders for their support during 2021. The company aims to overcome market challenges in 2022, including the COVID-19 pandemic and rising raw material costs. Key achievements include the launch of two brands in Gansu Province and new projects in heparin sodium and organic fertilizers. For 2022, Qilian targets over 20% growth in fertilizer production and sales, enhanced R&D efforts, and international trade expansion.
Qilian International Holding Group Limited (Nasdaq: QLI) announced that its products, Gan Di Xin® and Qilian Shan® Oxytetracycline, have been added to Gansu Province's List for Development of Leading Enterprises in Pharmaceuticals. This List, issued by the Department of Industry and Information Technology on October 13, 2021, aims to enhance the local pharmaceutical industry.
The inclusion supports brand awareness and market expansion, allowing the products to be sold across Gansu and potentially nationwide, benefiting from national medical insurance reimbursement.
Qilian International Holding Group Limited (Nasdaq: QLI) has initiated the development of a new drug, Vitacoenzyme, aimed at preventing gastric cancer. This drug is currently in the fungal strain selection phase and is expected to enter the market within three years. Vitacoenzyme is designed to improve immunity and detoxify carcinogens, showing positive effects in treating various gastrointestinal diseases. The research involved collaboration with prominent institutions, demonstrating efficacy without adverse effects. The company aims to meet market demand for this drug, which could enhance its production capacity and financial performance.
Qilian International Holding Group Limited (Nasdaq: QLI) announced a donation valued at over RMB500,000 to the government of Suzhou District, Jiuquan City, to aid in controlling a local COVID-19 outbreak. The donation includes its patented antitussive and expectorant medicine Gan Di Xin® and 75% alcohol disinfectant. The company has previously contributed significant resources to combat the pandemic, having donated RMB2 million worth of drugs to Hubei in early 2020. CEO Zhanchang Xin emphasized the company's commitment to public health during the ongoing pandemic.
Qilian International Holding Group Limited (Nasdaq: QLI) announced the completion of phase one of its new organic fertilizer production facility in Jiuquan, China, increasing its annual production capacity to 30,000 tons. The facility expansion includes advanced production equipment and is projected to reach a capacity of 50,000 tons upon full completion. This development is part of the company's strategy to enhance its entire industrial chain and supports local agricultural growth by utilizing livestock waste, aiding in pollution control.
Qilian International Holding Group Limited (Nasdaq: QLI) announced that its subsidiary, Gansu Qilianshan Pharmaceutical Co., Ltd., received a Certificate of a Pharmaceutical Product on September 14, 2021, allowing the export of its Qilian Shan® Oxytetracycline APIs to Egypt. This approval indicates compliance with Chinese standards and no export restrictions. Oxytetracycline products generate over 90% of revenue in this segment, contributing more than 60% to overall company revenue. The CEO expressed optimism about expanding into overseas markets following this approval.
Qilian International Holding Group Limited (Nasdaq: QLI) reported an 8% revenue increase to $29.9 million for the six months ended March 31, 2021, driven primarily by oxytetracycline sales. However, gross profit fell 34% to $4.1 million, with gross margin declining to 13.7% due to decreased licorice product prices. Net income was $2.2 million or $0.07 earnings per share, reflecting a 46% decline from the previous year. Despite challenges, the company anticipates growth in heparin products due to rising global demand.
Qilian International Holding Group Limited (Nasdaq: QLI) has announced a new agreement with the Chongqing Tongnan District Government to establish a pig by-product processing facility in the Tongnan High-tech Zone. This project aims to enhance R&D for heparin sodium preparations, which are vital for treating various diseases. The global anticoagulant market is projected to grow from $28.69 billion in 2020 to $38.85 billion by 2027, indicating significant potential for QLI's heparin products. The project is considered a strategic move to expand the company’s capabilities and market reach.
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