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Renhuang Pharmaceuticals, Inc.

No. 281, Taiping Road,
Taiping District
Harbin, Heilongjiang Province, 150050, P. R. China
Phone: 86-451-5762-0378
Fax: 86-451-5762-0378
www.renhuang.com


US Representative Office
65 Broadway, Suite 888
New York, NY 10006
Phone: (212) 430-6548
Fax: (646) 356-7034


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MARKET INFORMATION

Investor Relations
SmallCapVoice.com
Stuart Smith
Ph: (512) 267-2430 SSmith@SmallCapVoice.com


Renhuang Pharmaceuticals, Inc. (OTCPK: RHGP)
OTCBB: RHGP

Get a detailed quote for RHGP


Authorized Shares: 35,096,681 as of 08/30/2007


Outstanding Shares: 100,000,000


Trailing Sales: For the nine months ended July 31, 2007:


Total Revenue: $20.9 million


Net income: $8.5 million


Transfer Agent: Securities Transfer Corporation


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KEY EXECUTIVES

Mr. Li Shaoming
CEO and Chairman of the Board

Mr. Pi Dianjun
Chief Operating Officer

Mr. Lou Jingwang
Chief Sales & Marketing Officer

Ms. Han Yuling
Chief Manufacturing Officer

Mr. Zhang Youzhi
Chief Technology Officer

Mr. Cui Yuhai
Chief R&D Officer

Mr. Wang Zuoliang
Interim Chief Financial Officer

Mr. Liu Guangming
Director, Capital Operations

Mr. He Jiang
Assistant to the CEO and Chairman


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Renhuang Pharmaceuticals to Present at Roth Capital Partners Growth Stock Conference on February 21, 2008

Renhuang Pharmaceuticals Inc. (OTC BB: RHGP) manufactures and distributes a broad line of high-quality nutraceutical, natural medicinal and bio-pharmaceutical products in mainland China. Its three major product lines are Acanthopanax- based natural medicinal products, the Shark Power healthcare series and traditional Chinese medicines.


Renhuang has established a multi-channel research and development infrastructure consisting of in-house researchers, a post-doctoral working center, and collaborations with leading institutions and scientists. The Company has a portfolio of over 100 products, and a presence in more than 50 markets. It has a dominant share of the market for Acanthopanax-based natural medicines and controls 70% of China's Acanthopanax resource (also known as Siberian Ginseng). Products are distributed through a network of over 2,000 sales agents in 24 districts covering over 50% of China and also exported to Russia and Southeast Asia.


The Company acquired Harbin Renhuang Pharmaceutical Company Limited in September 2006 and all of the assets of Qingyang Herbal Extracting Factory in March 2007. The acquired facility is capable of processing approximately 18,000 tons of herbal raw materials into extracts and doubles the Company's current herbal extraction capacity. Renhuang Pharmaceuticals is headquartered in Harbin in the Heilongjiang Province in Northeast China.


Values

Why Invest in Renhuang Pharmaceuticals, Inc.?

Growth through acquisitions

In March 2007, Renhuang acquired Qingyang Herbal Extracting Factory from Yerui Pharmaceutical Co. Ltd. The acquired facility is capable of processing approximately 18,000 tons of herbal raw materials into extracts, doubling the Company’s current herbal extraction capacity. The factory is located near herb- planting farms, and close to supplies of Acanthopanax (used in Siberian Ginseng-derived products), Isatis (for making Ban Lan Gen) and Schisandra Chinensis (used in traditional herbal medicines).

Controls supply of key herbal ingredient

Through the 2003 acquisition of Dongfanghong Pharmaceutical Co., the Company gained control of over 70% of China’s Acanthopanax resource. Acanthopanax has been used in China for over 2,000 years for stress relief and as an energy booster. The Chinese market for Acanthopanax products is estimated at $50 million and is growing 30% annually. Management’s goal is to increase Renhuang’s market share from 25% to more than 50% within the next 3-5 years, which would make Acanthopanax products its primary revenue source.

Product research and development

Renhuang has made significant R&D progress in methods for standard extraction, separation of effective components and medication with specificity. Several of its products have already been submitted for approval by China’s State Food and Drug Administration. Demand for these new products will likely be strong due to growing interest and an insufficient supply of traditional herbal medicines in China.


New Traditional Medicine products in the development stage include Lysozyme products. Lysozyme acts as a mild antiseptic and disinfectant by destroying the cell walls of certain kinds of bacteria. There is currently no company in China able to produce Lysozyme on a large scale. The Company is also awaiting approval from China’s SFDA for five new Monoclonal Antibody Reagents. Renhuang’s products in this group have proven to be 60% more effective and 50% less costly to produce than competitor products. Due to the huge potential market in China, several large pharmaceutical companies are pursuing partnerships in this segment. The Company estimates that its Monoclonal Antibody Reagent series will achieve a 100% annual growth rate over the next five years.


Products

Strong Revenue Growth

Renhuang has produced strong growth and margin improvement over the past three years. Between 2004 and 2006, the Company’s revenues grew 179% from $10.3 million to $28.7 million, gross margins surged from 31% to 54% and net income climbed from a $0.5 million loss to net profits of $4.9 million.


During the nine months ended July 31, 2007, while revenues were modestly lower year-over-year at $20.9 million versus $21.8 million one year ago, net income improved 175% to $8.5 million from $3.1 million. Profitability gains reflect better cost controls and significant reductions in the Trade Receivables balance.


For full-year fiscal 2007, Renhuang anticipates revenues of between $30 million and $35 million and net profits of between $10 million and $12 million. Roughly 50% of sales are expected to come from Acanthopanax-based products, 30% from Traditional Chinese Medicine products with the balance representing sales of Shark Liver Oil products and other bio-pharmaceuticals.


Going forward, the Company is expecting 30% annual growth in sales of its Acanthopanax-based products over the next three to five years.


At a current P/E multiple of 5.6 times trailing twelve month earnings, Renhuang trades at a steep discount to the 17.8 times P/E of its biotechnology industry peers.


Investment Highlights


  • Leading Chinese pharmaceutical company providing high quality nutraceutical, natural medicinal, and bio-pharmaceutical products
  • Vertically integrated manufacturer
  • High growth in sales and income driven by rapid growth of consumption demand in China
  • High value-added product portfolio
  • Dominant market player in Acanthopanax based products by controlling estimated 70% of China’s natural supply
  • Market leader in traditional over-the-counter medical products
  • International GMP certified manufacturing facilities
  • Multi-channel R&D infrastructure
  • Large multi-layer distribution network
  • Advanced information management system for internal control

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