Commencing its business as trading pharmaceutical products, CCM
stage its game to manufacturing drugs by obtaining license from the government.
As there are many patents involved in manufacturing drugs, the industry find
less competitors. However, emergence of strong competitors recently in the
market has made the competition tougher than ever. As most of the people
purchasing decisions of pharmaceutical products depend largely on the
effectiveness rather than pricing, it won’t be a problem for CCM to adjust
their price. In terms of branding, the company has few well established
products such as Thompson cough reliever and Chewes kids' vitamin which gain
the loyalty of its customers’ base. Based on its cash flow statements for the
past ten years, there are no acquisitions of any subsidiary nor associates
where the company generates its growth mostly internally which are different from
other pharmaceutical company’s expansion strategy.
As the company ventures itself into an industry that adapts
automation process, recent rise of utility rate will hugely affect the company’s
margin unless the company adjusts its price.
Based on the graph, the company has been performing on a gradual
upward trend for the past ten years. Although there is a sharp decrease during
2011, it quickly recovered to the level before 2010. Both ratios are up to
expectations as the company has been performing efficiently. From what I see,
the company is adapting a very conservative strategy where the growth is steady
and minimal risks are bared. Overall, the company performs well and possesses
the potential to grow steadily in the future.
Stock: CCMDBIO[S] Code: 7148
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