China Pharma Holdings, Inc. reported a significant decline in financial performance for the fiscal year ending December 31, 2024, with total revenue of $4.5 million, down from $7.0 million in 2023. This 36% decrease was primarily attributed to increased competition in the Chinese pharmaceutical market, particularly due to the inclusion of more drugs in the national centralized procurement (CP) program, which Helpson's products could not participate in due to not passing the required consistency evaluations. The company experienced a gross loss of $2.0 million, resulting in a gross loss margin of 43.8%, a stark contrast to the previous year's margin of 4.0%. The increase in gross loss was driven by rising idle equipment costs and increased inventory impairments.
In terms of operational changes, China Pharma's subsidiary, Hainan Helpson Medical and Biotechnology Co., Ltd., has been focusing on enhancing its product portfolio and exploring new market opportunities. The company launched several healthcare products, including Noni enzymes and various types of masks, in response to the COVID-19 pandemic. Additionally, Helpson began serving as a Contract Manufacturing Organization (CMO) in April 2024, generating approximately $50,000 in revenue from this initiative. The company is also actively pursuing consistency evaluations for its existing products to improve market access and competitiveness.
The company's operational metrics indicate a challenging environment, with total inventory decreasing to $2.27 million from $3.73 million year-over-year, reflecting reduced production and sales. As of December 31, 2024, China Pharma had 231 employees, maintaining a stable workforce despite the financial challenges. The company has also been adjusting its sales strategies to cope with the evolving market conditions, including reducing selling expenses to support sales and improve accounts receivable collection.
Looking ahead, China Pharma's management has expressed a cautious optimism regarding its future prospects. The company plans to enhance its sales model, strengthen accounts receivable management, and explore strategic alternatives to accelerate the launch of new healthcare products. However, the company faces substantial doubt about its ability to continue as a going concern, as indicated by its auditors, due to recurring losses and net current liabilities. The management is actively seeking additional financing and exploring options to improve liquidity, but there are no assurances that these efforts will be successful.
About CHINA PHARMA HOLDINGS, INC.
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