Tongjitang Chinese Medicines, a specialty pharmaceutical company focusing on manufacturing, marketing and selling traditional Chinese medicine in China, announced that its revenue for Q2 2010 has increased 2.8 percent to $20.3 million.

Mr Xiaochun Wang, CEO and Chairman of Tongjitang, said, "Our second quarter performance reflects strong contributions from products such as Jingshu Granules, which we have been marketing actively since acquiring Anhui Jingfang. This was offset by weaker demand for XLGB, which reflects continued delay in the implementation of the National Essential Drug List (EDL) by local governments. We continue to pursue a more diversified product portfolio strategy, and expect sales of XLGB to recover when the rollout of EDL eventually gains momentum."

The company's net revenue in the second quarter of 2010 has increased 2.8 percent to $20.3 million (RMB137.9 million) (). Net revenue from Moisturizing & Anti-itching Capsules and Zaoren Anshen Capsules reached $2.8 million (RMB19million) in the second quarter of 2010. Net revenue from the company's other products increased 27 percent to $6.6 million (RMB44.8 million).

The company's gross profit has decreased 3.1 percent to $11.7 million (RMB 79.2) million in the second quarter of 2010. Gross margin was 57.5 percent in the second quarter of 2010, compared to 61 percent in the same period of 2009. According to the company, its gross margin reflects higher revenue contribution from lower-margin products, as well as increased costs of raw materials related to herbal medicines, including the cost of barrenwort. Quality control costs are also said to have increased in line with a more stringent regulatory environment.