ChinaSecurities

Tongjitang Chinese Medicines Company focuses on the development, manufacture, marketing, and sale of modernized traditional Chinese medicines. Its primary product, Xianling Gubao, is the traditional Chinese medicine for the treatment of osteoporosis. The company also manufactures and markets a portfolio of 10 other traditional Chinese medicines, including Zaoren Anshen Capsules, an OTC medicine for treating insomnia; and moisturizing and anti-itching capsules, an over-the-counter medicine for treating inflammatory skin conditions. Its product development pipeline includes potential uses of its existing products for additional medical indications and a number of new product candidates that are intended to address the medical needs in the therapeutic areas of women’s health, mental health, and dermatology.

The company sells its Xianling Gubao and other products exclusively through third-party distributors, who resell the products to hospitals and retail pharmacies in China. Tongjitang Chinese Medicines Company was founded in 1995 and is headquartered in Shenzhen, China. For 4Q08, net revenue decreased to $16.9 million or 37.2% decline in Xianling Gubao (“XLGB”) sales to $12.4 million and a 46.6% decrease in sales of other core products to $2.1 million. Gross margin decreased to 61.2% from 65.5% a year ago and 62.4% in 3Q08. Net loss was $11.6 million or net loss per ADS of ($0.36), and net loss per share of ($0.09). On 12/16/08, the Company announced the appointment of Charles Wang as its CFO.