(Yicai) April 25 -- Sinopep-Allsino Biopharmaceutical remains competitive despite ramped up US tariffs, according to the Chinese supplier of active pharmaceutical ingredients for drugs that are used to treat type 2 diabetes and obesity.

Sinopep retains its competitive advantage due to the higher gross profit margins of customers’ products and limited price sensitivity among clients, along with scarce high-quality production capacity, the Jiangsu province-based firm said in investor meeting notes released yesterday.

The company also outlined a number of strategies to limit the impact of higher US tariffs, including expanding into emerging markets, such as Southeast Asia, South America, and Russia, promoting flexible trade arrangements, implementing dynamic pricing strategies to secure profit margins, and cost-cutting through technological innovation.

Sinopep’s shares [SHA: 688076] have fallen 9 percent since the Trump administration announced so-called reciprocal tariffs on Chinese imports on April 2. They closed 0.7 percent lower at CNY54.21 (USD7.44) apiece in Shanghai today.

Some of Sinopep’s active pharmaceutical ingredients are for semaglutide, an injection that promotes insulin secretion by activating glucagon-like peptide-1 receptors, which help regulate blood sugar and control appetite, especially among people with type 2 diabetes. It has become a popular weight-loss drug in recent years.

Danish pharmaceutical giant Novo Nordisk holds the original patent for semaglutide, but its impending expiration has spurred multiple companies to start developing generic versions, creating growth opportunities for upstream API suppliers like Sinopep.

There is strong demand and limited premium production capacity for peptides, Sinopep noted, adding that it has secured orders from several international clients and is actively expanding into emerging markets such as Latin America, the Middle East, and countries along the Belt and Road Initiative.

The peptide industry has significant economies of scale, so as the company increases peptide production in the future, it will have a positive impact on costs, Sinopep noted.

Sinopep had a net profit of CNY400 million (USD55 million) last year, a 148 percent surge from the year before. Revenue jumped 57 percent to CNY1.6 billion (USD223 million), with international sales accounting for CNY1 billion, or 63 percent of the total.

Editor: Futura Costaglione