8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):  January 25, 2011

CHINA BOTANIC PHARMACEUTICAL INC.

(Exact name of Registrant as Specified in its Charter)

Nevada	0-24512	88-1273503
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

No. 281, Taiping Road, Taiping District

Harbin, Heilongjiang Province, 150050

(Address of Principal Executive Offices)

Registrant’s telephone number, including area code:  86-451-5762-0378

Renhuang Pharmaceuticals, Inc.

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 2.02. Results of Operations and Financial Condition

On January 25, 2011, China Botanic Pharmaceutical Inc. (the “Company”) issued a press release announcing the Company’s financial results for the three months and fiscal year ended October 31, 2010. A copy of this press release is attached hereto as Exhibit 99.1.

The information in this Item 2.02 of Form 8-K, including the accompanying exhibit, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities and Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liability of such section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of the general incorporation language of such filing, except as shall be expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
99.1*	Press Release dated January 25, 2011 announcing fourth quarter and full-year 2010 financial results

* Such Exhibit is being “furnished” (not filed) pursuant to Item 2.02 of the Current Report on Form 8-K.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	CHINA BOTANIC PHARMACEUTICAL INC.
Date:  January 25, 2011	By:	/s/ Shaoming Li
		Shaoming Li
		Chief Executive Officer

EXHIBIT INDEX

Exhibit No.	Description
99.1*	Press Release dated January 25, 2011 announcing fourth quarter and full-year 2010 financial results

* Such Exhibit is being “furnished” (not filed) pursuant to Item 2.02 of the Current Report on Form 8-K.

EX-99.1

Company Contact:	CCG Investor Relations:
China Botanic Pharmaceutical Inc.	Mr. Mark Collinson, Partner
Ms. Portia Tan, IR Contact	Phone: +1-310-954-1343 (Los Angeles)
Tel: 86-451-8260-2162	Email: mark.collinson@ccgir.com
Email: ir@renhuang.com	Website: www.ccgirasia.com
	Mr. Crocker Coulson, President
	Phone: +1-646-213-1915 (New York)
	Email: crocker.coulson@ccgir.com

For Immediate Release

China Botanic Pharmaceutical Reports Fourth Quarter and Fiscal Year 2010 Results

§ Provides Guidance for FY 2011

Harbin, China – January 25, 2011 – China Botanic Pharmaceutical Inc. (AMEX: CBP) (formerly Renhuang Pharmaceutical, Inc.) ("China Botanic" or the "Company"), a developer, manufacturer and distributor of botanical products, bio-pharmaceuticals and traditional Chinese medicines (“TCM”) in China, today announced financial results for the three months and fiscal year ended October 31, 2010.

Fourth Quarter 2010 Highlights

§   Net sales grew 15.2% year-over-year to $16.7 million

§   Gross profit increased 13.3% to $9.1 million from $8.0 million in the fourth quarter of fiscal year 2009

§   Gross margin was 54.4%

§   Net income was approximately $5.6 million or $0.14 per diluted share, as compared to approximately $5.8 million or $0.15 per diluted share a year ago

§   New products, including Qing Re Jie Du Oral Liquid, Compound Schisandra Tablets, and Ginseng and Deer Antler Extract accounted for 8.2% of gross sales in the fourth quarter of fiscal 2010

Fiscal Year 2010 Highlights

§   Net sales rose to $55.2 million, an increase of 27.1% over fiscal year 2009

§   Gross profit increased to $29.4 million, up 27.4% from $23.1 million

§   Gross margin was 53.3% compared to  53.2% in fiscal year 2009

§   Net income rose 20.4% to $17.9 million or $0.44 per diluted share, as compared to $14.8 million or $0.41 per diluted share in fiscal year 2009

§   Introduced three new products:  Qing Re Jie Du Oral Liquid, Compound Schisandra Granules and Deer Antler Extract, which together accounted for approximately 3.0% of gross sales in 2010

§   In July 2010, the Company’s common stock began trading on NYSE AMEX market under the symbol “CBP”

“We are pleased to report double digit revenue and net income growth in fiscal year 2010. This fiscal year, we maintained a leading market position with our Siberian Ginseng product series and successfully introduced several new products, including Compound Schisandra Tablets, which strengthens our offering in the nerve-regulation and depression treatment segment,” said Mr. Shaoming Li, Chairman and Chief Executive Officer of China Botanic.  “During the year, we experienced increases in average selling prices of several of our products, reflecting the continued strong demand for our all-natural plant based remedies.”

Fourth Quarter Fiscal 2010 Results

During the three months ended October 31, 2010, net sales increased 15.2% to $16.7 million, from $14.5 million during the same period in 2009.  The rise was mainly attributable to growing market acceptance and resulting increased sales volume of the Company’s new products. China Botanic also successfully gained additional market share during the quarter.

Gross profit increased 13.3% to $9.1 million compared to $8.0 million in the fourth quarter of fiscal 2009. Gross margin decreased to 54.4% as compared to 55.3% in the same period of 2009. The growth in gross profit was mainly driven by increased sales. The decline in gross margin was a result of changes in the Company’s product mix and higher raw materials costs.

Operating expenses for the fourth quarter of fiscal 2010 were $3.5 million, as compared to $2.2 million in the same period last year. Sales and distribution expenses rose to $1.3 million from $1.1 million a year ago. The spending increase reflected continued investment in the Company’s distribution network and TV advertising in order to increase product market share and create greater consumer awareness of the Company’s premium quality products. General and administrative expenses increased to $1.4 million from $0.4 million in the fourth quarter of fiscal 2009, primarily reflecting  warrants and options granted for services, increase in professional fees, and amortization of intangible assets purchased in the fourth fiscal quarter. Research and development expenses were $0.8 million, up from $0.7 million in the year ago period, reflecting the Company’s commitment to continuing to build a pipeline of products.

Our operating income in the fourth fiscal quarter was $5.6 million, compared to $5.8 million in the fourth quarter of 2009. Operating margin decreased year-over-year to 33.6% from 40.0%. The Company did not incur income tax expenses as its subsidiary registered in the PRC has been granted a tax holiday for fiscal 2010. For the fourth quarter ended October 31, 2010, net income declined by 3.0% to $5.6 million, or $0.14 per diluted share, from $5.8 million, or $0.15 per diluted share in the prior year period.

Fiscal Year 2010 Results

For the fiscal year ended October 31, 2010, net sales were $55.2 million, up 27.1% from $43.4 million in fiscal 2009. The increase in sales was mainly attributable to the launch of new OTC medicines, increased demand and strong market acceptance of the Company’s products, effective marketing efforts and product price increases. Gross profit was $29.4 million, up 27.4% from gross profit of $23.1 million in fiscal 2009. Gross margin was 53.3% compared to 53.2% in fiscal 2009. Operating expenses for fiscal 2010 were $11.6 million, as compared to $8.3 million for the same period a year ago. Income from operations was $17.8 million, up 20.2% from $14.8 million in fiscal 2009. Net income was $17.9 million, or $0.44 per diluted share, up 20.4% from $14.8 million, or $0.41 per diluted share, for the same period a year ago.

Financial Condition

As of October 31, 2010, the Company had cash and cash equivalents of approximately $27.8 million and total current assets of approximately $50.5 million. As of October 31, 2010, China Botanic had working capital of approximately $47.1 million as compared to $32.0 million for the fiscal year ended October 31, 2009.  The Company has enhanced its working capital position as a result of tightened credit terms extended to customers and a decrease in the level of inventories. The Company had no long-term debt on its balance sheet as of October 31, 2010. Shareholders' equity stood at $69.8 million, compared with $50.5 million as of October 31, 2009. Net cash flow from operating activities increased to $23.8 million during fiscal year end October 31, 2010 from $13.1 million for fiscal year ended October 31, 2009, primarily reflecting increases in net income and trade receivables and a decrease in inventories.

Subsequent Events

On November 23, 2010, the Company successfully exhibited its unique portfolio of natural products at the 108th China Import and Export Fair recently held in Guangzhou, China. The Company attracted over 1,000 foreign and domestic visitors at its booth and signed letters of intent from 10 prospective distributors.

On November 29, 2010, the Company changed its name from Renhuang Pharmaceutical Inc. to China Botanic Pharmaceutical Inc. to better reflect the Company's corporate identity, brand image and business operations. The legal structure of China Botanic remains unchanged.

On December 2, 2010, Siberian Ginseng (Acanthopanax) Total Flavonoids Extract was awarded the third prize by the recently held Heilongjiang Province Science and Technological Progress assessment.

On December 14, 2010, the Company announced the appointment of Mr. David Dong as its new Chief Financial Officer.

Business Outlook

The market demand for pharmaceutical products in China is rapidly growing and China Botanic’s growth strategy focuses on capitalizing on such opportunity through new product introductions, marketing efforts to gain additional market share and a larger distribution network. For fiscal 2011, the Company estimates net sales and net income to grow at 28% to 30%.  Excluding any non-cash, non-operational gains or expenses, the Company expects fiscal 2011 net sales of $70.6 million to $71.7 million and net income of $22.9 million to $23.2 million. The Company experiences seasonality in its business, which is strongest in the first and fourth quarter and softer in the spring and summer season or the second and third quarter. Additionally, the Company’s financial guidance also reflects its plan to continue to expand its sales and distribution network to drive growth in market share and to increase R&D spending on its pipeline projects.

“In 2011, we expect to see strong growth in revenue as a result of increased market acceptance and awareness of the benefits of our Siberian Ginseng Series in treating depression and nerve-regulation. We also anticipate many of our products will be listed in the reimbursement catalog of essential medicine for health insurance and we expect to grow as the PRC government moves forward with its Health Reforms in 2011,” said Mr. Li. “We will continue to present our product offering at international pharmaceutical trade shows and conventions as they present outstanding opportunities to showcase our products to an international audience. In fiscal 2011, we anticipate continued sales growth from China and expansion into the overseas market.”

Conference Call

China Botanic will host a conference call at 9:00 a.m. Eastern Time on Tuesday, January 25, 2011, to discuss financial results for the fourth quarter and full year of fiscal year 2010, ended October 31, 2010. To participate in the conference call, please dial the following number five to ten minutes prior to the scheduled conference call time: 866-394-2209. International callers should dial +1 706- 758-1481. The conference ID number for the call is 3846 4897.

If you are unable to participate in the call at this time, a replay will be available on Tuesday, January 25, 2011 at 10:00 am Eastern Time, through Tuesday, February 8, 2011. To access the replay, dial 800-642-1687. International callers should dial +1 706-645-9291. The conference ID number for the replay is 3846 4897.

ABOUT CHINA BOTANIC PHARMACEUTICAL INC.

China Botanic Pharmaceutical Inc. is engaged in the research, development, manufacturing, and distribution of botanical products, bio-pharmaceutical products, and traditional Chinese medicines (“TCM”), in the People's Republic of China. All of the Company’s products are produced at its three GMP-certified production facilities in Ah City, Dongfanghong and Qingyang. The Company distributes its botanical anti-depression and nerve-regulation products, biopharmaceutical products, and botanical antibiotic and OTC TCMs through its network of over 3,000 distributors and over 70 sales centers across 24 provinces in China.  For more information, please visit www.renhuang.com.

Safe Harbor Statement

This press release contains certain statements that may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based upon management’s beliefs, assumptions and expectations of the Company’s future operations and financial performance, taking into account the information currently available to management. These statements are not statements of historical fact. Forward-looking statements involve risks and uncertainties, some of which are not currently known that may cause actual results, performance or financial condition to be materially different from the expectations of future results, performance or financial condition expressed or implied in any forward-looking statements. These forward-looking statements are based on current plans and expectations and are subject to a number of uncertainties including, but not limited to, the Company’s ability to manage expansion of its operations effectively, and other factors detailed in the Company’s annual report on Form 10-K and other filings with the Securities and Exchange Commission.  The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You are cautioned not to unduly rely on such forward-looking statements when evaluating the information presented herein.

- Financial Tables Follow-

CHINA BOTANIC PHARMACEUTICAL INC. AND SUBSIDIAIRES

CONSOLIDATED BALANCE SHEETS

	As of October 31,
	2010		2009
ASSETS
Current assets:
Cash and cash equivalents	$	27,826,142	$	8,111,514
Trade receivables, net		19,814,438		23,203,410
Due from related parties		28,877		130,199
Inventory, net		2,645,616		3,024,016
Prepayments		-		89,281
Other receivables, net		200,994		102,613
Total current assets		50,516,067		34,661,033
Property and equipment, net		2,069,460		2,352,163
Intangible assets , net		1,953,617
Deposits for properties		18,605,935		16,137,000
Total assets	$	73,145,079	$	53,150,196
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities
Accounts payable	$	333,555	$	369,329
Value added tax payable		1,064,066		1,186,642
Accrued employee benefits		1,645,192		1,136,267
Warrant liabilities		342,770		-
Total liabilities	$	3,385,583	$	2,692,238
Shareholders’ equity
Preferred stock (no par value, 1,000,000 shares authorized; none issued and outstanding as of October 31, 2010 and 2009)		-		-
Common stock ($0.001 par value, 100,000,000 shares, authorized; 37,239,536  issued and outstanding as of October 31, 2010 and 2009, respectively)		37,240		37,240
Additional paid-in capital		7,627,987		7,596,525
Common stock warrants		496,732		496,732
Reserves		3,372,697		3,372,697
Accumulated other comprehensive income		4,768,793		3,367,659
Retained earnings		5 3,456,047		35,587,105
Total shareholders’ equity		69,759,496		50,457,958
Total liabilities and shareholders’ equity	$	73,145,079	$	53,150,196

CHINA BOTANIC PHARMACEUTICALS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

	Three months ended October 31,				Twelve months ended October 31,
	2010		2009		2010		2009
	US$		US$		US$		US$
Sales, net		16,694,929		14,496,490		55,183,941		43,411,562
Cost of goods sold		7,614,773		6,485,718		25,765,835		20,311,410
Gross profit		9,080,156		8,010,772		29,418,106		23,100,152
Operating and administrative expenses:
Sales and distribution		1,276,772		1,114,955		4,966,062		3,649,820
General and administrative		1,405,844		404,772		3,614,809		2,117,114
Research and development		790,961		695,694		3,042,815		2,529,085
Total operating expenses		3,473,577		2,215,421		11,623,686		8,296,019
Income from operations		5,606,579		5,795,351		17,794,420		14,804,133
Other income:
Interest income		25,316		11,520		74,522		42,724
Other income, net						-		-
Income from operations before income tax expenses		5,631,895		5,806,871		17,868,942		14,846,857
Income tax expenses						-		-
Net income		5,631,895		5,806,871		17,868,942		14,846,857
Other comprehensive income:
Cumulative currency translation adjustments		1,099,203		145,913		1,401,134		66,345
Total comprehensive income		6,731,098		5,952,784		19,270,076		14,913,202
				0
Earnings per common stock- Basic		0.15		0.16		0.48		0.41
Earnings per common stock - Diluted		0.14		0.15		0.44		0.41
Weighted average common stock outstanding
Basic		37,239,536		37,239,536		37,239,536		36,088,853
Diluted		40,174,637		38,270,148		40,174,637		36,088,853

CHINA BOTANIC PHARMACEUTICALS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	For the years ended October 31,
	2010			2009
	US$			US$
Cash flows from operating activities:
Net income		17,868,942			14,846,857
Adjustments to reconcile net income to operating activities:
Depreciation		363,567			356,440
Amortization		435,653			-
Warrants issued for service		342,770			-
Option granted to directors		31,462			-
Forgiven rent		367,224			-
Changes in assets and liabilities:
Increase in trade receivables		3,814,889			(2,328,833	)
Decrease in due from related parties		(28,300	)		(275,476	)
Decrease (Increase) in inventory, net		423,480			(394,750	)
Decrease (Increase)  in prepayments		89,397			(55,491	)
Decrease in other receivables, net		(94,232	)		31,180
Increase in accounts payable		(44,546	)		174,979
Increase in value added tax payable		(145,371	)		491,666
Increase in accrued employee benefits		442,040			414,433
(Decrease) increase in other payable		(31,413	)		(193,472	)
Net cash provided by (used in) operating activities		23,835,562			13,067,533
Cash flows from investing activities:
Deposits for land use right and properties		(3,944,749	)		(14,670,000	)
Deposits for patents		(717,926	)		(1,467,000	)
Purchase of property and equipment		(36,473	)		(84,371	)
Net cash used in investing activities		(4,699,148	)		(16,221,371	)
Cash flows from financing activities:
Proceeds from share issues		-			1,500,000
Net cash provided by financing activities		-			1,500,000
Effect of exchange rate changes on cash		578,214			17,659
Net decrease in cash and cash equivalents		19,714,628			(1,636,179	)
Cash and cash equivalents, beginning of year		8,111,514			9,747,693
Cash and cash equivalents, end of year		27,826,142			8,111,514
Supplemental disclosure of cash flow information:
Cash paid during the year for income taxes		-			-
Interest paid during the year		-			-

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