Financial Performance - The group's revenue for the six months ended June 30, 2024, was approximately RMB 8,385,473,000, a decrease of 9.9% compared to RMB 9,302,957,000 in the same period last year[8]. - Gross profit was approximately RMB 4,061,254,000, down 14.6% from RMB 4,757,976,000 year-on-year, with a gross margin of 48.4%, a decline of 2.7 percentage points from 51.1% in the previous year[8]. - The net profit for the period was approximately RMB 214,143,000, a decrease of 65.3% from RMB 616,960,000 in the same period last year, with a net profit margin of 2.6%[60]. - Basic earnings per share were RMB 0.0419, a decline of 63.5% from RMB 0.1149 in the same period last year, reflecting a significant drop in profit attributable to equity holders[61]. - The company reported a total comprehensive income of RMB 213,958,000, down from RMB 624,763,000, a decrease of 65.75%[85]. - Operating profit decreased significantly to RMB 384,582,000 from RMB 814,046,000, representing a decline of 52.77%[85]. - The group recorded other losses of approximately RMB 64,768,000, compared to losses of RMB 14,004,000 in the same period last year, primarily due to a substantial increase in late fees[52]. - The group’s credit impairment losses were approximately RMB 158,768,000, a significant increase from RMB 47,768,000 in the same period last year, with accounts receivable growing by 6.7%[53]. Revenue Breakdown - The revenue contribution from traditional Chinese medicine formula granules was approximately RMB 3,479,735,000, accounting for 41.5% of total revenue[8]. - The revenue from traditional Chinese medicine (TCM) production and operation was RMB 754,277,000, down 14.3% from RMB 880,585,000, accounting for 9.0% of total revenue[42]. - The revenue from TCM decoction pieces increased by 20.8% to RMB 1,576,914,000 from RMB 1,305,191,000, representing 18.8% of total revenue[44]. - The revenue from TCM formula granules decreased by 29.4% to RMB 3,479,735,000 from RMB 4,930,591,000, with a gross profit margin of 59.1%[45]. - The revenue from TCM proprietary medicines was RMB 2,418,349,000, an increase of 18.9% from RMB 2,034,759,000, with a sales cost of RMB 853,221,000[41]. - The revenue for traditional Chinese medicine health sector was approximately RMB 156,198,000, an increase of 2.9% from RMB 151,831,000 in the same period last year, accounting for 1.9% of total revenue[49]. Strategic Initiatives - The company aims to enhance its competitive advantage across the entire industry chain, focusing on sustainable development and quality management of traditional Chinese medicine resources[11]. - The company has completed mid-term adjustments to its "14th Five-Year" strategic plan, focusing on five major business segments: production and operation of medicinal materials, traditional Chinese medicine pieces, formula granules, proprietary Chinese medicines, and health products[9]. - The company launched a brand strategy for "Chinese Medicinal Materials," promoting key products through major media channels to enhance brand value and influence[10]. - The company is actively adapting to the centralized procurement trend and enhancing its competitive advantages through differentiated product strategies[17]. - The company is focusing on the development of key products and has published 15 new guidelines and consensus documents to support sales growth[19]. Compliance and Quality Management - The company has successfully passed compliance checks for several varieties under the new traditional Chinese medicine GAP standards, leading the nation in the number of compliant varieties[11]. - The company has completed the qualification certification for 47 varieties of fresh-cut medicinal materials, enhancing the quality assurance of traditional Chinese medicine[14]. - The company aims to improve compliance management and risk control mechanisms, ensuring no major risk events occurred during the reporting period[28]. - The company has maintained the highest number of national and provincial standard approvals in the industry, reinforcing its market share[18]. Research and Development - The company has developed 5 new excellent varieties and holds 108 patents related to standardized production techniques for traditional Chinese medicine[11]. - Research and development expenses for the period were RMB 267,925,000, compared to RMB 313,614,000 in the previous year, showing a reduction of 14.58%[85]. - The company established a new CNAS laboratory, bringing the total to 7, and collaborated with Guizhou University to publish research in the journal Nature[22]. Market Trends and Regulatory Environment - The National Medical Insurance Administration issued a notice on January 12, 2024, emphasizing the importance of ensuring supply security for selected products in centralized procurement, requiring provinces to monitor supply and rectify issues[31]. - The National Health Commission's action plan for 2024-2027 aims to shift health work focus from "disease-centered" to "health-centered," promoting traditional Chinese medicine (TCM) as a cultural awareness for health improvement[35]. - The National Administration of Traditional Chinese Medicine's notice on June 6, 2024, emphasized the development of rehabilitation services in TCM hospitals to meet the growing demand for TCM rehabilitation services[35]. Financial Position and Liquidity - As of June 30, 2024, the group's current assets amounted to approximately RMB 20,552,746,000, an increase from RMB 19,799,846,000 as of December 31, 2023[62]. - The group's cash and cash equivalents and bank deposits were approximately RMB 3,771,999,000, up from RMB 3,267,276,000 as of December 31, 2023[62]. - The company had approximately RMB 10,035,352,000 in unused bank loan facilities as of June 30, 2024, indicating a strong liquidity position[65]. - The company’s total liabilities decreased to RMB 9,888,531,000, a rise of 5.97% from RMB 9,332,600,000 as of December 31, 2023[87]. - The company’s total equity attributable to owners increased to RMB 21,371,097,000, compared to RMB 21,160,135,000 as of December 31, 2023, reflecting a growth of 1.00%[87]. Human Resources and Corporate Governance - The company received the "2024 Outstanding Human Resource Management Award" from 51job and was recognized as a favorite employer brand among Chinese university students[24]. - The company is committed to building a comprehensive employer brand and enhancing talent management capabilities[38]. - The company maintained compliance with the corporate governance code throughout the reporting period[79].

Financial Performance - The total revenue for the six months ended June 30, 2024, was RMB 8,385,473, a decrease of 9.9% compared to RMB 9,302,957 for the same period in 2023[2]. - The revenue from traditional Chinese medicine production and operation decreased by 14.3% to RMB 754,277 from RMB 880,585[2]. - The revenue from Chinese medicine decoction pieces increased by 20.8% to RMB 1,576,914 from RMB 1,305,191[2]. - The gross profit for the period was RMB 4,061,254, down 14.6% from RMB 4,757,976 in the previous year[3]. - The net profit attributable to equity holders of the company was RMB 210,979, a decrease of 63.5% compared to RMB 578,742 in the same period last year[2]. - Basic earnings per share decreased to RMB 4.19 from RMB 11.49, reflecting a 63.5% decline[4]. - The company reported a decrease in operating profit to RMB 384,582 from RMB 814,046 in the previous year[3]. - The total profit for the period was RMB 214,143,000, after accounting for unallocated corporate expenses of RMB 3,227,000[13]. - The group reported a net profit of approximately RMB 214,143,000 for the six months ended June 30, 2024, a decrease of 65.3% from RMB 616,960,000 in the previous year, with a net profit margin of 2.6% compared to 6.6% last year[79]. Assets and Liabilities - The total assets as of June 30, 2024, were RMB 27,657,890, slightly down from RMB 27,735,748 as of December 31, 2023[5]. - The total liabilities as of June 30, 2024, were RMB 3,507,314, compared to RMB 3,799,130 as of December 31, 2023[6]. - The total assets of the group amounted to RMB 37,546,421,000, with the Yifang segment holding RMB 16,276,214,000 in assets[14]. - The total liabilities were reported at RMB 13,395,845,000, with the Yifang segment's liabilities at RMB 5,369,781,000[14]. - Current assets as of June 30, 2024, were approximately RMB 20,552,746,000, an increase from RMB 19,799,846,000 as of December 31, 2023, with a current ratio of 2.1[81]. - The group’s bank and other loans amounted to approximately RMB 4,009,484,000 as of June 30, 2024, up from RMB 3,034,020,000 as of December 31, 2023[82]. Revenue Breakdown - For the six months ended June 30, 2024, total revenue reached RMB 8,385,473,000, with a significant contribution from the Yifang segment at RMB 2,964,170,000[13]. - The Tianjiang segment reported a revenue of RMB 2,028,528,000, while the Tongjitang segment generated RMB 1,423,593,000[13]. - Revenue from Chinese herbal formula granules was RMB 3,479,735 thousand, down 29.4% from RMB 4,930,591 thousand year-on-year[19]. - The revenue contribution from traditional Chinese medicine formula granules was approximately RMB 3,479,735,000, accounting for 41.5% of total revenue[36]. - The revenue from TCM patent medicines grew by 18.9% to RMB 2,418,349,000, making up 28.8% of total revenue[68]. - The revenue from TCM health products was RMB 156,198,000, an increase of 2.9% compared to RMB 151,831,000[70]. Expenses and Costs - Research and development expenses for the period were RMB 267,925, down from RMB 313,614 in the previous year[3]. - Financial expenses for the six months ended June 30, 2024, were RMB 84,274 thousand, a decrease from RMB 105,438 thousand in the same period of 2023[24]. - The cost of goods sold for the six months ended June 30, 2024, was RMB 4,324,219,000, a decrease from RMB 4,544,981,000 in the same period of 2023, indicating a reduction of approximately 4.8%[25]. - Sales and distribution costs decreased by 13.6% to approximately RMB 2,752,658,000, down from RMB 3,186,920,000 in the previous year[74]. - Administrative expenses for the six months ended June 30, 2024, were approximately RMB 512,150,000, an increase of 10.2% compared to RMB 464,754,000 for the same period last year[75]. Research and Development - Research and development costs for the six months ended June 30, 2024, amounted to RMB 267,925,000, down from RMB 313,614,000 in the same period of 2023, indicating a decrease of approximately 14.6%[28]. - The company has successfully developed 5 new varieties through standardized production technology, with a total of 108 patents formed[40]. - The company completed research on 19 out of 31 new national standards for traditional Chinese medicine formula granules, accounting for 61%[49]. - The company is focusing on the integration of technology and innovation to strengthen its research and development capabilities[48]. Market and Strategy - The company continues to focus on expanding its market presence through various brands and healthcare solutions[11]. - The company aims to enhance its competitive advantage across the entire industry chain by focusing on sustainable development and resource integration[37]. - The company is actively expanding its market share and enhancing supply capabilities, maintaining the highest number of national and provincial standard approvals[44]. - The company will implement a major brand strategy for "Chinese Medicinal Materials," focusing on brand promotion and exploring international market opportunities[61]. Compliance and Governance - The company has implemented a comprehensive compliance management system, ensuring no major risk events occurred during the reporting period[54]. - The company aims to establish a robust compliance culture and risk identification mechanisms to enhance marketing compliance management and regulatory oversight[61]. - The audit committee reviewed the unaudited consolidated financial performance for the six months ending June 30, 2024, with no disagreements on accounting principles or practices[92]. Sustainability and Social Responsibility - The company is actively promoting green and low-carbon transformation, conducting 78 internal training sessions on energy conservation and environmental protection[53]. - The company was recognized as one of the "Top 100 ESG Listed Companies in China," ranking 25th overall and first among pharmaceutical companies[38].

Financial Performance - The company's revenue for the year ended December 31, 2023, was RMB 18.121 billion, an increase of 26.7% compared to the same period in 2022[14]. - Net profit for the same period was RMB 1.396 billion, representing a significant increase of 93.6% year-on-year[14]. - The compound annual growth rate (CAGR) for revenue from 2019 to 2023 was 6.06%[8]. - The gross profit margin for 2023 was 51.18%, reflecting a decrease from previous years[8]. - The total assets of the company as of December 31, 2023, were RMB 37.068 billion[8]. - The total liabilities stood at RMB 13.132 billion, with a debt-to-asset ratio of 35.43%[8]. - The group's revenue for the reporting period was approximately RMB 18,121,861,000, an increase of 26.7% compared to RMB 14,304,242,000 in the same period last year[22]. - The revenue from traditional Chinese medicine (TCM) formula granules was approximately RMB 9,108,382,000, accounting for 50.3% of total revenue, with a year-on-year growth of 18.1%[22]. - The revenue from TCM raw material production and operation was approximately RMB 1,855,534,000, representing 10.2% of total revenue, with a year-on-year increase of 45.8%[22]. - The revenue for Traditional Chinese Medicine (TCM) formula granules reached RMB 9,108,382,000, an increase of 18.1% from RMB 7,710,933,000 in the previous year, accounting for 50.3% of total revenue[63]. - The revenue for Chinese patent medicine reached RMB 3,994,333,000, a growth of 28.0% from RMB 3,121,636,000, contributing 22.0% to total revenue[65]. - The revenue for TCM health products was RMB 212,832,000, a significant increase of 58.6% from RMB 134,202,000, representing 1.2% of total revenue[67]. - The revenue for TCM clinics was RMB 139,412,000, a growth of 6.2% from RMB 131,324,000, accounting for 0.8% of total revenue[68]. - Other income increased by 26.1% to RMB 290,015,000, primarily due to government subsidies rising by 42.5% to RMB 216,911,000[70]. - For the 12 months ending December 31, 2023, the group's profit was approximately RMB 1,396,070,000, an increase of 93.6% compared to RMB 720,965,000 in the previous year[77]. - The net profit margin improved to 7.7%, up from 5.0% in the same period last year, reflecting a 2.7 percentage point increase[77]. - Basic earnings per share rose to RMB 25.52, a 68.1% increase from RMB 15.18 in the previous year[78]. Strategic Development - The company is focusing on high-quality development goals and implementing the "14th Five-Year" strategic plan[14]. - The company aims to build a sustainable and collaborative health industry chain in traditional Chinese medicine[14]. - The group aims to focus on the development of modern TCM and strategic emerging industries, enhancing the innovation chain, industry chain, and supply chain[17]. - The company aims to enhance its core competitiveness in areas such as collaboration, innovation, talent, branding, and marketing to drive high-quality development in the traditional Chinese medicine sector[52]. - The company plans to leverage opportunities in the traditional Chinese medicine industry while focusing on operational efficiency and management improvements[52]. - The company will continue to focus on the full industry chain development of traditional Chinese medicine, aiming for modernization and internationalization[52]. Research and Development - Research and development expenses reached RMB 686 million, a 12.06% increase year-on-year, accounting for 3.78% of operating revenue[34]. - The group has established multiple high-level research platforms, including 2 national enterprise technology centers and 15 provincial technology centers[34]. - The company has developed new varieties of traditional Chinese medicine, with "Guitong Jianye No. 1" and "Guitong Jianye No. 2" for Epimedium, and "Huacang No. 1" and "Huacang No. 2" for Atractylodes, receiving respective certification[35]. - The company has completed research on 36 out of 65 national drug standards for traditional Chinese medicine formula granules, accounting for 55.38%[36]. - A total of 248 patents were applied for during the reporting period, with 185 granted, including 100 invention patents and 82 utility model patents[36]. - The company has established 12 technical demonstration bases for various traditional Chinese medicine varieties, with 9 completed and passed inspection[35]. - The company has launched a digital quality traceability management platform for traditional Chinese medicine, achieving data visualization and product traceability[38]. Sustainability and ESG - The group has been recognized as a pioneer in ESG governance, being included in the "Top 100 ESG Listed Companies in China" and receiving the "ESG Governance Pioneer Award" in 2023[24]. - The group emphasizes sustainable development, enhancing quality management, and creating a healthy workplace environment for employees[24]. - The group plans to continue promoting energy management and green production to reduce environmental impact[24]. - The group has established a comprehensive environmental management and monitoring system, conducting quarterly wastewater monitoring and semi-annual boiler emissions monitoring[166]. - The group promotes a green production philosophy aimed at energy saving, consumption reduction, and pollution reduction[166]. - The group has invested in environmental upgrades, including converting fuel boilers to gas boilers and enhancing wastewater treatment facilities[166]. Corporate Governance - The board consists of both executive and non-executive directors, with recent changes due to retirement and reappointments[96]. - The company has adopted the Corporate Governance Code as its governance practices and is committed to continuous improvement in governance standards[133]. - The board has established several committees, including the Audit Committee, Remuneration and Assessment Committee, Nomination Committee, and Strategic Committee, to enhance corporate governance[143]. - The company has implemented a system for directors to seek independent professional advice at the company's expense when necessary[136]. - The board has a clear separation of roles between the chairman and the CEO to ensure balanced power distribution[136]. - The company has purchased appropriate liability insurance for directors and senior management, with annual reviews of coverage[136]. - The company emphasizes compliance and governance, with experienced legal professionals in key management positions[199]. Market Position and Expansion - The company has made substantial progress in the construction of traditional Chinese medicine material bases and the development of traditional Chinese medicine pieces[14]. - The market layout for proprietary Chinese medicine has been upgraded and expanded[14]. - The company has established 172 TCM raw material production bases across 22 provinces, covering 101 TCM varieties, with a total area exceeding 460,000 mu[25]. - The company is positioned to benefit from the relaxed market access measures for traditional Chinese medicine in the Guangdong-Macao cooperation zone[49]. - The company is actively pursuing market expansion and innovation in product development, particularly in the field of traditional Chinese medicine[198]. Financial Management - The company optimized its borrowing portfolio to accelerate financial circulation along the industrial chain, effectively reducing financing costs[42]. - The company implemented a standard manufacturing cost system for three core business areas: traditional Chinese medicine granules, Chinese patent medicines, and Chinese herbal pieces[42]. - The company has extended the deadline for fulfilling conditions related to its privatization proposal, indicating ongoing strategic adjustments[85]. - The company has a strong liquidity position, with approximately RMB 6,504,027,000 in unused bank loan facilities as of December 31, 2023[81]. - The company does not recommend the payment of a final dividend for the year ending December 31, 2023, compared to a dividend of RMB 0.0455 per share (equivalent to HKD 0.0518) for 2022[86][90]. Community Engagement - The company made charitable donations totaling approximately RMB 14,455,000 during the reporting period[101]. - The company is enhancing community health service standards to improve the service capabilities of traditional Chinese medicine facilities[46]. Shareholder Communication - The company is committed to regular and proactive communication with shareholders and investors, ensuring timely disclosure of significant developments[181]. - The board reviewed the effectiveness of the shareholder communication policy and deemed it sufficient for the year ending December 31, 2023[181].

Financial Performance - The total revenue for the year ended December 31, 2023, was RMB 18.12 billion, an increase of 26.7% compared to RMB 14.30 billion in 2022[2]. - The net profit for the same period was RMB 1.40 billion, representing a significant increase of 93.6% from RMB 720.97 million in 2022[2]. - The gross profit margin improved to 51.1%, up from 50.3% in the previous year[2]. - The basic earnings per share increased to RMB 25.52, up 68.1% from RMB 15.18 in 2022[2]. - The total comprehensive income for 2023 was RMB 1,393,071, compared to RMB 730,535 in 2022, showing a robust growth in overall financial performance[46]. - The group’s profit for the 12 months ending December 31, 2023, was approximately RMB 1,396,070,000, an increase of 93.6% compared to RMB 720,965,000 in the same period last year[97]. - The net profit margin improved to 7.7%, up 2.7 percentage points from 5.0% in the previous year[97]. - The total revenue for the year 2023 reached RMB 18,121,861, an increase of 26.5% compared to RMB 14,304,242 in 2022[45]. Revenue Breakdown - The revenue breakdown shows that the Chinese medicine formula granules accounted for 50.3% of total revenue, with a year-on-year growth of 18.1%, while traditional Chinese medicine pieces grew by 45.4%[7]. - The revenue from traditional Chinese medicine pieces reached RMB 2.81 billion, reflecting a growth of 45.4% compared to the previous year[2]. - The production and operation of traditional Chinese medicinal materials generated revenue of RMB 1.86 billion, a 45.8% increase year-on-year[2]. - The revenue from TCM formula granules was RMB 9,108,382,000, an 18.1% increase from RMB 7,710,933,000, representing 50.3% of total revenue[39]. - The revenue from TCM patent medicines was RMB 3,994,333,000, a growth of 28.0% from RMB 3,121,636,000, contributing 22.0% to total revenue[41]. - The revenue from TCM health products reached RMB 212,832,000, a significant increase of 58.6% from RMB 134,202,000, accounting for 1.2% of total revenue[43]. Strategic Focus and Development - The company aims to focus on modern traditional Chinese medicine and strategic emerging industries to enhance its innovation chain and supply chain[5]. - The company is committed to achieving the goals set in the 14th Five-Year Plan, focusing on high-quality development in the traditional Chinese medicine sector[5]. - The company plans to continue promoting sustainable development and improving corporate governance to strengthen its competitive edge[4]. - The company is focusing on enhancing its quality control systems and optimizing inventory structures to improve production efficiency in the Chinese medicine formula granules sector[11]. - The company is committed to accelerating the construction of a comprehensive traditional Chinese medicine health product industry system and optimizing its product line[31]. Research and Development - The company invested RMB 686 million in R&D during the reporting period, a 12.06% increase year-on-year, representing 3.78% of total revenue[17]. - The company is focused on research and development of traditional Chinese medicine resources, processing standards, and innovative drugs to strengthen its technological capabilities[32]. - The company has established 12 technical demonstration bases for TCM materials, with 9 completed and passed evaluation[17]. - The company applied for 248 patents during the reporting period, with 185 granted, including 100 invention patents and 82 utility model patents, supporting high-quality development in the traditional Chinese medicine industry[19]. Market and Sales Growth - The company developed over 1,800 medical terminal customers for its traditional Chinese medicine pieces, leading to significant sales growth and achieving a historical high in performance[10]. - The company’s traditional Chinese medicine health products revenue grew by 58.6% year-on-year, contributing to the overall revenue increase[7]. - Sales of 10 TCM products exceeded RMB 100 million, all achieving double-digit growth, with several products seeing sales growth over 50% year-on-year[12]. - The company has established 45 intelligent distribution centers across 13 provinces, enhancing its sales capabilities for traditional Chinese medicine pieces[10]. Corporate Governance and Compliance - The company has adhered to the corporate governance code throughout the year ending December 31, 2023[109]. - The independent auditor has reviewed the preliminary performance announcement, confirming consistency with the group's consolidated financial statements for the year ending December 31, 2023[111]. - The audit committee consists of four independent non-executive directors, with Mr. Xie Rong serving as the chairman, overseeing financial reporting and risk management[112]. Sustainability and ESG - The company has been recognized in the top 100 ESG listed companies in China, highlighting its commitment to sustainable development[8]. - The company organized safety production training activities with over 30,000 participants, achieving zero major safety incidents throughout the year[23]. - Nearly 300 quality improvement and efficiency enhancement projects were initiated during the reporting period, generating economic benefits exceeding 100 million yuan[25]. Future Outlook - The company plans to enhance its strategic layout and expand its traditional Chinese medicine services, contributing to future growth[44]. - The company aims to promote the internationalization of traditional Chinese medicine standards and enhance overseas certification efforts[32]. - The company is expanding its TCM health service network in major cities, including projects in Shenzhen and Shanghai[16].

Core Viewpoint - China Traditional Chinese Medicine (CTCM) is set to be privatized by China National Pharmaceutical Group (Sinopharm) at a cash price of HKD 4.6 per share, representing a 34.11% premium over the latest closing price, with a total consideration of approximately HKD 154.5 billion [1][2]. Group 1: Privatization Proposal - Sinopharm's proposal to privatize CTCM has been officially announced, with the board agreeing to present the proposal to shareholders [1]. - The privatization plan involves the cancellation of shares held by controlling shareholders at a specified price, with the remaining shares being canceled at HKD 4.6 per share [2]. - Following the cancellation, CTCM will issue new shares to restore its capital structure, resulting in full ownership by Sinopharm [2]. Group 2: Historical Context - Rumors of CTCM's privatization have circulated three times since 2021, each time causing a temporary spike in the company's stock price [1]. - Previous attempts to privatize CTCM included a proposal in January 2021 at a price of at least HKD 5.10 per share and another in December 2022, which was denied by the company [1][2]. - The latest rumors in February 2023 led to a significant increase in CTCM's stock price, indicating strong market interest [1]. Group 3: Company Overview - CTCM is a wholly-owned subsidiary of Sinopharm and serves as a core investment platform for the traditional Chinese medicine sector [2]. - The company has a comprehensive industrial chain, including research, manufacturing, and sales, with over 800 finished product specifications and a workforce of approximately 18,000 employees [2][3]. - CTCM emphasizes the legal and rational development of medicinal resources, particularly in the areas of endangered medicinal materials and imports/exports [3]. Group 4: Rationale for Privatization - CTCM cites limited functionality as a public financing platform and low stock trading prices as reasons for the privatization, which would streamline governance and optimize organizational structure [3]. - For Sinopharm, privatizing CTCM enhances financing flexibility and reduces exposure to public market volatility [3].

Financial Performance - The company's revenue for the six months ended June 30, 2023, was approximately RMB 9,302,957,000, an increase of 57.4% compared to RMB 5,911,638,000 in the same period last year[8]. - The gross profit was approximately RMB 4,757,976,000, up 61.2% from RMB 2,951,871,000 in the previous year, with a gross margin of 51.1%, an increase of 1.2 percentage points year-on-year[8]. - The net profit attributable to equity holders rose by 39.9% to approximately RMB 578,742,000, up from RMB 413,588,000 for the six months ended June 30, 2022[69]. - Basic earnings per share for the six months ended June 30, 2023, increased by 40.0% to RMB 0.1149, compared to RMB 0.0821 for the same period last year[69]. - Total operating profit for the period was RMB 616,960,000, a 46.4% increase from RMB 421,535,000, with a net profit margin of 6.6%, down 0.5 percentage points from the previous year[68]. Revenue Breakdown - The revenue from traditional Chinese medicine formula granules was approximately RMB 4,930,591,000, representing a year-on-year growth of 78.5% and accounting for 53.0% of total revenue[8]. - The revenue from traditional Chinese medicine health products increased by 95.0% year-on-year, contributing approximately RMB 94,243,000 to total revenue[8]. - The revenue from traditional Chinese medicine pieces was approximately RMB 1,305,191,000, reflecting a year-on-year increase of 55.1%[8]. - The revenue from traditional Chinese medicine (TCM) production and operation reached RMB 880,585,000, a growth of 104.2% year-on-year, contributing 9.5% to total revenue[44]. - Revenue from the Chinese mainland market was RMB 9,256,673,000, a 57.5% increase compared to RMB 5,864,389,000 in the previous year[119]. Research and Development - The company’s research and development capabilities in traditional Chinese medicine have significantly improved, ranking third in the "2023 China Traditional Chinese Medicine R&D Strength Ranking"[11]. - The group completed research on 48 national drug standards for traditional Chinese medicine formula granules, with 27 of them (56.25%) developed by the group[22]. - The group applied for 95 patents during the reporting period, including 3 PCT patents and 56 invention patents, with 48 patents granted[22]. - Research and development expenses were RMB 313,614,000, a slight decrease of 1.2% from RMB 317,534,000, focusing on quality standards and new drug development[64]. Operational Developments - The group completed a total of 523 product registrations for TCM formula granules, maintaining the industry’s leading position[16]. - The intelligent digital production workshop for TCM formula granules has transitioned from traditional to automated production, improving efficiency and competitiveness[16]. - The group is actively participating in the first national inter-provincial alliance procurement for TCM decoction pieces, showcasing its advantages in supply capabilities and quality control[13]. - The group has accelerated the development of medical terminals, opening over 1,000 new secondary and higher medical institutions during the reporting period[17]. Market and Industry Trends - The demand for traditional Chinese medicine is steadily increasing, with the industry showing positive development momentum amid complex market conditions[39]. - The State Council's implementation plan for major projects in the revitalization and development of traditional Chinese medicine aims to establish a high-quality service system by 2025, enhancing the quality and international influence of traditional Chinese medicine[36]. - The "14th Five-Year Plan" for the promotion of traditional Chinese medicine culture aims to increase public health literacy in traditional Chinese medicine to approximately 25% by 2025[38]. Financial Position - Current assets as of June 30, 2023, amounted to approximately RMB 20,956,635,000, an increase from RMB 17,966,676,000 as of December 31, 2022[70]. - The total liabilities increased to RMB 15,918,085,000 from RMB 13,673,339,000, marking a rise of about 16.4%[96]. - The company's inventory decreased to RMB 5,625,330,000 from RMB 6,039,880,000, a decline of approximately 6.9%[95]. - The company's interest-bearing bank and other borrowings rose to RMB 2,823,272,000 from RMB 1,255,268,000, an increase of about 125.0%[95]. Corporate Governance and Compliance - The company maintained compliance with the corporate governance code throughout the reporting period[87]. - The company established a compliance management system, enhancing legal risk prevention and ensuring sustainable development[33]. - The company did not recommend the distribution of an interim dividend for the six months ended June 30, 2023[80]. Shareholder Information - Major shareholder, Guoyao Hong Kong, holds approximately 32.46% of the issued shares, with 1,634,705,642 shares[83]. - Ping An Life Insurance Company holds approximately 12.00% of the issued shares, with 604,296,222 shares[84].

Financial Performance - The total revenue for the six months ended June 30, 2023, was RMB 9,302,957 thousand, representing a 57.4% increase compared to RMB 5,911,638 thousand for the same period in 2022[2]. - The revenue from traditional Chinese medicine granules reached RMB 4,930,591 thousand, a significant increase of 78.5% from RMB 2,761,603 thousand in the previous year[2]. - Gross profit for the period was RMB 4,757,976 thousand, reflecting a 61.2% increase from RMB 2,951,871 thousand in the prior year[3]. - The net profit attributable to equity holders of the company was RMB 578,742 thousand, up 39.9% from RMB 413,588 thousand in the same period last year[4]. - Basic earnings per share increased to RMB 11.49, a rise of 40.0% compared to RMB 8.21 in the previous year[4]. - The company reported a total comprehensive income of RMB 624,763 thousand for the period, compared to RMB 422,789 thousand in the same period of 2022[4]. - The total profit for the period was RMB 616,960 thousand, after accounting for unallocated corporate expenses of RMB 22,204 thousand[13]. - The group's profit before tax for the six months ended June 30, 2023, was RMB 578,742,000, compared to RMB 413,588,000 for the same period in 2022, representing an increase of approximately 39.9%[27]. - The cost of goods sold for the six months ended June 30, 2023, was RMB 4,544,981,000, up from RMB 2,959,767,000 in the same period of 2022, indicating a significant increase of approximately 53.5%[23]. - Total tax expense for the period was RMB 89,852,000, compared to RMB 48,231,000 in the previous year, reflecting an increase of approximately 86.2%[25]. Assets and Liabilities - Non-current assets as of June 30, 2023, amounted to RMB 17,458,848 thousand, compared to RMB 15,353,000 thousand at the end of 2022[5]. - Current liabilities totaled RMB 10,876,481 thousand, an increase from RMB 10,102,784 thousand at the end of the previous year[5]. - The company's total equity as of June 30, 2023, was RMB 23,340,398 thousand, compared to RMB 22,946,602 thousand at the end of 2022[6]. - Total assets as of June 30, 2023, amounted to RMB 38,415,483 thousand, with the "Yifang" segment holding assets of RMB 18,059,355 thousand[13]. - Total liabilities were reported at RMB 15,075,085 thousand, with the "Yifang" segment's liabilities at RMB 7,256,286 thousand[13]. - As of June 30, 2023, total inventory was RMB 5,625,330,000, a decrease from RMB 6,039,880,000 as of December 31, 2022, representing a reduction of approximately 6.9%[30]. - Accounts receivable as of June 30, 2023, amounted to RMB 10,290,844,000, compared to RMB 8,141,891,000 as of December 31, 2022, indicating an increase of approximately 26.4%[31]. - The company's accounts payable as of June 30, 2023, was RMB 5,780,359,000, compared to RMB 5,232,179,000 as of December 31, 2022, reflecting an increase of approximately 10.5%[33]. - The group's net asset value increased to approximately RMB 10,080,154,000 as of June 30, 2023, compared to RMB 7,863,892,000 as of December 31, 2022[83]. Research and Development - The company continues to invest in research and development, with R&D expenses amounting to RMB 313,614 thousand for the period[3]. - The group incurred research and development costs of RMB 313,614,000 for the six months ended June 30, 2023, compared to RMB 317,534,000 in the same period of 2022[23]. - The group applied for 95 patents during the reporting period, including 3 PCT patents and 56 invention patents, with 48 patents granted[49]. - The company is committed to advancing scientific innovation and addressing key research challenges in the development of traditional Chinese medicine[61]. Market and Product Development - The company continues to focus on expanding its product offerings in traditional Chinese medicine and health products across its various brands[11]. - The company has completed the listing of 523 varieties of TCM granules, maintaining the industry’s leading position[42]. - The company developed over 1,000 new medical institutions for TCM products during the reporting period, enhancing terminal sales[43]. - The revenue from TCM health products was approximately RMB 94,243,000, reflecting a year-on-year growth of 95.0%[37]. - The group plans to enhance its core competitiveness by implementing a collaborative development strategy and leveraging its full industry chain advantages in the second half of 2023[60]. - The company aims to strengthen its digital transformation initiatives, including the implementation of the "Digital Traditional Chinese Medicine" project and the establishment of a digital management system[61]. - The group will continue to expand its production and operation scale of Chinese medicinal materials and enhance internal supply chain coordination[61]. Compliance and Governance - The company applied new and revised Hong Kong Financial Reporting Standards during the reporting period, which did not have a significant impact on financial performance[10]. - The group established a chief compliance officer role to strengthen compliance management and legal risk prevention[55]. - The group has optimized the traditional Chinese medicine quality traceability management platform and obtained software copyright registration[52]. Corporate Actions - The group did not recommend an interim dividend for the six months ended June 30, 2023, while the proposed final dividend for 2022 was HKD 0.0518 per share, totaling approximately RMB 235,995,000[26]. - 蕢凯频先生辞任非执行董事，自2023年8月29日起生效[95]. - 董事会由十一名董事组成，包括三名执行董事和七名非执行董事[96].

Financial Performance - The company's revenue for 2022 was RMB 14,304,242 thousand, reflecting a compound annual growth rate (CAGR) of 6.17% from 2018 to 2022[4] - Gross profit for 2022 was RMB 7,198,452 thousand, with a gross margin of 50.32%[4] - The operating profit for 2022 decreased to RMB 1,064,283 thousand, representing a decline of 16.18% compared to the previous year[4] - Profit attributable to equity holders for 2022 was RMB 764,266 thousand, down 14.63% year-on-year[4] - The company's net profit margin for 2022 was 5.04%, a decline from previous years[4] - In 2022, the company's revenue was RMB 14.304 billion, a decrease of 24.9% compared to RMB 19.053 billion in 2021[7] - The company's revenue in the second half of 2022 increased by 42.0% compared to the first half, indicating a significant reduction in the downward trend[7] - The company reported a net profit of approximately RMB 720,752,000, a significant decline of 66.1% from RMB 2,123,424,000 in the previous year, with a net profit margin of 5.0% compared to 11.1%[61] - Basic earnings per share decreased by 60.4% to RMB 0.1518 from RMB 0.3838, attributed to a 60.5% drop in profit attributable to equity holders[61] Assets and Liabilities - Total assets as of 2022 amounted to RMB 35,619,941 thousand, showing a steady increase over the five-year period[4] - The company's total liabilities for 2022 were RMB 12,673,339 thousand, indicating a slight decrease from previous years[4] - Current assets totaled approximately RMB 17,966,676,000, a slight decrease from RMB 18,203,046,000[63] - The company's current liabilities increased to approximately RMB 10,102,784,000 from RMB 8,764,528,000, primarily due to the reclassification of medium-term notes[63] - The total equity attributable to owners of the parent company was RMB 20,166,720 thousand in 2022, an increase of 2.3% from RMB 19,718,669 thousand in 2021[173] Cash Flow and Investments - Cash and cash equivalents at the end of 2022 were RMB 3,065,054 thousand, reflecting a decrease from RMB 2,894,757 thousand in 2021[4] - The company’s cash flow from operating activities for 2022 was RMB 1,092,362,000, an increase of 37.2% compared to RMB 796,029,000 in 2021[175] - The company reported a net cash flow from investing activities of RMB (374,153,000) in 2022, an improvement from RMB (536,936,000) in 2021[176] - The company raised RMB 3,000,000,000 from the issuance of unsecured notes in 2022, compared to RMB 1,000,000,000 in 2021[176] Research and Development - The company invested approximately RMB 612 million in research and development, accounting for 4.3% of the revenue during the reporting period, exceeding the industry average[26] - The R&D team consists of 1,309 members, including 3 experts receiving special government allowances and 1 national-level technology innovation leader[27] - The group completed research on 64 national drug standards for traditional Chinese medicine formula granules during the reporting period, totaling 424 standards completed cumulatively, ranking first in the country[27] - The company is focusing on enhancing its technological innovation capabilities, particularly in the areas of TCM raw material resources and national drug standards for TCM formula granules[15] Market Strategy and Expansion - The company plans to focus on market expansion and new product development in the upcoming fiscal year[5] - The company is exploring potential mergers and acquisitions to enhance its market position and product offerings[5] - The company aims to leverage its advantages in the entire traditional Chinese medicine industry chain to enhance its market position and drive recovery in 2023[8] - The company is committed to sustainable development and improving healthcare accessibility for the public, actively participating in pandemic response efforts[9] Corporate Governance - The company has completed the main tasks of the three-year action plan for state-owned enterprise reform, enhancing corporate governance and operational efficiency[16] - The board consists of 12 members, including 3 executive directors, 5 non-executive directors, and 4 independent non-executive directors[109] - The independent non-executive directors have confirmed their independence according to the listing rules, ensuring compliance with governance standards[109] - The board is committed to continuously reviewing and improving corporate governance practices to safeguard shareholder interests[108] Social Responsibility and ESG - The group has been recognized with multiple ESG awards, including being listed in the "Top 20 ESG Pharmaceutical Companies" and receiving the "Public Welfare Pioneer" award[30] - The group is committed to social responsibility by integrating TCM material base construction with rural revitalization strategies[33] - The group emphasizes environmental management and has implemented monitoring systems for emissions, including quarterly wastewater monitoring and semi-annual boiler emissions monitoring[129] Compliance and Risk Management - The company is enhancing its compliance governance and has established a compliance responsibility list for key positions to strengthen its operational compliance framework[35] - The company has implemented a mechanism to ensure independent views and opinions from directors are communicated to the board[109] - The board has adopted a risk management and internal control system, which is reviewed at least annually to ensure adequate resources and training for financial reporting[138] Shareholder Information - The board proposed a final dividend of RMB 0.0455 per share for the year ended December 31, 2022, down from RMB 0.0598 per share in 2021[68] - The total amount of dividends distributed for the year ended December 31, 2022, was RMB 0.0455 per share, compared to RMB 0.1152 per share in 2021[71] - The company has adopted a dividend policy aimed at providing reasonable and sustainable returns to shareholders while maintaining financial stability[72] Supply Chain and Procurement - The company has a close relationship with Ping An Group, which holds 12% of its issued share capital[87] - The total procurement agreement with China National Pharmaceutical Group allows for stable and quality raw material procurement[88] - The new procurement agreement sets annual limits of RMB 300,000,000, RMB 450,000,000, and RMB 675,000,000 for the years 2023, 2024, and 2025 respectively[90] Leadership and Management - The company appointed Mr. Chen Yinglong as Chairman of the Board on May 12, 2022, and he has extensive experience in management and pharmaceutical industries[147] - The company has a strong leadership team with members holding various professional qualifications, including senior engineer and chief Chinese medicine practitioner[150] - The management team emphasizes the importance of compliance and quality control in its operations to maintain industry standards[151]

Financial Performance - The total revenue for the year ended December 31, 2022, was RMB 14,304,242,000, a decrease of 24.9% compared to RMB 19,052,802,000 in 2021[2]. - Gross profit for the year was RMB 7,198,452,000, down 39.1% from RMB 11,829,163,000 in the previous year[2]. - The net profit for the year was RMB 720,752,000, a decline of 66.1% compared to RMB 2,123,424,000 in 2021[2]. - Basic earnings per share decreased by 60.4% to RMB 15.18 from RMB 38.38 in the previous year[2]. - The company reported a segment profit of RMB 757,383,000 for the year 2022, down from RMB 2,187,848,000 in 2021, reflecting a decline of approximately 65.3%[69]. - The total comprehensive income for the year was RMB 730,322,000, down 65.6% from RMB 2,126,746,000 in 2021[56]. - The operating profit for the year was RMB 720,752,000, down from RMB 2,123,424,000 in the previous year, indicating a decrease of about 66.1%[70]. - The group’s net profit for the 12 months ended December 31, 2022, was approximately RMB 720,752,000, a decline of 66.1% from RMB 2,123,424,000, with a net profit margin of 5.0%, down from 11.1%[99]. Revenue Breakdown - The revenue from traditional Chinese medicine (TCM) raw materials production and operation increased by 69.0% to RMB 1,272,761,000, while the revenue from TCM decoction pieces rose by 31.8% to RMB 1,933,386,000[2]. - The revenue from TCM formula granules decreased by 42.5% to RMB 7,710,933,000, and the revenue from proprietary Chinese medicines fell by 2.3% to RMB 3,121,636,000[2]. - Revenue from the Chinese herbal medicine production and operation business was approximately RMB 1,272,761,000, accounting for 8.9% of total revenue, with a year-on-year increase of 69.0%[9]. - Revenue from the Chinese herbal pieces business was approximately RMB 1,933,386,000, accounting for 13.5% of total revenue, with a year-on-year increase of 31.8%[9]. - Revenue from the Chinese herbal formula granules business was approximately RMB 7,710,933,000, accounting for 53.9% of total revenue, with a year-on-year decrease of 42.5%[9]. - Revenue from the Chinese patent medicine business was approximately RMB 3,121,636,000, accounting for 21.9% of total revenue, with a year-on-year decrease of 2.3%[9]. - Revenue from the Chinese herbal health products business was approximately RMB 134,202,000, accounting for 0.9% of total revenue, with a year-on-year increase of 43.5%[9]. - Revenue from the National Medicine Hall business was approximately RMB 131,324,000, accounting for 0.9% of total revenue, with a year-on-year decrease of 9.2%[9]. Operational Insights - The company aims for a recovery in operational performance in 2023, driven by the expansion of TCM medical demand and the ongoing transition of new and old standards for TCM formula granules[4]. - The company experienced a 27.5% year-on-year decline in revenue in the first half of 2022 due to policy changes and the pandemic[10]. - In the second half of 2022, the company's sales performance steadily recovered, with a 42.0% increase in revenue compared to the first half of the year[10]. - The company aims to leverage its advantages in the entire Chinese medicine health industry chain to enhance innovation and management levels, solidifying its leading position in the industry[8]. - The company is focused on enhancing its core competitiveness through improved governance structures and a more flexible income distribution mechanism[12]. - The company aims to deepen market expansion by promoting its unique service models and enhancing customer engagement in traditional Chinese medicine services[15]. Research and Development - The group invested approximately RMB 612 million in research and development, accounting for 4.3% of the operating revenue, exceeding the industry average[22]. - The group completed research on 64 national drug standards for traditional Chinese medicine formula granules, with a total of 424 standards completed, ranking first in the country[24]. - The group established a new academician workstation and several technology centers, enhancing its research capabilities and collaboration with key subsidiaries[23]. - The group’s research on traditional Chinese medicine resources progressed, with international standard research for Epimedium approved domestically[25]. - The group’s collaborative research projects received multiple awards, including the first prize for technological progress in Guangdong Province[26]. Strategic Initiatives - The company is committed to sustainable development and enhancing the accessibility of healthcare for the public, while actively participating in national pandemic response efforts[6]. - The company has established strategic alliances with local governments to promote the development of traditional Chinese medicine planting bases[30]. - The company is committed to adapting to new market changes and regulatory environments to ensure sustainable growth and operational efficiency[12]. - The company has implemented the "14th Five-Year Plan" strategy, focusing on six major business sectors to enhance strategic support and management collaboration[28]. - The company is enhancing its production quality management system for traditional Chinese medicine materials, ensuring traceability and quality control throughout the entire production process[34]. Market Challenges - The decline in traditional Chinese medicine formula granules revenue is attributed to insufficient product standards and reduced terminal demand due to prior stockpiling by medical institutions[50]. - The group faces challenges due to increased standards for TCM formula granules, which raise costs and complicate compliance across different provincial standards[38]. Governance and Compliance - The company has received multiple awards for its human resources management, including the "2022 Model of Talent Management Culture in China" and "2022 Benchmark Enterprise Award for Recruitment Operations"[29]. - The company has established a modern ESG management framework, achieving recognition as one of the "Top 20 ESG Pharmaceutical Listed Companies" and receiving the "Public Welfare Pioneer" award in 2022[27]. - The company has been recognized for its governance improvements and has made adjustments to its board of directors to enhance decision-making capabilities[27]. - The audit committee consists of four independent non-executive directors, ensuring oversight of financial reporting and risk management[115]. - The company has adhered to the corporate governance code throughout the year ended December 31, 2022[112].

Financial Performance - The group's revenue for the six months ended June 30, 2022, was approximately RMB 5,911,638,000, a decrease of 27.5% compared to RMB 8,149,351,000 in the same period last year[7]. - Gross profit was approximately RMB 2,951,871,000, down 41.0% from RMB 5,002,764,000 year-on-year, with a gross margin of 49.9%, a decline of 11.5 percentage points from 61.4% in the previous year[7]. - The company's net profit for the six months ended June 30, 2022, was approximately RMB 421,535,000, a decline of 58.1% from RMB 1,006,679,000 in the same period last year, with a net profit margin of 7.1%[64]. - Basic earnings per share for the six months ended June 30, 2022, were RMB 0.0821, down 55.5% from RMB 0.1846 in the previous year, reflecting a significant decrease in profit attributable to equity holders[65]. - The company reported a total sales cost of RMB 2,959,767,000, which is a decrease of 5.9% from RMB 3,146,587,000 in the previous year[37]. - The group reported a total of RMB 5,757,550,000 in accounts payable and other payables as of June 30, 2022, down from RMB 6,236,167,000 at the end of 2021, a decrease of 7.7%[138]. Revenue Breakdown - The revenue contribution from Chinese medicine formula granules was approximately RMB 2,761,603,000, accounting for 46.7% of total revenue, while the revenue from traditional Chinese medicine pieces was approximately RMB 841,372,000, accounting for 14.2%[7]. - The revenue from proprietary Chinese medicines was approximately RMB 1,765,649,000, accounting for 29.9% of total revenue[7]. - The revenue from traditional Chinese medicine (TCM) granules saw a significant decline of 49.1%, dropping to RMB 2,761,603,000 from RMB 5,424,327,000[37]. - The revenue from TCM production and operation increased by 41.9%, reaching RMB 431,175,000 compared to RMB 303,954,000 in the previous year[37]. - The revenue from TCM decoction pieces rose by 22.1%, amounting to RMB 841,372,000, up from RMB 688,908,000[37]. - The revenue for traditional Chinese medicine materials reached RMB 431,175,000, a 41.9% increase from RMB 303,954,000 in the same period last year, contributing 7.3% to total revenue[38]. Cost and Expenses - Sales and distribution expenses for the six months ended June 30, 2022, were approximately RMB 1,717,006,000, a decrease of 43.6% from RMB 3,043,328,000 in the previous year, due to reduced marketing activities and travel expenses[57]. - Administrative expenses increased by 5.8% to approximately RMB 401,610,000 for the six months ended June 30, 2022, compared to RMB 379,704,000 in the same period last year, driven by increased management costs related to fixed asset investments[59]. - Research and development expenses rose by 7.7% to approximately RMB 317,534,000 for the six months ended June 30, 2022, compared to RMB 294,703,000 in the previous year, focusing on quality standards and new drug development[60]. Strategic Initiatives - The group aims to enhance risk prevention capabilities and improve corporate governance efficiency as part of its strategic planning[8]. - The group is focusing on sustainable business development and expanding its traditional Chinese medicine resource layout[9]. - The group plans to enhance the digital management capabilities of traditional Chinese medicine, focusing on a comprehensive digital empowerment strategy[52]. - The group aims to accelerate the modernization and standardization of traditional Chinese medicine, establishing a collaborative and efficient industry chain[52]. - The group will continue to explore new product development and business models in the health sector, integrating research, production, and market resources[52]. Research and Development - The group established a high-level research platform, with Jiangyin Tianjiang Pharmaceutical recognized as a "National Enterprise Technology Center" to enhance innovation capabilities[19]. - The group engaged in nine collaborative research projects with educational and research institutions to improve research and development efficiency[19]. - The company completed the research of 63 national standards and 73 provincial standards for traditional Chinese medicine formula granules during the reporting period, totaling 423 national standards and 376 provincial standards completed[21]. - The company received several awards for its research projects, including a first-class award for establishing the national standard system for traditional Chinese medicine formula granules[23]. Assets and Liabilities - As of June 30, 2022, the group's current assets amounted to approximately RMB 19,954,907,000, an increase from RMB 18,203,046,000 as of December 31, 2021[66]. - Current liabilities increased by approximately 43.2% to RMB 12,553,595,000 from RMB 8,764,528,000 as of December 31, 2021, primarily due to new short-term borrowings and the reclassification of certain liabilities[66]. - The debt ratio increased from 25.2% as of December 31, 2021, to 35.7% as of June 30, 2022, due to an increase in bank loans and unsecured notes[66]. - The company’s total liabilities increased, with bank borrowings and other loans amounting to RMB 2,919,081,000, compared to RMB 2,337,343,000 in the previous year[94]. Market and Product Development - The group launched 68 new varieties and 49 new sales products in the health product sector, enhancing its product structure[17]. - The group adjusted market strategies for core traditional Chinese medicine products, with over 20% growth in several varieties, including Yupingfeng granules and Baijing tablets[15]. - The market size of traditional Chinese medicine formula granules experienced an overall decline due to the transition to new standards, but the group aims to restore performance as the national standard system improves[13]. Governance and Compliance - The company maintained compliance with the corporate governance code throughout the reporting period[83]. - The board of directors approved the interim consolidated financial statements on August 26, 2022[155]. - The company has established pricing strategies for transactions with state-owned entities, considering them as independent third parties[150].