Financial Performance - The company's revenue for 2021 was RMB 5,400,487, an increase of 17.2% compared to RMB 4,607,369 in 2020[11]. - Gross profit for 2021 reached RMB 2,291,295, reflecting a gross margin of 42.43%[12]. - Profit for the year was RMB 866,844, up 10.2% from RMB 786,507 in 2020[11]. - Earnings per share increased to RMB 0.40, compared to RMB 0.37 in the previous year[11]. - The total assets of the company as of December 31, 2021, were RMB 11,593,866, an increase from RMB 10,940,798 in 2020[12]. - The net profit margin for 2021 was 16.05%, down from 17.07% in 2020[12]. - The company declared a dividend per share of RMB 0.16, consistent with the previous year[11]. - The return on equity for 2021 was 10.63%, an increase from 10.15% in 2020[12]. Market Strategy and Expansion - The company plans to continue expanding its market presence and invest in new product development[10]. - The Group plans to focus on major product series and expand into daily cosmetics, food supplements, and disinfection products to meet market demands[26]. - The Group aims to achieve high-quality comprehensive development in line with the "14th Five Year Plan" goals[26]. - The Group's strategic focus on "active health" aligns with national policies promoting traditional Chinese medicine, creating a favorable market environment for growth[30]. - The company is expanding its distribution channels, particularly in e-commerce and medical channels, to enhance market presence and sales[36]. Product Performance - In 2021, 54 product lines achieved single-product sales exceeding RMB 5 million, with 11 products surpassing RMB 100 million in sales[35]. - Major products such as Jinkui Shenqi Pills and Xihuang Pills saw sales increases of 4.84% and 11.69%, respectively, while Liuwei Dihuang Pills experienced a decline of 13.13% due to regulatory changes[35]. - The sales amount of Ejiao series increased by 9.79% compared to the previous year, attributed to expanded distribution channels and retail store construction[35]. - Sales of Jinkui Shenqi Pills increased by 4.84%, Shengmai Liquor by 6.21%, and Ganmao Qingre Granules by 11.55% year-on-year, while sales of Liuwei Dihuang Pills decreased by 13.13% due to regulatory changes[36]. Operational Efficiency - The Company improved production efficiency and maintained stringent control over production cycles, ensuring stability in product supply[32]. - The Daxing Branch Factory and Tong Ren Tang Technologies Tangshan operated at full capacity, contributing to overall production stability[32]. - The Group's cash and cash equivalents totaled RMB 3,246,159,000 as of December 31, 2021, up from RMB 2,947,958,000 in the previous year[46]. - Short-term borrowings increased to RMB 735,300,000 with an interest rate of 3.450% per annum, compared to RMB 235,000,000 at 1.354% in the previous year[47]. - Long-term borrowings amounted to RMB 732,153,000, with an annual interest rate of 3.672%[47]. Research and Development - The company is focusing on technological innovation to enhance the efficacy and market value of products, including research on chronic disease treatments[39]. - Research and development expenses for the year ended December 31, 2021, were RMB 48,904,000, accounting for 0.60% of net assets and 0.91% of revenue[59][66]. - The company is conducting safety evaluations and stability research on classic prescriptions as part of its product development strategy[39]. Customer and Supplier Relations - The largest customer, Tong Ren Tang Holdings and its subsidiaries, contributed RMB 1,286,642,000, accounting for 23.82% of the Group's total revenue[97]. - The Group's five largest customers accounted for 47.73% of total revenue, with the largest customer representing 23.82%[97]. - The Group's purchases from the five largest suppliers accounted for 20.67% of total purchases, with the largest supplier contributing 6.48%[98]. - There were no significant disputes with suppliers or customers during the reporting period, indicating stable relationships[105]. Environmental and Compliance - The Group emphasizes environmental protection and adheres to relevant laws such as the Environmental Protection Law and the Air Pollution Prevention Law[139]. - The Group has implemented strict quality control measures in production, adhering to Good Manufacturing Practice (GMP) and Good Supply Practice (GSP)[136]. - The Group's operations are subject to various laws and regulations, including the Company Law and the Contract Law of the People's Republic of China[137]. Connected Transactions - The annual caps for the continuing connected transactions under the Property Leasing Framework Agreement for the three years ending December 31, 2022, are RMB200,000,000, RMB80,000,000, and RMB60,000,000, respectively[147][151]. - In 2021, the rental fee paid by the Group to the Tong Ren Tang Group under the Property Leasing Framework amounted to RMB817,000, which did not exceed the relevant annual cap[147][151]. - The Group's pricing policies for continuing connected transactions have been confirmed to be followed in 2021[176]. Risk Management - Major risks identified include policy risks and operational risks, which may impact product sales and operational costs[127][128]. - The company faces uncertainties due to potential adjustments in industry policies and increasing regulatory requirements[128][131]. - The pandemic has affected the supply chain, impacting the availability of raw materials and production processes[133]. - The Group faces risks related to supply chain disruptions due to climate change and the ongoing pandemic[136].

Contents 目錄 2 Corporate Structure 公司架構 4 Corporate Information 公司資料 6 Financial Highlights 財務概要 8 Chairman's Statement 董事長報告 12 Management Discussion and Analysis 管理層討論與分析 26 Report of the Board of Directors 董事會報告 68 Report of the Supervisory Committee 監事會報告 70 Corporate Governance Report 企業管治報告 98 Directors, Supervisors and Senior Management 董事、監事及高級管理人員 104 Independent Auditor's Report 獨立核數師報告 114 Consolidated Balance Sheet 合併資產負債表 116 Consolidated Income Statement 合併利潤表 117 Consolidated Statement of Comp ...

Financial Performance - In 2019, the total revenue of Tong Ren Tang Technologies reached RMB 10,469,970,000, an increase from RMB 9,769,866,000 in 2018, representing a growth of approximately 7.1%[26] - The gross profit for the year was RMB 3,055,396,000, up from RMB 2,493,017,000 in 2018, indicating a growth of about 22.6%[26] - The profit attributable to owners of the Company was RMB 5,527,255,000, compared to RMB 5,316,652,000 in 2018, reflecting an increase of approximately 4.0%[26] - The EBITDA for the year was RMB 5,527,255,000, showing a consistent performance compared to previous years[23] - The gross profit margin improved to 29.2% in 2019 from 25.5% in 2018, indicating enhanced operational efficiency[23] - The net profit margin for the year was 52.8%, up from 54.3% in 2018, demonstrating strong profitability despite slight fluctuations[23] - For the year ended December 31, 2019, the Group's revenue was RMB4,476,449,000, a decrease of 11.53% from RMB5,059,638,000 in the previous year[31] - Net profit for the same period was RMB741,390,000, down 26.29% from RMB1,005,853,000 in 2018[31] - Net profit attributable to owners of the Company was RMB417,650,000, representing a decrease of 38.38% from RMB677,815,000 in the previous year[31] - Earnings per share decreased to RMB0.33 from RMB0.53 in 2018, while the dividend per share was RMB0.16, down from RMB0.18[31] Operational Challenges - The Group faced challenges including increased competition in the pharmaceutical industry and insufficient production capacity, leading to declines in both production volume and value[32] - The outbreak of COVID-19 in early 2020 posed additional challenges, prompting the Group to monitor the situation closely and implement effective response measures[39] - The Group anticipates continued downward pressure on the macro economy and challenges in the pharmaceutical industry, including stricter regulatory policies[41] - The overall production volume of Chinese patent medicine decreased by more than approximately 20% compared to the previous year due to production capacity transition issues[47] - The transition from old to new production capacity has been a significant challenge, impacting the production of key products like Liuwei Dihuang Pills and Jinkui Shenqi Pills[47] Strategic Initiatives - The Company plans to continue expanding its market presence and investing in new product development to drive future growth[23] - Two new production bases in Daxing District, Beijing, and Yutian County, Tangshan, commenced production during the year, aimed at alleviating supply and demand pressure[34] - The Group plans to enhance production scheduling capabilities and has commenced operations at two new production bases to meet market demand[98] - The Group aims to strengthen its marketing, production, and management capabilities to support sustainable high-quality development in the future[102] Financial Position - The current ratio stood at 2.5, indicating a strong liquidity position for the Company[23] - The total assets of the Company amounted to RMB 10,469,970,000, while total liabilities were RMB 3,055,396,000, resulting in a liability-to-asset ratio of approximately 29.2%[26] - The return on equity was reported at 15.3%, reflecting the Company's effective use of equity capital[23] - As of December 31, 2019, the group's cash and cash equivalents totaled RMB 2,990.645 million, up from RMB 1,904.036 million in 2018[63] - Short-term borrowings were reported at RMB 35 million, down from RMB 195 million in the previous year, with an interest rate of 4.534%[64] - Long-term borrowings increased to RMB 1,223.571 million, representing 40.05% of total liabilities, with an annual interest rate of 2.660%[64] Market Dynamics - The Chinese government is expected to provide more support for the traditional Chinese medicine industry, presenting new opportunities for development[40] - The Group's products, including Huoxiang Zhengqi Liquid, were included in the national treatment plan for COVID-19, indicating a strategic response to market demand[97] - Revenue from the five largest customers accounted for 47.83% of total revenue, with the largest customer, Tong Ren Tang Group, contributing RMB959,408,000, or 21.43% of total revenue[119][124] Research and Development - Research and development expenses amounted to RMB 28,316,000 (2018: RMB 27,835,000), accounting for 0.63% of revenue (2018: 0.55%)[74] - The company received five national invention patents for the production process and therapeutic use of certain products, enhancing intellectual property protection[54] Employee and Supplier Relations - The company emphasizes the importance of employee development and offers training and career planning opportunities[122] - The company maintains a strong partnership with suppliers, ensuring quality through rigorous selection and assessment processes[123] - The group maintained a strong focus on developing new customers and suppliers, expanding new channels, and tapping into new markets to mitigate reliance risks, with no significant disputes reported with suppliers and customers during the reporting period[128] Legal and Compliance - The Group's compliance with laws and regulations is ensured through internal control and approval procedures, with no significant legal risks reported during the year[157] - The Group has established a professional legal team to enhance its legal affairs management and prevent legal risks related to contracts[158] Environmental Commitment - The Group's commitment to environmental protection includes compliance with the Environmental Protection Law and the Air Pollution Prevention Law of the People's Republic of China[162] - The Group's philosophy emphasizes equal importance on development and environmental protection, aiming to minimize environmental impact[163]