Regulatory and Market Position - The company holds 102 medical device registrations in China, including 34 Class III, 21 Class II, and 47 Class I registrations, enhancing its market competitiveness [7]. - In the first half of 2023, the company achieved significant progress in obtaining domestic and international registrations, marking the beginning of an accelerated certification phase [8]. - The orthopedic medical device market in China is experiencing growth due to factors such as an aging population and increased healthcare spending [6]. - The orthopedic implant industry is relatively concentrated, with high entry barriers due to strict regulatory measures and high-quality product requirements [6]. - The company actively responds to national procurement policies to ensure stable supply and compliance in the orthopedic joint sector [6]. - The orthopedic implant market is dominated by multinational companies, but domestic firms are expected to increase market share through improved product offerings [6]. Product Development and Innovation - The company aims to expand its product portfolio to meet diverse market and clinical needs, thereby enhancing its overall competitiveness [7]. - The company has established itself as a leader in the domestic orthopedic industry, focusing on the research and development of artificial joint prosthetics, with over 20 years of experience [9]. - As of June 30, 2023, the company has received government funding for multiple R&D projects, including the development of high-quality medical metal powder materials and clinical research on minimally invasive knee joint prosthetics [9]. - The company has successfully launched several new products, including vitamin E high-crosslinked polyethylene hip and knee products, marking a significant advancement in the domestic market [11]. - The company has expanded its product line in the spinal sector, obtaining registration certificates for self-stabilizing cervical interbody fusion devices and artificial vertebral body fixation systems [11]. - In the trauma field, the company has received approvals for multiple products, including bone plates and intramedullary nails, enhancing its orthopedic product offerings [11]. - The company has made significant strides in sports medicine, obtaining registration for seven new products, which will boost sales revenue in this segment [11]. - The company has entered the oral care market, acquiring registration for orthodontic products and maxillofacial surgical devices, establishing a comprehensive oral product line [11]. Financial Performance - As of June 30, 2023, the company's operating revenue was approximately RMB 540.71 million, a decrease of 5.37% compared to RMB 571.39 million in the same period last year [17]. - The company's gross profit for the six months ended June 30, 2023, was approximately RMB 391.41 million, down 8.08% from RMB 425.80 million year-on-year, resulting in a gross margin of 72.39% [19]. - The company achieved a net profit of approximately RMB 125.99 million for the six months ended June 30, 2023, a decline of 19.74% from RMB 156.98 million in the same period last year [25]. - Sales expenses increased by 7.66% to approximately RMB 166.89 million due to the gradual recovery of market activities post-pandemic [20]. - The company's current assets decreased from approximately RMB 957.19 million as of December 31, 2022, to approximately RMB 855.12 million as of June 30, 2023 [26]. - The company reported a total of RMB 154,599,501.79 in special reserves for the period [80]. Research and Development - Research and development expenses for the first half of 2023 amounted to approximately RMB 74.57 million, representing a 3.15% increase from RMB 72.29 million in the previous year, accounting for 13.79% of revenue [22]. - The company plans to enhance its product range by optimizing existing products and investing more resources in new product development, particularly in the orthopedic medical device sector [40]. - The company is focusing on developing customized orthopedic implants, which include traditional and assembled customized joint prosthetics [41]. - The company is committed to enhancing its market share by strengthening production operations and internal management while expanding into new markets [41]. Corporate Governance and Compliance - The board of directors is committed to maintaining high standards of corporate governance, believing it is crucial for protecting shareholder interests and enhancing corporate value [46]. - The company has adopted the "Standard Code" for securities transactions by directors and supervisors, confirming compliance for the six months ending June 30, 2023 [47]. - The audit committee has reviewed the consolidated financial statements for the six months ending June 30, 2023, including the accounting principles and practices used [48]. - The financial report was approved by the board of directors on August 30, 2023, indicating ongoing compliance with accounting standards [86]. Shareholder Information - As of June 30, 2023, Mr. Shi Chunbao holds 113,685,435 A shares, representing 39.42% of the relevant class of share capital and 29.64% of the total share capital [50]. - Ms. Yue Shujun also holds 95,447,900 A shares, representing 33.09% of the relevant class of share capital and 24.88% of the total share capital [50]. - CITIC Securities Co., Ltd. holds 19,750,000 A shares, representing 6.85% of the relevant class of share capital and 5.15% of the total share capital [52]. - FIL Limited holds 7,791,000 H shares, representing 8.19% of the relevant class of share capital and 2.03% of the total share capital [53]. - The total number of issued shares as of June 30, 2023, is 383,568,500, comprising 288,428,000 A shares and 95,140,500 H shares [54]. Assets and Liabilities - As of June 30, 2023, total assets amounted to RMB 3,472,457,994.37, an increase from RMB 3,409,766,690.91 as of December 31, 2022, reflecting a growth of approximately 1.84% [57]. - Total liabilities reached RMB 745,055,516.20, up from RMB 690,066,911.19, marking an increase of around 7.97% [60]. - Shareholders' equity totaled RMB 2,727,402,478.17, compared to RMB 2,719,699,779.72 at the end of 2022, showing a slight increase of about 0.1% [60]. - The company's long-term liabilities, including lease liabilities, were reported at RMB 625,860.19, with deferred income tax liabilities increasing to RMB 10,439,311.12 from RMB 7,879,291.52 [58]. - The total current liabilities increased to RMB 650,355,916.53 from RMB 595,804,539.93, representing a growth of approximately 9.15% [59]. Cash Flow and Investments - The net cash outflow from operating activities was approximately RMB 38.97 million as of June 30, 2023, mainly due to increased cash received from sales [34]. - The net cash flow from operating activities is negative at RMB -38,971,893.80, an improvement from RMB -81,512,729.59 in the same period last year [71]. - The net cash flow from investing activities is RMB -63,934,501.16, an improvement from RMB -510,359,121.29 in the previous year [72]. - Cash inflow from investment activities totaled RMB 1,537,695,421.37, compared to RMB 926,741,308.22 in the previous year, indicating a significant increase [75]. - The company redeemed all structured deposit products with a total investment of RMB 30 million from Bank of Beijing, yielding an actual return of RMB 313.27 thousand at an annualized return of 3.15% [36]. Inventory and Receivables - The company reported a total inventory at the end of the period is RMB 408,488,947.36, an increase from RMB 280,772,410.70 at the beginning of the period, representing a growth of 45.5% [173]. - The raw materials inventory increased to RMB 152,517,933.68 from RMB 85,077,518.73, reflecting an increase of 79.2% [173]. - The finished goods inventory at the end of the period is RMB 199,661,078.26, up from RMB 142,731,746.75, indicating a rise of 39.7% [173]. - Accounts receivable at the end of the period totaled RMB 578,927,472.41, up from RMB 488,746,494.02, indicating an increase of approximately 18.5% [155]. - The provision for bad debts was RMB 60,772,707.03, which is 9.50% of the total accounts receivable, compared to 51,949,099.75 and 9.61% at the beginning of the period [156]. Taxation and Deferred Tax - The company maintains a corporate income tax rate of 15%, benefiting from high-tech enterprise status valid until 2023 [151]. - The total deferred tax assets at the end of the period amounted to CNY 8,156,997.68, an increase from CNY 3,130,616.33 at the beginning of the period, reflecting a growth of approximately 160% [197]. - The total deferred tax liabilities at the end of the period were CNY 10,439,311.12, up from CNY 7,879,291.52 at the beginning, representing an increase of about 32% [198]. Accounting Policies and Practices - The financial statements are prepared in accordance with the Chinese Accounting Standards, ensuring transparency and accuracy in financial reporting [86]. - The company recognizes revenue when the customer obtains control of the related goods or services, which is determined by specific indicators such as the transfer of legal ownership and the acceptance of goods [134]. - The company assesses the useful life of intangible assets based on contractual or legal rights without a clear term, and reviews these annually [125]. - The company recognizes expected credit losses for financial assets measured at amortized cost and those classified at fair value through other comprehensive income, including receivables and lease receivables [106].

Financial Performance - For the six months ended June 30, 2023, the company reported operating revenue of RMB 540,706,888.57, a significant increase from RMB 571,391,616.43 in the same period of 2022[6]. - The company's operating profit for the same period was RMB 138,459,630.64, compared to RMB 174,637,494.77 in 2022, indicating a decrease in profitability[6]. - The net profit for the six months ended June 30, 2023, was RMB 125,985,161.70, a decrease of approximately 19.7% compared to RMB 156,982,496.60 for the same period in 2022[8]. - The net profit attributable to shareholders of the parent company was RMB 126,077,038.00, down from RMB 156,982,496.60, indicating a decline of about 19.7% year-over-year[9]. - Basic and diluted earnings per share for the six months ended June 30, 2023, were both RMB 0.33, compared to RMB 0.41 for the same period in 2022, reflecting a decrease of approximately 19.5%[10]. - The total comprehensive income attributable to shareholders of the parent company for the period was RMB 125,985,161.70, compared to RMB 156,982,496.60 in the previous year, marking a decline of around 19.7%[10]. - The company's main operating revenue for the first half of 2023 was RMB 540,241,563.44, compared to RMB 569,856,989.16 in the same period of 2022, indicating a decline of about 5.23%[24]. - The company's gross profit for the same period was approximately RMB 391.41 million, down 8.08% from RMB 425.80 million year-on-year, resulting in a gross margin of 72.39%, a decline of 2.13%[46]. Assets and Liabilities - Total assets as of June 30, 2023, amounted to RMB 3,472,457,994.37, up from RMB 3,409,766,690.91 at the end of 2022[2]. - The total liabilities increased to RMB 745,055,516.20 as of June 30, 2023, compared to RMB 690,066,911.19 at the end of 2022[4]. - The company’s cash and cash equivalents totaled RMB 855,124,538.98 as of June 30, 2023, compared to RMB 957,193,661.02 at the end of 2022[2]. - The company’s accounts receivable increased to RMB 578,927,472.41 as of June 30, 2023, from RMB 488,746,494.02 at the end of 2022, reflecting a growth of approximately 18.5%[2]. - The total accounts payable as of June 30, 2023, was RMB 232,142,733.03, slightly down from RMB 237,786,563.39 at the end of 2022, indicating a decrease of about 2.7%[19]. - The company's current assets decreased from approximately RMB 957.19 million as of December 31, 2022, to RMB 855.12 million as of June 30, 2023[53]. - The company's net current assets decreased from approximately RMB 2,183.28 million as of December 31, 2022, to approximately RMB 2,171.08 million as of June 30, 2023, primarily due to an increase in current liabilities during the period[60]. Research and Development - Research and development expenses for the first half of 2023 were RMB 74,572,384.70, slightly higher than RMB 72,289,835.94 in the same period of 2022[6]. - The company has significantly increased its R&D investment, resulting in a large number of domestic and international registrations obtained in the first half of 2023[34]. - The company plans to establish a product R&D center at the Daxing New Production Base, which will include departments for joint prosthetics, spine products, orthopedic trauma products, and a biomechanics center[68]. - The company is focused on developing standard joint prosthetic products, advanced customized joint prosthetic products, orthopedic robots, spine products, trauma, sports medicine products, PRP products, and oral products[68]. Market and Growth Strategy - The company plans to continue its market expansion and product development strategies to enhance future growth prospects[11]. - The orthopedic medical device market in China is experiencing growth due to factors such as an aging population and increased healthcare spending[32]. - The company aims to enhance its market share by improving its product portfolio and expanding its marketing network[33]. - The company is actively expanding its product line to meet diverse market and clinical needs, enhancing its overall competitiveness[34]. - The company aims to achieve a targeted annual growth rate of 5% in the upcoming fiscal year[63]. Compliance and Governance - The financial statements were prepared based on the going concern assumption, adhering to the applicable disclosure requirements under Hong Kong company regulations[12]. - The company has adopted new and revised Chinese accounting standards effective as of June 30, 2023, to ensure compliance with regulatory requirements[12]. - The audit committee has reviewed the consolidated financial statements for the six months ended June 30, 2023, including the accounting principles applied[74]. - The company is committed to maintaining high standards of corporate governance to protect shareholder interests and enhance corporate value[72]. Employee and Talent Management - As of June 30, 2023, the company employed approximately 1,379 employees, with total salary and related costs amounting to approximately RMB 135.89 million[70]. - The company continues to implement its existing talent development policies and has established an effective incentive mechanism to motivate employees[69]. International Expansion - The company obtained registration certificates for 19 countries, including Ukraine, South Korea, and Mexico, enhancing its international sales capabilities[41]. - The company has completed several clinical research projects and has received approvals for various innovative medical materials and products[36]. - The company is committed to maintaining its leading position in the domestic market while strengthening its international business development and market promotion efforts[66].

Investment Strategy - Beijing Chunlizhengda Medical Instruments Co., Ltd. reported significant investments in structured deposit products, with a total investment amount of RMB 67,000,000 across various banks[2]. - The company has maintained a focus on utilizing idle fundraising for investment in structured deposits, enhancing liquidity management[3]. - The company continues to explore further investment opportunities in structured financial products to optimize asset allocation[4]. - The structured deposits are part of the company's broader financial strategy to ensure capital preservation and yield enhancement[4]. - The investment in structured deposit products is aimed at effectively utilizing temporarily idle funds raised from the public offering of A-shares, enhancing the overall capital return of the group[5]. Financial Performance - The annualized return for the structured deposits from Beijing Bank ranged from 1.35% to 1.6%, with actual returns reported at 3.2% for some products[2][3]. - The actual returns from structured deposits were reported as RMB 126.25 million, RMB 236.71 million, and RMB 196.03 million, reflecting positive investment outcomes[2][3]. - The company recorded investment income from structured deposit products of approximately RMB 6,748,000 and fair value changes of structured deposit products amounting to approximately RMB 9,491,000 as of December 31, 2022[5]. - As of December 31, 2022, the balance of structured deposit products was RMB 765,000,000, with a fair value of approximately RMB 767,728,000, accounting for about 23% of the company's total assets[5]. Cash Management - The company fully redeemed all structured deposits by the end of the reporting period, indicating effective cash management strategies[2][3]. - The company's core objectives include ensuring capital security and maintaining liquidity[5]. Banking Relationships - The company has established relationships with reputable banks, ensuring reliable investment channels for its financial products[4]. Monitoring and Future Objectives - The financial performance and investment strategies will be closely monitored to align with future growth objectives[4]. - The supplementary information provided does not affect other data disclosed in the 2022 annual report[5].

Financial Performance - The company's operating revenue for Q1 2023 was RMB 246,355,024.32, representing a decrease of 4.18% compared to the same period last year[5] - Net profit attributable to shareholders for Q1 2023 was RMB 55,861,404.05, down 24.53% year-on-year[5] - The net profit after deducting non-recurring gains and losses was RMB 49,607,213.75, reflecting a decline of 33.36% compared to the previous year[5] - Basic and diluted earnings per share for Q1 2023 were both RMB 0.15, a decrease of 21.05% year-on-year[7] - The weighted average return on equity was 2.03%, down by 0.92 percentage points compared to the previous year[7] - The report indicates that the company is committed to enhancing its market position through strategic investments in R&D and product development[10] - The company reported a net profit margin decline due to increased operating costs, impacting overall profitability[16] - The net profit for Q1 2023 was CNY 55,861,404.05, a decrease of 24.5% compared to CNY 74,021,366.53 in Q1 2022[18] - Operating profit for Q1 2023 was CNY 62,341,671.90, down 26.0% from CNY 84,279,091.21 in the same period last year[18] Cash Flow - The net cash flow from operating activities was negative RMB 120,197,574.28, indicating a significant cash outflow[7] - The net cash flow from operating activities was not applicable, primarily due to increased R&D expenditures and higher cash outflows for raw material purchases influenced by "volume-based procurement"[10] - Cash flow from operating activities in Q1 2023 showed a net outflow of CNY 120,197,574.28, compared to a net outflow of CNY 20,120,816.00 in Q1 2022[21] - Cash inflow from investment activities in Q1 2023 was CNY 771,181,481.64, compared to CNY 904,215.33 in Q1 2022[21] - Cash outflow for the purchase of fixed assets and intangible assets in Q1 2023 was CNY 1,025,917.03, significantly lower than CNY 21,232,408.43 in Q1 2022[21] - The net increase in cash and cash equivalents was -$118,849,021.05, a notable decline from -$710,667,029.94 in the previous period[22] - The ending balance of cash and cash equivalents stood at $838,344,639.97, down from $1,025,826,965.44 in the previous period[22] Assets and Liabilities - Total assets at the end of Q1 2023 were RMB 3,391,412,670.08, a slight decrease of 0.54% from the end of the previous year[7] - Current assets totaled CNY 2,745,321,590.09, a slight decrease from CNY 2,779,088,982.86 in the previous year[14] - Non-current assets increased to CNY 646,091,079.99 from CNY 630,677,708.05 year-over-year[14] - Total liabilities decreased to CNY 615,416,974.31 from CNY 690,066,911.19 in the previous year[15] - Shareholders' equity rose to CNY 2,775,995,695.77, up from CNY 2,719,699,779.72 year-over-year[15] Shareholder Information - The total number of ordinary shareholders at the end of the reporting period was 5,766, with the top ten shareholders holding significant stakes[11] - The largest shareholder, Shi Chunbao, held 29.88% of the shares, while the second-largest shareholder, Yue Shujun, held 24.84%[11] - The top ten shareholders include various institutional and individual investors, indicating a diverse ownership structure[12] - The company has not reported any significant changes in the relationships or agreements among the top shareholders[12] - The company has not disclosed any significant pledges or freezes on shares held by the top shareholders[12] Research and Development - Research and development expenses totaled RMB 33,270,315.66, accounting for 13.51% of operating revenue, an increase of 0.63 percentage points year-on-year[7] - The net profit attributable to shareholders, excluding non-recurring gains and losses, decreased by 33.36% due to the impact of "volume-based procurement" leading to a decline in terminal selling prices and increased R&D investments[10] - The company is focusing on long-term strategic planning, emphasizing the development of new products, technologies, and processes to drive innovation and product iteration[10] - The company has increased its R&D investment to support technological innovation and product upgrades[10] - Research and development expenses for Q1 2023 were CNY 33,270,315.66, slightly up from CNY 33,114,231.75 in Q1 2022[18] Operating Costs - Total operating costs increased to CNY 183,535,965.29, up 7.8% from CNY 170,342,269.72 in the previous year[16] - Operating costs included CNY 77,916,277.20 in operating expenses, which rose significantly from CNY 50,214,509.64 in Q1 2022[16] - The company recorded a decrease in sales expenses to CNY 64,965,051.80 in Q1 2023 from CNY 79,897,136.99 in Q1 2022, a reduction of 18.7%[18] Foreign Exchange and Accounting - The company recorded a foreign exchange gain of CNY 2,022,556.16 in Q1 2023, compared to a gain of CNY 1,695,561.64 in Q1 2022, indicating an increase of 19.2%[18] - The impact of exchange rate changes on cash and cash equivalents was -$218,020.84, reflecting currency fluctuations during the period[22] - The company did not apply new accounting standards or interpretations for the first quarter of 2023[23]

Financial Performance - In 2022, the company achieved operating revenue of RMB 1,201.60 million, representing a year-on-year growth of 8.43%[8]. - The net profit attributable to shareholders of the listed company was RMB 307.72 million, a decrease of 4.54% compared to the previous year[8]. - Basic earnings per share were RMB 0.80, reflecting a decline of 13.98% year-on-year[8]. - The company's operating revenue increased by 8.43% from approximately RMB 1,108.14 million in 2021 to approximately RMB 1,201.61 million in 2022, driven by growth in joint prosthesis sales and continuous sales increases in spinal and sports medicine products[17]. - Revenue from joint prosthesis products was approximately RMB 1,046.39 million, a slight increase of 1.05% from RMB 1,035.55 million in 2021; spinal products revenue surged by 70.14% to RMB 115.87 million; sports medicine products revenue skyrocketed by 927.01% to RMB 36.77 million[18]. - Gross profit rose by 6.90% from approximately RMB 854.54 million in 2021 to approximately RMB 913.53 million in 2022, while the gross profit margin decreased from 77.11% to 76.03% due to price reductions from the implementation of centralized procurement policies[19]. - The company's net profit decreased by 4.54% from approximately RMB 322.36 million in 2021 to approximately RMB 307.72 million in 2022, primarily due to price declines in products affected by centralized procurement policies[26]. - The total comprehensive income for 2022 was RMB 298,778,119.15, a decrease of approximately 7.5% from RMB 322,989,532.24 in the previous year[184]. Assets and Liabilities - The total assets of the company increased to RMB 3,409.77 million, up 13.67% from the end of the previous year[8]. - The company's current assets decreased by 44.88% from approximately RMB 1,736.49 million in 2021 to approximately RMB 957.19 million in 2022, mainly due to investments in financial products[26]. - The company's total current assets increased by 8.72% from approximately RMB 2,008.14 million in 2021 to approximately RMB 2,183.28 million in 2022[33]. - As of December 31, 2022, the company's accounts receivable balance was CNY 540.70 million, with a provision for bad debts amounting to CNY 51.95 million[166]. - The company's inventory balance as of December 31, 2022, was CNY 280.77 million, with a provision for inventory impairment of CNY 20.98 million[168]. - As of December 31, 2022, total liabilities amounted to RMB 690,066,911.19, an increase of 30.1% from RMB 530,579,974.97 in 2021[176]. - Current liabilities totaled RMB 595,804,539.93, up 35.5% from RMB 439,618,888.24 in the previous year[176]. Research and Development - The company has increased R&D investment, achieving significant results in laboratory construction and product development, with a total of 21 testing qualifications obtained by December 31, 2022[10]. - Research and development expenses increased by 54.84% from approximately RMB 104.84 million in 2021 to approximately RMB 162.34 million in 2022, accounting for 13.51% of total revenue, reflecting the company's focus on long-term strategic planning and innovation[23]. - Two products under the national key R&D project have entered the registration review stage, indicating progress in innovative product development[10]. - The company is committed to becoming a first-class international orthopedic innovation enterprise by enhancing R&D capabilities and brand influence[14]. Market Expansion and Strategy - The company successfully registered its products in eight countries, including Ukraine, South Korea, and Mexico, to expand its international market presence[9]. - The company accelerated the development of new products and expanded its market share amid ongoing pandemic challenges[7]. - The orthopedic implant market in China is expected to grow due to favorable factors such as an aging population and increased healthcare spending[16]. - The company aims to maintain its leading position in the domestic joint prosthesis market and continuously improve market share[12]. - The company plans to establish a professional sales team to enhance the development of various product lines, including joints, spine, sports medicine, and dental products[13]. - The company is expanding its market presence in Southeast Asia, targeting a 30% market share by 2025[56]. Corporate Governance and Compliance - The company has complied with all applicable principles and code provisions of the corporate governance code as of December 31, 2022[51]. - The board of directors consists of eight members, including four executive directors, one non-executive director, and three independent non-executive directors[100]. - The company is committed to maintaining high corporate governance standards and has complied with all applicable principles and provisions[99]. - The independent non-executive directors possess extensive experience in corporate governance, financial management, and medical engineering[102]. - The company has established a salary committee to review the compensation policy for all directors and senior management, considering operational performance and market practices[83]. Environmental and Social Responsibility - The company is committed to environmental sustainability by promoting energy conservation and encouraging the reuse of office supplies[86]. - The company has established a comprehensive environmental management system to mitigate its impact on natural resources[140]. - The company has committed to sustainable development and actively responds to national carbon neutrality policies[144]. - The company produced 6.905 tons of titanium waste in 2022, with a waste generation rate of 0.09 kg per RMB 10,000 of output[142]. - The total greenhouse gas emissions in 2022 included 19.37 tons of direct CO2 emissions and 3,216.9 tons of indirect CO2 emissions, with a CO2 emission rate of 0.0222 tons per RMB 10,000 of product[142]. Employee and Community Engagement - As of December 31, 2022, the company employed approximately 1,303 staff, with total salary and related costs amounting to RMB 193.41 million[43]. - The company has established multiple promotion pathways, including technical and management routes, to support employee development[151]. - The company has implemented a health check policy for new employees and provides annual health check cards for existing employees[148]. - The company continues to support the "Spring Sunshine Project," providing free internal fixation materials for joint replacement surgeries to impoverished patients, benefiting over 80 hospitals nationwide[158]. - The company has been actively involved in community investment, collaborating with various charitable organizations and conducting donation activities[158].

Financial Performance - The total revenue for the year ended December 31, 2022, was RMB 1,201,604,254.24, representing an increase of 8.4% compared to RMB 1,108,139,520.61 in 2021[6] - The operating profit for 2022 was RMB 328,908,764.68, a decrease of 10.5% from RMB 367,591,655.59 in the previous year[6] - The net profit attributable to shareholders for 2022 was RMB 1,136,732,358.10, up from RMB 908,847,424.37 in 2021, marking a growth of 25.1%[5] - The total profit for the year ended December 31, 2022, was RMB 336,879,766.43, a decrease of 8.3% from RMB 367,378,723.41 in 2021[7] - The net profit attributable to the parent company's shareholders for 2022 was RMB 307,719,145.65, down 4.0% from RMB 322,360,736.79 in 2021[9] - Basic earnings per share for 2022 were RMB 0.80, compared to RMB 0.93 in 2021, reflecting a decline of 14.0%[10] - The income tax expense for 2022 was RMB 29,160,620.78, significantly lower than RMB 45,017,986.62 in 2021, indicating a reduction of 35.3%[7] - The total comprehensive income attributable to the parent company's shareholders for 2022 was RMB 307,719,145.65, compared to RMB 322,360,736.79 in 2021, showing a decrease of 4.0%[10] Assets and Liabilities - The total assets as of December 31, 2022, amounted to RMB 3,409,766,690.91, compared to RMB 2,999,657,361.45 in 2021, indicating a growth of 13.7%[2] - The total liabilities as of December 31, 2022, were RMB 690,066,911.19, an increase from RMB 530,579,974.97 in 2021[4] - The total equity attributable to shareholders increased to RMB 2,719,699,779.72 in 2022 from RMB 2,469,077,386.48 in 2021, representing a growth of 10.1%[5] - The cash and cash equivalents as of December 31, 2022, were RMB 957,193,661.02, compared to RMB 767,727,534.25 in 2021, reflecting an increase of 24.7%[2] - As of December 31, 2022, the accounts receivable amounted to RMB 540,695,593.77, with a provision for bad debts of RMB 51,949,099.75, representing 9.61% of the total[14] - The total accounts payable as of December 31, 2022, was RMB 237,786,563.39, an increase of 67.0% from RMB 142,415,529.82 in 2021[3] Research and Development - Research and development expenses increased to RMB 162,340,798.73 in 2022, up from RMB 104,843,140.53 in 2021, reflecting a growth of 55%[6] - The company plans to continue investing in R&D to enhance product offerings and expand market presence in the coming years[6] - The company emphasizes R&D with a team of professionals, including PhDs and experienced personnel, ensuring continuous product innovation[36] - The company collaborates with clinical experts to ensure that its R&D products meet market demands and clinical practicality[36] - The company has initiated a large-scale clinical follow-up project involving over 300 hospitals in China, focusing on joint prosthetics[36] - The company obtained 21 testing qualifications by December 31, 2022, and its laboratory will undertake significant R&D projects for the nation, enhancing the safety and scientific design of new products[37] - The company led the application for a key national R&D project in 2020, focusing on the development and clinical application of multi-channel tantalum bone repair materials, which was approved by the Ministry of Science and Technology of the People's Republic of China[37] Market and Product Development - The orthopedic implant market in China is expected to grow due to factors such as an aging population, increasing medical expenditures, and improvements in public healthcare infrastructure[29] - The company has obtained 16 product registration certificates from the National Medical Products Administration in 2022, enhancing its product line and expanding its presence in the orthopedic field[31] - The company entered the oral field with registration certificates for orthodontic brackets, buccal tubes, and maxillofacial osteosynthesis systems, marking its official entry into this sector[33] - The company is developing an advanced customized joint prosthetic product using 3D reconstruction technology, targeting a broader range of patients and expected to yield higher profit margins[63] - The company anticipates continued growth in demand for its products, aligning with the expansion of the Chinese joint prosthetic market[62] - The company is focusing on the development of spinal products and sports medicine products alongside its joint prosthetic offerings[64] Corporate Governance and Shareholder Information - The company has adhered to all applicable principles and provisions of the corporate governance code as of December 31, 2022[75] - The board of directors proposed a final dividend of RMB 3.13 per 10 shares for the fiscal year ending December 31, 2022, compared to RMB 1.30 per 10 shares for the previous year[69] - The company will hold its annual general meeting on June 28, 2023, for shareholders to approve the proposed final dividend[70] - The company successfully listed on the Shanghai Stock Exchange's Sci-Tech Innovation Board on December 30, 2021, raising a total of RMB 1,145,538,680.00, netting RMB 1,067,128,292.23 after expenses[73] Employee and Talent Management - The company employed a total of approximately 1,303 employees as of December 31, 2022, with total salary and related costs amounting to approximately RMB 193.41 million[67] - The company has established an effective incentive mechanism to motivate employees and attract high-quality talent through a competitive compensation system[66] - The company will recruit more R&D talent and enhance collaboration with renowned medical institutions to strengthen its professional knowledge and competitiveness[64]

[Cover and Table of Contents](index=1&type=section&id=Cover%20and%20Table%20of%20Contents) [Company Information](index=3&type=section&id=Company%20Information) This section provides essential company details, including board and supervisory committee members, company secretary, authorized representatives, registered address, principal place of business, website, and auditor - Executive Directors include Ms. Shi Wenling, Mr. Xie Fengbao, Mr. Shi Chunbao, and Ms. Yue Shujun[3](index=3&type=chunk) - The company's auditor is Da Xin Certified Public Accountants (Special General Partnership)[3](index=3&type=chunk) [Management Discussion and Analysis](index=4&type=section&id=Management%20Discussion%20and%20Analysis) Despite pandemic challenges, the company achieved steady revenue growth in H1 2022 through a "volume-for-price" strategy under national artificial joint procurement policies, advancing product registration, R&D, market network, and financial performance [Industry Overview and Competitive Advantages](index=4&type=section&id=Industry%20Overview%20and%20Competitive%20Advantages) In H1 2022, national artificial joint volume-based procurement policies reshaped the industry, with the company leveraging its comprehensive medical device registrations, strong R&D, high-end ceramic joint products, and extensive sales network to establish significant competitive advantages - National artificial joint volume-based procurement policies were progressively implemented across provinces, significantly influencing the industry landscape[4](index=4&type=chunk) - As of June 30, 2022, the company held **59 medical device registration certificates and filing credentials** in China, making it one of the domestic enterprises with the most comprehensive joint prosthesis registrations[5](index=5&type=chunk) - The company was the first domestic enterprise to obtain registration for BIOLOX®delta fourth-generation ceramic joint prosthesis products and the first to possess registration for BIOLOX®OPTION tapered ceramic heads in 2020[10](index=10&type=chunk) [Financial Review](index=8&type=section&id=Financial%20Review) For the six months ended June 30, 2022, revenue increased by **18.39%** to **RMB 571 million**, driven by joint prosthesis volume-for-price and rapid growth in spine and sports medicine products, while net profit slightly increased by **0.92%** to **RMB 157 million** despite rising R&D expenses Product Category Revenue (RMB Thousand) | Product Category | H1 2022 Revenue (RMB Thousand) | H1 2021 Revenue (RMB Thousand) | YoY Growth | | :--- | :--- | :--- | :--- | | Joint Prosthesis Products | 524,208 | 462,134 | 13.43% | | Spine Products | 41,105 | 18,535 | 121.77% | | Sports Medicine Products | 4,544 | 1,141 | 298.25% | | **Total** | **571,392** | **482,631** | **18.39%** | - Gross margin decreased from **76.51%** in the prior period to **74.52%**, primarily due to increased raw material prices and lower unit selling prices from volume-based procurement policies[16](index=16&type=chunk) - R&D expenses significantly increased by **111.19%** year-on-year to **RMB 72.3 million**, representing **12.65%** of revenue, mainly due to increased investment in new areas such as joint robots, PRP, sports medicine, and dentistry[19](index=19&type=chunk) - Net profit increased by **0.92%** year-on-year to **RMB 157 million**, as the company maintained stable profits through internal cost reduction, efficiency improvements, and external market expansion via a "volume-for-price" strategy[22](index=22&type=chunk) [Liquidity and Financial Resources](index=9&type=section&id=Liquidity%20and%20Financial%20Resources) As of June 30, 2022, the company's liquidity decreased to **RMB 1.107 billion** from **RMB 1.737 billion** at the beginning of the year, primarily due to net cash outflow from operating activities of **RMB 81.5 million** and investing activities of **RMB 510 million** - Net cash outflow from operating activities was approximately **RMB 81.5 million**, primarily due to increased cash expenses for sales, R&D, and higher accounts receivable[32](index=32&type=chunk) - Net cash outflow from investing activities was approximately **RMB 510 million**, mainly due to new wealth management investments[32](index=32&type=chunk) - As of June 30, 2022, the principal amount of unredeemed structured deposit wealth management products subscribed by the company was **RMB 738 million**[32](index=32&type=chunk) [Use of Proceeds](index=10&type=section&id=Use%20of%20Proceeds) The company utilized net proceeds of approximately **RMB 186 million** from H-share global offering and **RMB 1.067 billion** from A-share listing on the STAR Market, primarily for developing the Daxing production base, R&D activities, expanding marketing networks, and supplementing working capital H-share Proceeds Use (RMB Million) | H-share Proceeds Use | Available Amount (RMB Million) | Amount Expended as of 2022/6/30 (RMB Million) | Remaining Amount (RMB Million) | | :--- | :--- | :--- | :--- | | Development of Daxing New Production Base Phase I | 92.93 | 87.25 | 5.68 | | R&D Activities | 37.55 | 21.59 | 15.96 | | Expansion of Marketing and Distribution Network | 37.17 | 37.17 | 0.00 | | Working Capital and Others | 18.21 | 18.21 | 0.00 | | **Total** | **185.86** | **164.22** | **21.64** | - Net proceeds from A-share offering amounted to **RMB 1.067 billion**, used to replace **RMB 128 million** of self-raised funds previously invested and to purchase **RMB 415 million** in wealth management products with idle proceeds[26](index=26&type=chunk)[28](index=28&type=chunk) [Future Outlook](index=13&type=section&id=Future%20Outlook) The company anticipates benefiting from an aging population, increased per capita income, and expanded medical insurance coverage, planning to enrich product lines, enhance innovation, expand brand influence, and optimize talent development to achieve its goal of becoming a globally renowned orthopedic medical device manufacturer - The company plans to develop advanced customized individual joint prosthesis products using new materials and 3D reconstruction technologies to meet broader patient needs and achieve higher profit margins[35](index=35&type=chunk) - Plans include establishing a product R&D center at the new Daxing production base and leveraging platforms such as academician expert workstations and postdoctoral research workstations to strengthen R&D talent cultivation and collaboration with external institutions[36](index=36&type=chunk) [Corporate Governance and Other Information](index=15&type=section&id=Corporate%20Governance%20and%20Other%20Information) This section details the company's corporate governance practices, compliance with securities dealing codes by directors and supervisors, and shareholding details of directors, supervisors, and major shareholders, confirming adherence to HKEX Listing Rules' Corporate Governance Code [Corporate Governance and Compliance](index=15&type=section&id=Corporate%20Governance%20and%20Compliance) The company maintains high corporate governance standards, complying with all code provisions of the Corporate Governance Code in Appendix 14 of the HKEX Listing Rules during the reporting period, with the Audit Committee having reviewed the interim financial statements - The Board believes that the company has complied with all code provisions of the Corporate Governance Code during the reporting period[41](index=41&type=chunk) - The Board's Audit Committee has reviewed the company's consolidated financial statements for the six months ended June 30, 2022[43](index=43&type=chunk) [Interests of Directors, Supervisors and Major Shareholders](index=15&type=section&id=Interests%20of%20Directors%2C%20Supervisors%20and%20Major%20Shareholders) As of June 30, 2022, controlling shareholders Mr. Shi Chunbao and Ms. Yue Shujun (a married couple) collectively controlled **54.42%** of the company's total issued share capital, with detailed interests of directors, supervisors, and major shareholders in A and H shares disclosed Interests of Directors (Shares and Percentage of Total Share Capital) | Director Name | Share Class | Number of Shares | Nature of Interest | Percentage of Total Share Capital | | :--- | :--- | :--- | :--- | :--- | | Mr. Shi Chunbao | A-share | 113,685,435 | Beneficial Owner | 29.58% | | | H-share | 1,155,250 | Beneficial Owner | 0.3006% | | | A-share | 95,447,900 | Spouse's Interest | 24.84% | | Ms. Yue Shujun | A-share | 95,447,900 | Beneficial Owner | 24.84% | | | A-share | 113,685,435 | Spouse's Interest | 29.58% | | | H-share | 1,155,250 | Spouse's Interest | 0.3006% | - CITIC Securities Co., Ltd. holds **19,750,000 A-shares** through its controlled entities, representing **5.14%** of the total share capital[47](index=47&type=chunk) [Review Report](index=18&type=section&id=Review%20Report) This section presents the review report by Da Xin Certified Public Accountants (Special General Partnership) on the company's 2022 interim financial statements, concluding that no matters were identified suggesting the statements were not prepared in accordance with enterprise accounting standards or did not fairly reflect the company's financial position, operating results, and cash flows in all material respects - The review institution is Da Xin Certified Public Accountants (Special General Partnership)[50](index=50&type=chunk) - The review conclusion states that "nothing has come to our attention that causes us to believe that the financial statements are not prepared in accordance with enterprise accounting standards, nor do they fairly reflect in all material respects," indicating a standard limited assurance conclusion with no material issues identified[51](index=51&type=chunk) [Financial Statements](index=19&type=section&id=Financial%20Statements) This section includes the company's unaudited consolidated and parent company financial statements for the period ended June 30, 2022, and comparative periods, comprising the balance sheet, income statement, cash flow statement, and statement of changes in equity, comprehensively reflecting the company's financial position, operating results, and cash flows [Consolidated Balance Sheet](index=19&type=section&id=Consolidated%20Balance%20Sheet) As of June 30, 2022, total assets were **RMB 3.107 billion**, a slight increase from **RMB 3.000 billion** at the beginning of the year, with total liabilities remaining stable at **RMB 531 million** and equity attributable to parent company shareholders increasing to **RMB 2.576 billion** Consolidated Balance Sheet (RMB) | Item | June 30, 2022 (RMB) | December 31, 2021 (RMB) | | :--- | :--- | :--- | | Total Current Assets | 2,500,429,723.24 | 2,447,763,881.22 | | Total Non-current Assets | 606,472,609.72 | 551,893,480.23 | | **Total Assets** | **3,106,902,332.96** | **2,999,657,361.45** | | Total Current Liabilities | 441,738,289.37 | 439,618,888.24 | | Total Non-current Liabilities | 89,060,560.51 | 90,961,086.73 | | **Total Liabilities** | **530,798,849.88** | **530,579,974.97** | | **Total Shareholders' Equity** | **2,576,103,483.08** | **2,469,077,386.48** | [Consolidated Income Statement](index=23&type=section&id=Consolidated%20Income%20Statement) In H1 2022, the company achieved operating revenue of **RMB 571 million**, an **18.4%** year-on-year increase, with operating profit at **RMB 175 million** (down from **RMB 182 million**), and net profit stable at **RMB 157 million**, a **0.9%** increase Consolidated Income Statement (RMB) | Item | Current Period (RMB) | Prior Period (RMB) | | :--- | :--- | :--- | | Operating Revenue | 571,391,616.43 | 482,631,531.05 | | Operating Profit | 174,637,494.77 | 182,432,709.61 | | Total Profit | 172,397,259.62 | 182,250,045.85 | | Net Profit | 156,982,496.60 | 155,555,218.93 | | Basic Earnings Per Share | 0.41 | 0.45 | [Consolidated Cash Flow Statement](index=25&type=section&id=Consolidated%20Cash%20Flow%20Statement) In H1 2022, net cash flow from operating activities was a **RMB 81.51 million** outflow, from investing activities a **RMB 510.36 million** outflow, and from financing activities a **RMB 38.13 million** outflow, resulting in a **RMB 629.64 million** decrease in cash and cash equivalents Consolidated Cash Flow Statement (RMB) | Item | Current Period (RMB) | Prior Period (RMB) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | -81,512,729.59 | 18,949,001.41 | | Net Cash Flow from Investing Activities | -510,359,121.29 | -108,484,921.71 | | Net Cash Flow from Financing Activities | -38,133,052.89 | -1,277,869.50 | | Net Increase/Decrease in Cash and Cash Equivalents | -629,642,997.67 | -91,283,894.57 | [Consolidated Statement of Changes in Shareholders' Equity](index=30&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Shareholders'%20Equity) As of June 30, 2022, total equity attributable to parent company shareholders was **RMB 2.576 billion**, an increase from **RMB 2.469 billion** at the beginning of the period, primarily due to **RMB 157 million** in net profit, partially offset by **RMB 49.96 million** in dividend distribution - Beginning balance of equity attributable to parent company shareholders was **RMB 2.469 billion**[71](index=71&type=chunk) - Total comprehensive income (i.e., net profit) for the period was **RMB 157 million**, increasing shareholders' equity[71](index=71&type=chunk) - Profit distribution (distribution to shareholders) for the period decreased shareholders' equity by **RMB 49.96 million**[71](index=71&type=chunk) [Notes to Financial Statements](index=34&type=section&id=Notes%20to%20Financial%20Statements) This section provides detailed notes to the financial statements, covering the company's basic information, basis of preparation, significant accounting policies and estimates, taxation, notes to major items in consolidated financial statements, related party transactions, commitments and contingencies, and other significant matters [Company Profile and Basis of Preparation](index=34&type=section&id=Company%20Profile%20and%20Basis%20of%20Preparation) Beijing Chunli Zhengda Medical Devices Co., Ltd., established in 1998 and headquartered in Beijing, is listed on the HKEX (01858.HK) and Shanghai Stock Exchange STAR Market (688236.SH) within the medical device industry, with financial statements prepared on a going concern basis - The company was listed on the Hong Kong Stock Exchange in March 2015 and on the Shanghai Stock Exchange STAR Market in December 2021[77](index=77&type=chunk) - Financial statements are prepared on a going concern basis, with the ability to continue as a going concern for at least 12 months from the end of the reporting period[78](index=78&type=chunk) [Significant Accounting Policies and Estimates](index=35&type=section&id=Significant%20Accounting%20Policies%20and%20Estimates) This section details the company's key accounting policies and estimates, including revenue recognition upon customer obtaining control, impairment of financial instruments using the expected credit loss model, inventory valuation at the lower of cost or net realizable value using the weighted-average method, and depreciation of fixed assets using the straight-line method - Revenue Recognition: The company recognizes revenue when the customer obtains control of the related goods or services; for distribution, upon dealer's receipt; for direct sales and delivery, upon actual use by the hospital; for overseas sales, upon customs export declaration[125](index=125&type=chunk)[126](index=126&type=chunk) - Expected Credit Loss: The company accounts for impairment of financial assets based on expected credit losses; for receivables without significant financing components, the simplified approach is used to measure loss allowances at an amount equal to the lifetime expected credit losses[98](index=98&type=chunk)[99](index=99&type=chunk) - Inventory Valuation: Inventories are valued using the weighted-average method upon issuance and measured at the lower of cost or net realizable value at period-end[103](index=103&type=chunk) [Notes to Major Items in Consolidated Financial Statements](index=58&type=section&id=Notes%20to%20Major%20Items%20in%20Consolidated%20Financial%20Statements) This section provides detailed notes on key consolidated financial statement items, including accounts receivable increasing to **RMB 657 million** with an **8.14%** bad debt provision, inventory rising to **RMB 182 million**, fixed assets significantly increasing to **RMB 287 million** due to transfers from construction in progress, and substantial R&D expenses primarily for new projects, with **RMB 491 million** in wealth management products purchased with idle funds - Accounts receivable balance increased from **RMB 439 million** at the beginning of the year to **RMB 657 million**, with bad debt provision increasing from **RMB 39.2 million** to **RMB 53.48 million** accordingly[147](index=147&type=chunk)[148](index=148&type=chunk) - Fixed assets book value increased from **RMB 178 million** at the beginning of the year to **RMB 362 million**, primarily due to **RMB 180 million** transferred from construction in progress[166](index=166&type=chunk) - Market development expenses of **RMB 121 million** were a major component of selling expenses[212](index=212&type=chunk) - Technical service fees, employee compensation, and material consumption were the main expenditures within R&D expenses, collectively accounting for over **75%** of total R&D expenses[214](index=214&type=chunk) [Related Party Relationships and Transactions](index=93&type=section&id=Related%20Party%20Relationships%20and%20Transactions) The company's actual controllers are Mr. Shi Chunbao and Ms. Yue Shujun, a married couple; during the reporting period, the company conducted sales of goods totaling **RMB 2.56 million** with Beijing Meizhuo Medical Devices Co., Ltd., a related party, and disclosed key management personnel compensation of **RMB 2.11 million** - The company's actual controllers are Mr. Shi Chunbao (Executive Director) and Ms. Yue Shujun (Executive Director and Deputy General Manager), a married couple, who collectively hold **54.72%** of the company's voting rights[248](index=248&type=chunk) - Sales of goods to related party Beijing Meizhuo Medical Devices Co., Ltd. amounted to **RMB 2,564,968.32**, representing **0.45%** of similar transactions for the period[251](index=251&type=chunk) - Total compensation paid to key management personnel for the period was **RMB 2,109,438.92**[252](index=252&type=chunk)