Financial Performance - Revenue for the six months ended June 30, 2024, was RMB 7,175,804 thousand, representing a 3.9% increase from RMB 6,906,524 thousand in the same period of 2023[3]. - EBITDA for the same period was RMB 2,231,943 thousand, up 14.2% from RMB 1,953,790 thousand year-over-year[3]. - Profit before tax increased by 18.0% to RMB 1,901,702 thousand, compared to RMB 1,612,155 thousand in the previous year[3]. - Net profit attributable to the company's owners rose by 16.1% to RMB 1,491,404 thousand, from RMB 1,284,496 thousand in 2023[3]. - Basic earnings per share increased to RMB 82.08, a 16.1% rise from RMB 70.69 in the prior year[3]. - The interim dividend per share was declared at RMB 16.0, reflecting a 33.3% increase from RMB 12.0 in the previous year[3]. - Gross profit increased to RMB 3,344,365 thousand, up 4.1% from RMB 3,213,298 thousand year-over-year[9]. - Net profit for the period was RMB 1,490,995 thousand, a rise of 16.1% compared to RMB 1,284,240 thousand in the previous year[9]. - Basic earnings per share increased to RMB 82.08, up from RMB 70.69, reflecting a growth of 16.5%[9]. - The company reported a pre-tax profit of RMB 1,901,702 thousand for the six months ended June 30, 2024, an increase of 17.9% compared to RMB 1,612,155 thousand for the same period in 2023[14]. - The company recognized a total comprehensive income of RMB 1,285,591 thousand for the six months ended June 30, 2024, compared to RMB 1,284,240 thousand for the same period in 2023, indicating a slight increase[12]. Assets and Liabilities - Total assets as of June 30, 2024, amounted to RMB 15,147,724 thousand, compared to RMB 13,787,201 thousand at the end of 2023, indicating a growth of 9.9%[10]. - Non-current assets increased to RMB 7,678,405 thousand from RMB 7,229,979 thousand, marking a rise of 6.2%[10]. - Current liabilities decreased to RMB 7,733,502 thousand from RMB 7,160,469 thousand, a reduction of 8.0%[11]. - The company’s total equity attributable to owners increased to RMB 13,525,453 thousand as of June 30, 2024, compared to RMB 11,530,528 thousand as of June 30, 2023, representing a growth of 17.3%[12]. - The company’s total liabilities decreased from RMB 2,030,355 thousand in the previous year to RMB 127,000 thousand in the current year, showing a significant reduction in debt[15]. - The group’s total liabilities decreased to RMB 5,376,343,000 as of June 30, 2024, from RMB 6,084,888,000 as of December 31, 2023, reflecting a decline of approximately 11.6%[53]. Cash Flow and Investments - The company reported a cash and cash equivalents balance of RMB 6,554,830 thousand, significantly up from RMB 4,261,989 thousand, reflecting a growth of 53.7%[10]. - Operating cash flow generated was RMB 2,207,903 thousand, up from RMB 1,470,153 thousand year-over-year, reflecting a growth of 50.1%[14]. - The company recorded a net cash increase of RMB 2,292,276 thousand for the six months ended June 30, 2024, compared to a net increase of RMB 1,174 thousand in the same period of 2023[15]. - The company invested RMB 732,459 thousand in property, plant, and equipment during the six months ended June 30, 2024, compared to RMB 396,697 thousand in the same period of 2023, reflecting an increase of 84.5%[15]. - Capital expenditures on property, plant, and equipment for the six months ended June 30, 2024, were approximately RMB 741,061,000, significantly higher than RMB 395,085,000 in the same period of 2023, marking an increase of about 87.5%[46]. Revenue Sources and Market Performance - Revenue from intermediates was RMB 3,081,282 thousand, while raw materials and formulations generated RMB 3,917,640 thousand and RMB 2,397,777 thousand, respectively, contributing to the overall revenue[24]. - The revenue from the Chinese market (including Hong Kong) was RMB 5,748,478 thousand, up from RMB 5,544,083 thousand in the previous year, indicating a growth of about 3.7%[26]. - The company reported a significant increase in sales of antibiotic products, generating RMB 5,150,288 thousand, compared to RMB 5,144,679 thousand in the prior period, reflecting stable demand[24]. - The insulin product line contributed RMB 528,341 thousand in revenue, showing a positive trend in this segment[24]. - The company plans to continue expanding its market presence, particularly in Europe and India, where revenues were RMB 376,958 thousand and RMB 331,769 thousand, respectively[26]. - The total segment revenue for intermediates, APIs, and formulations for the first half of 2024 was RMB 9,396,699,000, with a total inter-segment sales of RMB 2,220,895,000[28]. Research and Development - Research and development expenses rose to RMB 446,800 thousand, an increase of 32.0% from RMB 338,678 thousand in the previous year[9]. - The company invested RMB 479,400,000 in drug research and development, a 36.9% increase compared to the previous year[74]. - The company has 44 new human drug products under development, including 19 Class 1 new drugs focusing on various therapeutic areas[74]. - The company is focused on enhancing its research and innovation capabilities to adapt to industry changes[84]. Shareholder and Corporate Governance - The company declared an interim dividend of RMB 0.16 per ordinary share for the six months ended June 30, 2024, totaling RMB 290,724,000, compared to RMB 218,043,000 for the same period in 2023[46]. - The company is committed to creating more value for shareholders and society amidst the transformation of the pharmaceutical industry in China[84]. - The company adopted a share incentive plan on October 26, 2023, allowing for the issuance of up to 181,702,650 shares, representing 10% of the total issued shares[93]. - A total of 12,096,900 shares were granted under the share incentive plan on November 13, 2023, all acquired through market transactions[93]. - The board of directors confirmed compliance with the standards set forth in the code of conduct for securities trading during the six-month period ending June 30, 2024[98]. Employee and Operational Metrics - The total employee costs, including directors' remuneration, for the six months ended June 30, 2024, were RMB 916,843,000, up from RMB 769,768,000 in the previous year, indicating a rise of approximately 19.1%[41]. - The company employed approximately 15,000 staff as of June 30, 2024, maintaining the same number as at the end of 2023[81]. - The total remuneration for directors for the six months ended June 30, 2024, was RMB 10,034,000, compared to RMB 9,630,000 for the same period in 2023, reflecting an increase of 4.2%[63]. Compliance and Regulatory Matters - The company has implemented revised Hong Kong Financial Reporting Standards, which did not have a significant impact on the financial performance for the current and prior periods[21]. - The company has no significant contracts or interests that conflict with its business operations as of the reporting period[86]. - The audit committee reviewed the unaudited condensed consolidated financial statements for the six-month period ending June 30, 2024[100].

Share Incentive Plan - The company granted a total of 12,096,900 shares under the share incentive plan on November 13, 2023, which will not result in the issuance of new shares[2] - A total of 169,605,750 shares are available for grant under the share incentive plan, representing 9.33% of the company's issued shares as of the 2023 annual report date[4] - The share incentive plan aims to align the interests of the company's directors and employees with those of shareholders[2] - The share incentive plan allows for a maximum of 10% of the issued shares to be granted, equating to 181,702,650 shares[2] - The total number of shares granted to the five highest-paid individuals amounted to 1,618,800 shares[2] - The vesting period for the granted shares is from November 13, 2024, to November 13, 2026[2] Share Valuation - The fair value of the granted shares on the date of award was HKD 7.45 per share, with the closing prices being HKD 7.77 and HKD 7.45 on the respective dates[3] - The company did not purchase any incentive shares during the fiscal year ending December 31, 2023[3] Corporate Governance - The company’s board of directors includes six executive directors and three independent non-executive directors[5] - The announcement does not affect other information contained in the 2023 annual report, which remains accurate and unchanged[4]

Investment Rating - The report maintains a "Buy" rating for the company [4][9]. Core Views - The company reported a slight revenue increase of 3.9% year-on-year to 7.176 billion RMB in the first half of 2024, with net profit attributable to shareholders rising by 16.1% to 1.49 billion RMB, slightly exceeding expectations [2]. - The formulation segment, particularly the animal health and insulin products, showed strong sales performance, with revenues increasing by 25.7% and 11.3% respectively, despite a 1.5% decline in human antibiotic sales due to centralized procurement impacts [2]. - The intermediate and active pharmaceutical ingredient (API) segments also performed well, with revenues increasing by 25.4% and 1.2% respectively, indicating robust demand outside of human antibiotics [2]. - The company expects the animal health business to maintain rapid growth, with a projected CAGR of 18.6% from 2023 to 2026, while insulin revenue is expected to grow at a CAGR of 7.5% over the same period [2]. - The report adjusts revenue forecasts for 2024-2026 downwards by 5.4%, 4.8%, and 1.8% respectively, but raises net profit forecasts by 0.2%, 1.8%, and 4.2% for the same periods due to a decrease in sales expense ratios [3]. Summary by Sections Financial Performance - Total revenue for 2024E is projected at 14.445 billion RMB, with a growth rate of 5.1% [4]. - Net profit for 2024E is expected to reach 2.883 billion RMB, reflecting a growth rate of 6.8% [4]. - The earnings per share (EPS) for 2024E is estimated at 1.59 RMB, with a price-to-earnings (P/E) ratio of 5.3 [4]. Business Segments - The formulation segment's revenue is projected to be 4.883 billion RMB in 2024E, with a slight decline due to antibiotic sales [4]. - The intermediate segment is expected to generate 2.660 billion RMB in 2024E, benefiting from high demand for 6-APA [4]. - The API segment is forecasted to achieve 6.902 billion RMB in revenue for 2024E, with a stable growth outlook [4]. Valuation - The target price is set at 11.90 HKD, based on a rolling P/E of 6.5 times the 2025E earnings [3][5]. - The current market price is 9.21 HKD, indicating a potential upside of over 20% [5].

Financial Performance - Revenue increased by 3.9% to RMB 7,175,804 thousand compared to RMB 6,906,524 thousand in the same period last year[2] - EBITDA rose by 14.2% to RMB 2,231,943 thousand from RMB 1,953,790 thousand year-over-year[2] - Profit before tax grew by 18.0% to RMB 1,901,702 thousand compared to RMB 1,612,155 thousand in the previous year[2] - Net profit attributable to the company's owners increased by 16.1% to RMB 1,491,404 thousand from RMB 1,284,496 thousand[2] - Basic earnings per share rose by 16.1% to 82.08 RMB cents from 70.69 RMB cents[2] - Interim dividend per share increased by 33.3% to 16.0 RMB cents from 12.0 RMB cents[2] - Total revenue for the first half of 2024 reached RMB 7,175,804 thousand, a 3.9% increase from RMB 6,906,524 thousand in the same period last year[13][14] Revenue Breakdown by Product - Revenue from intermediate products increased to RMB 3,081,282 thousand, up 14.5% YoY from RMB 2,692,115 thousand[13][14] - Revenue from active pharmaceutical ingredients (API) rose to RMB 3,917,640 thousand, a 1.8% increase from RMB 3,849,116 thousand YoY[13][14] - Revenue from finished dosage products slightly decreased to RMB 2,397,777 thousand, down 1.6% from RMB 2,436,110 thousand YoY[13][14] Revenue Breakdown by Region - Revenue from China (including Hong Kong) grew to RMB 5,748,478 thousand, a 3.7% increase from RMB 5,544,083 thousand YoY[15] - Revenue from Europe decreased to RMB 411,566 thousand, down 4.6% from RMB 431,526 thousand YoY[15] - Revenue from India increased to RMB 376,958 thousand, up 13.6% from RMB 331,769 thousand YoY[15] Research and Development - Research and development expenses increased to RMB 446,800 thousand from RMB 338,678 thousand, reflecting a focus on innovation[4] - R&D expenditure increased significantly to RMB 446,800 thousand, up 31.9% from RMB 338,678 thousand YoY[13][14] Assets and Liquidity - Total assets increased to RMB 15,411,907 thousand from RMB 14,390,448 thousand, indicating growth in the company's asset base[5] - Cash and cash equivalents rose significantly to RMB 6,554,830 thousand from RMB 4,261,989 thousand, reflecting improved liquidity[5] - Total equity increased to RMB 13,573,883 thousand from RMB 12,747,618 thousand, showing growth in shareholder value[6] - The company's cash and bank balances increased to RMB 7,321,900,000 as of June 30, 2024, up from RMB 5,234,200,000 on December 31, 2023[42] - Total assets grew to RMB 22,826,100,000 as of June 30, 2024, compared to RMB 21,017,200,000 at the end of 2023[42] - Net current assets rose to RMB 7,733,500,000 as of June 30, 2024, from RMB 7,160,500,000 on December 31, 2023[42] - The company's net cash and bank balances after deducting bank borrowings and trade payables stood at RMB 3,265,100,000 as of June 30, 2024, up from RMB 1,755,500,000 at the end of 2023[42] - The company's current ratio was 2.04 as of June 30, 2024, slightly down from 2.08 on December 31, 2023[42] Debt and Borrowings - The company's interest-bearing borrowings increased to RMB 2,439,400,000 as of June 30, 2024, up from RMB 1,496,900,000 at the end of 2023[42] Government Subsidies and Foreign Exchange - Government subsidies surged to RMB 100,709 thousand, a 189.3% increase from RMB 34,809 thousand YoY[16] - Net foreign exchange gains decreased to RMB 30,773 thousand, down 39.3% from RMB 50,682 thousand YoY[18] Legal and Environmental Initiatives - The company is involved in a legal case seeking to recover RMB 340,000,000 from Chengdu Evergrande, with a partial judgment of RMB 136,300,000 awarded[45] - The company's Inner Mongolia subsidiary launched a salt separation and acid-base conversion project, expected to reduce solid waste by 6,600 tons annually and cut CO2 emissions by 45,000 tons[46] Strategic Focus - The company is focusing on consolidating core industry advantages and enhancing R&D innovation capabilities in response to China's healthcare reform[47] Employee Count - The company employs approximately 15,000 staff in Hong Kong and Mainland China, unchanged from December 31, 2023[44]

Investment Rating - The report assigns a "Buy" rating to the company with a target price of HKD 11.97, indicating a potential upside of 30.0% from the current price of HKD 9.21 [1][12]. Core Insights - The company has demonstrated rapid revenue growth, with a 2023 revenue of RMB 137.39 billion, representing a year-on-year increase of 21.2%. The net profit attributable to shareholders reached RMB 27 billion, up 70.9% year-on-year, and the dividend per share increased by 108% to RMB 0.52 [6][9]. - The company is focusing on the diabetes and weight management sectors, with significant progress in new product development. A new GLP-1/GIP/GCG triple receptor agonist has received clinical trial approval in the U.S. and is expected to enter the Chinese market soon [7][10]. - The company plans to continue increasing its R&D investment, which reached RMB 8.08 billion in 2022, a 36% increase from the previous year. The revenue projections for 2024-2026 are RMB 151 billion, RMB 160.3 billion, and RMB 169.7 billion, respectively [10][12]. Financial Summary - In 2023, the company reported a total revenue of RMB 137.39 billion, with a gross profit margin of 46.11% and a net profit margin of 19.66% [14]. - The company’s total assets amounted to RMB 210 billion, with a net asset value of RMB 127 billion. The earnings per share (EPS) for 2023 was RMB 1.49, with projections of RMB 1.58, RMB 1.70, and RMB 1.80 for 2024, 2025, and 2026, respectively [2][14]. - The company’s market capitalization is approximately HKD 167 billion, with a total share count of 1.817 billion shares [2].

Summary of the Conference Call Company and Industry Involved - The conference call involved Huazhong Medicine, focusing on the pharmaceutical industry [1] Core Points and Arguments - The company held a summer strategy meeting to discuss its future direction and performance in the pharmaceutical sector [1] Other Important but Possibly Overlooked Content - The meeting aimed to engage with investors and provide insights into the company's strategic initiatives and market positioning [1]

Research and Development - The company has over 100 ongoing research projects and has obtained more than 100 patents[6]. - The company has expanded its product range to include biopharmaceuticals and veterinary medicines, with a global sales network covering nearly 80 countries and regions[6]. - The company has received clinical trial approvals for several first-class innovative drugs, including UBT251 injection for type 2 diabetes and TUL01101 tablets for moderate to severe atopic dermatitis[12]. - Research and development expenditure for the year reached RMB 808,300,000, reflecting a 36.2% increase year-on-year[24]. - The company is expanding its pipeline in areas such as metabolism, autoimmune diseases, ophthalmology, and anti-infection, with new drugs for dry eye disease and moderate to severe atopic dermatitis entering clinical trials[24]. - The company is developing 39 new human drug products, including 19 Class 1 new drug projects[37]. - The company’s new drug TUL12101 eye drops received approval for clinical trials in March 2023, targeting dry eye treatment[37]. - The company has been actively involved in the development of recombinant protein drugs, particularly in diabetes biopharmaceuticals, for over 18 years[61]. Financial Performance - The company reported a revenue of RMB 13,739,879,000 for 2023, representing a 21.2% increase from RMB 11,334,262,000 in 2022[17]. - Profit attributable to the company's owners reached RMB 2,701,350,000, a significant increase of 70.9% compared to RMB 1,581,094,000 in the previous year[17]. - Basic earnings per share rose to RMB 148.67, up 71.1% from RMB 86.89 in 2022[17]. - The company’s EBITDA was approximately RMB 3,976,700,000, reflecting a year-on-year growth of 50.6%[32]. - The company’s total comprehensive income for the year was RMB 2,701,270 thousand, compared to RMB 1,582,450 thousand in 2022, marking an increase of 70.8%[129]. - The company reported a pre-tax profit of RMB 3,344,148 thousand, which is an increase of 66.5% from RMB 2,006,766 thousand in 2022[127]. - The financial costs decreased to RMB 66,896 thousand from RMB 81,595 thousand, indicating a reduction of 18.0%[127]. - The company’s total assets increased to RMB 12,747,618 thousand in 2023, compared to RMB 10,609,431 thousand in 2022, representing a growth of approximately 20.1%[134]. Dividends and Shareholder Returns - The company plans to distribute a final dividend of RMB 28.0 per share and a special dividend of RMB 12.0 per share, totaling an annual dividend of RMB 52.0 per share, which is an increase of 108.0% from RMB 25.0 in 2022[17]. - The company reported a proposed final dividend of RMB 0.28 per share and a special dividend of RMB 0.12 per share, subject to shareholder approval at the upcoming annual general meeting[63]. - The total share premium and reserves available for distribution to shareholders is approximately RMB 4,790,000,000[66]. Corporate Governance - The company emphasizes strong governance with a diverse board and experienced management team to drive strategic initiatives[58]. - The board consists of six executive directors and three independent non-executive directors, with five established committees for oversight[91]. - The company has adopted corporate governance practices in line with the Hong Kong Stock Exchange's requirements, ensuring high standards of governance[89]. - The board of directors has established a policy to achieve a balanced strategy goal for diversity among board members, with a current gender diversity ratio of 33.3% (3 out of 9 directors being female)[94]. - The company has implemented a policy to consider diversity factors in the recruitment and selection of senior management and staff[94]. Market Expansion and Strategic Initiatives - The company is actively pursuing market expansion through trade relationships with BRICS countries and along the Belt and Road Initiative, enhancing its global sales network[27]. - The company has launched a cross-border production product, vitamin C effervescent tablets, in the Greater Bay Area, marking a significant milestone[10]. - The company has completed the acquisition of I, which is projected to add $J million in annual revenue and strengthen its market position[180]. - Strategic initiatives include a focus on sustainability, with plans to reduce carbon emissions by K% by 2025[181]. Risk Management and Compliance - The company is actively managing currency exchange risks through treasury policies and forward contracts[43]. - The company has maintained compliance with applicable laws and regulations, with no significant violations reported during the fiscal year ending December 31, 2023[85]. - The internal control system was deemed sufficient and effective by the board, with no significant events affecting the group's ability to continue as a going concern[107]. Investor Relations - The company emphasizes the importance of effective communication with shareholders to enhance investor relations and understanding of business performance and strategy[112]. - The investor relations team, led by the Vice Chairman and the Director of Investor Relations, will continue to engage with investors through various platforms, including roadshows and conference calls[112]. - The company is committed to maintaining high-quality investor relations as part of its management philosophy[112]. Management and Staffing - The company employed approximately 15,000 staff as of December 31, 2023, an increase from 14,000 in 2022[44]. - The executive team includes Mr. Tsoi Hoi Shan as Chairman and Executive Director, with over 23 years of experience in quality control[53]. - The company has experienced significant management continuity, with key executives having over 20 years of experience in the pharmaceutical industry[60][61]. Financial Reporting and Accounting Standards - The financial statements have been prepared in accordance with Hong Kong Financial Reporting Standards and reflect a true and fair view of the group's financial position as of December 31, 2023[114]. - The company expects that the application of the revised Hong Kong Financial Reporting Standards will not have a significant impact on the consolidated financial statements in the foreseeable future[160]. - The group has not yet applied the temporary exception related to the OECD's Pillar Two rules, as the relevant jurisdictions have not implemented these rules[149].

Investment Rating - The investment rating for the company is upgraded to "Buy" with a target price of HKD 11.58 [3][12]. Core Views - The company's 2023 earnings exceeded expectations, with a revenue growth of 21.2% to RMB 13.74 billion, driven by a significant recovery in demand for intermediates and active pharmaceutical ingredients in overseas markets, as well as a gradual recovery in the domestic market [1]. - The company expects stable revenue growth from 2024 to 2026, with a projected CAGR of 6.9% from 2023 to 2026, supported by improving demand in the pharmaceutical sector, a rebound in insulin business revenue, and continued growth in the animal health business [2]. - The company has multiple diabetes drugs in its R&D pipeline, with potential approvals for liraglutide, degludec insulin, and semaglutide expected in 2024 and 2025, which could provide new revenue growth points [2]. Summary by Sections Financial Performance - In 2023, the company's revenue reached RMB 13.74 billion, a 21.2% increase year-on-year, slightly above expectations. The revenue from intermediates and active pharmaceutical ingredients grew by 44.9% and 23.7%, respectively [1]. - The gross profit margin improved from 43.8% to 46.1%, and the net profit attributable to shareholders increased by 70.9% to approximately RMB 2.70 billion, exceeding expectations by 18.8% [1][8]. Revenue Forecast - Revenue forecasts for 2024 and 2025 have been slightly raised by 0.05% and 2.5%, respectively, with expected revenues of RMB 15.10 billion and RMB 15.94 billion [2][9]. - The insulin business, which saw a 4.9% decline in 2023, is expected to recover starting in 2024, with a projected CAGR of 11.4% from 2023 to 2026 [2]. Valuation - The target price has been adjusted to HKD 11.58 based on a 7.0x 2024E PER valuation, reflecting an increase in net profit estimates for 2024 and 2025 by 21.2% and 23.0%, respectively [3][10].

Investment Rating - The report maintains a "Buy" rating for the company [1] Core Insights - The company achieved a total revenue of 137.40 billion CNY in 2023, representing a year-on-year growth of 21.22%, while the net profit reached 27.01 billion CNY, up 70.85% year-on-year [4][7] - The intermediate and raw material drug segments showed strong performance, with revenue from intermediates and raw materials growing by 44.9% and 23.7% respectively [4][7] - The company has a rich pipeline in the diabetes field, with significant progress in GLP-1 products, including the submission of liraglutide injection for production and completion of Phase III clinical enrollment for semaglutide injection [12][14] Financial Performance - The company's revenue forecast for 2024-2026 is projected at 150.47 billion CNY, 158.06 billion CNY, and 165.92 billion CNY, with respective year-on-year growth rates of 9.40%, 5.04%, and 4.97% [4][17] - The net profit forecast for the same period is expected to be 28.70 billion CNY, 29.95 billion CNY, and 31.15 billion CNY, with year-on-year growth rates of 6.23%, 4.36%, and 4.00% [4][17] - The gross margin for 2023 was 46.11%, an increase of 2.27 percentage points, while the net margin was 19.66%, up 5.71 percentage points [9][10] Segment Performance - The formulation segment generated revenue of 50.24 billion CNY, with a growth of 10.2%, while the insulin series saw a decline of 4.93% to 11.18 billion CNY [4][7] - The antibiotic segment, including animal health products, achieved sales of 35.33 billion CNY, marking a growth of 15.3% [4][7] - The overseas business contributed 26.16 billion CNY in revenue, reflecting a growth of 10.3%, while domestic revenue reached 61.00 billion CNY, up 38.57% [4][7] Research and Development - The company has established a comprehensive coverage in the diabetes sector, with projects including degludec insulin injection and liraglutide injection [12][14] - Significant advancements in GLP-1 products were noted, with multiple clinical trials progressing and approvals being sought for various indications [12][14]

Financial Performance - Revenue for 2023 reached RMB 13,739,879,000, a 21.2% increase compared to 2022[2] - Net profit attributable to the company's owners surged by 70.9% to RMB 2,701,400,000[4] - The company's EBITDA rose by 50.6% to RMB 3,976,692,000 in 2023[2] - The company's pre-tax profit grew by 66.6% to RMB 3,344,148,000[2] - Revenue for 2023 reached RMB 13,739.879 million, a 21.2% increase from RMB 11,334.262 million in 2022[12] - Net profit for 2023 was RMB 2,700.845 million, up 70.8% from RMB 1,581.023 million in 2022[12] - Earnings per share for 2023 increased to RMB 148.67 cents, compared to RMB 86.89 cents in 2022[12] - Profit before tax for 2023 was RMB 3,344,148 thousand, up from RMB 2,006,766 thousand in 2022[22][24] - Revenue for the year ended December 31, 2023, was approximately RMB 13,739.9 million, an increase of 21.2% year-over-year[43] - EBITDA for the year was approximately RMB 3,976.7 million, up 50.6% year-over-year[43] - Net profit attributable to shareholders was RMB 2,701.4 million, a 70.9% increase year-over-year[43] R&D and Innovation - R&D investment increased by 36.2% to RMB 808,300,000 in 2023[5] - The company's GLP-1 drug UBT251 injection received clinical trial approvals in both China and the US[5] - Research and development costs rose to RMB 757,248 thousand in 2023, compared to RMB 593,598 thousand in 2022, reflecting increased investment in innovation[27] - The company invested RMB 808.3 million in R&D, a 36.2% increase year-over-year, with 39 new human drug products under development, including 19 Class 1 new drug projects[46] Global Expansion and Market Reach - The company's upstream products now cover nearly 80 countries and regions globally[6] - Revenue from China (including Hong Kong) increased to RMB 11,124,265 thousand in 2023, compared to RMB 8,962,740 thousand in 2022[25] - Revenue from Europe grew to RMB 783,732 thousand in 2023, up from RMB 631,282 thousand in 2022[25] - Revenue from India reached RMB 673,922 thousand in 2023, compared to RMB 556,336 thousand in 2022[25] - Revenue from South America increased to RMB 340,391 thousand in 2023, up from RMB 297,594 thousand in 2022[25] - Overseas sales of intermediate products and APIs reached RMB 2,615.6 million, accounting for 19.0% of total sales[44] Product Segments and Revenue Breakdown - Revenue from intermediate products increased to RMB 5,753,101 thousand in 2023, up from RMB 4,317,709 thousand in 2022[22][24] - Revenue from active pharmaceutical ingredients (API) rose to RMB 7,392,185 thousand in 2023, compared to RMB 6,044,904 thousand in 2022[22][24] - Revenue from finished dosage products grew to RMB 5,023,821 thousand in 2023, up from RMB 4,560,331 thousand in 2022[22][24] - Total revenue for 2023 reached RMB 13,739,879 thousand, a significant increase from RMB 11,334,262 thousand in 2022[22][24] - Intermediate products and active pharmaceutical ingredients (API) segments saw revenue increases of 33.2% and 22.3%, respectively, with profit increases of 116.0% and 102.7%[43] Capital and Asset Management - Total assets as of December 31, 2023, were RMB 14,390.448 million, up from RMB 11,946.598 million in 2022[13] - Non-current assets grew to RMB 7,229.979 million in 2023, compared to RMB 6,464.679 million in 2022[13] - Current assets increased to RMB 13,787.201 million in 2023, up from RMB 12,514.946 million in 2022[13] - The company's equity attributable to owners rose to RMB 12,734.778 million in 2023, from RMB 10,608.086 million in 2022[15] - The company invested RMB 1,143,439 thousand in property, plant, and equipment in 2023, a significant increase from RMB 701,986 thousand in 2022[34] - Trade receivables and bills receivable totaled RMB 6,314,480 thousand in 2023, up from RMB 4,911,704 thousand in 2022, with credit loss provisions of RMB 12,459 thousand for trade receivables[35] - The company typically offers trade customers a credit period of 45 to 120 days, with selected customers potentially receiving extended credit based on trade volume and historical settlement records[36] - The aging analysis of trade receivables shows that 0 to 30 days receivables amounted to RMB 920,770 thousand in 2023, down from RMB 1,026,413 thousand in 2022[37] - Trade payables and other payables totaled RMB 2,238,152 thousand in 2023, with supplier financing arrangements accounting for RMB 1,981,929 thousand[39] - Capital commitments for the acquisition of property, plant, and equipment amounted to RMB 989,055 thousand in 2023, up from RMB 355,691 thousand in 2022[40] - The company pledged assets worth RMB 22,440 thousand in property, plant, and equipment and RMB 972,249 thousand in bank deposits as collateral for bank credit in 2023[41] - The company's current assets increased to RMB 13,787,200,000 in 2023 from RMB 12,514,900,000 in 2022, with net current assets rising to RMB 7,160,500,000 from RMB 5,481,900,000[49] - The current ratio improved to 2.08 in 2023 compared to 1.78 in 2022[49] - Total assets grew to RMB 21,017,200,000 in 2023 from RMB 18,979,600,000 in 2022, while total liabilities decreased to RMB 8,269,600,000 from RMB 8,370,200,000[49] - Equity attributable to owners of the company increased to RMB 12,734,800,000 in 2023 from RMB 10,608,100,000 in 2022[49] - Net cash and bank balances after deducting borrowings and supplier financing arrangements stood at RMB 1,755,500,000 in 2023, up from RMB 1,394,600,000 in 2022[49] - The company held RMB 5,234.2 million in bank deposits, cash, and cash equivalents as of December 31, 2023[48] - The company's interest-bearing borrowings were RMB 1,496.9 million, all due within five years, with RMB 23.9 million in fixed-rate loans and RMB 1,473.0 million in floating-rate loans[48] Dividends and Shareholder Returns - The company's total dividend for 2023 increased by 108% to RMB 52 cents per share[2] - Dividends declared for 2023 totaled RMB 581,448 thousand, up from RMB 272,636 thousand in 2022, reflecting higher interim and special dividends[32] - The company proposed a final dividend of RMB 28 cents per share and a special dividend of RMB 12 cents per share for 2023, totaling RMB 726,811 thousand[32] Employee and Social Responsibility - The company added over 5,000 jobs in the past decade, contributing to social responsibility efforts[10] - The company launched a stock incentive plan in 2023 to align employee interests with corporate value[10] - The company is committed to green factory construction, supporting national carbon neutrality goals[10] - Employee costs, including salaries and benefits, rose to RMB 1,648,745 thousand in 2023, compared to RMB 1,397,006 thousand in 2022[31] - The company employed approximately 15,000 staff in Hong Kong and Mainland China as of December 31, 2023, compared to 14,000 in 2022[51] - The company granted a total of 12,096,900 reward shares to selected participants under the 2023 Share Award Scheme[52] Legal and Contingent Liabilities - The company won a lawsuit against Chengdu Evergrande, with the court ordering payment of approximately RMB 136,300,000, though the company has appealed the decision[53] - The company has no significant contingent liabilities as of December 31, 2023[52] Financial Costs and Taxation - Financial costs decreased to RMB 66,896 thousand in 2023 from RMB 81,595 thousand in 2022, primarily due to lower borrowing interest[28] - Tax expenses increased to RMB 643,303 thousand in 2023, up from RMB 425,743 thousand in 2022, mainly due to higher corporate income tax in China[29] - The company's financial costs decreased by 18.0% to RMB 66.9 million, with net cash and bank balances of RMB 1,755.5 million as of December 31, 2023[47] Other Income and Expenses - Other income increased to RMB 212,475 thousand in 2023, up from RMB 165,817 thousand in 2022, driven by higher bank interest income and subsidy income[26] - Depreciation of property, plant, and equipment increased to RMB 536,303 thousand in 2023 from RMB 521,834 thousand in 2022[31] Treasury and Risk Management - The company maintains a treasury policy to monitor and manage currency exchange rate risks, using forward contracts as needed[50] Production and Infrastructure - The company launched the construction of the Zhuhai Lianbang Gaolan Port API project in November 2023[7] - The company's animal health business experienced rapid growth, with new production bases under construction in Inner Mongolia and Zhuhai[9] - The company's new production base in Zhuhai Gaolan Port, with a total construction area of 120,000 square meters, began construction in November 2023, aiming to enhance the automation and scale of API production[44]