Financial Performance - Revenue for the six months ended June 30, 2023, reached RMB 6,906,524 thousand, a 33.3% increase from RMB 5,181,925 thousand in the same period of 2022[6] - EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) increased by 71.2% to RMB 1,953,790 thousand, compared to RMB 1,140,996 thousand in the previous year[6] - Profit before tax surged by 95.0% to RMB 1,612,155 thousand, up from RMB 826,954 thousand year-over-year[6] - Net profit attributable to the owners of the company was RMB 1,284,496 thousand, reflecting a 104.0% increase from RMB 629,517 thousand in the prior year[6] - Basic earnings per share rose by 104.6% to RMB 70.69, compared to RMB 34.55 in the same period last year[6] - Total comprehensive income for the period amounted to RMB 1,285,591 thousand, compared to RMB 631,731 thousand in the previous year[16] - The company reported a significant increase in other income, totaling RMB 92,491 thousand, compared to RMB 72,641 thousand in the prior year[16] - The company’s pre-tax profit for the six months ended June 30, 2023, was RMB 1,612,155 thousand, compared to RMB 826,954 thousand for the same period in 2022, indicating a growth of approximately 95.1%[43] - Bank interest income increased to RMB 51,432 thousand, up from RMB 29,512 thousand, representing a growth of 74.2% year-over-year[47] - Total other income reached RMB 92,491 thousand, compared to RMB 72,641 thousand in the previous year, marking a 27.2% increase[47] Dividends and Shareholder Returns - The interim dividend per share was increased by 140.0% to RMB 12.0, up from RMB 5.0 in the previous year[6] - The total dividends declared for the period included a final dividend of RMB 0.14 per share, amounting to RMB 254,384,000, and a special dividend of RMB 0.109021 per share, totaling RMB 109,021,000, resulting in total dividends of RMB 363,405,000 for 2023, up from RMB 181,757,000 in 2022[63] - The interim dividend declared for the six months ended June 30, 2023, was RMB 0.12 per share, totaling RMB 218,043,000, compared to RMB 0.05 per share and RMB 90,879,000 in 2022[64] Assets and Liabilities - As of June 30, 2023, total assets amounted to RMB 13,212,085 thousand, an increase of 5.6% from RMB 12,514,946 thousand as of December 31, 2022[18] - Non-current assets reached RMB 6,557,875 thousand, up from RMB 6,464,679 thousand, reflecting a growth of 1.4%[18] - Current liabilities increased to RMB 7,063,733 thousand from RMB 7,033,027 thousand, indicating a slight rise of 0.4%[19] - The net asset value stood at RMB 11,531,617 thousand, representing a 8.7% increase from RMB 10,609,431 thousand[19] - The total equity attributable to owners of the company was RMB 11,530,528 thousand, reflecting a growth of 8.7% from RMB 10,608,086 thousand[19] - The company reported cash and cash equivalents of RMB 4,744,842 thousand, showing a marginal increase from RMB 4,743,071 thousand[18] - The deferred tax liabilities rose to RMB 251,296 thousand from RMB 194,069 thousand, marking a significant increase of 29.5%[19] - The company’s goodwill remained stable at RMB 3,031 thousand, unchanged from the previous period[18] Cash Flow and Investments - Operating cash flow for the six months ended June 30, 2023, was RMB 1,470,153 thousand, a significant increase from RMB 806,708 thousand in the same period of 2022, representing an increase of approximately 82%[25] - The company reported a net cash generated from operating activities of RMB 1,197,471 thousand for the first half of 2023, compared to RMB 659,552 thousand in the prior year, reflecting a growth of about 82%[25] - Cash used in investing activities amounted to RMB 381,558 thousand for the six months ended June 30, 2023, compared to RMB 125,527 thousand in the same period of 2022, indicating an increase in investment outflows[27] - The company recorded a significant increase in cash and cash equivalents at the end of the period, totaling RMB 4,744,842 thousand, up from RMB 4,037,956 thousand at the end of June 2022, marking an increase of approximately 17.5%[27] - The company incurred a financial cost of RMB 38,736 thousand in the first half of 2023, compared to RMB 21,802 thousand in the same period of 2022, representing an increase of about 77%[25] Revenue Breakdown - The revenue breakdown shows that the antibiotic products generated RMB 5,144,679 thousand, while insulin products contributed RMB 474,634 thousand for the six months ended June 30, 2023[38] - The revenue from the Chinese market (including Hong Kong) was RMB 5,544,083 thousand, up from RMB 4,129,014 thousand in the previous year, indicating a growth of about 34.4%[41] - The revenue from the Indian market increased to RMB 331,769 thousand in 2023 from RMB 204,031 thousand in 2022, marking a growth of approximately 62.5%[41] - The company’s total external customer revenue from Europe was RMB 431,526 thousand, up from RMB 308,533 thousand in the previous year, representing an increase of about 39.8%[41] - The segment revenue for intermediates was RMB 2,692,115 thousand, raw materials was RMB 3,849,116 thousand, and formulation products was RMB 2,436,110 thousand for the six months ended June 30, 2023[43] Research and Development - The company invested RMB 350,300,000 in drug research and development, a 44.4% increase year-on-year[103] - The company has 34 new human drug products in development, including 16 first-class new drugs[103] - The company is actively pursuing new drug research and development, aiming to enhance its industrialization capabilities and accelerate the commercialization process[112] Corporate Governance and Shareholder Engagement - The company has adopted high standards of corporate governance to protect shareholder interests and enhance group performance[126] - The audit committee reviewed the unaudited condensed consolidated financial statements for the six months ending June 30, 2023[129] - The board expresses gratitude to shareholders and partners for their support during the first half of 2023[131] Legal and Regulatory Matters - The company is awaiting a judgment from the Chengdu Intermediate People's Court regarding a lawsuit to recover approximately RMB 340,000,000 from Chengdu Evergrande[110] Employee and Director Compensation - Total employee costs, including director remuneration, rose to RMB 769,768 thousand, compared to RMB 642,765 thousand, an increase of 19.8%[59] - The total remuneration for directors for the six months ended June 30, 2023, was RMB 9,630,000, compared to RMB 9,242,000 for the same period in 2022[90]

Financial Performance - Revenue for the six months ended June 30, 2023, was RMB 6,906,524 thousand, representing a 33.3% increase from RMB 5,181,925 thousand in the same period of 2022[2] - Profit before interest, tax, depreciation, and amortization (EBITDA) was RMB 1,953,790 thousand, up 71.2% from RMB 1,140,996 thousand year-on-year[2] - Profit attributable to owners of the company reached RMB 1,284,496 thousand, a significant increase of 104.0% compared to RMB 629,517 thousand in the previous year[2] - Basic earnings per share rose to RMB 70.69, reflecting a 104.6% increase from RMB 34.55[2] - The profit before tax for the period was RMB 1,612,155 thousand, reflecting strong operational performance[13] - The total segment profit for the six months ended June 30, 2023, was RMB 919,831 thousand, compared to RMB 826,954 thousand for the same period in 2022, showing a growth of approximately 11.2%[15] - The company reported a net foreign exchange gain of RMB 50,682 thousand for the six months ended June 30, 2023, compared to a loss of RMB 48,568 thousand in the same period of 2022[19] - The income tax expense for the six months ended June 30, 2023, was RMB 327,915,000, up from RMB 197,437,000 in the same period of 2022, reflecting a growth of 66.1%[21] - The financial cost for the company was approximately RMB 38,700,000, representing a year-on-year increase of 77.7%[42] Dividends - The interim dividend per share was declared at RMB 12.0, a 140.0% increase from RMB 5.0 in the prior period[2] - The company declared an interim dividend of RMB 0.12 per share for the six months ended June 30, 2023, totaling RMB 218,043,000, compared to RMB 0.05 per share totaling RMB 90,879,000 for the same period in 2022[26] - The total dividend declared for the year included a final dividend of RMB 0.14 per share and a special dividend of RMB 0.06 per share, totaling RMB 363,405,000 for the six months ended June 30, 2023, compared to RMB 181,757,000 for the same period in 2022[25] Assets and Liabilities - Total assets as of June 30, 2023, amounted to RMB 13,212,085 thousand, compared to RMB 12,514,946 thousand at the end of 2022[5] - Net current assets increased to RMB 6,148,352 thousand from RMB 5,481,919 thousand at the end of 2022[5] - Non-current liabilities decreased to RMB 1,174,610 thousand from RMB 1,337,167 thousand at the end of 2022[6] - The company's net asset value increased to RMB 11,531,617 thousand from RMB 10,609,431 thousand at the end of 2022[6] - The company's total liabilities decreased to approximately RMB 8,238,300,000 as of June 30, 2023, from RMB 8,370,200,000 as of December 31, 2022[44] Revenue Segmentation - The revenue from intermediates was RMB 2,692,115 thousand, while the revenue from APIs and formulations were RMB 3,849,116 thousand and RMB 2,436,110 thousand respectively, contributing to a total segment revenue of RMB 8,977,341 thousand[14] - The revenue from the Chinese market (including Hong Kong) was RMB 5,544,083 thousand, an increase from RMB 4,129,014 thousand in the previous year, reflecting a growth of approximately 34.4%[16] - Revenue from intermediates, active pharmaceutical ingredients, and formulations was approximately RMB 2,692,100,000, RMB 3,849,100,000, and RMB 2,436,100,000 respectively, with year-on-year increases of 37.2%, 34.6%, and 29.1%[38] - The intermediate and raw materials segment recorded external sales revenue of approximately RMB 1,047,400,000 and RMB 3,423,000,000, representing year-on-year increases of 41.4% and 34.1% respectively[39] - The formulation products segment achieved sales revenue of approximately RMB 2,436,100,000, a year-on-year increase of 29.1%[40] - Antibiotic products, including animal health products, recorded sales revenue of RMB 1,725,000,000, reflecting a year-on-year growth of 50.5%[40] Investments and Expenditures - The total expenditure on property, plant, and equipment for the six months ended June 30, 2023, was approximately RMB 395,085,000, an increase from RMB 281,759,000 in the same period of 2022, marking a rise of 40.3%[27] - The company invested RMB 350,300,000 in drug research and development, marking a year-on-year increase of 44.4%[41] - As of June 30, 2023, the company had capital expenditure commitments of RMB 497,212,000 for property, plant, and equipment[35] Corporate Governance and Management - The board emphasizes strong corporate governance as essential for protecting shareholder interests and enhancing group performance, adhering to the corporate governance code[51] - The company currently does not have a CEO, with plans to appoint one at an appropriate time[52] - The Audit Committee, composed of three independent non-executive directors, has reviewed the unaudited condensed consolidated financial statements for the six months ending June 30, 2023[53] Future Outlook - The company anticipates a recovery phase in the Chinese economy post-pandemic, with a focus on consolidating core industry advantages and enhancing cost control along the supply chain[49] Legal Matters - The company is involved in a lawsuit against Chengdu Evergrande, seeking to recover approximately RMB 340 million in unpaid receivables and related damages, with the first hearing held on February 21, 2023, and the second on June 6, 2023, currently awaiting a judgment[47] Shareholder Engagement - The board expresses gratitude to shareholders and partners for their support during the first half of 2023, highlighting the contributions of all employees[55]

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) The company reported significant financial growth for the six months ended June 30, 2023, with revenue increasing by 33.3% and profit attributable to owners of the Company surging by 104.0% Key Financial Highlights for the Six Months Ended June 30, 2023 | Metric | 2023 (Thousand RMB) | 2022 (Thousand RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 6,906,524 | 5,181,925 | 33.3% | | EBITDA | 1,953,790 | 1,140,996 | 71.2% | | Profit before tax | 1,612,155 | 826,954 | 95.0% | | Profit for the period attributable to owners of the Company | 1,284,496 | 629,517 | 104.0% | | Basic EPS (RMB cents) | 70.69 | 34.55 | 104.6% | | Interim Dividend per Share (RMB cents) | 12.0 | 5.0 | 140.0% | [Condensed Consolidated Financial Statements](index=2&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the condensed consolidated financial performance and position, highlighting significant growth in revenue and profit, alongside a strengthened balance sheet [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2023, the Group's revenue increased by 33.3% to RMB 6.91 billion, gross profit rose by 42.5% to RMB 3.21 billion, and profit for the period attributable to owners of the Company surged by 104.0% to RMB 1.28 billion, with basic EPS at RMB 70.69 cents Key Data from Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Metric | 2023 (Thousand RMB) | 2022 (Thousand RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 6,906,524 | 5,181,925 | 33.3% | | Cost of sales | (3,693,226) | (2,927,960) | 26.1% | | Gross profit | 3,213,298 | 2,253,965 | 42.5% | | Other income | 92,491 | 72,641 | 27.3% | | Net other gains and losses | 52,472 | (71,251) | Significant improvement | | Selling and distribution expenses | (974,906) | (805,744) | 21.0% | | Administrative expenses | (380,688) | (344,847) | 10.4% | | Research and development expenses | (338,678) | (242,607) | 39.6% | | Finance costs | (38,736) | (21,802) | 77.7% | | Profit before tax | 1,612,155 | 826,954 | 95.0% | | Income tax expense | (327,915) | (197,437) | 66.1% | | Profit for the period | 1,284,240 | 629,517 | 104.0% | | Profit for the period attributable to owners of the Company | 1,284,496 | 629,517 | 104.0% | | Basic EPS (RMB cents) | 70.69 | 34.55 | 104.6% | [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2023, the Group's total assets increased to RMB 19.77 billion, total liabilities slightly decreased to RMB 8.24 billion, and equity attributable to owners of the Company grew to RMB 11.53 billion, indicating a robust financial position with improved net current assets and current ratio Key Data from Condensed Consolidated Statement of Financial Position | Metric | June 30, 2023 (Thousand RMB) | December 31, 2022 (Thousand RMB) | Change (%) | | :--- | :--- | :--- | :--- | | **Assets** | | | | | Non-current assets | 6,557,875 | 6,464,679 | 1.4% | | Current assets | 13,212,085 | 12,514,946 | 5.6% | | **Total assets** | 19,769,960 | 18,979,625 | 4.2% | | **Liabilities** | | | | | Current liabilities | 7,063,733 | 7,033,027 | 0.4% | | Non-current liabilities | 1,174,610 | 1,337,167 | -12.1% | | **Total liabilities** | 8,238,343 | 8,370,194 | -1.6% | | **Equity** | | | | | Equity attributable to owners of the Company | 11,530,528 | 10,608,086 | 8.7% | | Non-controlling interests | 1,089 | 1,345 | -19.0% | | **Total equity** | 11,531,617 | 10,609,431 | 8.7% | | Net current assets | 6,148,352 | 5,481,919 | 12.1% | | Current ratio | 1.87 | 1.78 | 5.1% | [Notes to the Financial Statements](index=5&type=section&id=Notes%20to%20the%20Financial%20Statements) This section provides detailed explanations and disclosures regarding the accounting policies, financial performance, and position of the Group [1. Basis of Presentation](index=5&type=section&id=1.%20Basis%20of%20Presentation) The condensed consolidated financial statements are prepared in accordance with HKAS 34 'Interim Financial Reporting' and the disclosure requirements of Appendix 16 to the HKEX Listing Rules - The financial statements comply with HKAS 34 and the disclosure requirements of Appendix 16 to the HKEX Listing Rules[8](index=8&type=chunk) [2. Significant Accounting Policies](index=5&type=section&id=2.%20Significant%20Accounting%20Policies) The condensed consolidated financial statements are prepared on a historical cost basis, with certain financial instruments measured at fair value, and accounting policies remain consistent with 2022, except for new HKFRS amendments - The financial statements are primarily prepared on a historical cost basis, with certain financial instruments measured at fair value[9](index=9&type=chunk) - Accounting policies are largely consistent with the 2022 annual financial statements, with changes only due to the application of newly amended HKFRS[9](index=9&type=chunk) [Application of Amended Hong Kong Financial Reporting Standards](index=5&type=section&id=Application%20of%20Amended%20Hong%20Kong%20Financial%20Reporting%20Standards) The Group first applied HKFRS amendments effective January 1, 2023, during this interim period, which had no material impact on its financial performance, position, or disclosures - Amendments to HKFRS 17 and HKAS 8, 12 were applied during the period[11](index=11&type=chunk) - These amendments had no material impact on the Group's financial performance, position, or disclosures for the current and prior periods[11](index=11&type=chunk) [2.1 Impact of Application of Amendments to HKAS 12 Income Taxes (International Tax Reform – Pillar Two Model Rules)](index=5&type=section&id=2.1%20Impact%20of%20Application%20of%20Amendments%20to%20HKAS%2012%20Income%20Taxes%20(International%20Tax%20Reform%20–%20Pillar%20Two%20Model%20Rules)) The Group has not yet applied the temporary exception in HKAS 12 regarding Pillar Two legislation, as its entities are not in relevant jurisdictions, and will disclose information when the legislation becomes effective - The Group has not yet applied the temporary exception in HKAS 12 regarding Pillar Two legislation[12](index=12&type=chunk) - The Group's entities are not currently in jurisdictions where Pillar Two legislation has been enacted or substantively enacted[12](index=12&type=chunk) - Relevant qualitative and quantitative information will be disclosed when Pillar Two legislation is enacted or becomes effective[12](index=12&type=chunk) [3. Revenue and Segment Information](index=6&type=section&id=3.%20Revenue%20and%20Segment%20Information) The Group's revenue primarily stems from three business segments: intermediates, APIs, and finished products, categorized by customer geographical markets, all showing significant growth in H1 2023, with China being the largest contributor - The Group has three main business revenue streams: intermediates, APIs, and finished products[14](index=14&type=chunk) [(a) Segment Revenue and Results](index=6&type=section&id=(a)%20Segment%20Revenue%20and%20Results) For the six months ended June 30, 2023, segment revenue (including inter-segment sales) for intermediates, APIs, and finished products grew by 37.2%, 34.6%, and 29.1% respectively, with intermediates and APIs showing strong profit growth while finished products slightly declined Segment Revenue and Results (For the six months ended June 30, 2023) | Segment | External Sales (Thousand RMB) | Inter-segment Sales (Thousand RMB) | Segment Revenue (Thousand RMB) | Segment Profit (Thousand RMB) | | :--- | :--- | :--- | :--- | :--- | | Intermediates | 1,047,439 | 1,644,676 | 2,692,115 | 814,405 | | APIs | 3,422,975 | 426,141 | 3,849,116 | 427,956 | | Finished Products | 2,436,110 | - | 2,436,110 | 303,767 | | **Consolidated** | **6,906,524** | **-** | **6,906,524** | **1,546,128** | Year-on-Year Change in Segment Revenue and Results (For the six months ended June 30, 2023) | Segment | Segment Revenue YoY Growth (%) | Segment Profit YoY Growth (%) | | :--- | :--- | :--- | | Intermediates | 37.2% | 89.8% | | APIs | 34.6% | 133.4% | | Finished Products | 29.1% | -1.2% | [(b) Geographical Information](index=7&type=section&id=(b)%20Geographical%20Information) China (including Hong Kong) remained the Group's largest revenue source in H1 2023, contributing RMB 5.54 billion, a 34.3% increase year-on-year, with other markets like Europe, India, and South America also showing significant growth Revenue by Customer Geographical Market (Thousand RMB) | Region | 2023 | 2022 | | :--- | :--- | :--- | | PRC (including Hong Kong) | 5,544,083 | 4,129,014 | | Europe | 431,526 | 308,533 | | India | 331,769 | 204,031 | | Middle East | 26,046 | 32,208 | | South America | 170,335 | 124,404 | | Other Asia | 308,142 | 263,667 | | Other Regions | 94,623 | 120,068 | | **Total** | **6,906,524** | **5,181,925** | [4. Other Income](index=7&type=section&id=4.%20Other%20Income) The Group's other income totaled RMB 92.49 million in H1 2023, a 27.3% year-on-year increase, primarily driven by bank interest income, scrap sales, and government grants, with bank interest showing significant growth Other Income Details (Thousand RMB) | Item | 2023 | 2022 | | :--- | :--- | :--- | | Bank interest income | 51,432 | 29,512 | | Scrap sales | 2,576 | 2,191 | | Subsidy income | 34,809 | 33,778 | | Miscellaneous income | 3,674 | 7,160 | | **Total** | **92,491** | **72,641** | - Subsidy income includes grants from PRC government authorities for capital expenditure, R&D activities, and unconditional awards[17](index=17&type=chunk) - RMB **0.529 million** (2022: RMB 0.65 million) in Covid-19 related subsidies from the Hong Kong government were recognized during the period[18](index=18&type=chunk) [5. Net Other Gains and Losses](index=8&type=section&id=5.%20Net%20Other%20Gains%20and%20Losses) The Group recorded net other gains of RMB 52.47 million in H1 2023, a significant improvement from a loss of RMB 71.25 million in the prior year, mainly due to net foreign exchange gains and fair value gains from derivative financial instruments Net Other Gains and Losses Details (Thousand RMB) | Item | 2023 | 2022 | | :--- | :--- | :--- | | Net foreign exchange gains (losses) | 50,682 | (48,568) | | Net fair value gains from derivative financial instruments | 24,231 | 308 | | Gains on disposal of financial assets at fair value through profit or loss | 36,690 | - | | Fair value gains on financial assets at fair value through profit or loss | 54 | - | | Net loss on disposal of property, plant and equipment | (2,330) | (2,803) | | Write-off of property, plant and equipment | (56,087) | (19,263) | | Others | (768) | (925) | | **Total** | **52,472** | **(71,251)** | - The Group manages foreign exchange risk through cross currency interest rate swap contracts and foreign currency forward contracts, which are not accounted for as hedging instruments[19](index=19&type=chunk) [6. Finance Costs](index=8&type=section&id=6.%20Finance%20Costs) The Group's finance costs for H1 2023 increased by 77.7% to RMB 38.74 million, primarily due to interest on borrowings, with a portion capitalized into property, plant and equipment Finance Costs Details (Thousand RMB) | Item | 2023 | 2022 | | :--- | :--- | :--- | | Interest on borrowings | 44,288 | 23,752 | | Interest on lease liabilities | 260 | 293 | | Less: Amount capitalized into property, plant and equipment | (5,812) | (2,243) | | **Total** | **38,736** | **21,802** | - The average capitalization rate for borrowing costs was **4.28%** (2022: 2.42%)[20](index=20&type=chunk) [7. Income Tax Expense](index=9&type=section&id=7.%20Income%20Tax%20Expense) The Group's income tax expense for H1 2023 increased by 66.1% to RMB 327.92 million, mainly comprising PRC corporate income tax, withholding tax on interest income and distributed profits, and deferred tax expense, with certain PRC entities benefiting from a 15% high-tech enterprise tax rate Income Tax Expense Details (Thousand RMB) | Item | 2023 | 2022 | | :--- | :--- | :--- | | PRC corporate income tax | 256,986 | 148,635 | | PRC withholding tax on interest income | 3,594 | 2,294 | | PRC withholding tax on distributed profits of PRC subsidiaries | 9,785 | 16,500 | | Deferred tax expense | 57,550 | 30,008 | | **Income tax expense** | **327,915** | **197,437** | - Certain PRC Group entities, as high-tech enterprises, enjoy a **15%** preferential tax rate[22](index=22&type=chunk) - The Group applies a **5%** withholding tax rate for dividends distributed by PRC entities to non-PRC tax residents[22](index=22&type=chunk) [8. Profit for the Period](index=10&type=section&id=8.%20Profit%20for%20the%20Period) Profit for the period was derived after deducting employee costs of RMB 769.77 million, depreciation of RMB 294.13 million, amortization of intangible assets of RMB 8.77 million, and net inventory provision of RMB 5.29 million Items Deducted from Profit for the Period (Thousand RMB) | Item | 2023 | 2022 | | :--- | :--- | :--- | | Employee costs (including directors' emoluments) | 769,768 | 642,765 | | Depreciation of right-of-use assets | 5,468 | 5,198 | | Depreciation of property, plant and equipment | 288,665 | 278,560 | | Amortization of intangible assets | 8,766 | 8,482 | | Net provision for (reversal of provision for) inventories | 5,292 | 432 | | Cost of inventories recognized as expense | 3,693,226 | 2,927,960 | [9. Earnings Per Share](index=10&type=section&id=9.%20Earnings%20Per%20Share) Basic earnings per share attributable to owners of the Company for the six months ended June 30, 2023, significantly increased to RMB 70.69 cents from RMB 34.55 cents in the prior year, with no diluted EPS presented due to the absence of potential ordinary shares EPS Calculation (Thousand RMB) | Metric | 2023 | 2022 | | :--- | :--- | :--- | | Profit for the period attributable to owners of the Company for basic EPS calculation | 1,284,496 | 629,517 | | Weighted average number of ordinary shares (thousands) | 1,817,027 | 1,822,167 | | **Basic EPS (RMB cents)** | **70.69** | **34.55** | - No diluted EPS is presented as there were no potential ordinary shares in issue for both periods[24](index=24&type=chunk) [10. Dividends](index=11&type=section&id=10.%20Dividends) The Group recognized total dividends of RMB 363.41 million in H1 2023, including final and special dividends for 2022, and the Board declared an interim dividend of RMB 12 cents per share, totaling RMB 218.04 million, a 140% increase year-on-year Dividends Recognized and Declared (Thousand RMB) | Item | 2023 | 2022 | | :--- | :--- | :--- | | 2022 final dividend (RMB 14 cents per share) | 254,384 | 145,406 | | 2022 special dividend (RMB 6 cents per share) | 109,021 | 36,351 | | **Total dividends recognized as distribution during the year** | **363,405** | **181,757** | | Interim dividend declared (RMB 12 cents per share) | 218,043 | 90,879 | [11. Movements in Property, Plant and Equipment](index=11&type=section&id=11.%20Movements%20in%20Property,%20Plant%20and%20Equipment) The Group incurred capital expenditure of approximately RMB 395 million on property, plant and equipment in H1 2023, primarily for expansion and upgrades in Zhuhai and Inner Mongolia, while also incurring total losses of RMB 58.42 million from asset disposals and write-offs - Capital expenditure on property, plant and equipment in H1 2023 was approximately **RMB 395 million**, a **40.2%** year-on-year increase[27](index=27&type=chunk) - Primarily for the expansion and upgrade of production plants and office buildings in Zhuhai and Inner Mongolia, China[27](index=27&type=chunk) - Disposal and write-off of assets resulted in total losses of approximately **RMB 58.417 million**[27](index=27&type=chunk) [12. Trade and Bills Receivables, Other Receivables, Deposits and Prepayments](index=12&type=section&id=12.%20Trade%20and%20Bills%20Receivables,%20Other%20Receivables,%20Deposits%20and%20Prepayments) As of June 30, 2023, the Group's total trade and bills receivables, other receivables, deposits, and prepayments amounted to RMB 5.58 billion, a 13.6% increase from year-end 2022, with typical credit terms of 60 to 120 days for trade customers Trade and Other Receivables Details (Thousand RMB) | Item | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Trade receivables (net of provision) | 2,468,584 | 2,103,912 | | Bills receivable - bank acceptance (net of provision) | 2,563,480 | 2,359,376 | | Bills receivable - commercial (net of provision) | 1,351 | 12,534 | | Consideration receivable (net of provision) | 339,574 | 339,574 | | VAT recoverable | 114,862 | 115,866 | | Other receivables, deposits and prepayments (net of provision) | 429,696 | 320,016 | | **Total** | **5,577,973** | **4,911,704** | - Trade customers are generally granted credit terms of **60 to 120 days**, while bank and commercial bills receivable have maturity periods of **90 days to 1 year**[28](index=28&type=chunk) [13. Trade and Other Payables](index=14&type=section&id=13.%20Trade%20and%20Other%20Payables) As of June 30, 2023, the Group's total trade and other payables increased by 7.9% to RMB 5.79 billion, with a significant rise in trade payables under supplier financing arrangements, reflecting the Group's financing strategy Trade and Other Payables Details (Thousand RMB) | Item | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Trade payables | 1,634,607 | 1,970,355 | | Trade payables under supplier financing arrangements | 2,318,473 | 1,588,069 | | Other payables and accrued expenses | 482,330 | 485,992 | | Other tax payables | 181,924 | 158,654 | | Price concession liabilities | 39,284 | - | | Accrued freight charges | 78,323 | 76,441 | | Accrued salaries, staff welfare and untaken annual leave | 196,927 | 191,578 | | Accrued water, electricity and steam charges | 364,186 | 370,618 | | Deferred income from government grants | 88,036 | 95,859 | | Payables for acquisition of property, plant and equipment | 400,941 | 423,723 | | **Total** | **5,785,031** | **5,361,289** | - The Group is generally granted credit terms of **120 to 180 days** by its suppliers[32](index=32&type=chunk) - Price concession liabilities represent amounts expected to be refunded to customers due to price reductions from the 8th round of China's centralized drug procurement[34](index=34&type=chunk) [14. Capital Commitments](index=15&type=section&id=14.%20Capital%20Commitments) As of June 30, 2023, the Group's contracted but unprovided capital expenditure commitments for property, plant and equipment amounted to RMB 497.21 million, a 39.8% increase from year-end 2022 - Capital expenditure commitments amounted to **RMB 497.212 million** (December 31, 2022: RMB 355.691 million), a **39.8%** year-on-year increase[35](index=35&type=chunk) [15. Pledged or Restricted Assets](index=15&type=section&id=15.%20Pledged%20or%20Restricted%20Assets) As of June 30, 2023, the Group had pledged property, plant and equipment, right-of-use assets, bills receivable, and pledged bank deposits to banks as collateral for credit facilities, with certain right-of-use assets restricted Pledged Assets (Thousand RMB) | Item | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Property, plant and equipment | 384,621 | 416,896 | | Right-of-use assets | 165,226 | 167,837 | | Bills receivable - bank acceptance | 1,074,187 | 764,422 | | Pledged bank deposits | 674,355 | 694,704 | - Right-of-use assets related to lease liabilities cannot be used as collateral for borrowings[36](index=36&type=chunk) [16. Related Party Transactions](index=15&type=section&id=16.%20Related%20Party%20Transactions) Total emoluments for the Company's directors amounted to RMB 9.63 million during the period, a slight increase from the prior year, primarily comprising fees, salaries, other benefits, and retirement benefit scheme contributions Directors' Emoluments (Thousand RMB) | Item | 2023 | 2022 | | :--- | :--- | :--- | | Fees | 286 | 329 | | Salaries and other benefits | 9,300 | 8,869 | | Retirement benefit scheme contributions | 44 | 44 | | **Total** | **9,630** | **9,242** | [Management Discussion and Analysis](index=16&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an overview of the Group's business performance, operational highlights, financial position, and strategic initiatives during the reporting period [Business Review](index=16&type=section&id=Business%20Review) In H1 2023, despite a weak global recovery, China's economy improved, and pharmaceutical reforms deepened, leading to the Group's turnover increasing by 33.3% to RMB 6.91 billion and profit attributable to owners of the Company surging by 104.0% to RMB 1.285 billion, with all segments showing significant revenue growth - Global economic recovery was weak, while China's economy improved, with the pharmaceutical sector focusing on "health," "innovation," and "cooperation"[38](index=38&type=chunk) - The 8th round of national centralized drug procurement proceeded orderly, and the national medical insurance drug catalog adjustment commenced[38](index=38&type=chunk) Key Financial Performance H1 2023 | Metric | Amount (RMB) | YoY Growth (%) | | :--- | :--- | :--- | | Turnover | 6,906,500,000 | 33.3% | | EBITDA | 1,953,800,000 | 71.2% | | Profit attributable to owners of the Company | 1,284,500,000 | 104.0% | | EPS | 70.69 cents | - | | Interim Dividend per Share | 12 cents | - | - Revenue from intermediates, APIs, and finished products segments increased by **37.2%**, **34.6%**, and **29.1%** respectively[38](index=38&type=chunk) [Intermediates and APIs Business](index=16&type=section&id=Intermediates%20and%20APIs%20Business) In H1 2023, external sales revenue for intermediates and APIs grew by 41.4% and 34.1% respectively, with overseas export sales increasing by 29.4% to RMB 1.362 billion, driven by recovering demand and stable market prices, reinforcing the Group's leading position Intermediates and APIs External Sales Revenue | Segment | H1 2023 External Sales Revenue (RMB) | YoY Growth (%) | | :--- | :--- | :--- | | Intermediates | 1,047,400,000 | 41.4% | | APIs | 3,423,000,000 | 34.1% | - Overseas export sales revenue was **RMB 1.362 billion**, a **29.4%** year-on-year increase, accounting for **19.7%** of total turnover[39](index=39&type=chunk) - Recovering overseas market demand led to stable price increases for related products[39](index=39&type=chunk) [Finished Products Business](index=16&type=section&id=Finished%20Products%20Business) In H1 2023, finished products sales revenue grew by 29.1% to RMB 2.436 billion, with strong growth in insulin analogues and antibiotics, including the successful bid for Piperacillin Sodium and Tazobactam Sodium for Injection in the 8th national centralized procurement, and significant growth in animal health products Finished Products Sales Revenue | Product Category | H1 2023 Sales Revenue (RMB) | YoY Growth (%) | | :--- | :--- | :--- | | Total Finished Products | 2,436,100,000 | 29.1% | | Diabetes Products | 498,000,000 | -19.6% | | - Human Insulin | 230,900,000 | - | | - Insulin Analogues | 267,100,000 | Sales volume grew rapidly | | Antibiotics (including Animal Health Products) | 1,725,000,000 | 50.5% | | - Piperacillin Sodium and Tazobactam Sodium for Injection | 386,600,000 | 22.7% | | - Amoxicillin Capsules | 247,100,000 | 17.7% | | Animal Health Products | 534,300,000 | 158.6% | - Piperacillin Sodium and Tazobactam Sodium for Injection (specification: **4.5g**) was selected in the 8th round of national centralized drug procurement[40](index=40&type=chunk) - Strategic cooperation with Muyuan Foods Co., Ltd. continues to advance steadily, aiming to build a leading brand in China's animal health industry[40](index=40&type=chunk) [Progress in Pharmaceutical R&D](index=17&type=section&id=Progress%20in%20Pharmaceutical%20R%26D) The Group's pharmaceutical R&D investment in H1 2023 increased by 44.4% to RMB 350.3 million, with 34 new human drug products under development (16 being Class 1 new drugs), achieving multiple clinical trial approvals and registration applications in endocrinology, autoimmune, ophthalmology, and high-end anti-infectives, including the first domestic approvals for insulin degludec liraglutide injection and semaglutide injection for weight management, and the second global application for a long-acting GLP-1/GIP/GCG triple agonist Pharmaceutical R&D Investment | Item | H1 2023 Investment (RMB) | YoY Growth (%) | | :--- | :--- | :--- | | Total R&D Investment | 350,300,000 | 44.4% | | Expensed R&D Investment | 338,700,000 | - | | Capitalized R&D Investment | 11,600,000 | - | - **34** new human drug products are under development, with **16** being Class 1 new drugs[41](index=41&type=chunk) - Class 1 new drug TUL12101 eye drops received clinical trial approval, a new generation small molecule RASP inhibitor for dry eye disease[41](index=41&type=chunk) - First domestic approvals for biosimilar clinical trials of insulin degludec liraglutide injection and semaglutide injection for weight management indications[41](index=41&type=chunk) - Clinical trial registration application for self-developed Class 1 innovative drug UBT251 injection (long-acting GLP-1/GIP/GCG triple agonist) was accepted, making it the first domestic and second global company to prepare it via chemical synthesis of peptides[41](index=41&type=chunk) - Amoxicillin Capsules (specification: **0.5g**) passed consistency evaluation, becoming the Group's third amoxicillin capsule product to do so[41](index=41&type=chunk) [Optimization of Financial Structure](index=17&type=section&id=Optimization%20of%20Financial%20Structure) The Group optimized its financial structure by adjusting domestic and overseas borrowing portfolios to reduce finance costs and enhance liquidity, with finance costs increasing by 77.7% to RMB 38.7 million, while prioritizing domestic RMB borrowings to improve financial flexibility and capital utilization efficiency - Adjusted domestic and overseas borrowing portfolios to reduce finance costs and optimize financial structure for enhanced liquidity[42](index=42&type=chunk) - Finance costs for the period were approximately **RMB 38.7 million**, a **77.7%** year-on-year increase[42](index=42&type=chunk) - Prioritized domestic RMB as the primary borrowing currency to enhance financial flexibility and capital utilization efficiency[42](index=42&type=chunk) [Liquidity and Financial Resources](index=17&type=section&id=Liquidity%20and%20Financial%20Resources) As of June 30, 2023, the Group maintained robust liquidity with bank balances and cash of approximately RMB 5.42 billion, interest-bearing borrowings of RMB 1.52 billion (45.4% fixed-rate), net current assets increasing to RMB 6.15 billion, and a current ratio of 1.87 Key Liquidity and Financial Resources Data | Metric | June 30, 2023 (RMB) | December 31, 2022 (RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Pledged bank deposits, bank balances and cash | 5,419,200,000 | 5,437,800,000 | -0.3% | | Interest-bearing borrowings | 1,520,900,000 | 2,455,100,000 | -38.0% | | - Fixed-rate loans | 691,200,000 | 251,400,000 | 175.0% | | - Floating-rate loans | 829,700,000 | 2,203,700,000 | -62.4% | | Current assets | 13,212,100,000 | 12,514,900,000 | 5.6% | | Net current assets | 6,148,400,000 | 5,481,900,000 | 12.1% | | Current ratio | 1.87 | 1.78 | 5.1% | | Total assets | 19,770,000,000 | 18,979,600,000 | 4.2% | | Total liabilities | 8,238,300,000 | 8,370,200,000 | -1.6% | | Equity attributable to owners of the Company | 11,530,500,000 | 10,608,100,000 | 8.7% | | Net cash and bank balances (after deducting borrowings and supplier financing) | 1,579,900,000 | 1,394,600,000 | 13.3% | [Contingent Liabilities](index=18&type=section&id=Contingent%20Liabilities) The Group had no significant contingent liabilities as of June 30, 2023, and December 31, 2022 - The Group had no significant contingent liabilities at the end of the reporting period[45](index=45&type=chunk) [Foreign Currency Exchange Risk](index=18&type=section&id=Foreign%20Currency%20Exchange%20Risk) The Group's purchases and sales are primarily settled in RMB, USD, and HKD, with operating expenses mainly in RMB and HKD, and a treasury policy is in place to monitor and manage foreign exchange rate fluctuation risks, using forward contracts for hedging as needed - Purchases and sales are primarily settled in RMB, USD, and HKD, while operating expenses are mainly in RMB and HKD[45](index=45&type=chunk) - A treasury policy is established to monitor and manage foreign exchange rate fluctuation risks, with forward contracts used for hedging as needed[45](index=45&type=chunk) [Employees and Remuneration Policy](index=18&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2023, the Group employed approximately 14,000 staff in Hong Kong and mainland China, with remuneration determined by basic salary, bonuses, other benefits, industry practice, and individual performance - As of June 30, 2023, the Group employed approximately **14,000** staff[46](index=46&type=chunk) - Employee remuneration is determined by basic salary, bonuses, other benefits, industry practice, and individual performance[46](index=46&type=chunk) [Litigation](index=18&type=section&id=Litigation) The Group has filed a lawsuit against Evergrande Real Estate Group Chengdu Co., Ltd. with the Chengdu Intermediate People's Court to recover approximately RMB 340 million in outstanding consideration and related damages, with the case currently awaiting first-instance judgment after two hearings - The Group filed a lawsuit against Evergrande Real Estate Group Chengdu Co., Ltd. to recover approximately **RMB 340 million** in outstanding consideration and damages[47](index=47&type=chunk) - The lawsuit has been transferred to the Chengdu Intermediate People's Court, with two hearings held, and is currently awaiting the first-instance judgment[47](index=47&type=chunk) [Proposed Adoption of Share Award Scheme](index=18&type=section&id=Proposed%20Adoption%20of%20Share%20Award%20Scheme) The Board proposes adopting a 2023 Share Award Scheme to recognize employee contributions, incentivize and retain talent, provide additional motivation for performance targets, and attract suitable talent to enhance Company value, subject to shareholder and HKEX approval - Proposed adoption of the 2023 Share Award Scheme aims to recognize contributions, incentivize talent retention, achieve performance targets, and attract talent[48](index=48&type=chunk) - The scheme is subject to shareholder approval and HKEX approval to become effective[48](index=48&type=chunk) [Outlook](index=19&type=section&id=Outlook) The Group anticipates China's economy to enter a recovery growth phase with stable medical demand, and plans to consolidate core industry advantages, strengthen supply chain cost control, advance brand strategy, accelerate market development, enhance R&D innovation, upgrade production facilities, and actively pursue external collaborations for long-term sustainable growth and industry leadership - China's economy is gradually entering a recovery growth phase, with normal medical institution visits and steady release of drug demand[49](index=49&type=chunk) - The Group will consolidate core industry advantages, strengthen supply chain cost control, advance brand strategy, and accelerate market development and commercialization processes[49](index=49&type=chunk) - Continuously enhance scientific research and innovation capabilities, efficiently advance new drug R&D and launch processes, upgrade production line facilities, and comprehensively improve industrialization capabilities[49](index=49&type=chunk) - Actively expand external cooperation to add momentum for the Group's long-term sustainable development, confident in consolidating and enhancing its industry position and influence[49](index=49&type=chunk) [Other Information](index=19&type=section&id=Other%20Information) This section covers disclosures on securities transactions, corporate governance, and administrative matters [Purchase, Redemption or Sale of the Company’s Listed Securities](index=19&type=section&id=Purchase,%20Redemption%20or%20Sale%20of%20the%20Company’s%20Listed%20Securities) Neither the Company nor its subsidiaries purchased, redeemed, or sold any of the Company's listed securities during the six months ended June 30, 2023 - Neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the period[50](index=50&type=chunk) [Code for Securities Transactions by Directors](index=19&type=section&id=Code%20for%20Securities%20Transactions%20by%20Directors) The Company adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 to the HKEX Listing Rules, and all directors confirmed full compliance during the period - The Company has adopted the Model Code as set out in Appendix 10 to the HKEX Listing Rules[50](index=50&type=chunk) - All directors confirmed full compliance with the Model Code during the period[50](index=50&type=chunk) [Corporate Governance](index=19&type=section&id=Corporate%20Governance) The Board is committed to maintaining high standards of corporate governance and has adopted and complied with the Corporate Governance Code in Appendix 14 to the Listing Rules, with a deviation from Code Provision C.2.1 - The Board is committed to maintaining and ensuring high standards of corporate governance[51](index=51&type=chunk) - The Company has adopted and consistently complied with the Corporate Governance Code as set out in Appendix 14 to the Listing Rules[51](index=51&type=chunk) [Code Provision C.2.1](index=19&type=section&id=Code%20Provision%20C.2.1) The Company deviates from Code Provision C.2.1 as the roles of Chairman and Chief Executive are not separate, with the Chief Executive position currently vacant and an appointment to be made at an appropriate time - The Company has no Chief Executive Officer, and the roles of Chairman and Chief Executive are not separated, deviating from Code Provision C.2.1[52](index=52&type=chunk) - The Company will make an appointment to fill the vacancy at an appropriate time[52](index=52&type=chunk) [Audit Committee](index=19&type=section&id=Audit%20Committee) The Audit Committee, comprising three independent non-executive directors, reviewed the unaudited condensed consolidated financial report for H1 2023, relying on the external auditor's review and management's representations - The Audit Committee comprises three independent non-executive directors: Mr. Zhang Pinwen, Professor Song Min, and Dr. Fu Qiushi[53](index=53&type=chunk) - The Audit Committee has reviewed the unaudited condensed consolidated financial report for the period and relied on the external auditor's review results[53](index=53&type=chunk) [Closure of Register of Members](index=19&type=section&id=Closure%20of%20Register%20of%20Members) The Company's register of members will be closed on September 18 and 19, 2023, to determine eligibility for the interim dividend, requiring shareholders to register transfers by 4:30 p.m. on September 15, 2023 - The register of members will be closed on **September 18 and 19, 2023**, to determine eligibility for the interim dividend[54](index=54&type=chunk) - Shareholders must register transfers by **4:30 p.m. on September 15, 2023**[54](index=54&type=chunk) [Acknowledgement](index=20&type=section&id=Acknowledgement) The Board extends its gratitude to shareholders, partners, and all employees for their trust, support, efforts, and contributions during H1 2023 - The Board thanks shareholders, partners, and all employees for their trust, support, and contributions in H1 2023[55](index=55&type=chunk)

Financial Performance - Revenue for 2022 reached RMB 11,334,262 thousand, representing a 16.8% increase from RMB 9,703,438 thousand in 2021[12] - EBITDA for 2022 was RMB 2,640,792 thousand, up 40.2% from RMB 1,883,735 thousand in 2021[12] - Profit before tax increased by 66.9% to RMB 2,006,766 thousand compared to RMB 1,202,647 thousand in the previous year[12] - Net profit attributable to shareholders rose by 60.0% to RMB 1,581,094 thousand from RMB 988,098 thousand in 2021[12] - Basic earnings per share for 2022 were RMB 86.89, a 61.8% increase from RMB 53.70 in 2021[12] - The company declared a total dividend of RMB 25.0 per share for 2022, an increase of 78.6% from RMB 14.0 in 2021[12] - The total comprehensive income for the year amounted to RMB 1,582,450 thousand, compared to RMB 990,060 thousand in the previous year, showing robust overall performance[129] - The company reported a net profit of RMB 1,581,094 thousand for the year, compared to a profit of RMB 988,098 thousand in the previous year, showing an increase of 60%[135] Research and Development - Research and development investment reached RMB 593,600,000, an increase of 27.6% year-on-year, with significant progress in diabetes and ophthalmology drug development[21] - The company has 29 new products in development, including 15 first-class new drug projects, focusing on endocrine, autoimmune, and ophthalmology fields[33] - The company aims to continue expanding its market presence and investing in new product development to sustain growth momentum[130] Market and Business Development - The company plans to accelerate market development and commercialization processes, expanding external collaborations to diversify products and business[22] - The animal health business experienced rapid growth, benefiting from the implementation of new regulatory standards in the veterinary drug industry[23] - The company aims to leverage the opportunities presented by the transformation of the Chinese pharmaceutical industry to enhance its market position and influence[26] Financial Position - As of December 31, 2022, the company held cash and bank deposits of approximately RMB 5,437,800,000, an increase from RMB 4,158,400,000 in the previous year[37] - The group's current assets amounted to RMB 12,514,900,000, an increase from RMB 9,986,300,000 in 2021[38] - Total assets as of December 31, 2022, were approximately RMB 18,979,600,000, up from RMB 16,331,100,000 in 2021[38] - Total liabilities increased to approximately RMB 8,370,200,000 in 2022 from RMB 6,991,200,000 in 2021[38] - The equity attributable to owners rose from RMB 9,340,500,000 in 2021 to RMB 10,680,100,000 in 2022[38] Governance and Compliance - The company maintains compliance with applicable laws and regulations, with no significant violations reported for the year ending December 31, 2022[79] - The board consists of six executive directors and three independent non-executive directors, with a commitment to high corporate governance standards[84] - The company has a robust governance structure with independent non-executive directors overseeing audit, remuneration, and risk management committees[58][59] Shareholder Relations - The company emphasizes the importance of effective communication with shareholders to enhance investor relations and understanding of business performance and strategies[115] - 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[115] - The company aims to build a supportive shareholder base to enhance its market value[115] Financial Reporting and Audit - 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, 2022[117] - The audit report indicates that the financial statements are free from material misstatement due to fraud or error[118] - The auditor's fees for the year ended December 31, 2022, were approximately RMB 4,704,000 for audit services and RMB 1,603,000 for non-audit services[110] Employee and Management - The group employed approximately 14,000 staff as of December 31, 2022, compared to 13,300 in 2021, indicating growth in workforce[40] - The company has a strong management team with extensive experience in the pharmaceutical industry, including Mr. Wu Shou Ting, who has over 30 years of experience in production management[60] Legal and Regulatory Matters - The company has ongoing litigation to recover approximately RMB 340,000,000 from Chengdu Evergrande, with the case currently under review by the Chengdu Intermediate People's Court[42] - The company confirmed that there were no significant events that could question its ability to continue as a going concern as of December 31, 2022[110]

Financial Performance - The company reported a revenue of RMB 11,334,262,000 for 2022, an increase of 16.8% compared to 2021[2]. - Profit attributable to shareholders was RMB 1,581,094,000, reflecting a growth of 60.0% year-on-year[2]. - Basic earnings per share increased to RMB 86.89, up 61.8% from RMB 53.70 in the previous year[2]. - The total revenue for the year ended December 31, 2022, was RMB 11,334,262, an increase of 16.7% compared to RMB 9,703,438 in 2021[11]. - Gross profit for the year was RMB 4,968,990, representing a gross margin of approximately 43.8%, up from RMB 4,211,047 in the previous year[11]. - The net profit for the year was RMB 1,581,023, which is a 59.8% increase from RMB 989,585 in 2021[11]. - Total comprehensive income for the year amounted to RMB 1,582,450, up from RMB 990,060 in 2021, indicating strong overall performance[12]. - The group reported a total revenue of RMB 11,334,262 thousand for the year ending December 31, 2022, compared to RMB 9,703,438 thousand for the previous year, representing an increase of approximately 16.7%[23][25]. - The group’s pre-tax profit for the year ending December 31, 2022, was RMB 1,202,647 thousand, a decrease from RMB 2,006,766 thousand in 2021[22][23]. - The group’s bank interest income increased to RMB 70,737 thousand in 2022 from RMB 51,594 thousand in 2021, reflecting a growth of approximately 37%[26]. - The group reported a net loss from other income and expenses of RMB 88,571 thousand in 2022, compared to a net loss of RMB 19,256 thousand in 2021[27]. - The group’s total other income for 2022 was RMB 165,817 thousand, slightly up from RMB 155,879 thousand in 2021, showing a growth of about 6.2%[26]. - Interest expenses increased to RMB 87,971,000 in 2022 from RMB 63,532,000 in 2021, reflecting a growth of 38.5%[28]. - Corporate income tax expenses rose significantly to RMB 401,231,000 in 2022, compared to RMB 164,864,000 in 2021, marking an increase of 143.5%[29]. - The total tax expenses, including deferred tax, amounted to RMB 425,743,000 in 2022, up from RMB 213,062,000 in 2021, an increase of 99.9%[29]. - The company recorded revenue of approximately RMB 11,334,300,000, an increase of about 16.8% year-on-year[43]. - EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) was approximately RMB 2,640,800,000, up 40.2% year-on-year[43]. Dividends - The company proposed a final dividend of RMB 14.0 per share, a 75.0% increase from RMB 8.0 in 2021, and a special dividend of RMB 6.0, up 200.0% from RMB 2.0[2]. - The company declared a final dividend of RMB 0.14 per share for 2022, compared to RMB 0.08 per share in 2021, indicating a 75% increase[32]. - The company proposed a final dividend of RMB 14 per share and a special dividend of RMB 6 per share, totaling RMB 25 per share for the year[43]. Research and Development - Research and development expenditure reached RMB 593,600,000, marking a 27.6% increase year-on-year, with significant progress in diabetes and ophthalmology drug development[5]. - Research and development costs for the year were RMB 593,598 thousand, up from RMB 465,243 thousand in the previous year, indicating an increase of about 27.5%[27]. - The company invested RMB 593,600,000 in drug research and development, with R&D expenses increasing by 27.6% year-on-year[46]. - A total of 29 new products are under development, including 15 first-class new drug projects, focusing on endocrine, autoimmune, and ophthalmology fields[46]. - The company received clinical trial approval for the insulin injection and several other new drugs, enhancing its product portfolio in diabetes treatment and ophthalmology[46]. Market Performance - The company’s insulin product sales maintained steady growth following the implementation of the sixth batch of national drug centralized procurement[6]. - The animal health business experienced rapid growth, supported by the implementation of new GMP standards, enhancing market opportunities[7]. - The group’s revenue from the Chinese market (including Hong Kong) was RMB 8,962,740 thousand in 2022, accounting for approximately 79% of total revenue[25]. - The company achieved overseas export sales revenue of RMB 2,371,500,000, a year-on-year increase of 13.1%, accounting for 20.9% of total revenue[44]. - Sales revenue from formulation products was approximately RMB 4,560,300,000, up 13.0% year-on-year[45]. - Antibiotic products, including veterinary formulations, recorded sales revenue of RMB 3,063,000,000, a year-on-year increase of 32.9%[45]. Assets and Liabilities - Non-current assets as of December 31, 2022, totaled RMB 6,464,679, an increase from RMB 6,344,787 in 2021[13]. - Current assets increased to RMB 12,514,946 from RMB 9,986,332 in the previous year, driven by higher inventory and trade receivables[13]. - Current liabilities rose to RMB 7,033,027, compared to RMB 6,535,246 in 2021, reflecting increased trade payables[13]. - The total equity attributable to owners of the company was RMB 10,608,086, up from RMB 9,340,492 in the previous year, indicating a strong capital position[15]. - The company’s total assets reached approximately RMB 18,979,600,000, up from RMB 16,331,100,000 in the previous year, while total liabilities increased to RMB 8,370,200,000 from RMB 6,991,200,000[50]. - The company held interest-bearing borrowings of approximately RMB 2,455,100,000, an increase from RMB 1,831,100,000 in the previous year, with all borrowings due within five years[49]. - The current ratio improved to approximately 1.78 from 1.53 in the previous year, indicating better short-term financial health[50]. Corporate Governance - The company has adopted and complied with the corporate governance code as per the listing rules, with some deviations noted[56]. - The company did not have a CEO as of December 31, 2022, and plans to appoint one in due course[57]. - All directors confirmed compliance with the securities trading code during the covered year[58]. - The audit committee reviewed the consolidated financial statements for the year ending December 31, 2022[59]. Employee and Shareholder Actions - The company employed approximately 13,600 staff as of December 31, 2022, an increase from 13,000 in the previous year[52]. - The company repurchased a total of 12,464,000 shares at a total cost of approximately HKD 51,534,000, all of which were subsequently canceled[54]. - The company purchased a total of 3,324,000 shares in January at an average price of HKD 4.60, with a total cost of HKD 14,786,000[55]. - In March, the company bought 3,068,000 shares at an average price of HKD 4.10, totaling HKD 12,310,000[55]. - In April, the company acquired 5,524,000 shares at an average price of HKD 4.10, with a total expenditure of HKD 22,684,000[55]. - The company made a minor purchase of 4,000 shares in September at HKD 3.20, costing HKD 13,000[55]. - In October, the company purchased 544,000 shares at an average price of HKD 3.20, totaling HKD 1,741,000[55].

Financial Performance - Revenue for the six months ended June 30, 2022, was RMB 5,181,925 thousand, representing a 9.8% increase from RMB 4,719,054 thousand in the same period of 2021[5] - Profit before tax increased by 14.5% to RMB 826,954 thousand, compared to RMB 722,204 thousand in the previous year[5] - Basic earnings per share rose by 2.0% to RMB 34.55, up from RMB 33.86 in the prior year[5] - The interim dividend per share increased by 25.0% to RMB 5.0, compared to RMB 4.0 in the previous year[5] - Total comprehensive income for the period was RMB 631,731 thousand, slightly up from RMB 625,092 thousand in the previous year[36] - The company reported a net profit attributable to owners of the company of RMB 629,517 thousand, compared to RMB 624,618 thousand in the previous year[36] Revenue Breakdown - The revenue breakdown shows that the intermediates segment generated RMB 1,962,872 thousand, raw materials contributed RMB 2,858,724 thousand, and formulation products accounted for RMB 1,887,652 thousand[61] - Revenue from the Chinese market (including Hong Kong) reached RMB 4,129,014 thousand, up from RMB 3,522,480 thousand in the previous year, indicating a growth of approximately 17.2%[57] - The antibiotics product line generated revenue of RMB 3,489,861 thousand, which includes RMB 2,550,260 thousand from raw materials and RMB 939,601 thousand from formulation products[54] - The insulin product line contributed RMB 575,021 thousand to the total revenue, indicating a stable performance in this segment[54] - The company’s other revenue sources, including intermediates and other products, totaled RMB 722,507 thousand for the period[54] Expenses and Costs - Research and development expenses totaled RMB 242,607 thousand, compared to RMB 203,165 thousand in the previous year[36] - Employee costs, including director remuneration, totaled RMB 642,765,000 for the first half of 2022, up from RMB 620,602,000 in the previous year, representing a 3.5% increase[72] - The company incurred a financial cost of RMB 21,802 thousand, down from RMB 32,361 thousand in the previous year, reflecting a decrease of 32.5%[43] - The depreciation of property, plant, and equipment was RMB 278,560 thousand, a slight decrease from RMB 291,592 thousand in the previous year, showing a trend of stable asset management[43] Assets and Liabilities - Non-current assets totaled RMB 6,375,102 thousand as of June 30, 2022, a slight increase from RMB 6,344,787 thousand as of December 31, 2021, representing a growth of approximately 0.48%[37] - Current assets increased to RMB 10,979,337 thousand from RMB 9,986,332 thousand, reflecting a growth of about 9.95% year-over-year[37] - Total liabilities amounted to RMB 9,749,193 thousand, up from RMB 9,339,908 thousand, indicating an increase of approximately 4.40%[38] - The company's equity attributable to owners was RMB 9,749,777 thousand, compared to RMB 9,340,492 thousand, marking a rise of around 4.38%[38] Cash Flow - The net cash generated from operating activities was RMB 659,552 thousand, down 23.8% from RMB 866,113 thousand in the previous year[45] - The total cash and cash equivalents at the end of the period increased to RMB 4,037,956 thousand, compared to RMB 3,526,158 thousand at the end of the same period last year, reflecting a growth of 14.5%[45] - The cash used in investing activities was RMB 125,527 thousand, significantly reduced from RMB 368,604 thousand in the previous year, indicating a decrease of 66.0%[45] - The net cash generated from financing activities was RMB 171,748 thousand, a substantial increase from RMB 31,177 thousand in the same period last year[45] Market Strategy and Growth - The company continues to focus on expanding its market presence, particularly in the Chinese and European markets, which are showing significant growth potential[57] - The company aims to enhance its market share and brand influence in the diabetes product sector, focusing on domestic alternatives[112] - The company plans to strengthen international cooperation and project introduction to enhance its competitiveness in the biopharmaceutical industry[114] - The company is the second domestic enterprise to obtain clinical trial approval for its biosimilar insulin product, marking a significant breakthrough in diabetes drug development[114] Corporate Governance and Compliance - The company has adopted the corporate governance code and has complied with the relevant rules during the reporting period[129] - The audit committee has reviewed the unaudited condensed consolidated financial report for the six months ended June 30, 2022[135] - The company has confirmed compliance with the standards set for directors' trading in the company's securities during the reporting period[129] Shareholder Information - The company declared an interim dividend of RMB 0.05 per share for the six months ended June 30, 2022, totaling RMB 90,879,000, compared to RMB 73,616,000 for the same period in 2021, marking a 23.4% increase[76] - During the six-month period ending June 30, 2022, the company repurchased a total of 11,916,000 shares at a total cost of approximately HKD 49,780,000[127] - Heren Far East Limited holds 49.42% of the company's issued share capital, totaling 898,250,000 shares[125]

Financial Performance - Revenue for the year 2021 reached RMB 9,703,438 thousand, representing a 10.6% increase from RMB 8,772,488 thousand in 2020[8] - EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) was RMB 1,883,735 thousand, up 12.3% from RMB 1,678,072 thousand in the previous year[8] - Profit before tax increased by 36.3% to RMB 1,202,647 thousand, compared to RMB 882,334 thousand in 2020[8] - Net profit attributable to shareholders was RMB 988,098 thousand, a 40.6% rise from RMB 702,989 thousand in 2020[8] - Basic and diluted earnings per share increased by 34.9% to RMB 53.7 cents, up from RMB 39.81 cents in the previous year[8] - The company reported a total comprehensive income of RMB 990,060 thousand for the year, compared to RMB 706,822 thousand in 2020, marking an increase of 40.1%[106] - The company reported a profit attributable to owners of the company of RMB 702,989,000 for the year, up from RMB 700,918,000 in the previous year[111] - The company’s total equity attributable to owners increased to RMB 9,340,492,000 as of December 31, 2021, from RMB 8,613,906,000 at the end of 2020, reflecting a growth of approximately 8.4%[111] Dividends and Shareholder Returns - The board proposed a final dividend of RMB 0.08 per share and a special dividend of RMB 0.02 per share, totaling an annual dividend of RMB 0.14 per share[12] - The company recognized dividends payable of RMB 128,140,000 for the year, compared to RMB 220,847,000 in the previous year, showing a decrease of approximately 41.9%[111] - The company paid dividends totaling RMB 220,847 thousand in 2021, which is an increase from RMB 128,140 thousand in 2020, indicating a commitment to returning value to shareholders[116] Research and Development - The company plans to enhance investment in new drug research and development, aiming to strengthen its scientific capabilities and expand its talent pool[12] - Research and development expenses for the year were RMB 465,200,000, a 37.0% increase, with 23 new products currently under development[18] - The company is focused on expanding its market presence and enhancing its product offerings through ongoing research and development efforts[45] Market Position and Strategy - The company aims to leverage its comprehensive competitive advantages in drug research, production, and sales to strengthen its market position amid intense competition[12] - The company anticipates continued growth in the upcoming year, driven by new product launches and market expansion strategies[190] - Future outlook includes potential mergers and acquisitions to strengthen market position and diversify offerings[200] Operational Efficiency - Financial costs decreased significantly from RMB 181,300,000 in 2020 to RMB 60,200,000 in 2021, a reduction of 66.8%[20] - The company reported a significant increase in deposits in pledged bank accounts, totaling RMB (2,551,448) thousand in 2021, compared to RMB (1,735,053) thousand in 2020[116] - The company has established treasury policies to monitor and manage currency exchange risks associated with its operations[24] Governance and Compliance - The company has adopted corporate governance practices in line with the Hong Kong Stock Exchange's requirements[68] - The board consists of six executive directors and three independent non-executive directors, with established committees for audit, remuneration, nomination, and risk management[70] - The company has maintained compliance with applicable laws and regulations without any significant violations affecting its operations[65] Assets and Liabilities - The total assets of the group as of December 31, 2021, were approximately RMB 16,331,100,000, compared to RMB 14,963,700,000 in 2020[23] - Total liabilities increased to approximately RMB 6,991,200,000 as of December 31, 2021, from RMB 6,351,900,000 in 2020[23] - The group’s cash and bank balances, net of bank borrowings and trade payables, amounted to RMB 212,600,000 as of December 31, 2021, up from RMB 20,300,000 in 2020[23] Financial Reporting and Standards - The company has adopted revised Hong Kong Financial Reporting Standards, which may impact future financial reporting but did not have a significant effect on the current year's financial statements[126] - The company recognizes revenue when control of the related goods or services is transferred to the customer, with contract liabilities recorded for amounts received from customers for which goods or services have yet to be delivered[142] - The company assesses control over subsidiaries based on the ability to exercise power, receive variable returns, and influence those returns, with consolidated financial statements reflecting the results from the date control is obtained[139] Credit Risk Management - The company assesses the expected credit loss based on the difference between the cash flows due and the expected cash flows to be received[179] - The expected credit loss for trade receivables is assessed based on historical credit loss experience and adjusted for forward-looking factors, with a specific focus on the nature and industry of the debtors[185] - The company will write off financial assets when there is evidence of severe financial distress and no realistic prospect of recovery, such as bankruptcy[176]

Financial Performance - Revenue for the six months ended June 30, 2021, was RMB 4,719,054 thousand, representing a 9.6% increase from RMB 4,304,591 thousand in 2020[3] - EBITDA for the same period was RMB 1,056,821 thousand, up 39.8% from RMB 755,797 thousand in the previous year[3] - Profit before tax surged by 121.6% to RMB 722,204 thousand, compared to RMB 325,896 thousand in 2020[3] - Net profit attributable to the owners of the company reached RMB 623,076 thousand, a significant increase of 207.2% from RMB 202,836 thousand in the prior year[3] - Basic and diluted earnings per share were both RMB 33.86, reflecting an increase of 182.9% from RMB 11.97 in 2020[3] - The company reported a total comprehensive income of RMB 625,092 thousand for the period, compared to RMB 203,973 thousand in 2020[11] - The company’s total comprehensive income for the period included a profit of RMB 623,076 thousand, reflecting strong operational performance[17] - The company declared dividends amounting to RMB 147,231 thousand during the period, marking a significant return to shareholders[17] Assets and Liabilities - As of June 30, 2021, non-current assets totaled RMB 6,441,622 thousand, a decrease of 4.4% from RMB 6,738,717 thousand as of December 31, 2020[13] - Current assets increased to RMB 9,408,309 thousand, up 14.4% from RMB 8,224,997 thousand at the end of 2020, driven by higher inventory and cash balances[13] - Total liabilities amounted to RMB 9,089,696 thousand, an increase of 5.5% from RMB 8,611,835 thousand as of December 31, 2020[15] - The company reported a net asset value of RMB 3,763,382 thousand for current assets, reflecting a growth of 11.8% compared to RMB 3,365,133 thousand in the previous period[13] - The cash and cash equivalents increased significantly to RMB 3,526,158 thousand, a rise of 17.7% from RMB 2,996,802 thousand[13] - Trade payables and other payables rose to RMB 3,949,162 thousand, an increase of 6.9% from RMB 3,692,715 thousand[13] - The company’s equity attributable to owners reached RMB 9,090,225 thousand, up from RMB 8,613,906 thousand, indicating a growth of 5.5%[15] Cash Flow and Investments - The net cash generated from operating activities for the first half of 2021 was RMB 865,563,000, up from RMB 681,955,000 in the same period last year, reflecting a growth of 27%[20] - The company reported a net cash outflow from investing activities of RMB 368,054,000, compared to a net inflow of RMB 204,972,000 in the previous year[21] - The company incurred a financial cost of RMB 32,361,000, significantly reduced from RMB 127,047,000 in the prior year, indicating a decrease of approximately 74%[20] - The company recorded a loss from the fair value changes of derivative financial instruments amounting to RMB 6,958,000, compared to a loss of RMB 5,661,000 in the previous year[20] Revenue Breakdown - The revenue breakdown for 2021 included RMB 1,634,581 thousand from intermediates, RMB 2,282,389 thousand from active pharmaceutical ingredients, and RMB 1,928,879 thousand from formulation products[33] - The company's revenue from the Chinese market (including Hong Kong) reached RMB 3,522,480 thousand in 2021, up from RMB 2,926,433 thousand in 2020, indicating a growth of approximately 20.4%[31] - The revenue from the sale of antibiotics products was RMB 2,860,670 thousand in 2021, compared to RMB 2,755,050 thousand in 2020, showing a slight increase of approximately 3.8%[30] - The revenue from the Indian market decreased to RMB 393,889 thousand in 2021 from RMB 472,344 thousand in 2020, representing a decline of approximately 16.6%[31] Research and Development - Research and development expenses increased to RMB 203,165 thousand from RMB 162,759 thousand, highlighting the company's commitment to innovation[11] - The company has received regulatory approval for the launch of its insulin products, with the first batch shipped on July 21, 2021[103] - The company aims to expand its product portfolio in endocrine, autoimmune diseases, and ophthalmology areas[103] - The group plans to continue focusing on new drug research and development, particularly in the diabetes sector, to enhance market competitiveness[109] Corporate Governance and Shareholder Information - The company has adopted and complied with the corporate governance code, with no CEO appointed as of June 30, 2021[122] - The audit committee consists of three independent non-executive directors who reviewed the unaudited condensed consolidated financial statements for the six months ended June 30, 2021[127] - The company aims to ensure high standards of corporate governance for the benefit of shareholders[122] - Heren Far East Limited holds 898,250,000 shares, representing 48.81% of the company's issued share capital[118] Market Strategy and Future Plans - The company plans to continue expanding its market presence and investing in research and development to enhance its product offerings and technological capabilities[32] - The company aims to strengthen its market position in veterinary medicine through the joint entity established with Zhejiang Puluo Biotechnology[95] - The group anticipates further expansion of the centralized procurement of drugs, which may exert short-term price adjustment pressure on the industry[109]

Financial Performance - The company's revenue for the year reached RMB 8,772,488,000, an increase of 4.5% compared to RMB 8,392,600,000 in the previous year[19] - EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) was RMB 1,678,072,000, reflecting a decrease of 6.7% from RMB 1,798,222,000[19] - Profit attributable to the owners of the company was RMB 702,989,000, representing a 9.5% increase from RMB 641,764,000[19] - Basic and diluted earnings per share were both RMB 39.81, up 1.7% from RMB 39.14[19] - The company's revenue for the year ended December 31, 2020, was approximately RMB 8,772,500,000, an increase of 4.5% compared to the previous year[34] - Shareholders' profit for the same period was approximately RMB 703,000,000, representing a 9.5% increase from RMB 641,800,000 in 2019[34] - The sales revenue for diabetes products reached RMB 1,234,700,000, a growth of 35.7%, with the sales volume of recombinant human insulin injection and glargine insulin injection increasing by 22.0% and 81.3% respectively[37] - The company reported a pre-tax profit of RMB 882,334,000, which is an increase from RMB 841,652,000 in the prior year, showing a growth of approximately 4.9%[170] - The company reported a significant increase in cash flow from operating activities, with net cash generated amounting to RMB 1,569,262,000, down from RMB 1,801,184,000 in the previous year[170] Research and Development - The company invested approximately RMB 339,600,000 in R&D during the year, with 26 new products under development, including 10 Class 1 new drugs[41] - The company launched a new drug for the treatment of moderate to severe active rheumatoid arthritis, WXSH0150, which received clinical trial approval[10] - The company plans to continue focusing on the diabetes sector and enhance its academic platform and comprehensive competitiveness[33] Corporate Governance - The board consists of six executive directors and three independent non-executive directors, with a commitment to high corporate governance standards[109] - The company has adopted and complied with the corporate governance code as per the Hong Kong Stock Exchange listing rules[106] - The company has established four board committees: Audit Committee, Remuneration Committee, Nomination Committee, and Risk Management Committee[109] - Independent non-executive directors have submitted annual independence confirmation statements, affirming their independence as per listing rules[118] - The company confirmed that all directors complied with the standard code of conduct for securities trading during the year ending December 31, 2020[127] Financial Position - Total assets were approximately RMB 14,963,700,000 as of December 31, 2020, down from RMB 15,699,700,000 in 2019, while total liabilities decreased from RMB 9,027,900,000 to RMB 6,351,900,000[45] - Shareholders' equity increased from RMB 6,671,800,000 in 2019 to RMB 8,613,900,000 in 2020, reflecting a strong growth in shareholder value[45] - Current assets amounted to approximately RMB 8,225,000,000 as of December 31, 2020, compared to RMB 8,713,500,000 in 2019, while net current assets increased from RMB 2,254,700,000 to RMB 3,365,100,000[45] - The current ratio improved to approximately 1.69 as of December 31, 2020, compared to 1.35 in 2019, indicating a significant enhancement in short-term financial health[45] Cash Flow and Investments - The company made significant investments in property, plant, and equipment, with payments totaling RMB 514,980 thousand in 2020, compared to RMB 374,977 thousand in 2019, representing an increase of approximately 37.3%[172] - The company reported a substantial increase in receivables collected, amounting to RMB 300,000 thousand in 2020, compared to RMB 100,000 thousand in 2019, marking a 200% increase[172] - The company’s financing activities resulted in a net cash outflow of RMB 1,909,035 thousand in 2020, a stark contrast to a net inflow of RMB 317,731 thousand in 2019[172] Social Responsibility - The company donated over RMB 4 million and provided nearly RMB 1 million worth of epidemic prevention materials to support COVID-19 control efforts[29] - The company achieved significant recognition, including awards for social responsibility and contributions to the fight against the pandemic[10] Risk Management - The group has established treasury policies to monitor and manage currency exchange risks associated with its operations[46] - There were no significant contingent liabilities reported as of December 31, 2020, indicating a stable risk profile[47] Auditor and Compliance - The company has engaged Deloitte as its auditor for the upcoming annual general meeting[103] - The auditor's fees for the year 2020 amounted to approximately RMB 4,775,000 for audit services and RMB 1,690,000 for non-audit services[131] - The company has maintained compliance with applicable laws and regulations, with no significant violations reported for the year ending December 31, 2020[102]

Financial Performance - Revenue for the six months ended June 30, 2020, was RMB 4,304,591 thousand, representing a 5.2% increase from RMB 4,090,023 thousand in 2019[6] - Gross profit for the same period was RMB 1,798,005 thousand, up from RMB 1,721,034 thousand in 2019[16] - The profit attributable to the owners of the company decreased by 31.5% to RMB 202,836 thousand from RMB 295,919 thousand in the previous year[6] - Basic and diluted earnings per share were both RMB 11.97, down 33.7% from RMB 18.05 in 2019[6] - The company reported a decrease in operating profit before interest, tax, depreciation, and amortization (EBITDA) of 3.2%, totaling RMB 755,797 thousand compared to RMB 781,101 thousand in 2019[6] - The company reported a total comprehensive income of RMB 203,973 thousand for the six months ended June 30, 2020[23] - The company’s profit attributable to shareholders for the six months ended June 30, 2020, was RMB 202,836,000, compared to RMB 295,919,000 for the same period in 2019[57] Expenses and Costs - Research and development expenses increased to RMB 162,759 thousand from RMB 118,560 thousand, indicating a focus on innovation[16] - The company experienced a tax expense of RMB 123,060 thousand, significantly higher than RMB 40,837 thousand in the previous year[16] - The company incurred a loss of RMB 37,655 thousand from the sale of property, plant, and equipment, contrasting with a gain of RMB 13,526 thousand in the previous year[26] - The company’s financial costs decreased to RMB 127,047 thousand from RMB 137,957 thousand, a reduction of 7.0%[26] - Employee costs, including director remuneration, totaled RMB 436,863,000 for the six months ended June 30, 2020, slightly down from RMB 449,754,000 in the same period of 2019[55] - Inventory cost for the six months ended June 30, 2020, was RMB 2,506,586,000, an increase from RMB 2,368,989,000 in the same period of 2019, reflecting a growth of 5.8%[55] Assets and Liabilities - Non-current assets totaled RMB 6,892,316 thousand as of June 30, 2020, a decrease of 1.35% from RMB 6,986,165 thousand on December 31, 2019[18] - Current assets amounted to RMB 8,238,864 thousand, down 5.43% from RMB 8,713,527 thousand at the end of 2019[18] - Current liabilities were RMB 4,700,700 thousand, a reduction of 27.24% compared to RMB 6,458,874 thousand at the end of 2019[18] - The net current asset value increased to RMB 3,538,164 thousand, up 56.67% from RMB 2,254,653 thousand at the end of 2019[18] - Total assets minus current liabilities reached RMB 10,430,480 thousand, an increase of 12.91% from RMB 9,240,818 thousand at the end of 2019[18] - Non-current liabilities stood at RMB 2,591,142 thousand, slightly up from RMB 2,569,029 thousand at the end of 2019[21] - The company's equity attributable to owners increased to RMB 7,839,338 thousand, up 17.58% from RMB 6,671,789 thousand at the end of 2019[21] Cash Flow and Financing - The net cash generated from operating activities was RMB 681,955 thousand, down from RMB 800,510 thousand in the previous year, reflecting a decline of 14.8%[26] - The cash flow from investing activities showed a net inflow of RMB 204,972 thousand, compared to a net outflow of RMB 286,844 thousand in the same period of 2019[28] - The company’s cash flow from financing activities resulted in a net outflow of RMB 976,623 thousand, contrasting with a net inflow of RMB 534,172 thousand in the same period of 2019[28] - The company’s total borrowings increased significantly, with new loans amounting to RMB 2,256,748 thousand, compared to RMB 1,757,316 thousand in the previous year[28] - The company reported a significant increase in cash and cash equivalents at the end of the period, totaling RMB 3,075,680 thousand, up from RMB 2,530,466 thousand year-over-year[28] Revenue Breakdown - Revenue from intermediates was RMB 1,315,085 thousand, while raw materials and formulation products generated RMB 2,109,111 thousand and RMB 1,750,765 thousand respectively[40] - The profit from segments totaled RMB 675,834 thousand for the first half of 2020, compared to RMB 529,008 thousand in the same period of 2019, reflecting a 27.8% increase[42] - Revenue from the Chinese market, including Hong Kong, was RMB 2,926,433 thousand, slightly up from RMB 2,919,480 thousand year-on-year[38] - The company reported a significant increase in revenue from the Middle East, rising to RMB 40,650 thousand from RMB 13,712 thousand, marking a 196.5% growth[38] - The sales of insulin products contributed RMB 528,532 thousand to the total revenue in the first half of 2020, compared to RMB 351,965 thousand in the same period of 2019[40] - The segment revenue from antibiotics products was RMB 2,755,050 thousand, which accounted for a substantial portion of the total revenue[40] Market Strategy and Future Outlook - The company continues to focus on expanding its market presence and enhancing its product offerings in response to growing demand[39] - The group plans to focus on its insulin series as a core strategic product to drive sales growth and increase market share[119] - The group aims to enhance its academic platform and improve management systems to achieve balanced and sustainable development across products, markets, and teams[119] - The company will actively promote the development of diabetes medications and new drug research projects to enrich its product portfolio[119] - The group will closely monitor national pharmaceutical policies and seize market opportunities to enhance its competitive edge[119] Corporate Governance and Compliance - The company has adopted and complied with the corporate governance code as per the listing rules, with some deviations noted[128] - The company has not appointed a CEO as of June 30, 2020, and will fill the position at an appropriate time[129] - The audit committee reviewed the unaudited condensed consolidated financial statements for the six months ending June 30, 2020[132] Shareholder Information - Heren Far East Limited holds 898,250,000 shares, representing a 49.56% equity interest in the company[125] - The company did not recommend the distribution of an interim dividend for the six months ended June 30, 2020, compared to no interim dividend for the same period in 2019[59]