Financial Performance - The company's revenue for 2020 was CNY 3,149,689,675.80, representing a 28.04% increase from CNY 2,459,985,533.80 in 2019[14]. - The net profit attributable to shareholders for 2020 was CNY 722,091,360.68, a 30.37% increase compared to CNY 553,863,836.07 in 2019[14]. - The net profit after deducting non-recurring gains and losses was CNY 643,971,039.13, up 31.79% from CNY 488,626,334.69 in 2019[14]. - The company's total assets increased by 90.42% to CNY 7,157,565,543.71 at the end of 2020, compared to CNY 3,758,736,367.43 at the end of 2019[14]. - The basic earnings per share for 2020 was CNY 3.10, reflecting a 28.10% increase from CNY 2.42 in 2019[14]. - The diluted earnings per share for 2020 was CNY 3.08, an increase of 28.33% from CNY 2.40 in 2019[14]. - The net cash flow from operating activities for 2020 was CNY 569,291,589.49, a decrease of 5.26% from CNY 600,867,843.92 in 2019[14]. - The company reported a weighted average return on equity of 18.16% for 2020, down from 19.92% in 2019[14]. - The company received government subsidies amounting to CNY 99,257,315.07 in 2020, compared to CNY 90,483,570.77 in 2019[19]. - The company achieved total revenue of 3.15 billion yuan in 2020, a year-on-year increase of 28.04%, and a quarterly revenue of 1.067 billion yuan in Q4, marking a historical high with a growth of 48.69%[44]. Market Position and Strategy - As a leading global CDMO, the company focuses on technological innovation and commercialization in pharmaceutical processes, providing one-stop CMC services to large and medium-sized pharmaceutical and biotechnology companies[2]. - The company operates under a model that separates marketing authorization from production, allowing for flexibility in manufacturing partnerships[5]. - The company is involved in both clinical and commercial stages of drug development, focusing on innovative drugs and generic drugs[5]. - The company has served over 800 global clients and participated in more than 600 clinical projects, establishing itself as a long-term strategic partner for several multinational pharmaceutical companies[22]. - The company aims to leverage its technological innovations and platform advantages to continuously extend its service offerings and enhance competitive advantages in the CDMO sector[26]. - The company is strategically positioning itself to meet the growing demand in emerging markets, particularly in the Chinese biotechnology sector[43]. Research and Development - The company invested 259 million yuan in R&D, a 34.50% increase year-on-year, representing 8.22% of total revenue, with a total of 279 patent applications filed by the end of the reporting period[55]. - The company has filed a total of 279 patents and has been granted 159 patents, with 27 papers published in leading international journals[37]. - The application rate of continuous reaction technology and biocatalysis in the company's clinical late-stage projects exceeds 30%[31]. - The company has developed a biocatalysis platform with over 1,600 enzymes, including more than 800 proprietary enzymes, to enhance its enzyme-related service capabilities[64]. - The company established a Center of Excellence for Process Science (CEPS) to enhance R&D efficiency and address complex process challenges[58]. Risk Management - The company faces several risks, including the potential withdrawal or large-scale recall of major innovative drugs, operational risks in clinical projects, and risks related to international trade friction and exchange rate fluctuations[2]. - The company emphasizes the importance of risk awareness for investors regarding forward-looking statements and future plans[2]. Corporate Governance - The board of directors and management have confirmed their attendance and participation in the review of the annual report, ensuring governance and accountability[2]. - The company has established a comprehensive corporate governance structure and internal control system to ensure fairness and transparency for all shareholders[155]. - The company has maintained a stable management structure with no significant changes in board members during the reporting period[196]. Environmental Responsibility - The company has maintained compliance with environmental standards, with no instances of exceeding pollutant discharge limits reported[156]. - The company has achieved a VOCs emission concentration of 38.2 mg/m³ at the process exhaust outlet, with total emissions of 26.13 tons, equating to an annual emission of 52.27 tons[159]. - The company has been recognized as a national-level "green factory" by the Ministry of Industry and Information Technology, emphasizing its commitment to environmental protection and sustainable practices[159]. Shareholder Returns - The company proposed a cash dividend of RMB 6.00 per 10 shares for the 2020 fiscal year, which is subject to approval at the annual shareholders' meeting[122]. - The cash dividend for 2020 is fully funded from the company's distributable profits, which totaled RMB 183,406,819.45[124]. - The company has a structured plan for shareholder returns for the years 2020-2022, aligning with its financial strategy[124]. Future Outlook - The company provided guidance for the next fiscal year, projecting a revenue growth of 25% and aiming to reach 1.875 billion RMB[129]. - The company plans to continue focusing on the development of innovative drugs and enhancing its CDMO capabilities to capitalize on market growth opportunities[106]. - The company is exploring new product development and technological advancements to stay competitive in the market[199].

Financial Performance - The company's operating revenue for Q1 2020 was ¥475,496,806.78, a decrease of 0.21% compared to ¥476,494,446.55 in the same period last year[8] - Net profit attributable to shareholders increased by 17.34% to ¥108,029,889.53 from ¥92,063,799.35 year-on-year[8] - The net profit after deducting non-recurring gains and losses was ¥93,342,503.90, up 16.33% from ¥80,239,049.36 in the previous year[8] - Basic and diluted earnings per share increased by 17.50% to ¥0.47 from ¥0.40 year-on-year[8] - The company reported a total comprehensive income of 110,265,879.79 CNY for the quarter, compared to 95,879,096.52 CNY in the previous year, indicating a growth of around 15%[41] - The total operating revenue for the first quarter was 119,349,601.73 CNY, an increase from 102,899,107.24 CNY in the previous year, representing a growth of approximately 15.5%[40] - The net profit for the first quarter reached 108,029,889.53 CNY, compared to 92,063,799.35 CNY in the same period last year, marking an increase of about 17.3%[40] Cash Flow and Liquidity - The net cash flow from operating activities decreased by 34.93% to ¥49,207,245.92 compared to ¥75,617,344.15 in the same period last year[8] - Cash received from operating activities decreased by 77.18% to ¥1,362,572.64, attributed to a reduction in other receivables[16] - The company's cash and cash equivalents decreased to ¥380,914,652.63 from ¥435,252,214.16, indicating a decline in liquidity[30] - The cash inflow from operating activities amounted to ¥590,399,514.40, slightly up from ¥588,254,842.79 in the previous period[47] - The cash outflow from operating activities totaled ¥541,192,268.48, an increase from ¥512,637,498.64 year-over-year[48] - The cash and cash equivalents at the end of the period were ¥362,991,966.61, down from ¥598,029,313.74 in the previous period[49] - The net increase in cash and cash equivalents was -¥51,392,687.01, compared to -¥61,941,730.19 in the prior period[49] Assets and Liabilities - Total assets at the end of the reporting period were ¥3,839,819,411.87, an increase of 2.16% from ¥3,758,736,367.43 at the end of the previous year[8] - Total liabilities amounted to CNY 682,523,881.63, down from CNY 713,232,174.09[32] - The company's retained earnings increased to CNY 1,805,596,685.22 from CNY 1,697,566,795.69[33] - The total liabilities for the first quarter of 2020 were CNY 721,803,350.68, with current liabilities at CNY 707,264,693.11 and non-current liabilities at CNY 14,538,657.57[59] Shareholder Information - The total number of ordinary shareholders at the end of the reporting period was 18,404[12] - ASYMCHEM LABORATORIES, INCORPORATED held the largest share, with a holding ratio of 39.61% and 91,647,220 shares[12] - Net assets attributable to shareholders rose by 3.67% to ¥3,157,295,530.24 from ¥3,045,504,193.34 at the end of the previous year[8] - Owner's equity increased to CNY 3,157,295,530.24 from CNY 3,045,504,193.34[33] Research and Development - Research and development expenses increased by 48.33% to ¥54,845,685.02, reflecting strategic investments in pharmaceutical technology and an increase in R&D personnel[16] - Research and development expenses amounted to 54,845,685.02 CNY, up from 36,975,781.74 CNY, reflecting a significant increase of approximately 48.3% year-over-year[40] Government Support and Subsidies - The company received government subsidies amounting to ¥20,114,458.03 during the reporting period[9] Financial Management - The company reported a significant decrease in financial expenses by 185.46%, resulting in a negative amount of -¥8,621,600.07, mainly due to RMB to USD exchange rate fluctuations[16] - The financial expenses showed a significant improvement, with a net income of -8,621,600.07 CNY compared to 10,088,475.30 CNY in the previous year, indicating a positive change in financial management[40] Market Strategy - The company is focusing on expanding its market presence and enhancing its product offerings through increased investment in R&D and strategic initiatives[40]

[Important Notice](index=2&type=section&id=Important%20Notice) The company's Board of Directors, Supervisory Board, and senior management ensure the truthfulness, accuracy, and completeness of this quarterly report and assume legal responsibility - The company's Board of Directors, Supervisory Board, and all senior management ensure the truthfulness, accuracy, and completeness of this quarterly report and commit to legal responsibility. All directors attended the board meeting for reviewing this quarterly report[3](index=3&type=chunk) [Company Profile](index=3&type=section&id=Company%20Profile) [Key Accounting Data and Financial Indicators](index=3&type=section&id=Key%20Accounting%20Data%20and%20Financial%20Indicators) The company achieved strong growth in the first three quarters of 2019, with operating revenue and net profit attributable to shareholders increasing by 44.61% and 40.48% year-on-year, respectively 2019 Core Financial Data for the First Three Quarters | Indicator | Year-to-Date (Yuan) | Year-on-Year Change | | :--- | :--- | :--- | | Operating Revenue | 1,742,485,147.45 | 44.61% | | Net Profit Attributable to Shareholders | 366,515,484.88 | 40.48% | | Net Profit Attributable to Shareholders (Excluding Non-recurring Gains and Losses) | 337,749,587.22 | 38.97% | | Net Cash Flow from Operating Activities | 351,016,576.55 | 28.54% | | Basic Earnings Per Share (Yuan/share) | 1.60 | 39.13% | Asset Situation at Report End | Indicator | End of Reporting Period (Yuan) | Change from Previous Year-End | | :--- | :--- | :--- | | Total Assets | 3,568,241,843.73 | 12.02% | | Net Assets Attributable to Shareholders | 2,855,121,165.34 | 13.72% | - Non-recurring gains and losses totaled **28.77 million Yuan** for the period from the beginning of the year to the end of the reporting period, primarily consisting of **32.70 million Yuan** in government subsidies[5](index=5&type=chunk)[6](index=6&type=chunk) [Shareholder Information](index=4&type=section&id=Shareholder%20Information) As of the end of the reporting period, the total number of common shareholders was 12,708, with the largest shareholder being ASYMCHEM LABORATORIES, INCORPORATED, holding 41.59% - As of the end of the reporting period, the total number of common shareholders was **12,708**[7](index=7&type=chunk) Top Five Shareholders' Shareholding | Shareholder Name | Shareholder Nature | Shareholding Percentage | Number of Shares Held | | :--- | :--- | :--- | :--- | | ASYMCHEM LABORATORIES, INCORPORATED | Foreign Legal Entity | 41.59% | 96,247,220 | | Hao Hong | Foreign Natural Person | 4.40% | 10,191,928 | | Hong Kong Securities Clearing Company Limited | Foreign Legal Entity | 3.08% | 7,123,208 | | Tianjin Guorong Business Information Consulting Co., Ltd. | Domestic Non-State-Owned Legal Entity | 2.64% | 6,101,796 | | China Merchants Bank Co., Ltd. - Xingquan Flexible Allocation Mixed Securities Investment Fund | Domestic Non-State-Owned Legal Entity | 1.38% | 3,188,402 | [Significant Matters](index=6&type=section&id=Significant%20Matters) [Analysis of Changes in Key Financial Data](index=6&type=section&id=Analysis%20of%20Changes%20in%20Key%20Financial%20Data) The company experienced significant financial data changes, including a 44.61% increase in operating revenue due to strong CDMO demand, and strategic asset and expense adjustments for business expansion - Operating revenue increased by **44.61%** year-on-year, primarily due to the company's continued deep cultivation in the innovative drug CDMO field, with both commercialization and clinical project revenues maintaining rapid growth[12](index=12&type=chunk) - Monetary funds decreased by **50.90%** from the beginning of the year, primarily used for investment in Haihe Asymchem Fund, 2018 profit distribution, and new capacity construction[12](index=12&type=chunk) - Construction in progress increased by **42.50%** from the beginning of the year, mainly due to continuous investment in projects such as Jilin Asymchem, Asymchem Life Science, and Shanghai Asymchem Biotechnology[12](index=12&type=chunk) - Long-term equity investments increased by **200 million Yuan** from zero, mainly due to the current period's investment as an LP in Haihe Asymchem Fund[12](index=12&type=chunk) [Progress of Significant Matters](index=7&type=section&id=Progress%20of%20Significant%20Matters) The company is advancing a private placement plan to raise up to 2.3 billion Yuan, which has been approved by shareholders and accepted by the CSRC, with feedback responses currently being prepared - The company initiated a private placement plan in July 2019, intending to raise a total of no more than **2.3 billion Yuan**[14](index=14&type=chunk) - The private placement application was accepted by the China Securities Regulatory Commission on August 29, 2019, and a first feedback notice was received on October 11, with responses currently being prepared[14](index=14&type=chunk) [Other Significant Matters](index=8&type=section&id=Other%20Significant%20Matters) The company maintained compliant operations during the reporting period, with no irregular external guarantees, controlling shareholder fund occupation, or overdue unfulfilled commitments - During the reporting period, the company had no irregular external guarantees, controlling shareholder fund occupation, or entrusted wealth management[18](index=18&type=chunk)[19](index=19&type=chunk)[20](index=20&type=chunk) Financial Assets Measured at Fair Value (Unit: Yuan) | Asset Category | Initial Investment Cost (Yuan) | Fair Value Change Gain/Loss for the Period (Yuan) | Amount Purchased During the Reporting Period (Yuan) | Period-end Amount (Yuan) | | :--- | :--- | :--- | :--- | :--- | | Financial Derivatives | 7,109,552.98 | -7,109,552.98 | 0.00 | 0.00 | | Other | 0.00 | 0.00 | 20,000,000.00 | 20,000,000.00 | | Total | 7,109,552.98 | -7,109,552.98 | 20,000,000.00 | 20,000,000.00 | [Financial Statements](index=10&type=section&id=Financial%20Statements) [Key Financial Statements](index=10&type=section&id=Key%20Financial%20Statements) This section provides the company's consolidated and parent company balance sheets, income statements, and cash flow statements for Q3 2019, reflecting financial position, operating results, and cash flows [Balance Sheet (Consolidated)](index=10&type=section&id=Balance%20Sheet%20(Consolidated)) As of September 30, 2019, consolidated total assets were 3.57 billion Yuan, driven by increased construction in progress and long-term equity investments, with a stable financial structure Key Items from Consolidated Balance Sheet (2019-09-30) | Item | Amount (Yuan) | | :--- | :--- | | Total Assets | 3,568,241,843.73 | | Total Liabilities | 713,120,678.39 | | Total Equity Attributable to Parent Company Owners | 2,855,121,165.34 | [Income Statement (Consolidated)](index=16&type=section&id=Income%20Statement%20(Consolidated)) In the first three quarters of 2019, consolidated operating revenue reached 1.74 billion Yuan, with net profit attributable to parent company owners at 367 million Yuan, demonstrating rapid growth Key Items from Consolidated Income Statement (First Three Quarters of 2019) | Item | Amount (Yuan) | | :--- | :--- | | Total Operating Revenue | 1,742,485,147.45 | | Operating Profit | 412,458,717.15 | | Total Profit | 412,372,565.53 | | Net Profit Attributable to Parent Company Owners | 366,515,484.88 | [Cash Flow Statement (Consolidated)](index=25&type=section&id=Cash%20Flow%20Statement%20(Consolidated)) In the first three quarters of 2019, consolidated net cash flow from operating activities was 351 million Yuan, while investing activities resulted in a 669 million Yuan net outflow, primarily for asset acquisition and fund investments Key Items from Consolidated Cash Flow Statement (First Three Quarters of 2019) | Item | Amount (Yuan) | | :--- | :--- | | Net Cash Flow from Operating Activities | 351,016,576.55 | | Net Cash Flow from Investing Activities | -668,704,304.94 | | Net Cash Flow from Financing Activities | -38,857,454.22 | | Net Increase in Cash and Cash Equivalents | -356,833,726.42 | [Explanation of Financial Statement Adjustments](index=29&type=section&id=Explanation%20of%20Financial%20Statement%20Adjustments) The company adopted new financial instrument accounting standards from January 1, 2019, reclassifying certain financial assets to "Trading financial assets" without impacting total assets, liabilities, or net assets - The company implemented new financial accounting standards from January 1, 2019, reclassifying **7.11 million Yuan** from "Financial assets measured at fair value through profit or loss" to "Trading financial assets," with no impact on beginning net assets[49](index=49&type=chunk)[52](index=52&type=chunk)

[Important Notice, Table of Contents, and Definitions](index=2&type=section&id=Important%20Notice%2C%20Table%20of%20Contents%2C%20and%20Definitions) This section covers essential disclaimers, a detailed report index, and definitions of key terms used throughout the financial report [Important Notice](index=2&type=section&id=Important%20Notice) The company's management guarantees the report's accuracy and completeness, while future plans are not commitments, and no dividends or bonus shares are planned - The company's board of directors, supervisory board, and senior management guarantee the truthfulness, accuracy, and completeness of the report content[5](index=5&type=chunk) - The company plans not to distribute cash dividends, bonus shares, or convert capital reserves into share capital[5](index=5&type=chunk) [Table of Contents](index=3&type=section&id=Table%20of%20Contents) This section outlines all chapters of the 2019 semi-annual report, from important notices to financial statements and reference documents [Definitions](index=4&type=section&id=Definitions) This section defines key terms and abbreviations used in the report, including the reporting period and specialized pharmaceutical industry terminology - The reporting period is defined as January 1, 2019, to June 30, 2019[7](index=7&type=chunk) - CMO/CDMO refers to Contract Manufacturing/Development and Manufacturing Organizations, providing new drug process development, preparation, and large-scale production services for pharmaceutical companies[7](index=7&type=chunk) - Major collaboration clients include multinational pharmaceutical companies such as Merck, Eli Lilly, Bristol-Myers Squibb, Pfizer, Roche, and AbbVie[9](index=9&type=chunk) [Company Profile and Key Financial Indicators](index=7&type=section&id=Company%20Profile%20and%20Key%20Financial%20Indicators) This section provides an overview of the company's basic information and highlights its key financial performance metrics for the reporting period [Company Profile](index=7&type=section&id=Company%20Profile) This section introduces the basic information of Asymchem Laboratories (Tianjin) Co., Ltd., including stock abbreviation, code, listing exchange, Chinese and English names, and legal representative - Stock Abbreviation: **Asymchem**, Stock Code: **002821**, Listing Exchange: **Shenzhen Stock Exchange**[11](index=11&type=chunk) - Legal Representative is **HAO HONG**[11](index=11&type=chunk) [Contact Person and Contact Information](index=7&type=section&id=Contact%20Person%20and%20Contact%20Information) This section provides the name, contact address, telephone, fax, and email of the company's Board Secretary and Securities Affairs Representative - Board Secretary is Xu Xiangke, Securities Affairs Representative is Yu Changliang[12](index=12&type=chunk) - Contact address is No. 71, Seventh Avenue, Tianjin Economic-Technological Development Area[12](index=12&type=chunk) [Other Information](index=7&type=section&id=Other%20Information) During the reporting period, there were no changes in the company's registered address, office address, postal code, website, email, or information disclosure newspapers and designated websites, consistent with the 2018 annual report - The company's contact information and information disclosure locations remained unchanged during the reporting period[13](index=13&type=chunk)[14](index=14&type=chunk) [Key Accounting Data and Financial Indicators](index=8&type=section&id=Key%20Accounting%20Data%20and%20Financial%20Indicators) This section presents the company's key accounting data and financial indicators for the first half of 2019, showing significant growth in operating revenue, net profit, and earnings per share, but a decrease in net cash flow from operating activities 2019 Semi-Annual Key Accounting Data and Financial Indicators | Indicator | Current Period (RMB) | Prior Year (RMB) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 1,093,070,698.41 | 757,638,081.14 | 44.27% | | Net Profit Attributable to Listed Company Shareholders | 229,318,376.48 | 156,667,832.03 | 46.37% | | Net Profit Attributable to Listed Company Shareholders (Excluding Non-Recurring Gains/Losses) | 202,420,308.75 | 141,798,262.67 | 42.75% | | Net Cash Flow from Operating Activities | 154,731,495.99 | 261,213,294.49 | -40.76% | | Basic Earnings Per Share (RMB/share) | 1.00 | 0.69 | 44.93% | | Diluted Earnings Per Share (RMB/share) | 0.99 | 0.62 | 59.68% | | Weighted Average Return on Net Assets | 8.68% | 7.38% | 1.30% | | Total Assets (Period End) | 3,275,023,453.07 | 3,185,341,441.90 | 2.82% | | Net Assets Attributable to Listed Company Shareholders (Period End) | 2,699,807,526.64 | 2,510,569,180.56 | 7.54% | [Differences in Accounting Data under Domestic and Overseas Accounting Standards](index=8&type=section&id=Differences%20in%20Accounting%20Data%20under%20Domestic%20and%20Overseas%20Accounting%20Standards) During the reporting period, the company had no differences in net profit and net assets disclosed in financial reports under International Accounting Standards or overseas accounting standards compared to Chinese Accounting Standards - The company had no differences in accounting data under domestic and overseas accounting standards during the reporting period[16](index=16&type=chunk)[17](index=17&type=chunk) [Non-Recurring Gains and Losses and Amounts](index=8&type=section&id=Non-Recurring%20Gains%20and%20Losses%20and%20Amounts) This section lists the company's non-recurring gains and losses and their amounts for the first half of 2019, totaling **RMB 26.90 million**, primarily including government grants and fair value changes in financial assets 2019 Semi-Annual Non-Recurring Gains and Losses and Amounts | Item | Amount (RMB) | | :--- | :--- | | Non-current asset disposal gains and losses | 43,825.17 | | Government grants recognized in current profit or loss | 11,092,823.42 | | Gains and losses from changes in fair value of trading financial assets, derivative financial assets, etc., and investment income from disposal of trading financial assets, derivative financial assets, etc., excluding effective hedge accounting related to normal business operations | 20,568,508.89 | | Other non-operating income and expenses apart from the above | -26,087.77 | | Less: Income tax impact | 4,781,001.98 | | **Total** | **26,898,067.73** | - The company did not classify non-recurring gains and losses as recurring gains and losses during the reporting period[20](index=20&type=chunk) [Company Business Overview](index=10&type=section&id=Company%20Business%20Overview) This section provides a comprehensive overview of the company's core business activities, operational model, and strategic focus within the pharmaceutical CDMO industry [Main Businesses Engaged by the Company During the Reporting Period](index=10&type=section&id=Main%20Businesses%20Engaged%20by%20the%20Company%20During%20the%20Reporting%20Period) Asymchem, a leading global CDMO solution provider, focuses on pharmaceutical process technology innovation and commercial application, offering one-stop CMC services for drug R&D and production to domestic and international pharmaceutical companies, and expanding into formulation R&D and production, innovative drug clinical research, bioanalytical testing, and drug registration - The company is a leading global CDMO solution provider, offering drug R&D and production one-stop CMC services[22](index=22&type=chunk) - The service system has expanded to include domestic innovative drug CMC services, formulation R&D and production, innovative drug clinical research services, bioanalytical testing, and drug registration[22](index=22&type=chunk) - Main service areas include major diseases such as viral, infectious, oncological, cardiovascular, neurological, and diabetes[23](index=23&type=chunk) [Main Business Operations](index=10&type=section&id=Main%20Business%20Operations) Asymchem is dedicated to global pharmaceutical process technology innovation and commercial application, providing one-stop CMC services for drug R&D and production to large and medium-sized domestic and international pharmaceutical companies and biotechnology firms, forming a comprehensive service system including domestic innovative drug CMC, formulation R&D and production, innovative drug clinical research, bioanalytical testing, and drug registration. The company has established deep cooperation with international giants like Merck and Pfizer, as well as prominent domestic innovative drug companies, and is expanding into clinical CRO and large molecule biologics - The company has formed a comprehensive service system including domestic innovative drug CMC services, formulation R&D and production, innovative drug clinical research services, bioanalytical testing, and drug registration[22](index=22&type=chunk) - Clients include large and medium-sized global pharmaceutical companies such as Merck, Pfizer, Bristol-Myers Squibb, AbbVie, and Eli Lilly, as well as well-known domestic innovative drug companies like Betta Pharmaceuticals, Hutchison MediPharma, Zai Lab, Fosun Pharma, and Dizal Pharmaceutical[22](index=22&type=chunk) [Business Model and Main Therapeutic Areas](index=10&type=section&id=Business%20Model%20and%20Main%20Therapeutic%20Areas) As a technology-driven CDMO enterprise, the company strictly adheres to cGMP standards, providing full-process services from preclinical R&D to commercial production of new drugs, covering major disease therapeutic areas such as viral, infectious, oncological, cardiovascular, neurological, and diabetes, with some drugs becoming global blockbusters - Business scope covers preclinical new drug R&D, clinical stage process R&D and preparation, and commercial stage process optimization and large-scale production of marketed drugs[23](index=23&type=chunk) - Main drugs served involve major disease therapeutic areas such as viral, infectious, oncological, cardiovascular, neurological, and diabetes[23](index=23&type=chunk) [Operating Model](index=10&type=section&id=Operating%20Model) The company adopts a "customer-centric" CDMO model, driving technological innovation through continuous high R&D investment (e.g., continuous flow and biocatalysis technologies), strengthening deep strategic partnerships with clients, and continuously advancing new business and market expansion into chemical macromolecules like peptides, polysaccharides, and oligonucleotides, as well as clinical CRO business, to build an integrated innovative drug service ecosystem - The company continuously invests heavily in R&D, driving rapid progress in green pharmaceutical technologies such as continuous flow reaction technology and biocatalysis technology, which have been applied in commercial production[24](index=24&type=chunk) - Deep strategic partnerships have been established with clients, earning recognition and awards from companies like Roche, Pfizer, and Merck[24](index=24&type=chunk) - Expanding into chemical macromolecule businesses such as peptides, polysaccharides, and oligonucleotides, promoting the development of innovative drug clinical research business, and strategically entering the biologics field to enhance "CDMO + Clinical Research" one-stop integrated service capabilities[24](index=24&type=chunk) [Significant Changes in Major Assets](index=11&type=section&id=Significant%20Changes%20in%20Major%20Assets) During the reporting period, the company's major assets changed, with equity investments increasing due to investment in Haihe Asymchem Fund, fixed assets increasing by **7.52%** due to equipment purchases and construction in progress capitalization, and construction in progress increasing by **30.53%** due to ongoing projects at Jilin Asymchem Pharmaceutical and Asymchem Life Science Significant Changes in Major Assets | Major Asset | Significant Change Description | | :--- | :--- | | Equity Investments | Primarily due to investment as an LP in Haihe Asymchem Fund | | Fixed Assets | Increased by 7.52% at period end compared to period beginning, mainly due to current period purchases of production and R&D equipment and capitalization of construction in progress for production and R&D equipment | | Intangible Assets | No significant change | | Construction in Progress | Increased by 30.53% at period end compared to period beginning, mainly due to continuous investment in Jilin Asymchem Pharmaceutical project, Asymchem Life Science project, Asymchem Life Science new formulation workshop, and Shanghai Asymchem Biotechnology project during the current period | [Core Competitiveness Analysis](index=11&type=section&id=Core%20Competitiveness%20Analysis) The company has established high technological barriers in the pharmaceutical CDMO sector, with core competencies in continuously deepening global innovative drug CDMO and enhancing one-stop service capabilities, leading green technology development through technological innovation, continuously attracting excellent talent to build a core team, and adhering to the strictest industry quality standards while successfully passing various international official inspections - The company continuously deepens its presence in the global innovative drug CDMO field, building a comprehensive service system including domestic innovative drug CMC services, formulation R&D and production, innovative drug clinical research services, bioanalytical testing, and drug registration[27](index=27&type=chunk) - The company holds a leading international position in continuous flow reaction technology and biocatalysis technology, being one of the few companies globally to apply continuous flow reaction technology in manufacturing[28](index=28&type=chunk) - R&D investment in the first half of 2019 was **RMB 89.05 million**, accounting for **8.15% of operating revenue**, and the company has a scientific advisory board composed of Nobel laureates and other top experts[28](index=28&type=chunk) - As of the end of June 2019, the company had **3,440 employees**, including **1,538 R&D personnel**, accounting for **44.71% of the total workforce**[29](index=29&type=chunk) - The company and its subsidiaries have successfully passed multiple GMP on-site inspections by the US FDA, Australian TGA, and Korean MFDS, with Asymchem Laboratories Group passing US FDA inspections twice with zero deficiencies[30](index=30&type=chunk)[31](index=31&type=chunk) [Continuously Deepening Global Innovative Drug CDMO and Gradually Enhancing "CMC + Clinical Research Services" One-Stop Integrated Service Capabilities](index=11&type=section&id=Continuously%20Deepening%20Global%20Innovative%20Drug%20CDMO%20and%20Gradually%20Enhancing%20%22CMC%20%2B%20Clinical%20Research%20Services%22%20One-Stop%20Integrated%20Service%20Capabilities) The company possesses profound technical expertise, extensive project experience, and high client credibility in innovative drug CDMO, having achieved R&D capabilities, facilities, environmental standards, and patent protection aligned with international standards. It has built a comprehensive service system and expanded into clinical research and large molecule biologics, creating a "CMC + Clinical Research Services" one-stop integrated service system - The company's service projects involve major disease therapeutic areas such as oncology, viral, infectious, cardiovascular, neurological, and diabetes[27](index=27&type=chunk) - A comprehensive service system has been built, including domestic innovative drug CMC services, formulation R&D and production, innovative drug clinical research services, bioanalytical testing, and drug registration[27](index=27&type=chunk) [Leading Green Technology Development through Technological Innovation, Empowering CDMO Core Business Growth](index=11&type=section&id=Leading%20Green%20Technology%20Development%20through%20Technological%20Innovation%2C%20Empowering%20CDMO%20Core%20Business%20Growth) Through continuous R&D and technological accumulation, the company holds a leading international position in continuous flow reaction and biocatalysis technologies, and strategically invests in new solutions like photochemistry and electrochemistry. These green pharmaceutical technologies significantly shorten production cycles, improve conversion rates and yields, reduce environmental pollution, and create value for clients. R&D investment in the first half of 2019 was **RMB 89.05 million**, accounting for **8.15% of operating revenue**, and the company has a scientific advisory board composed of top scientists - The company holds a leading international position in continuous flow reaction technology and biocatalysis technology, being one of the few companies globally to apply continuous flow reaction technology in manufacturing[28](index=28&type=chunk) - R&D investment in the first half of 2019 was **RMB 89.05 million**, accounting for **8.15% of operating revenue**[28](index=28&type=chunk) - As of the end of June 2019, the company had applied for **208 international and domestic patents** (179 invention patents) and published **19 articles** in journals such as *Nature* and *Science*[28](index=28&type=chunk) [Continuously Attracting Excellent Talent, Building a Core Talent Pipeline](index=12&type=section&id=Continuously%20Attracting%20Excellent%20Talent%2C%20Building%20a%20Core%20Talent%20Pipeline) The company highly values talent development, continuously attracting experienced pharmaceutical experts and high-tech talent from both domestic and international sources through a blend of Chinese and Western talent. As of June 30, 2019, the company had **3,440 employees**, including **1,538 R&D personnel**, and has assembled an international top expert advisory team, including Nobel laureates, to ensure technological advantages and long-term development - As of June 30, 2019, the company had **3,440 employees**, including **1 national "Thousand Talents Program" expert**, **2 Tianjin "Thousand Talents Program" experts**, **75 personnel with experience from overseas multinational companies**; **1,538 R&D personnel**, accounting for **44.71% of the total workforce**[29](index=29&type=chunk) - The company has assembled an international top expert advisory committee composed of Nobel laureates, professors from renowned research institutes, and executives from multinational pharmaceutical companies[29](index=29&type=chunk) [Adhering to the Strictest Industry Quality Standards, Successfully Passing Various International Official Inspections, Quality System Aligned with International Standards](index=12&type=section&id=Adhering%20to%20the%20Strictest%20Industry%20Quality%20Standards%2C%20Successfully%20Passing%20Various%20International%20Official%20Inspections%2C%20Quality%20System%20Aligned%20with%20International%20Standards) The company consistently implements cGMP principles, establishing a comprehensive, systematic, and robust cGMP-standard quality system aligned with international mainstream pharmaceutical companies. In the first half of 2019, it hosted **195 client audits** and successfully passed multiple GMP on-site inspections by the US FDA, Australian TGA, and Korean MFDS, with Asymchem Laboratories Group passing US FDA inspections twice with zero deficiencies, significantly enhancing its CDMO business competitive advantage - In the first half of 2019, the company hosted a total of **195 client audits**, including **112 domestic client visits**, **50 international client visits**, **28 QA audits**, and **5 EHS audits**[30](index=30&type=chunk) - The company and its subsidiaries have successfully passed multiple GMP on-site inspections by the US FDA, Australian TGA, and Korean MFDS, with Asymchem Laboratories Group passing US FDA inspections twice with zero deficiencies[30](index=30&type=chunk)[31](index=31&type=chunk) [Management Discussion and Analysis](index=13&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an in-depth analysis of the company's operational performance, financial position, and future outlook, including key achievements, challenges, and strategic initiatives [Overview](index=13&type=section&id=Overview) In the first half of 2019, Asymchem benefited from global CDMO industry growth and favorable domestic pharmaceutical policies, maintaining steady performance growth. Total operating revenue increased by **44.27% to RMB 1.09 billion**, and net profit attributable to shareholders increased by **46.37% to RMB 229 million**. Performance growth was primarily driven by continuous growth in small molecule CDMO business orders, diversified new market and business expansion, and enhanced "CMC + Clinical Research Services" one-stop integrated service capabilities. The company continued to advance new technology development, with R&D investment increasing by **26.19%**, and successfully completed various audit works, while also increasing capacity investment and talent development, and implementing an equity incentive plan - In the first half of 2019, the company's total operating revenue was **RMB 1.09 billion**, a year-on-year increase of **44.27%**; net profit attributable to shareholders was **RMB 229 million**, a year-on-year increase of **46.37%**[33](index=33&type=chunk) - Performance growth was mainly due to continuous growth in small molecule CDMO business orders, diversified new market and business expansion, and enhanced "CMC + Clinical Research Services" one-stop integrated service capabilities[34](index=34&type=chunk) - R&D investment in the first half of 2019 was **RMB 89.05 million**, a year-on-year increase of **26.19%**, with several R&D papers published in international authoritative journals[40](index=40&type=chunk) - Overseas business revenue increased by over **40%** year-on-year, while domestic business revenue increased by over **85%**, accounting for **5.39% of total operating revenue**[44](index=44&type=chunk) - The first phase of Jilin Asymchem Pharmaceutical Co., Ltd.'s green pharmaceutical key technology industrialization project has officially started production, and Shanghai Asymchem Biopharmaceutical Co., Ltd. has commenced construction of its biologics project[46](index=46&type=chunk) - In the first half of 2019, **20 senior talents** were introduced, and a new phase of the employee equity incentive plan was launched, granting **691,125 restricted shares**[47](index=47&type=chunk) [Main Business Analysis](index=17&type=section&id=Main%20Business%20Analysis) The company's main business achieved strong growth during the reporting period, with operating revenue increasing by **44.27%**, primarily due to the securing of new orders and increased commercialization order scale in the innovative drug CDMO sector. Clinical stage custom R&D and production revenue grew by **74.71%**, and commercial stage custom R&D and production revenue grew by **33.29%**. Overseas markets remained the main source of revenue, accounting for **94.61%**, but revenue from mainland China increased by **85.66%**, indicating accelerated domestic market expansion Year-on-Year Changes in Key Financial Data | Indicator | Current Period (RMB) | Prior Year (RMB) | YoY Change (%) | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 1,093,070,698.41 | 757,638,081.14 | 44.27% | Continuous deepening in innovative drug CDMO, new orders secured and realized | | Operating Cost | 609,637,579.75 | 409,055,905.40 | 49.04% | Increase in operating revenue led to corresponding increase in costs and expenses | | Selling Expenses | 37,545,681.34 | 27,872,867.69 | 34.70% | Deepening overseas CDMO market and accelerating domestic market expansion, improving sales team | | Administrative Expenses | 122,907,583.10 | 82,957,477.44 | 48.16% | Further expansion of new businesses, accelerating talent acquisition | | Financial Expenses | -1,639,772.30 | 20,197,966.48 | -108.12% | Fluctuations in RMB to USD exchange rate | | Income Tax Expenses | 30,232,051.33 | 37,230,449.23 | -18.80% | Additional deduction for R&D expenses | | R&D Investment | 78,404,992.84 | 54,726,389.68 | 43.27% | Adherence to technology-driven strategy, strengthening R&D team capabilities | | Net Cash Flow from Operating Activities | 154,731,495.99 | 261,213,294.49 | -40.76% | Increase in payments and prepayments for project materials | | Net Cash Flow from Investing Activities | -496,744,973.58 | -253,563,918.63 | -95.91% | Payment for investment in Haihe Asymchem Fund | | Net Cash Flow from Financing Activities | -67,455,500.80 | -82,019,704.28 | 17.76% | Shareholder returns, increase in absolute amount of profit distribution, and registration of 2019 restricted stock equity incentive grant | | Net Increase in Cash and Cash Equivalents | -409,757,522.20 | -100,350,626.02 | -308.33% | Investing cash outflow greater than prior period | Operating Revenue Composition (by Product, by Region) | Category | Item | Current Period Amount (RMB) | % of Operating Revenue | Prior Year Amount (RMB) | % of Operating Revenue | YoY Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | By Industry | Pharmaceutical Industry | 1,093,070,698.41 | 100.00% | 757,635,041.25 | 100.00% | 44.27% | | By Product | Clinical Stage (Custom R&D and Production) | 353,518,537.02 | 32.34% | 202,349,599.25 | 26.71% | 74.71% | | | Commercial Stage (Custom R&D and Production) | 671,508,385.23 | 61.43% | 503,781,845.54 | 66.49% | 33.29% | | | Technical Services | 68,043,776.16 | 6.23% | 51,503,596.46 | 6.80% | 32.11% | | By Region | Mainland China | 58,962,744.00 | 5.39% | 31,757,851.42 | 4.19% | 85.66% | | | Overseas (Including North America, Europe, Asia excluding Mainland China) | 1,034,107,954.41 | 94.61% | 725,880,229.72 | 95.81% | 42.46% | [Non-Main Business Analysis](index=19&type=section&id=Non-Main%20Business%20Analysis) During the reporting period, the company had no non-main business revenue or profit, with all revenue derived from its core pharmaceutical industry business - The company had no non-main business revenue or profit during the reporting period[52](index=52&type=chunk) [Analysis of Assets and Liabilities](index=20&type=section&id=Analysis%20of%20Assets%20and%20Liabilities) At the end of the reporting period, the company's total assets increased by **2.82% to RMB 3.275 billion**. Monetary funds decreased by **19.89%** due to investments and capacity construction, long-term equity investments increased by **RMB 200 million** due to investment in Haihe Asymchem Fund, and construction in progress increased by **5.89%**. On the liability side, total current liabilities decreased, while total non-current liabilities increased, indicating an adjustment in the overall liability structure Significant Changes in Asset Composition | Item | Current Period End Amount (RMB) | % of Total Assets | Prior Year End Amount (RMB) | % of Total Assets | % Change in Proportion | Significant Change Description | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Monetary Funds | 217,667,034.06 | 6.65% | 727,440,173.91 | 26.54% | -19.89% | Payment for investment in Haihe Asymchem Fund, profit distribution, and continuous investment in new capacity | | Accounts Receivable | 593,204,793.60 | 18.11% | 346,217,708.54 | 12.63% | 5.48% | No significant change | | Inventories | 426,177,189.68 | 13.01% | 339,442,061.85 | 12.38% | 0.63% | No significant change | | Long-term Equity Investments | 200,000,000.00 | 6.11% | - | - | 6.11% | Investment as an LP in Haihe Asymchem Fund | | Fixed Assets | 975,428,497.71 | 29.78% | 801,073,408.05 | 29.22% | 0.56% | No significant change | | Construction in Progress | 400,585,629.64 | 12.23% | 173,698,013.15 | 6.34% | 5.89% | Continuous construction of Jilin Asymchem Pharmaceutical project, Asymchem Life Science project, etc | Assets and Liabilities Measured at Fair Value | Item | Beginning Balance (RMB) | Fair Value Change in Current Period (RMB) | Current Period Purchase Amount (RMB) | Ending Balance (RMB) | | :--- | :--- | :--- | :--- | :--- | | Trading Financial Assets | 7,109,552.98 | -7,109,552.98 | 10,533,648.00 | 10,533,648.00 | | Other Equity Instrument Investments | - | - | 20,000,000.00 | 20,000,000.00 | | **Total** | **7,109,552.98** | **-7,109,552.98** | **30,533,648.00** | **30,533,648.00** | - As of the end of the reporting period, the company had no restricted asset rights[55](index=55&type=chunk) [Investment Analysis](index=21&type=section&id=Investment%20Analysis) During the reporting period, the company's total investment increased by **96.08% to RMB 514 million**, primarily due to equity investment in the Haihe Asymchem Fund. The overall use of raised funds was good, with a cumulative investment of **RMB 602 million**, but some raised fund projects, such as Tianjin Asymchem Pharmaceutical Co., Ltd.'s drug production construction project, did not meet expected benefits. The non-raised fund investment in Jilin Asymchem Pharmaceutical's "Green Pharmaceutical Key Technology Industrialization Project Phase I" has invested **RMB 245 million**, with project progress at **81.79%** Investment Amount During the Reporting Period | Indicator | Amount (RMB) | | :--- | :--- | | Investment Amount in Reporting Period | 514,398,742.68 | | Investment Amount in Prior Year | 262,340,307.78 | | Change Percentage | 96.08% | - The company invested **RMB 200 million** as a limited partner in Tianjin Haihe Asymchem Biomedical Industry Innovation Investment Fund (Limited Partnership), holding a **26.40% stake**[57](index=57&type=chunk) Overall Use of Raised Funds | Indicator | Amount (RMB 10,000) | | :--- | :--- | | Total Raised Funds | 64,465 | | Total Raised Funds Invested in Current Period | 1,436.6 | | Cumulative Total Raised Funds Invested | 60,182.53 | | Cumulative Amount of Raised Funds with Changed Use | 0 | | Proportion of Cumulative Amount of Raised Funds with Changed Use | 0.00% | - The Tianjin Asymchem Pharmaceutical Co., Ltd. drug production construction project's benefits have not yet met expectations, mainly due to the gradual release of capacity utilization and high fixed asset investment[63](index=63&type=chunk) Major Non-Raised Fund Investment Projects | Project Name | Total Planned Investment (RMB 10,000) | Current Period Investment (RMB 10,000) | Cumulative Actual Investment as of Reporting Period End (RMB 10,000) | Project Progress | | :--- | :--- | :--- | :--- | :--- | | "Green Pharmaceutical Key Technology Industrialization Project Phase I" undertaken by Jilin Asymchem Pharmaceutical | 30,000 | 4,438 | 24,537 | 81.79% | [Significant Asset and Equity Sales](index=24&type=section&id=Significant%20Asset%20and%20Equity%20Sales) During the reporting period, the company did not engage in any significant asset or equity sales - The company did not sell any significant assets or equity during the reporting period[69](index=69&type=chunk) [Analysis of Major Holding and Participating Companies](index=25&type=section&id=Analysis%20of%20Major%20Holding%20and%20Participating%20Companies) This section lists the financial data of the company's major holding subsidiaries, Asymchem Life Science, Fuxin Asymchem, and Jilin Asymchem, with Jilin Asymchem contributing the most to the company's net profit. During the reporting period, the company established Shanghai Asymchem Biotechnology Co., Ltd., but it did not have a significant impact on overall production, operations, or performance Financial Data of Major Subsidiaries | Company Name | Company Type | Main Business | Registered Capital (RMB) | Total Assets (RMB) | Net Assets (RMB) | Operating Revenue (RMB) | Operating Profit (RMB) | Net Profit (RMB) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Asymchem Life Science | Subsidiary | Pharmaceutical Chemicals | 70,000,000.00 | 826,487,116.25 | 389,019,638.90 | 284,922,328.29 | -38,309,546.03 | -27,622,323.57 | | Fuxin Asymchem | Subsidiary | Pharmaceutical Chemicals | 3,310,856.98 | 202,324,401.08 | 154,581,020.91 | 90,308,458.78 | 11,153,366.52 | 10,235,906.56 | | Jilin Asymchem | Subsidiary | Pharmaceutical Chemicals | 87,600,000.00 | 1,507,936,240.52 | 1,290,398,831.73 | 752,107,356.85 | 313,559,784.46 | 268,260,491.63 | - Shanghai Asymchem Biotechnology Co., Ltd. was newly established during the reporting period and did not have a significant impact on overall production, operations, or performance[71](index=71&type=chunk) [Information on Structured Entities Controlled by the Company](index=25&type=section&id=Information%20on%20Structured%20Entities%20Controlled%20by%20the%20Company) During the reporting period, the company did not control any structured entities - The company did not control any structured entities during the reporting period[72](index=72&type=chunk) [Forecast of Operating Performance for January-September 2019](index=25&type=section&id=Forecast%20of%20Operating%20Performance%20for%20January-September%202019) The company did not provide a forecast for its operating performance for January-September 2019 - The company did not forecast its operating performance for January-September 2019[72](index=72&type=chunk) [Risks Faced by the Company and Countermeasures](index=25&type=section&id=Risks%20Faced%20by%20the%20Company%20and%20Countermeasures) The company faces major risks including innovative drug delisting/recall, life cycle changes, clinical stage project operations, failure to pass international regulatory reviews, uncertainty of high R&D investment returns, loss of core technical personnel, overseas market operations, environmental and safety production, and international trade frictions. To address these risks, the company will adhere to a technology-driven strategy, promote a dual-engine development strategy to expand domestic business, strengthen quality system construction and EHS management, and improve its human resource management system and implement equity incentive plans - The company faces risks such as innovative drug delisting/recall, life cycle changes, clinical stage project operations, failure to pass continuous reviews by international drug regulatory authorities, uncertainty of returns from continuous high R&D investment, loss of core technical personnel, overseas market operations, environmental and safety production, and international trade frictions[72](index=72&type=chunk)[73](index=73&type=chunk)[74](index=74&type=chunk)[75](index=75&type=chunk) - Countermeasures include: adhering to a technology-driven sustainable development strategy and promoting deep cooperation with clients for mutual benefit; advancing a dual-engine development strategy, actively planning and continuously expanding domestic business; strengthening quality system construction and EHS management; improving the human resource management system and implementing restricted stock incentive plans to enhance employee cohesion[75](index=75&type=chunk)[76](index=76&type=chunk)[77](index=77&type=chunk) [Significant Events](index=28&type=section&id=Significant%20Events) This section details all major events that occurred during the reporting period, including shareholder meetings, profit distribution, commitments, and other material developments [Information on Annual General Meetings and Extraordinary General Meetings Held During the Reporting Period](index=28&type=section&id=Information%20on%20Annual%20General%20Meetings%20and%20Extraordinary%20General%20Meetings%20Held%20During%20the%20Reporting%20Period) During the reporting period, the company held four shareholder meetings, including three extraordinary general meetings and one annual general meeting, approving multiple proposals, with investor participation ranging from **8.79% to 49.91%** Shareholder Meetings During the Reporting Period | Session | Meeting Type | Investor Participation (%) | Meeting Date | Disclosure Date | | :--- | :--- | :--- | :--- | :--- | | 2019 First Extraordinary General Meeting | Extraordinary General Meeting | 49.91% | 2019年01月18日 | 2019年01月18日 | | 2019 Second Extraordinary General Meeting | Extraordinary General Meeting | 49.41% | 2019年04月12日 | 2019年04月12日 | | 2018 Annual General Meeting | Annual General Meeting | 49.50% | 2019年04月18日 | 2019年04月18日 | | 2019 Third Extraordinary General Meeting | Extraordinary General Meeting | 8.79% | 2019年06月05日 | 2019年06月05日 | [Profit Distribution or Capital Reserve Conversion to Share Capital During the Reporting Period](index=28&type=section&id=Profit%20Distribution%20or%20Capital%20Reserve%20Conversion%20to%20Share%20Capital%20During%20the%20Reporting%20Period) The company plans not to distribute cash dividends, bonus shares, or convert capital reserves into share capital for the semi-annual period - The company plans not to distribute cash dividends, bonus shares, or convert capital reserves into share capital for the semi-annual period[80](index=80&type=chunk) [Commitments Fulfilled and Overdue Unfulfilled by the Company's Actual Controller, Shareholders, Related Parties, Acquirers, and Other Committed Parties During and as of the End of the Reporting Period](index=28&type=section&id=Commitments%20Fulfilled%20and%20Overdue%20Unfulfilled%20by%20the%20Company%27s%20Actual%20Controller%2C%20Shareholders%2C%20Related%20Parties%2C%20Acquirers%2C%20and%20Other%20Committed%20Parties%20During%20and%20as%20of%20the%20End%20of%20the%20Reporting%20Period) During the reporting period, there were no commitments by the company's actual controller, shareholders, related parties, acquirers, or other committed parties that were fulfilled or overdue and unfulfilled as of the end of the reporting period - The company had no commitments that were unfulfilled or overdue during the reporting period[80](index=80&type=chunk) [Appointment and Dismissal of Accounting Firms](index=28&type=section&id=Appointment%20and%20Dismissal%20of%20Accounting%20Firms) The company's semi-annual financial report was not audited - The company's semi-annual report was not audited[81](index=81&type=chunk) [Explanation by the Board of Directors and Supervisory Board on the Accounting Firm's "Non-Standard Audit Report" for the Current Reporting Period](index=29&type=section&id=Explanation%20by%20the%20Board%20of%20Directors%20and%20Supervisory%20Board%20on%20the%20Accounting%20Firm%27s%20%22Non-Standard%20Audit%20Report%22%20for%20the%20Current%20Reporting%20Period) During the reporting period, the company had no non-standard audit reports issued by the accounting firm - The company had no non-standard audit reports during the reporting period[82](index=82&type=chunk) [Explanation by the Board of Directors on Matters Related to the "Non-Standard Audit Report" for the Previous Year](index=29&type=section&id=Explanation%20by%20the%20Board%20of%20Directors%20on%20Matters%20Related%20to%20the%20%22Non-Standard%20Audit%20Report%22%20for%20the%20Previous%20Year) During the reporting period, the company had no explanations regarding matters related to the non-standard audit report for the previous year - The company had no explanations regarding matters related to the non-standard audit report for the previous year during the reporting period[82](index=82&type=chunk) [Bankruptcy and Reorganization Matters](index=29&type=section&id=Bankruptcy%20and%20Reorganization%20Matters) During the reporting period, the company did not experience any bankruptcy and reorganization matters - The company did not experience any bankruptcy and reorganization matters during the reporting period[82](index=82&type=chunk) [Litigation Matters](index=29&type=section&id=Litigation%20Matters) During the reporting period, the company had no significant litigation, arbitration, or other litigation matters - The company had no significant litigation or arbitration matters during the reporting period[83](index=83&type=chunk) [Media Scrutiny](index=29&type=section&id=Media%20Scrutiny) During the reporting period, the company was not subject to widespread media scrutiny - The company was not subject to widespread media scrutiny during the reporting period[83](index=83&type=chunk) [Penalties and Rectification](index=29&type=section&id=Penalties%20and%20Rectification) During the reporting period, the company had no penalties or rectification situations - The company had no penalties or rectification situations during the reporting period[84](index=84&type=chunk) [Integrity Status of the Company, its Controlling Shareholder, and Actual Controller](index=29&type=section&id=Integrity%20Status%20of%20the%20Company%2C%20its%20Controlling%20Shareholder%2C%20and%20Actual%20Controller) During the reporting period, there were no issues regarding the integrity status of the company, its controlling shareholder, or actual controller - There were no issues regarding the integrity status of the company, its controlling shareholder, or actual controller during the reporting period[84](index=84&type=chunk) [Implementation of Company Equity Incentive Plans, Employee Stock Ownership Plans, or Other Employee Incentive Measures](index=29&type=section&id=Implementation%20of%20Company%20Equity%20Incentive%20Plans%2C%20Employee%20Stock%20Ownership%20Plans%2C%20or%20Other%20Employee%20Incentive%20Measures) The company continued to implement its equity incentive plan, completing the second release of restricted shares of the 2016 equity incentive plan during the reporting period, and granting **691,125 restricted shares** to **12 incentive recipients** in May 2019, further improving the long-term incentive mechanism and promoting employee and company growth - In April 2019, the company completed the release of restricted shares for the second vesting period of the 2016 equity incentive plan, with **1,310,912 shares** eligible for release for **105 incentive recipients**[87](index=87&type=chunk) - In May 2019, the company granted **691,125 restricted shares** to **12 incentive recipients**, increasing the company's share capital from **230,718,837 shares to 231,409,962 shares**[88](index=88&type=chunk) [Significant Related Party Transactions](index=31&type=section&id=Significant%20Related%20Party%20Transactions) During the reporting period, the company had no related party transactions related to daily operations, asset or equity acquisitions/disposals, or related party creditor-debtor relationships. The company invested **RMB 200 million** as a limited partner in the Haihe Asymchem Fund, which primarily invests in innovative drug industrialization projects, constituting a related party transaction for joint external investment - The company had no related party transactions related to daily operations, asset or equity acquisitions/disposals, or related party creditor-debtor relationships during the reporting period[89](index=89&type=chunk)[91](index=91&type=chunk) - The company invested **RMB 200 million** as a limited partner in Tianjin Haihe Asymchem Biomedical Industry Innovation Investment Fund (Limited Partnership), which primarily invests in innovative drug industrialization projects[90](index=90&type=chunk)[92](index=92&type=chunk) [Significant Contracts and Their Performance](index=32&type=section&id=Significant%20Contracts%20and%20Their%20Performance) During the reporting period, the company had no entrustment, contracting, leasing matters, or significant guarantees. The company disclosed two other significant contracts, including a product supply contract with a large US pharmaceutical company and a product supply contract with a domestic new drug R&D company, both executed based on negotiated pricing principles - The company had no entrustment, contracting, leasing situations, or significant guarantees during the reporting period[94](index=94&type=chunk)[95](index=95&type=chunk) Other Significant Contracts | Contracting Company Name | Counterparty Name | Contract Subject | Transaction Price (RMB 10,000) | Related Party Transaction | Performance Status | | :--- | :--- | :--- | :--- | :--- | :--- | | Asymchem, Inc. | A large US pharmaceutical company | Product Supply | 7,350.89 | No | Sales revenue of RMB 170.70 million in 2017, RMB 176.14 million in 2018, and RMB 73.51 million in the reporting period | | Tianjin Asymchem Pharmaceutical Co., Ltd. | A domestic new drug R&D company | Product Supply | 465.73 | No | Sales revenue of RMB 13.43 million in 2018, and RMB 4.66 million in the reporting period | [Social Responsibility](index=33&type=section&id=Social%20Responsibility) The company and its subsidiaries highly prioritize environmental protection, strictly adhering to laws and regulations, focusing on source control, and developing green pharmaceutical technologies. All subsidiaries have comprehensive wastewater and exhaust gas treatment facilities, hazardous waste is entrusted to licensed operators for disposal, and noise pollution is controlled through technical measures, all complying with national environmental regulations and standards, with no significant environmental pollution incidents during the reporting period. The company and its subsidiaries have all formulated and filed emergency response plans for environmental incidents and execute annual environmental monitoring as planned - Subsidiaries such as Fuxin Asymchem, Jilin Asymchem, and Asymchem Pharmaceutical are classified as key pollutant-discharging units by environmental protection authorities, but all pollutant emissions comply with standards, with no exceedances[99](index=99&type=chunk)[100](index=100&type=chunk) - The company and its subsidiaries have comprehensive wastewater treatment plants (e.g., Fuxin Asymchem **400 tons/day**, Jilin Asymchem **500 m³/day**), exhaust gas treatment using spray towers + activated carbon, RTO treatment, etc., hazardous waste is entrusted to qualified agencies for disposal, and noise is controlled through low-noise equipment and sound insulation design[102](index=102&type=chunk)[103](index=103&type=chunk)[104](index=104&type=chunk)[105](index=105&type=chunk) - During the reporting period, environmental impact assessments for expansion projects at Jilin Asymchem and Asymchem Life Science were approved[106](index=106&type=chunk) - All subsidiaries have filed emergency response plans for environmental incidents and execute annual environmental monitoring as planned[106](index=106&type=chunk)[107](index=107&type=chunk) [Explanation of Other Significant Matters](index=36&type=section&id=Explanation%20of%20Other%20Significant%20Matters) During the reporting period, the company had no other significant matters requiring explanation - The company had no other significant matters requiring explanation during the reporting period[108](index=108&type=chunk) [Significant Matters of Company Subsidiaries](index=36&type=section&id=Significant%20Matters%20of%20Company%20Subsidiaries) During the reporting period, the company had no significant matters concerning its subsidiaries - The company had no significant matters concerning its subsidiaries during the reporting period[108](index=108&type=chunk) [Share Changes and Shareholder Information](index=37&type=section&id=Share%20Changes%20and%20Shareholder%20Information) This section details changes in the company's share capital, including restricted and unrestricted shares, and provides an overview of shareholder structure and major shareholdings [Share Change Information](index=37&type=section&id=Share%20Change%20Information) During the reporting period, the company's total share capital changed from **230,852,437 shares to 231,409,962 shares**, primarily due to the repurchase and cancellation of some restricted shares and the granting of the 2019 restricted stock incentive plan. Restricted shares decreased, while unrestricted shares increased. The company completed the release of restricted shares for the second vesting period of the 2016 equity incentive plan Share Change Information | Category | Quantity Before Change (Shares) | Proportion (%) | Change (Increase/Decrease) Subtotal (Shares) | Quantity After Change (Shares) | Proportion (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | I. Restricted Shares | 109,914,177 | 47.61% | -660,961 | 109,253,216 | 47.21% | | II. Unrestricted Shares | 120,938,260 | 52.39% | 1,218,486 | 122,156,746 | 52.79% | | **III. Total Shares** | **230,852,437** | **100.00%** | **557,525** | **231,409,962** | **100.00%** | - Share changes were primarily due to the repurchase and cancellation of some restricted shares from the 2016 and 2018 equity incentive plans, and the granting of the 2019 restricted stock incentive plan[110](index=110&type=chunk)[111](index=111&type=chunk)[112](index=112&type=chunk)[113](index=113&type=chunk) - In April 2019, **1,310,912 restricted shares** from the 2016 equity incentive plan for **105 incentive recipients** were released from restriction[111](index=111&type=chunk)[113](index=113&type=chunk) - In May 2019, **691,125 restricted shares** were granted to **12 incentive recipients**[112](index=112&type=chunk)[113](index=113&type=chunk)[119](index=119&type=chunk) [Share Change Information](index=37&type=section&id=Share%20Change%20Information) During the reporting period, the company's total share capital increased from **230,852,437 shares to 231,409,962 shares**, mainly due to the repurchase and cancellation of some restricted shares and the granting of 2019 restricted shares. Restricted shares decreased, and unrestricted shares increased, having a dilutive effect on earnings per share and net assets per share - The company's share capital changed from **230,852,437 shares to 230,718,837 shares**, then increased to **231,409,962 shares** due to the granting of restricted shares[110](index=110&type=chunk)[112](index=112&type=chunk) - The share changes had a dilutive effect on basic and diluted earnings per share for the most recent year and period, and also a reducing effect on net assets per share attributable to common shareholders[114](index=114&type=chunk) [Changes in Restricted Shares](index=39&type=section&id=Changes%20in%20Restricted%20Shares) During the reporting period, the total number of restricted shares slightly decreased. Restricted shares of major shareholders like ASYMCHEM LABORATORIES, INCORPORATED and HAO HONG remained within the 36-month lock-up period. Some restricted shares of executives and equity incentive recipients were released from restriction during this period, while new restricted shares from the 2019 equity incentive plan were added Changes in Restricted Shares | Shareholder Name | Beginning Restricted Shares (Shares) | Shares Released from Restriction in Current Period (Shares) | Shares Increased in Current Period (Shares) | Ending Restricted Shares (Shares) | Reason for Restriction | | :--- | :--- | :--- | :--- | :--- | :--- | | ASYMCHEM LABORATORIES, INCORPORATED | 96,247,220 | 0 | 0 | 96,247,220 | Restricted for 36 months from the date of the company's initial public offering and listing | | HAO HONG | 10,191,928 | 0 | 0 | 10,191,928 | Restricted for 36 months from the date of the company's initial public offering and listing | | Chen Chaoyong | 120,310 | 60,155 | 0 | 113,637 | Equity incentive restricted shares + part converted to executive lock-up shares after release of equity incentive restricted shares | | Zhang Da | 0 | 0 | 180,000 | 180,000 | 2019 equity incentive restricted shares | | Xiao Yi | 0 | 0 | 300,000 | 300,000 | 2019 equity incentive restricted shares | | Other 2016 Equity Incentive Recipients | 2,225,922 | 1,111,161 | 0 | 1,111,161 | Equity incentive restricted shares | | 2018 Equity Incentive Recipients | 749,731 | 0 | 0 | 619,731 | Equity incentive restricted shares | | Other 2019 Equity Incentive Recipients | 0 | 0 | 0 | 211,125 | 2019 equity incentive restricted shares | | **Total** | **109,814,303** | **1,310,912** | **480,000** | **109,253,217** | **--** | [Securities Issuance and Listing](index=42&type=section&id=Securities%20Issuance%20and%20Listing) On May 30, 2019, the company completed the registration of **691,125 restricted shares** granted to **12 incentive recipients**, leading to an increase in the company's share capital - On May 30, 2019, the company completed the registration of **691,125 restricted shares** granted to **12 incentive recipients**, changing the company's share capital from **230,718,837 shares to 231,409,962 shares**[119](index=119&type=chunk) [Number of Shareholders and Shareholding Information](index=42&type=section&id=Number%20of%20Shareholders%20and%20Shareholding%20Information) As of the end of the reporting period, the total number of common shareholders was **10,591**. Among the top ten shareholders, ASYMCHEM LABORATORIES, INCORPORATED and Hao Hong are the controlling shareholder and actual controller, respectively, holding a combined stake of over **45%**. Tianjin Guorong Business Information Consulting Co., Ltd. held **6,101,796 unrestricted common shares**, of which **1,555,999 shares** were pledged - The total number of common shareholders at the end of the reporting period was **10,591**[120](index=120&type=chunk) Top 10 Common Shareholders' Shareholding Information | Shareholder Name | Shareholder Nature | Shareholding Ratio (%) | Number of Common Shares Held at Period End (Shares) | Number of Restricted Common Shares Held (Shares) | Number of Unrestricted Common Shares Held (Shares) | Pledge or Freeze Status (Share Status/Quantity) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | ASYMCHEM LABORATORIES, INCORPORATED | Overseas Legal Person | 41.59% | 96,247,220 | 96,247,220 | - | - | | Hao Hong | Overseas Natural Person | 4.40% | 10,191,928 | 10,191,928 | - | - | | Tianjin Guorong Business Information Consulting Co., Ltd. | Domestic Non-State-Owned Legal Person | 2.64% | 6,101,796 | - | 6,101,796 | Pledged/1,555,999 | | Beijing Hongruntong Technology Partnership (Limited Partnership) | Domestic Non-State-Owned Legal Person | 2.22% | 5,127,329 | - | 5,127,329 | - | | China Merchants Bank Co., Ltd. - Xingquan Hexi Flexible Allocation Mixed Securities Investment Fund | Domestic Non-State-Owned Legal Person | 1.66% | 3,846,967 | - | 3,846,967 | - | | National Social Security Fund 115 Portfolio | Domestic Non-State-Owned Legal Person | 1.29% | 2,980,000 | - | 2,980,000 | - | | Hong Kong Securities Clearing Company Limited | Overseas Legal Person | 1.22% | 2,828,734 | - | 2,828,734 | - | | Jianshui County Ruizhihui Enterprise Management Co., Ltd. | Domestic Non-State-Owned Legal Person | 1.11% | 2,576,330 | - | 2,576,330 | - | | Xingquan Fund - Industrial Bank - Industrial Securities Co., Ltd. | Domestic Non-State-Owned Legal Person | 0.89% | 2,054,500 | - | 2,054,500 | - | | National Social Security Fund 101 Portfolio | Domestic Non-State-Owned Legal Person | 0.85% | 1,970,276 | - | 1,970,276 | - | - Mr. HAO HONG holds **70.64% of ALAB's equity**, making him the actual controller of ALAB, and has an associated relationship with ALAB[121](index=121&type=chunk) [Changes in Controlling Shareholder or Actual Controller](index=44&type=section&id=Changes%20in%20Controlling%20Shareholder%20or%20Actual%20Controller) During the reporting period, there were no changes in the company's controlling shareholder or actual controller - The company's controlling shareholder and actual controller remained unchanged during the reporting period[125](index=125&type=chunk) [Preferred Shares Information](index=45&type=section&id=Preferred%20Shares%20Information) This section confirms the absence of preferred shares within the company's capital structure during the reporting period [Preferred Shares Information](index=45&type=section&id=Preferred%20Shares%20Information) During the reporting period, the company had no preferred shares - The company had no preferred shares during the reporting period[126](index=126&type=chunk) [Information on Directors, Supervisors, and Senior Management](index=46&type=section&id=Information%20on%20Directors%2C%20Supervisors%2C%20and%20Senior%20Management) This section provides details on the shareholdings and any changes in the composition of the company's board of directors, supervisory board, and senior management [Changes in Shareholdings of Directors, Supervisors, and Senior Management](index=46&type=section&id=Changes%20in%20Shareholdings%20of%20Directors%2C%20Supervisors%2C%20and%20Senior%20Management) During the reporting period, the total shareholdings of the company's directors, supervisors, and senior management increased, mainly due to the granting of restricted shares to some executives (e.g., Zhang Da, Xiao Yi). Chairman HAO HONG's shareholding remained unchanged Changes in Shareholdings of Directors, Supervisors, and Senior Management | Name | Position | Employment Status | Beginning Shareholding (Shares) | Shares Increased in Current Period (Shares) | Shares Decreased in Current Period (Shares) | Ending Shareholding (Shares) | Number of Restricted Shares Granted at Period End (Shares) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | HAO HONG | Chairman, General Manager | Current | 10,191,928 | 0 | 0 | 10,191,928 | 0 | | Zhang Da | Director, Deputy General Manager, CFO | Current | 0 | 0 | 0 | 180,000 | 180,000 | | Xiao Yi | Deputy General Manager | Current | 0 | 0 | 0 | 300,000 | 300,000 | | **Total** | **--** | **--** | **10,714,664** | **0** | **0** | **11,194,664** | **480,000** | [Changes in Company Directors, Supervisors, and Senior Management](index=47&type=section&id=Changes%20in%20Company%20Directors%2C%20Supervisors%2C%20and%20Senior%20Management) During the reporting period, there were some changes in the company's board of directors and senior management. Yang Jing resigned as a director due to personal reasons, and Li Xinggang resigned as an independent director. Zhang Da was elected as a director and appointed as deputy general manager, Wang Qingsong was elected as an independent director, and Xiao Yi was appointed as deputy general manager Changes in Company Directors, Supervisors, and Senior Management | Name | Position Held | Type | Date | Reason | | :--- | :--- | :--- | :--- | :--- | | Yang Jing | Director | Resignation | 2019年04月03日 | Resigned as company director due to personal reasons | | Zhang Da | Director, Deputy General Manager | Election/Appointment | 2019年04月18日 | Appointed as Deputy General Manager after board review; elected as Director after shareholder meeting review | | Li Xinggang | Independent Director | Resignation | 2019年04月18日 | Resigned as company independent director due to personal reasons | | Wang Qingsong | Independent Director | Election | 2019年04月18日 | Nominated by the board's nomination committee, elected as independent director after shareholder meeting review | | Xiao Yi | Deputy General Manager | Appointment | 2019年04月04日 | Appointed as Deputy General Manager after board review | [Corporate Bonds Information](index=48&type=section&id=Corporate%20Bonds%20Information) This section confirms that the company has no outstanding corporate bonds publicly issued and listed on a stock exchange [Corporate Bonds Information](index=48&type=section&id=Corporate%20Bonds%20Information) The company has no corporate bonds publicly issued and listed on a stock exchange that are not yet due or have not been fully repaid as of the approval date of the semi-annual report - The company has no corporate bonds publicly issued and listed on a stock exchange that are not yet due or have not been fully repaid as of the approval date of the semi-annual report[131](index=131&type=chunk) [Financial Report](index=49&type=section&id=Financial%20Report) This section presents the company's complete financial statements, including the balance sheet, income statement, cash flow statement, and statement of changes in owners' equity, along with detailed notes and supplementary information [Audit Report](index=49&type=section&id=Audit%20Report) The company's semi-annual financial report was not audited - The company's semi-annual financial report was not audited[133](index=133&type=chunk) [Financial Statements](index=49&type=section&id=Financial%20Statements) This section provides the company's consolidated and parent company balance sheets, income statements, cash flow statements, and statements of changes in owners' equity for the first half of 2019, comprehensively presenting the company's financial position, operating results, and cash flow - The consolidated balance sheet shows total assets of **RMB 3,275,023,453.07** and total owners' equity attributable to the parent company of **RMB 2,699,807,526.64** at period end[135](index=135&type=chunk)[137](index=137&type=chunk) - The consolidated income statement shows total operating revenue of **RMB 1,093,070,698.41** and net profit attributable to parent company owners of **RMB 229,318,376.48** for the current period[144](index=144&type=chunk)[145](index=145&type=chunk) - The consolidated cash flow statement shows net cash flow from operating activities of **RMB 154,731,495.99** and net cash flow from investing activities of **-RMB 496,744,973.58**[153](index=153&type=chunk) [Consolidated Balance Sheet](index=49&type=section&id=Consolidated%20Balance%20Sheet) As of June 30, 2019, the company's consolidated total assets were **RMB 3.275 billion**, an increase of **2.82%** from the beginning of the period. Total current assets were **RMB 1.413 billion**, and total non-current assets were **RMB 1.862 billion**. Total liabilities were **RMB 575 million**, and total owners' equity was **RMB 2.7 billion** Key Data from Consolidated Balance Sheet | Item | 2019年6月30日 (RMB) | 2018年12月31日 (RMB) | | :--- | :--- | :--- | | Monetary Funds | 217,667,034.06 | 629,971,043.93 | | Trading Financial Assets | 30,533,648.00 | 7,109,552.98 | | Accounts Receivable | 593,204,793.60 | 525,239,401.20 | | Inventories | 426,177,189.68 | 424,117,254.59 | | Long-term Equity Investments | 200,000,000.00 | - | | Fixed Assets | 975,428,497.71 | 907,217,101.73 | | Construction in Progress | 400,585,629.64 | 306,881,800.07 | | Total Assets | 3,275,023,453.07 | 3,185,341,441.90 | | Total Liabilities | 575,215,926.43 | 674,772,261.34 | | Total Owners' Equity Attributable to Parent Company | 2,699,807,526.64 | 2,510,569,180.56 | [Parent Company Balance Sheet](index=52&type=section&id=Parent%20Company%20Balance%20Sheet) As of June 30, 2019, the parent company's total assets were **RMB 1.788 billion**, an increase of **15.67%** from the beginning of the period. Total current assets were **RMB 402 million**, and total non-current assets were **RMB 1.386 billion**. Total liabilities were **RMB 513 million**, and total owners' equity was **RMB 1.275 billion** Key Data from Parent Company Balance Sheet | Item | 2019年6月30日 (RMB) | 2018年12月31日 (RMB) | | :--- | :--- | :--- | | Monetary Funds | 107,625,559.89 | 209,316,874.71 | | Long-term Equity Investments | 1,242,406,283.17 | 480,492,163.02 | | Total Assets | 1,788,192,234.08 | 1,546,075,059.74 | | Total Liabilities | 512,992,225.06 | 229,460,229.00 | | Total Owners' Equity | 1,275,200,009.02 | 1,316,614,830.74 | [Consolidated Income Statement](index=55&type=section&id=Consolidated%20Income%20Statement) In the first half of 2019, the company achieved total operating revenue of **RMB 1.093 billion**, a year-on-year increase of **44.27%**. Operating profit was **RMB 260 million**, total profit was **RMB 260 million**, net profit was **RMB 229 million**, net profit attributable to parent company owners was **RMB 229 million**, and basic earnings per share was **RMB 1.00** Key Data from Consolidated Income Statement | Item | 2019 Semi-Annual (RMB) | 2018 Semi-Annual (RMB) | | :--- | :--- | :--- | | Total Operating Revenue | 1,093,070,698.41 | 757,638,081.14 | | Total Operating Cost | 860,289,020.38 | 604,829,408.83 | | Operating Profit | 259,576,515.58 | 176,483,583.02 | | Total Profit | 259,550,427.81 | 177,428,895.06 | | Net Profit | 229,318,376.48 | 140,198,445.83 | | Net Profit Attributable to Parent Company Owners | 229,318,376.48 | 156,667,832.03 | | Basic Earnings Per Share (RMB/share) | 1.00 | 0.69 | | Diluted Earnings Per Share (RMB/share) | 0.99 | 0.62 | [Parent Company Income Statement](index=58&type=section&id=Parent%20Company%20Income%20Statement) In the first half of 2019, the parent company achieved operating revenue of **RMB 87.35 million**, with a net loss of **RMB 1.11 million**, a decrease from the net profit of **RMB 7.25 million** in the prior year, mainly due to increased operating costs, administrative expenses, and R&D expenses Key Data from Parent Company Income Statement | Item | 2019 Semi-Annual (RMB) | 2018 Semi-Annual (RMB) | | :--- | :--- | :--- | | Operating Revenue | 87,351,438.22 | 41,698,462.72 | | Operating Profit | -2,081,106.72 | 9,301,110.21 | | Net Profit | -1,109,