证券代码：600518 证券简称：ST康美 编号：临2023-026 康美药业股份有限公司关于康美实业 所持公司部分股份将被司法拍卖的提示性公告 本公司董事会及全体董事保证本公告内容不存在任何虚假记载、误导性陈述 或者重大遗漏，并对其内容的真实性、准确性和完整性承担法律责任。 重要内容提示： 本次将被司法拍卖的股份为康美实业投资控股有限公司（以下简称康美 实业）持有的公司无限售流通股 155,290,000 股，占公司总股本的 1.12%。 截至本公告日，康美实业持有公司股份 723,176,677 股，占公司总股本 的 5.21%。若本次司法拍卖成功，不会导致公司控股股东及实际控制人发生变化， 亦不会对公司经营活动产生影响。 目前上述司法拍卖事项尚在公示阶段，后续将涉及竞拍、缴款、股权变 更过户等环节，拍卖结果尚存在不确定性，公司将根据后续进展及时履行信息披 露义务。 康美药业股份有限公司（以下简称公司）今日获知，康美实业管理人将依法 分批公开处置康美实业持有的公司股票，第一批司法拍卖股票标的为康美实业持 有的公司无限售流通股 155,290,000 股，占公司总股本的比例为 1.12%，现将本 次拍卖的情 ...

关 于 对 康 美 药 业 股 份 有 限 公 司 2021 年 度 财 务 报 表 出 具 非 标 准 审 计 意 见 审 计 报 告 所 涉 及 事 项 在 2022 年 度 消 除 情 况 的 专 项 说 明 天 职 业 字 [2023]28693-4 号 日 录 2021 年度财务报表出具非标准审计意见审计报告所涉及事项在 2022 年度消除情况的专项 说明— -1 t and the first and the first of the first 关于对康美药业股份有限公司 2021 年度财务报表出具非标准审计意见审计报告 所涉及事项在 2022年度消除情况的专项说明 天职业字[2023]28693-4 号 康美药业股份有限公司全体股东: 我们接受委托,审计了康美药业股份有限公司(以下简称"康美药业"或"公司")2022 年度的财务报表,并出具了标准无保留意见的《审计报告》（天职业字[2023]28693 号）。 康美药业 2021 年度财务报表业经本所审计,并由本所出具了带强调事项段的无保留意见的 《审计报告》（天职业字[2022]25396 号）（以下简称"上期审计报告"）。根据《监管规 则适 ...

Financial Performance - The company reported a net profit of -2,688,674,014.61 CNY for 2022, a decrease of 133.96% compared to the previous year[4]. - Total operating revenue for 2022 was 4,180,150,329.54 CNY, representing a slight increase of 0.67% from 2021[17]. - The net cash flow from operating activities was -749,961,986.24 CNY, a decline of 450.11% compared to the previous year[17]. - As of the end of 2022, the total assets amounted to 15,111,759,138.19 CNY, down 5.87% from the end of 2021[17]. - The company's net assets attributable to shareholders decreased by 30.01% to 6,947,130,703.24 CNY by the end of 2022[17]. - The company plans no profit distribution or capital reserve transfer for 2022[4]. - The company's undistributed profits reached -26,004,732,013.55 CNY by the end of 2022[4]. - The basic earnings per share for 2022 was -0.19 CNY, a decrease of 133.33% compared to 0.57 CNY in 2021[18]. - The diluted earnings per share for 2022 was also -0.19 CNY, reflecting the same percentage decrease of 133.33% from the previous year[18]. - The net profit attributable to shareholders for Q4 2022 was -1,802,903,818.18 CNY, with a total annual net profit of -1,690,774,213.81 CNY across all four quarters[19]. - The operating revenue for Q4 2022 reached 1,458,342,620.92 CNY, contributing to a total annual revenue of approximately 4.18 billion CNY[19]. - The weighted average return on equity for 2022 was -31.87%, an improvement of 88.52% from -120.39% in 2021[18]. - The net cash flow from operating activities for Q4 2022 was -412,997,081.86 CNY, indicating ongoing cash flow challenges[19]. - Non-recurring gains and losses for 2022 totaled -1,180,124,269.62 CNY, significantly impacting the overall financial performance[21]. Business Strategy and Operations - The company is focusing on the traditional Chinese medicine sector, leveraging its integrated operational advantages and strong product quality to capture market opportunities[22]. - The management has implemented strategic adjustments to enhance operational stability and compliance, aiming for sustainable growth in the core business[22]. - The company is committed to innovation and collaboration in the traditional Chinese medicine field, aligning with national health initiatives and increasing consumer demand[22]. - The company signed a strategic cooperation agreement with the government of Dingxi City to promote the healthy development of the traditional Chinese medicine industry, focusing on planting, processing, and storage of medicinal materials[23]. - The company established a new display center for fresh-cut traditional Chinese medicinal materials, which is expected to reduce logistics and procurement costs for pharmaceutical companies by improving quality levels[23]. - The company launched a new version of the "Kangmei Pharmacy Mall" mini-program to provide precise procurement services for wholesale pharmaceutical companies[24]. - The company participated in major trade exhibitions, showcasing its core products such as traditional Chinese medicinal pieces and ginseng, which received widespread recognition[24]. - The company formed seven special working groups to focus on key projects, including resource integration and sales business projects, to achieve its annual strategic goals[27]. - The company improved its internal control system by hiring a third-party consulting firm to optimize and rectify internal control deficiencies, resulting in the creation of the "Kangmei Pharmaceutical Internal Control Manual (2022)"[28]. - The company was recognized as one of the "Stable and Qualified Enterprises" in product quality by a national magazine, enhancing its brand reputation[25]. - The company established a long-term cooperation relationship with Shandong Zhongping Pharmaceutical Co., focusing on standardized planting bases for medicinal materials[24]. - The company’s products received multiple awards, including recognition as "High-tech Products" in Guangdong Province, enhancing its market competitiveness[26]. - The company actively engaged in cultural brand building, aiming to enhance its economic strength through cultural initiatives and value creation[25]. Research and Development - The company has built a 3,000 square meter research and development platform for traditional Chinese medicine, which includes various functional modules for pharmacological research and high-throughput sequencing[34]. - The joint venture company focused on developing traditional Chinese medicine formula granules and health products, resulting in the application of two national standards, with one officially published[35]. - The company launched a new strategic development plan in November 2022, focusing on becoming a leading brand in traditional Chinese medicine with a comprehensive service model[36]. - The traditional Chinese medicine segment is the company's core pillar, with over 1,000 types of products and more than 20,000 specifications currently in production[37]. - The company has verified 113 standard varieties of traditional Chinese medicine (TCM) formula granules, successfully filed 81 varieties, and achieved mass production of 113 varieties with 358 batches as of December 31, 2022[39]. - The company has applied for 84 technology patents, with 56 granted, including 13 invention patents and 43 utility model patents as of December 31, 2022[38]. - The company is committed to improving user data collection to better understand market needs and product effectiveness[88]. - The company is investing heavily in R&D, with a budget increase of 25% for new technology development[138]. Market Expansion and Sales - The company has signed contracts with over 1,000 medical institutions, serving a total of 8.24 million patient visits as of December 31, 2022[38]. - The company has developed a smart pharmacy model that integrates online and offline services, enhancing user experience and optimizing prescription review processes[38]. - The company is actively participating in the revision of national TCM standards and has established multiple industry standards for TCM products[40]. - The company aims to strengthen brand promotion and expand the influence of its proprietary TCM products, focusing on high-demand therapeutic areas[41]. - The company is developing a three-in-one medical and health platform that integrates chain health hospitals, TCM clinics, and rehabilitation departments in collaboration with various medical institutions[42]. - The company has established a nationwide layout of traditional Chinese medicine markets through self-construction and acquisitions, including Anhui Bozhou, Puning, Gansu, and Xining[43]. - The company is transitioning from a single rental and sales model to an integrated operation model, focusing on online and offline integration, with recent strategies including tailored approaches for each market[43]. - The health products segment includes successful development of various ginseng products, with plans to enhance R&D capabilities and expand the product series to meet diverse consumer needs[44]. - The pharmaceutical commercial segment is a major revenue contributor, with a focus on optimizing supply chain management and expanding into high-margin products[45]. - The company is positioned as a leading player in the traditional Chinese medicine industry, with a comprehensive operational model and strong integration capabilities[49]. - The company operates nine production bases across multiple provinces, capable of producing over 1,000 varieties and more than 20,000 specifications of traditional Chinese medicine products[49]. - The company has established strategic partnerships with major e-commerce platforms like Tmall and JD.com, enhancing its online sales presence[54]. - The company has developed 21 high-quality traditional Chinese medicine pieces recognized as high-tech products in Guangdong Province[51]. Corporate Governance and Compliance - The company has implemented a comprehensive internal control system to address deficiencies and enhance risk management[168]. - The company has maintained a strict quality control system, ensuring no major quality safety incidents occurred during the year[170]. - The company achieved ISO management system certifications, including ISO9001, ISO14001, and ISO45001, reinforcing its commitment to quality management[170]. - The company has enhanced financial control by refining financial management systems and improving fund management across subsidiaries[170]. - The company has established a three-in-one mixed performance evaluation system to enhance management performance and align it with organizational goals[168]. - The company has committed to maintaining independence in assets, personnel, finance, governance, and business operations as per the commitment letter from its controlling shareholder[132]. - The company organized independent director and supervisory board field investigations to enhance understanding of subsidiary operations and provide management suggestions[129]. - The company actively communicates with investors to ensure transparency and fairness in information disclosure[131]. - The company has implemented a third-party professional agency to optimize internal control and rectify deficiencies[129]. - The company has proposed to increase the expected amount of daily related transactions for 2022, indicating ongoing operational needs[157]. Social Responsibility - The company invested over CNY 1.4 million in healthcare resources for grassroots regions, enhancing public health services[195]. - The company supported 1,079 registered poor households in Yunnan Province, creating approximately 8,360 job opportunities, with an average annual income increase of CNY 3,000 per person[193]. - The company contributed CNY 697,100 to poverty alleviation and rural revitalization projects, with CNY 600,900 in cash and CNY 96,200 in material donations[191]. - Over 8,300 students from Jieyang were assisted in pursuing higher education through the Jieyang University Student Foundation, promoting local employment and entrepreneurship[194]. - The company plans to leverage its full industry chain advantages in traditional Chinese medicine to further enhance corporate social responsibility and promote local economic development[196]. Legal and Regulatory Issues - The company has a significant legal case involving a financial loan dispute, with a first-instance judgment requiring it to pay approximately 2.82 billion CNY, impacting its net profit for 2022 by 609.16 million CNY[124]. - The company received administrative penalties from the China Securities Regulatory Commission, with fines totaling 2 million yuan for several executives due to inaccurate disclosures[150]. - The Shanghai Stock Exchange publicly reprimanded the company for inaccurate earnings forecasts in 2019 and 2020, leading to disciplinary actions against key executives[150].

Financial Performance - The company's operating revenue for Q1 2023 was CNY 1,143,946,162.37, representing a year-on-year increase of 22.50%[4] - The net profit attributable to shareholders was a loss of CNY 50,408,574.68, and the net profit after deducting non-recurring gains and losses was a loss of CNY 88,901,510.70[4] - The net profit for Q1 2023 was a loss of CNY 49,765,383.27, an improvement from a loss of CNY 111,557,219.71 in Q1 2022[16] - The company reported a net loss attributable to the parent company of CNY -50,409,108.66 for Q1 2023, compared to a loss of CNY -111,422,065.03 in Q1 2022[17] - The net loss for Q1 2023 was CNY -45,278,952.12, compared to a net loss of CNY -35,501,940.53 in Q1 2022, representing a decline of 27.5%[25] Cash Flow - The net cash flow from operating activities was negative at CNY 203,223,900.59[4] - The total cash inflow from operating activities for Q1 2023 was CNY 1,464,558,204.32, compared to CNY 848,235,064.96 in Q1 2022, representing a year-over-year increase of approximately 73%[18] - The net cash outflow from operating activities was CNY -203,223,900.59, slightly worse than the previous year's outflow of CNY -199,492,837.60[19] - The total cash and cash equivalents at the end of Q1 2023 were CNY 1,211,362,848.00, down from CNY 2,133,612,721.59 at the end of Q1 2022, indicating a decrease of approximately 43%[20] - The cash flow from operating activities showed a net outflow of CNY -230,509,616.40, compared to CNY -218,081,164.50 in the same period last year[26] Assets and Liabilities - The company's total assets at the end of the reporting period were CNY 14,800,805,858.96, a decrease of 2.06% compared to the end of the previous year[4] - The total current assets decreased to RMB 7,122,767,014.98 from RMB 7,383,990,388.30, reflecting a decline of about 3.5%[13] - The company's accounts receivable stood at RMB 1,917,105,230.41, down from RMB 1,964,955,319.56, indicating a reduction of approximately 2.4%[13] - The total current liabilities decreased to CNY 5,157,359,239.77 from CNY 5,441,511,537.39 in the previous quarter, reflecting a reduction of approximately 5.2%[15] - The total liabilities decreased to CNY 5,225,963,290.04 from CNY 5,459,104,498.52, a decline of 4.3%[23] Shareholder Information - The number of ordinary shareholders at the end of the reporting period was 193,025[7] - The largest shareholder, Guangdong Shennong Enterprise Management Partnership, held 25.31% of the shares, totaling 3,509,413,788 shares[7] - The total equity attributable to shareholders was CNY 6,897,854,467.42, a slight decrease from CNY 6,947,130,703.24 in the previous quarter[15] - The company’s total equity decreased to CNY 11,928,678,270.55 from CNY 11,971,572,385.21, a decline of 0.4%[23] Research and Development - Research and development expenses increased by 141.65% due to higher investment in R&D projects[6] - Research and development expenses for Q1 2023 were CNY 9,486,049.57, significantly higher than CNY 3,925,608.53 in Q1 2022, indicating an increase of about 141.1%[16] - Research and development expenses for Q1 2023 were CNY 4,653,278.58, indicating ongoing investment in innovation[24] Legal and Regulatory Matters - The company has reached an out-of-court settlement regarding the bankruptcy application of its wholly-owned subsidiary, which will allow it to avoid bankruptcy proceedings[10] - The company is in the process of applying to revoke the "other risk warning" status, contingent on the Shanghai Stock Exchange's review[11] - The company has a pending lawsuit involving a financial loan dispute, with a first-instance judgment requiring it to pay approximately RMB 281,989,470.00 in principal and interest[12] Other Financial Metrics - Non-recurring gains and losses totaled CNY 38,492,936.02, with significant contributions from non-current asset disposal gains and government subsidies[5] - The total operating costs for Q1 2023 were CNY 1,230,355,256.52, compared to CNY 1,044,554,905.16 in Q1 2022, indicating an increase of about 17.8%[16] - The deferred tax assets increased to CNY 95,901,705.57 from CNY 40,149,436.75 in the previous quarter, showing a growth of approximately 138.5%[15] - The company reported a financial expense of CNY -4,530,890.08 in Q1 2023, an improvement from CNY -7,088,193.40 in Q1 2022[16]

| 证券代码：600518 | 证券简称：ST康美 | 编号：临2023-014 | | --- | --- | --- | | 债券代码：122354 | 债券简称：15康美债 | | | 债券代码：143730 | 债券简称：18康美01 | | | 债券代码：143842 | 债券简称：18康美04 | | 康美药业股份有限公司 关于召开 2022 年度业绩说明会的公告 本公司董事会及全体董事保证本公告内容不存在任何虚假记载、误导性陈述 或者重大遗漏，并对其内容的真实性、准确性和完整性承担法律责任。 重要内容提示： 会议召开时间：2023 年 05 月 16 日（星期二）上午 10:00-11:30 会议召开地点： 上海证券 交 易 所 上 证 路 演 中 心 （ 网址： http://roadshow.sseinfo.com/） 会议召开方式：上证路演中心视频录播和网络互动 投资者可于 2023 年 05 月 09 日（星期二）至 05 月 15 日（星期一）16:00 前登录上证路演中心网站首页点击"提问预征集"栏目或通过公司邮箱 kangmei@kangmei.com.cn 进行提问。公司将在业绩 ...

[Major Financial Data](index=1&type=section&id=Item%201.%20Major%20Financial%20Data) The company experienced a significant decline in financial performance in the first three quarters of 2022, marked by revenue decrease, substantial net losses, and adverse changes in key financial indicators due to major litigation and operational factors [Key Accounting Data and Financial Indicators](index=1&type=section&id=Key%20Accounting%20Data%20and%20Financial%20Indicators) In the first three quarters of 2022, the company's operating performance declined, with revenue decreasing by **11.80%** year-on-year and net profit attributable to shareholders recording a significant loss of **CNY 885.77 million**, while total assets and shareholders' equity also decreased from the end of the previous year Key Financial Indicators for the First Three Quarters of 2022 | Indicator | Year-to-Date (YTD) | YTD Change vs. Prior Period (%) | | :--- | :--- | :--- | | Operating Revenue | CNY 2,721,807,708.62 | -11.80% | | Net Profit Attributable to Shareholders | CNY -885,770,196.43 | N/A | | Net Profit Attributable to Shareholders (Excluding Non-Recurring Items) | CNY -322,030,545.55 | N/A | | Net Cash Flow from Operating Activities | CNY -336,964,904.38 | -410.31% | | Basic Earnings Per Share (CNY/share) | -0.064 | N/A | | **Indicator** | **As of Report Period End** | **Change vs. Prior Year-End (%)** | | Total Assets | CNY 15,562,044,201.81 | -3.07% | | Shareholders' Equity Attributable to Listed Company | CNY 9,032,649,451.71 | -9.01% | [Non-Recurring Gains and Losses Items and Amounts](index=2&type=section&id=Non-Recurring%20Gains%20and%20Losses%20Items%20and%20Amounts) During the reporting period, non-recurring gains and losses significantly impacted net profit, totaling a loss of **CNY 564 million** year-to-date, primarily due to provisions for liabilities from a financial loan contract dispute case, resulting in approximately **CNY 600 million** in contingent losses - The company recognized approximately **CNY 600 million** in provisions for liabilities due to the first-instance judgment in a financial loan contract dispute case, which is the primary reason for the substantial non-recurring loss[7](index=7&type=chunk) Major Non-Recurring Gains and Losses Items (Year-to-Date) | Item | Amount (CNY) | Description | | :--- | :--- | :--- | | Gains and losses from contingent events unrelated to normal business operations | -600,447,962.18 | Primarily provisions for liabilities from financial loan contract dispute case | | Government grants recognized in current profit or loss | 29,077,387.06 | Government grants | | Debt restructuring gains and losses | -11,255,061.29 | - | | Other non-operating income and expenses not listed above | 22,042,276.94 | - | | **Total** | **-563,739,650.88** | - | [Analysis of Major Financial Indicator Changes](index=3&type=section&id=Changes%20and%20Reasons%20for%20Major%20Accounting%20Data%20and%20Financial%20Indicators) Several financial indicators experienced significant fluctuations, with other current liabilities and non-operating expenses surging due to provisions for major litigation, while finance costs sharply decreased following bankruptcy reorganization, and operating cash flow significantly deteriorated due to reduced sales collections and prior-year tax payments - Finance costs decreased by **102.29%** year-on-year, primarily due to a significant reduction in interest-bearing debt after the company's bankruptcy reorganization[9](index=9&type=chunk) - Other current liabilities and non-operating expenses surged by **358.45%** and **32945.70%** respectively, mainly due to provisions for liabilities related to the Bohai International Trust financial loan contract dispute case based on the first-instance court judgment during the reporting period[9](index=9&type=chunk)[11](index=11&type=chunk) - Net cash flow from operating activities decreased by **410.31%** year-on-year, primarily due to reduced cash received from sales of goods and the payment of prior-year income tax arising from bankruptcy reorganization gains[11](index=11&type=chunk) - Research and development expenses increased by **70.48%** year-on-year, indicating increased investment in R&D projects during the reporting period[9](index=9&type=chunk) [Shareholder Information](index=4&type=section&id=Item%202.%20Shareholder%20Information) As of the reporting period end, the company had 177,922 common shareholders, with Guangdong Shennongshi Enterprise Management Partnership as the largest shareholder, while the former controlling shareholder's shares are fully pledged [Shareholding of Shareholders](index=4&type=section&id=Total%20Number%20of%20Common%20Shareholders%20and%20Top%20Ten%20Shareholders%27%20Shareholding%20Table) As of the reporting period end, the company had **177,922** common shareholders, with Guangdong Shennongshi Enterprise Management Partnership (Limited Partnership) as the largest shareholder at **25.31%**, and former controlling shareholder Kangmei Industrial Investment Holding Co., Ltd. holding **5.21%** as the second largest, with all its shares pledged - As of the end of the reporting period, the company had a total of **177,922** common shareholders[12](index=12&type=chunk) Top Three Shareholders' Shareholding | Shareholder Name | Number of Shares Held | Shareholding Percentage (%) | | :--- | :--- | :--- | | Guangdong Shennongshi Enterprise Management Partnership (Limited Partnership) | 3,509,413,788 | 25.31 | | Kangmei Industrial Investment Holding Co., Ltd. | 723,176,677 | 5.21 | | China Construction Bank Corporation Guangdong Branch | 653,206,909 | 4.71 | - The **723,176,677** shares held by the second largest shareholder, Kangmei Industrial Investment Holding Co., Ltd., have all been pledged[12](index=12&type=chunk) [Other Important Matters](index=5&type=section&id=Item%203.%20Other%20Important%20Matters) The company completed preferred share redemption and delisting, disclosed progress on major litigations including a significant provision for liabilities, and noted the expiration of a voting rights entrustment and the bankruptcy liquidation of its former controlling shareholder [Redemption and Delisting of Preferred Shares](index=5&type=section&id=Full%20Redemption%20and%20Delisting%20of%20Company%27s%20Non-Publicly%20Issued%20Preferred%20Shares) The company completed the full redemption and cancellation of its non-publicly issued preferred shares 'Kangmei You 1' on **July 13, 2022**, terminating their transfer service on the Shanghai Stock Exchange as part of its reorganization plan - In accordance with the company's reorganization plan, the full redemption and delisting of non-publicly issued preferred shares 'Kangmei You 1' have been completed, with the redeemed shares cancelled on **July 13, 2022**[14](index=14&type=chunk) [Progress of Major Litigation](index=5&type=section&id=Progress%20of%20Major%20Litigation%20Involving%20the%20Company) The company disclosed progress on two major litigations involving Bohai International Trust, with one ordinary bankruptcy claim confirmation dispute case reaching a final judgment upholding the original verdict, and another financial loan contract dispute case resulting in an unfavorable first-instance judgment, leading the company to appeal and prudently recognize approximately **CNY 605 million** in provisions for liabilities, significantly impacting current year net profit - Regarding the ordinary bankruptcy claim confirmation dispute between Bohai Trust and the company, the Guangdong Provincial High People's Court issued a final judgment, rejecting Bohai Trust's appeal and upholding the original verdict[16](index=16&type=chunk) - In another financial loan contract dispute case with Bohai Trust, the first-instance judgment required the company's related parties to repay a substantial principal and interest amount; the company has appealed, but based on prudence, has recognized provisions for liabilities of **CNY 604.99 million** according to the first-instance judgment[18](index=18&type=chunk) - This provision for liabilities is expected to reduce the company's net profit attributable to shareholders by **CNY 604.99 million** for the current year[18](index=18&type=chunk) [Shareholders' Equity Change](index=7&type=section&id=Expiration%20of%20Company%20Shareholders%27%20Voting%20Rights%20Entrustment%20and%20Equity%20Change) The 'Voting Rights Transfer Agreement' signed between Kangmei Industrial and its concerted parties and Yilin Pharmaceutical expired on **September 18, 2022**, restoring the voting rights corresponding to the **1.005 billion** shares held by Kangmei Industrial and its concerted parties - The voting rights transfer agreement between Kangmei Industrial and its concerted parties and Jieyang Yilin Pharmaceutical Investment Co., Ltd. expired, restoring the voting rights for the **1,005,120,793** shares held by Kangmei Industrial and its concerted parties[19](index=19&type=chunk) [Kangmei Industrial Bankruptcy Liquidation](index=7&type=section&id=Kangmei%20Industrial%20Ruled%20by%20Court%20for%20Bankruptcy%20Liquidation%20and%20Administrator%20Appointed) The company's former controlling shareholder, Kangmei Industrial Investment Holding Co., Ltd., was ruled by the Jieyang Intermediate People's Court of Guangdong Province to accept its bankruptcy liquidation application due to inability to repay due debts and insolvency, with an administrator already appointed - Due to its inability to repay due debts and insolvency, Kangmei Industrial Investment Holding Co., Ltd. was ruled by the Jieyang Intermediate People's Court to accept its bankruptcy liquidation application[20](index=20&type=chunk)[21](index=21&type=chunk) [Quarterly Financial Statements](index=8&type=section&id=Item%204.%20Quarterly%20Financial%20Statements) The quarterly financial statements reveal a decline in total assets and shareholders' equity, significant net losses driven by increased non-operating expenses, and negative operating cash flow due to reduced sales and increased tax payments [Consolidated Balance Sheet](index=8&type=section&id=Consolidated%20Balance%20Sheet) As of **September 30, 2022**, the company's total assets were **CNY 15.56 billion**, a **3.07%** decrease from the prior year-end; total liabilities were **CNY 6.49 billion**; and total equity attributable to owners of the parent company was **CNY 9.03 billion**, a **9.01%** decrease from the prior year-end, indicating a relatively stable asset-liability structure but reduced shareholders' equity due to losses Key Items from Consolidated Balance Sheet (Unit: CNY) | Item | September 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Total Assets | 15,562,044,201.81 | 16,054,259,253.19 | | Total Liabilities | 6,487,608,266.88 | 6,085,784,787.38 | | Total Equity Attributable to Owners of Parent Company | 9,032,649,451.71 | 9,926,555,018.46 | | Total Shareholders' Equity | 9,074,435,934.93 | 9,968,474,465.81 | [Consolidated Income Statement](index=11&type=section&id=Consolidated%20Income%20Statement) In the first three quarters of 2022, the company achieved operating revenue of **CNY 2.72 billion**, a **11.80%** year-on-year decrease; due to a surge in non-operating expenses from provisions for major litigation, total profit was **CNY -877 million**, and net loss attributable to parent company shareholders reached **CNY 886 million** Key Items from Consolidated Income Statement (Unit: CNY) | Item | First Three Quarters of 2022 (Jan-Sep) | First Three Quarters of 2021 (Jan-Sep) | | :--- | :--- | :--- | | Total Operating Revenue | 2,721,807,708.62 | 3,086,034,284.80 | | Operating Profit | -296,886,015.90 | -1,003,730,820.89 | | Non-Operating Expenses | 608,744,991.25 | 1,842,130.46 | | Total Profit | -876,727,472.61 | -998,477,197.48 | | Net Profit Attributable to Owners of Parent Company | -885,770,196.43 | -1,024,589,865.52 | [Consolidated Cash Flow Statement](index=12&type=section&id=Consolidated%20Cash%20Flow%20Statement) In the first three quarters of 2022, the company's cash flow was unfavorable, with net cash flow from operating activities at **CNY -337 million**, turning negative year-on-year due to reduced sales collections and increased tax payments, while both investing and financing activities resulted in net cash outflows, leading to a **CNY 405 million** decrease in cash and cash equivalents from the beginning of the period Key Items from Consolidated Cash Flow Statement (Unit: CNY) | Item | First Three Quarters of 2022 (Jan-Sep) | First Three Quarters of 2021 (Jan-Sep) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | -336,964,904.38 | 108,590,934.19 | | Net Cash Flow from Investing Activities | -12,766,125.95 | 975,992,806.16 | | Net Cash Flow from Financing Activities | -55,656,906.48 | -915,042,844.55 | | Net Increase in Cash and Cash Equivalents | -405,384,999.53 | 169,558,739.67 |

[Important Reminders](index=1&type=section&id=%E9%87%8D%E8%A6%81%E5%86%85%E5%AE%B9%E6%8F%90%E7%A4%BA) The company's board and management guarantee the report's accuracy, with this quarter's financial statements being unaudited - The company's board of directors, supervisory board, and senior management guarantee the truthfulness, accuracy, and completeness of the quarterly report, with no false records, misleading statements, or major omissions[3](index=3&type=chunk) - This quarter's financial statements are unaudited[3](index=3&type=chunk) [Key Financial Data](index=1&type=section&id=%E4%B8%80%E3%80%81%20%E4%B8%BB%E8%B4%A2%E5%8A%A1%E6%95%B0%E6%8D%AE) This section presents the company's primary financial performance and position indicators for the reporting period [Key Accounting Data and Financial Indicators](index=1&type=section&id=(%E4%B8%80)%E4%B8%BB%E8%A6%81%E4%BC%9A%E8%AE%A1%E6%95%B0%E6%8D%AE%E5%92%8C%E8%B4%A2%E5%8A%A1%E6%8C%87%E6%A0%87) Kangmei Pharmaceutical's Q1 2022 operating revenue decreased by **14.15%**, with a net loss of **CNY 111 million** and a **321.94%** drop in net cash flow from operating activities 2022 Q1 Key Accounting Data and Financial Indicators | Item | Amount for Current Period (CNY) | Change from Same Period Last Year (%) | | :--- | :--- | :--- | | Operating Revenue | 933,848,192.84 | -14.15 | | Net Profit Attributable to Shareholders of Listed Company | -111,422,065.03 | N/A | | Net Profit Attributable to Shareholders of Listed Company (Excluding Non-recurring Gains and Losses) | -121,493,079.02 | N/A | | Net Cash Flow from Operating Activities | -199,492,837.60 | -321.94 | | Basic Earnings Per Share (CNY/share) | -0.008 | N/A | | Diluted Earnings Per Share (CNY/share) | -0.008 | N/A | | Weighted Average Return on Net Assets (%) | -1.12 | N/A | 2022 Q1 End Asset and Liability Indicators | Item | Amount at End of Current Period (CNY) | Amount at End of Last Fiscal Year (CNY) | Change from End of Last Fiscal Year (%) | | :--- | :--- | :--- | :--- | | Total Assets | 15,919,718,524.85 | 16,054,259,253.19 | -0.84 | | Total Equity Attributable to Shareholders of Listed Company | 9,815,132,953.43 | 9,926,555,018.46 | -1.12 | [Non-recurring Gains and Losses and Amounts](index=2&type=section&id=(%E4%BA%8C)%20%E9%9D%9E%E5%B8%B8%E8%A7%84%E6%80%A7%E6%8D%9F%E7%9B%8A%E9%A1%B9%E7%9B%AE%E5%92%8C%E9%A2%9D) This period's total non-recurring gains and losses amounted to **CNY 10.07 million**, primarily from government grants, non-current asset disposals, and debt restructuring 2022 Q1 Non-recurring Gains and Losses and Amounts | Item | Amount for Current Period (CNY) | Explanation | | :--- | :--- | :--- | | Gains/Losses on Disposal of Non-current Assets | 322,130.28 | 处置非流动资产 | | Government Grants Included in Current Period's Profit/Loss | 9,204,297.03 | 政府补助 | | Debt Restructuring Gains/Losses | 338,334.48 | | | Other Non-operating Income and Expenses Apart from the Above | 803,735.73 | | | Less: Income Tax Impact | 13,308.25 | | | Impact on Minority Interests (After Tax) | 584,175.28 | | | **Total** | **10,071,013.99** | | [Changes and Reasons for Key Accounting Data and Financial Indicators](index=3&type=section&id=(%E4%B8%89)%E4%B8%BB%E8%A6%81%E4%BC%9A%E8%AE%A1%E6%95%B0%E6%8D%AE%E3%80%81%E8%B4%A2%E5%8A%A1%E6%8C%87%E6%A0%87%E5%8F%91%E7%94%9F%E5%8F%98%E5%8A%A8%E7%9A%84%E6%83%85%E5%86%B5%E3%80%81%E5%8E%9F%E5%9B%A0) Significant changes include a **235.24%** increase in trading financial assets, an **88.46%** decrease in notes receivable financing, and a **101.42%** drop in financial expenses due to debt reduction Changes in Key Accounting Data and Financial Indicators | No. | Item Name | Amount at Period-end/Current Period (CNY) | Amount at Period-start/Last Period (CNY) | Change Percentage (%) | Primary Reason | | :--- | :--- | :--- | :--- | :--- | :--- | | 1 | Trading Financial Assets | 1,757,632.04 | 524,298.00 | 235.24% | Due to increase in trading financial assets | | 2 | Notes Receivable Financing | 4,251,281.82 | 36,823,883.67 | -88.46% | Decrease in customer bank acceptance bills received for supplier payments compared to same period last year | | 4 | Selling Expenses | 87,599,302.51 | 130,637,893.75 | -32.94% | Strengthened management led to a year-on-year decrease in variable expenses such as sales service fees and office expenses; depreciation and amortization also decreased year-on-year | | 5 | Financial Expenses | -7,088,193.40 | 498,291,322.52 | -101.42% | Significant reduction in interest-bearing debt after bankruptcy reorganization | | 6 | Credit Impairment Losses | -13,288,230.63 | 4,534,070.07 | 393.08% | Due to impairment provision for receivables | | 9 | Non-operating Expenses | 640,382.50 | 160,282.22 | 299.53% | Due to payment of lease termination penalties | | 11 | Net Cash Flow from Operating Activities | -199,492,837.60 | 89,885,237.79 | -321.94% | Due to decrease in cash received from sales of goods in current period compared to same period last year | | 12 | Net Cash Flow from Investing Activities | -1,171,394.16 | -60,754,045.09 | -98.07% | Due to reduced investment in long-term assets in current period | | 13 | Net Cash Flow from Financing Activities | -10,456,437.26 | 55,453,944.01 | -118.86% | Due to subsidiary borrowing from related parties in same period last year | [Shareholder Information](index=4&type=section&id=%E4%BA%8C%E3%80%81%20%E8%82%A1%E4%B8%9C%E4%BF%A1%E6%81%AF) This section details the total number of ordinary and preferred shareholders, along with the top ten shareholders' holdings [Total Number of Ordinary Shareholders and Top Ten Shareholders' Holdings](index=4&type=section&id=(%E4%B8%80)%E6%99%AE%E9%80%9A%E8%82%A1%E8%82%A1%E4%B8%9C%E6%80%BB%E6%95%B0%E5%92%8C%E8%A1%A8%E5%86%B3%E6%9D%83%E6%81%A2%E5%A4%8D%E7%9A%84%E4%BC%98%E5%85%88%E8%82%A1%E8%82%A1%E4%B8%9C%E6%95%B0%E9%87%8F%E5%8F%8A%E5%89%8D%E5%8D%81%E5%90%8D%E8%82%A1%E4%B8%9C%E6%8C%81%E8%82%A1%E6%83%85%E5%86%B5%E8%A1%A8) As of the reporting period end, the company had **185,550** ordinary shareholders, with Guangdong Shennongshi holding **25.31%** as the largest shareholder - The total number of ordinary shareholders at the end of the reporting period was **185,550**[10](index=10&type=chunk) Top Ten Ordinary Shareholders' Holdings | Shareholder Name | Shareholder Nature | Number of Shares Held (shares) | Shareholding Percentage (%) | Share Status | Pledged, Marked, or Frozen Shares (shares) | | :--- | :--- | :--- | :--- | :--- | :--- | | Guangdong Shennongshi Enterprise Management Partnership (Limited Partnership) | Other | 3,509,413,788 | 25.31 | Unknown | - | | Kangmei Industrial Investment Holding Co., Ltd. | Domestic Non-state-owned Legal Person | 1,263,328,032 | 9.11 | Pledged | 1,263,328,032 | | Kangmei Pharmaceutical Co., Ltd. Bankruptcy Enterprise Property Disposal Special Account | Other | 1,023,686,349 | 7.38 | Unknown | - | [Total Number of Preferred Shareholders and Top Ten Preferred Shareholders' Holdings](index=5&type=section&id=(%E4%BA%8C)%E5%85%AC%E5%8F%B8%E4%BC%98%E5%85%88%E8%82%A1%E8%82%A1%E4%B8%9C%E6%80%BB%E6%95%B0%E5%8F%8A%E5%89%8D%2010%20%E5%90%8D%E4%BC%98%E5%85%88%E8%82%A1%E8%82%A1%E4%B8%9C%E6%8C%81%E8%82%A1%E6%83%85%E5%86%B5%E8%A1%A8) The company had **8** preferred shareholders, with Boshi Fund, Huashang Fund, and BOCOM Schroders Asset Management as the top three, holding **30%**, **20%**, and **20%** respectively - The total number of preferred shareholders at the end of the reporting period was **8**[12](index=12&type=chunk) Top Ten Preferred Shareholders' Holdings | Shareholder Name | Shareholder Nature | Number of Shares Held (shares) | Shareholding Percentage (%) | | :--- | :--- | :--- | :--- | | Boshi Fund - ICBC - Boshi - ICBC - Flexible Allocation No. 5 Specific Multi-Client Asset Management Plan | Other | 9,000,000 | 30.00 | | Huashang Fund - PSBC - Postal Savings Bank of China Co., Ltd. | Other | 6,000,000 | 20.00 | | BOCOM Schroders Asset Management - Bank of Communications - Bank of Communications Co., Ltd. | Other | 6,000,000 | 20.00 | - The company has approved the redemption of preferred shares and has settled them as ordinary claims, with coordination ongoing for preferred share cancellation[13](index=13&type=chunk) [Other Reminders](index=6&type=section&id=%E4%B8%89%E3%80%81%20%E5%85%B6%E4%BB%96%E6%8F%90%E9%86%92%E4%BA%8B%E9%A1%B9) No other significant information regarding the company's operating performance during the reporting period requires investor attention - There is no other important information regarding the company's operating performance during the reporting period that requires investors' attention[14](index=14&type=chunk) [Quarterly Financial Statements](index=6&type=section&id=%E5%9B%9B%E3%80%81%20%E5%AD%A3%E5%BA%A6%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8) This section presents the unaudited quarterly financial statements, including balance sheets, income statements, and cash flow statements [Type of Audit Opinion](index=6&type=section&id=(%E4%B8%80)%E5%AE%A1%E8%AE%A1%E6%84%8F%E8%A7%81%E7%B1%BB%E5%9E%8B) The financial statements for this quarter have not been audited - This quarter's financial statements are unaudited[14](index=14&type=chunk) [Financial Statements](index=6&type=section&id=(%E4%BA%8C)%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8) This section includes the company's consolidated and parent company balance sheets, income statements, and cash flow statements for Q1 2022 [Consolidated Balance Sheet](index=6&type=section&id=%E5%90%88%E5%B9%B6%E8%B5%84%E4%BA%A7%E8%B4%9F%E5%80%BA%E8%A1%A8) As of March 31, 2022, the company's consolidated total assets were **CNY 15.92 billion**, a slight decrease of **0.84%** from the end of last year Consolidated Balance Sheet Key Data (March 31, 2022 vs December 31, 2021) | Item | March 31, 2022 (CNY) | December 31, 2021 (CNY) | Change (%) | | :--- | :--- | :--- | :--- | | Total Assets | 15,919,718,524.85 | 16,054,259,253.19 | -0.84 | | Total Current Assets | 8,232,663,490.84 | 8,284,793,366.93 | -0.63 | | Total Non-current Assets | 7,687,055,034.01 | 7,769,465,886.26 | -1.06 | | Total Liabilities | 6,062,801,278.75 | 6,085,784,787.38 | -0.38 | | Total Owners' Equity | 9,856,917,246.10 | 9,968,474,465.81 | -1.12 | - Cash and cash equivalents decreased from **CNY 2.419 billion** to **CNY 2.188 billion**[15](index=15&type=chunk) - Accounts receivable increased from **CNY 1.357 billion** to **CNY 1.552 billion**[16](index=16&type=chunk) [Consolidated Income Statement](index=9&type=section&id=%E5%90%88%E5%B9%B6%E5%88%A9%E6%B6%A6%E8%A1%A8) In Q1 2022, consolidated operating revenue was **CNY 934 million**, down **14.15%** year-on-year, with net loss narrowing significantly to **CNY 112 million** Consolidated Income Statement Key Data (Q1 2022 vs Q1 2021) | Item | Q1 2022 (CNY) | Q1 2021 (CNY) | Change (%) | | :--- | :--- | :--- | :--- | | Total Operating Revenue | 933,848,192.84 | 1,087,761,605.96 | -14.15 | | Total Operating Costs | 1,044,554,905.16 | 1,707,361,995.39 | -38.82 | | Financial Expenses | -7,088,193.40 | 498,291,322.52 | -101.42 | | Net Profit | -111,557,219.71 | -596,824,311.74 | 81.37 (Loss narrowed) | | Net Profit Attributable to Parent Company Shareholders | -111,422,065.03 | -595,231,251.64 | 81.29 (Loss narrowed) | | Basic Earnings Per Share (CNY/share) | -0.008 | -0.121 | 93.40 (Loss narrowed) | - Selling expenses decreased by **32.94%** year-on-year, and administrative expenses decreased by **21.23%** year-on-year[19](index=19&type=chunk) [Consolidated Cash Flow Statement](index=11&type=section&id=%E5%90%88%E5%B9%B6%E7%8E%B0%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) In Q1 2022, net cash flow from operating activities turned negative to **CNY 199 million**, a significant decrease from the prior year's positive flow Consolidated Cash Flow Statement Key Data (Q1 2022 vs Q1 2021) | Item | Q1 2022 (CNY) | Q1 2021 (CNY) | Change (%) | | :--- | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | -199,492,837.60 | 89,885,237.79 | -321.94 | | Net Cash Flow from Investing Activities | -1,171,394.16 | -60,754,045.09 | 98.07 (Outflow decreased) | | Net Cash Flow from Financing Activities | -10,456,437.26 | 55,453,944.01 | -118.86 | | Net Increase in Cash and Cash Equivalents | -211,120,669.02 | 84,595,092.28 | -349.04 | - Cash received from sales of goods and provision of services decreased by **44.79%** year-on-year[22](index=22&type=chunk) [Parent Company Balance Sheet](index=12&type=section&id=%E6%AF%8D%E5%85%AC%E5%8F%B8%E8%B5%84%E4%BA%A7%E8%B4%9F%E5%80%BA%E8%A1%A8) As of March 31, 2022, the parent company's total assets were **CNY 18.59 billion**, a slight decrease of **0.40%** from the end of last year Parent Company Balance Sheet Key Data (March 31, 2022 vs December 31, 2021) | Item | March 31, 2022 (CNY) | December 31, 2021 (CNY) | Change (%) | | :--- | :--- | :--- | :--- | | Total Assets | 18,591,209,766.15 | 18,664,989,290.86 | -0.40 | | Total Current Assets | 13,392,091,061.83 | 13,435,043,229.49 | -0.32 | | Total Non-current Assets | 5,199,118,704.32 | 5,229,946,061.37 | -0.59 | | Total Liabilities | 4,288,004,984.18 | 4,326,282,568.36 | -0.88 | | Total Owners' Equity | 14,303,204,781.97 | 14,338,706,722.50 | -0.25 | - Parent company cash and cash equivalents decreased from **CNY 2.096 billion** to **CNY 1.869 billion**[23](index=23&type=chunk) - Parent company accounts receivable increased from **CNY 1.059 billion** to **CNY 1.216 billion**[24](index=24&type=chunk) [Parent Company Income Statement](index=14&type=section&id=%E6%AF%8D%E5%85%AC%E5%8F%B8%E5%88%A9%E6%B6%A6%E8%A1%A8) In Q1 2022, parent company operating revenue was **CNY 406 million**, down **30.90%** year-on-year, with net loss narrowing significantly to **CNY 35.5 million** Parent Company Income Statement Key Data (Q1 2022 vs Q1 2021) | Item | Q1 2022 (CNY) | Q1 2021 (CNY) | Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 405,884,780.50 | 587,311,913.47 | -30.90 | | Operating Costs | 341,499,762.75 | 447,906,497.83 | -23.87 | | Financial Expenses | -7,929,998.25 | 494,524,312.00 | -101.60 | | Net Profit | -35,501,940.53 | -481,643,716.31 | 92.63 (Loss narrowed) | | Basic Earnings Per Share (CNY/share) | -0.003 | -0.098 | 96.94 (Loss narrowed) | - Parent company selling expenses decreased by **13.12%** year-on-year, and administrative expenses decreased by **17.28%** year-on-year[26](index=26&type=chunk) [Parent Company Cash Flow Statement](index=16&type=section&id=%E6%AF%8D%E5%85%AC%E5%8F%B8%E7%8E%B0%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) In Q1 2022, parent company net cash flow from operating activities turned negative to **CNY 218 million**, a significant decrease from the prior year's positive flow Parent Company Cash Flow Statement Key Data (Q1 2022 vs Q1 2021) | Item | Q1 2022 (CNY) | Q1 2021 (CNY) | Change (%) | | :--- | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | -218,081,164.50 | 20,825,455.67 | -1147.00 | | Net Cash Flow from Investing Activities | -798,867.26 | -177,928.78 | -348.99 | | Net Cash Flow from Financing Activities | -8,320,669.28 | -8,882,064.44 | 6.32 (Outflow decreased) | | Net Increase in Cash and Cash Equivalents | -227,200,701.04 | 11,765,462.45 | -2031.60 | - Parent company cash received from sales of goods and provision of services decreased by **45.39%** year-on-year[28](index=28&type=chunk) [Other Information](index=17&type=section&id=%E5%85%B6%E4%BB%96%E4%BF%A1%E6%81%AF) This section notes that new accounting standards were first implemented in 2022 without restating prior year-end financial statements - New accounting standards were first implemented in 2022 without restating the financial statements at the beginning of that year[29](index=29&type=chunk) - This quarterly report was published on April 27, 2022[29](index=29&type=chunk)

Financial Performance - The company reported a net profit of ¥7,917,900,623.78 for the year 2021, a significant recovery from a net loss of ¥31,084,832,430.77 in 2020[6]. - Total operating revenue for 2021 was ¥4,152,521,099.09, representing a decrease of 23.27% compared to ¥5,412,007,961.66 in 2020[21]. - The net cash flow from operating activities decreased by 79.23%, amounting to ¥214,205,102.33 in 2021, down from ¥1,031,392,101.60 in 2020[21]. - The company has a negative retained earnings balance of ¥23,316,057,998.94 as of December 31, 2021[6]. - The company reported a net profit attributable to shareholders after deducting non-recurring gains and losses of -¥7,968,233,252.63 in 2021[21]. - The net assets attributable to shareholders decreased to ¥9,926,555,018.46, down from ¥20,515,274,013.61, representing a decline of 48.39%[23]. - Total assets decreased by 51.83% to ¥16,054,259,253.19 from ¥64,586,228,755.01[23]. - Basic earnings per share improved to ¥0.57 from a loss of ¥2.25 in the previous year, marking a significant recovery[24]. - The weighted average return on net assets increased by 295.77% to -120.39% from -416.16%[24]. - The company reported a total revenue of ¥1,087,761,605.96 in Q1 2021, with a gradual increase in subsequent quarters[26]. - Non-recurring gains and losses totaled ¥15,886,133,876.41 for 2021, significantly impacting the overall financial results[29]. Business Strategy and Operations - The company is focusing on the "Smart Pharmacy 020" platform to enhance its O2O mobile medical model, integrating traditional Chinese medicine with modern technology[31]. - The company is undergoing restructuring, with a new controlling shareholder, Guangdong Shennongshi Enterprise Management Partnership (Limited Partnership)[31]. - The company is implementing a strategy to streamline operations by discontinuing non-core businesses to improve overall efficiency[31]. - The company has signed contracts with hundreds of medical institutions, including major hospitals, to provide quality traditional Chinese medicine services, receiving positive feedback[32]. - The company is focusing on the full industry chain of traditional Chinese medicine, optimizing its business structure, and concentrating resources on core traditional Chinese medicine businesses[35]. - The company has implemented an integrated project for business and financial systems to improve internal controls and ensure the unity of business flow, data flow, and capital flow[36]. - The company has established a modern pharmaceutical logistics system and a multi-level marketing network that integrates medical institutions, smart pharmacies, OTC retail, chain pharmacies, direct sales, e-commerce, and mobile healthcare[62]. - The company has developed a comprehensive marketing network that includes medical institutions, smart pharmacies, OTC retail, chain pharmacies, direct sales, and e-commerce[53]. Research and Development - As of December 31, 2021, the company has applied for 83 technology patents, with 52 granted, including 10 invention patents and 42 utility model patents[33]. - The company has established a 3,000 square meter traditional Chinese medicine research platform, including a 945 square meter experimental animal barrier environment, approved by the Guangdong Provincial Science and Technology Department[34]. - The company has developed key technologies in traditional Chinese medicine, including production and quality control, which are positioned at the forefront of the industry[85]. - The company has 22 ongoing R&D projects, with several products currently under review by the evaluation center[114]. - The company is actively involved in research and development of new formulations, particularly in the areas of respiratory and gastrointestinal health, to enhance its product portfolio[101]. Market Expansion and Product Development - The company is focusing on the development of high-value consumables and small to medium-sized medical devices, gradually expanding into larger equipment[45]. - The company is actively pursuing new strategies for market expansion and product development to drive future growth[77]. - The company plans to expand its market presence, focusing on enhancing its product offerings and exploring new technologies[77]. - The company is exploring potential mergers and acquisitions to strengthen its market position and diversify its product offerings[101]. - The company aims to enhance its distribution channels to reach a broader customer base, particularly in underserved regions[101]. - The company is focusing on expanding its product offerings in the traditional Chinese medicine sector[100]. Financial Management and Governance - The company has improved its financial management structure and implemented strict internal control measures to maintain its operational sustainability and mitigate debt risks[187]. - The company has established a competitive salary and benefits management mechanism, linking employee income to company performance[175]. - The company has emphasized the importance of independent directors in the decision-making process regarding profit distribution[179]. - The company has implemented a unified information system to enhance management efficiency and prevent data leakage risks[184]. - The company has actively communicated with minority shareholders to ensure their rights and interests are protected[179]. Social Responsibility and Community Engagement - The company has directly employed over 56,000 individuals and assisted approximately 30,000 households, benefiting over 2 million farmers through its poverty alleviation initiatives[195]. - The company actively engaged in health poverty alleviation by providing medical services and health education to rural communities, addressing urgent medical needs[196]. - The company has supported over 4,600 students from Jieyang to pursue higher education through its educational assistance programs[197]. - The company plans to enhance its commitment to poverty alleviation by leveraging its health service industry and the entire Chinese medicine supply chain[198].