证券简称：通策医疗 证券代码：600763 编号：临 2023-041 通策医疗股份有限公司 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个别及连带责任。 一、董事会会议召开情况 通策医疗股份有限公司（以下简称"公司"）第九届董事会第二十次会议通知以 电子邮件、电话等方式发出，会议于 2023 年 8 月 24 日在浙江省杭州市西湖区灵溪北 路 21 号合生国贸中心 5 号楼会议室以现场结合通讯表决方式召开。 本次会议由公司董事长吕建明先生主持。会议应出席董事 7 人，实际出席 7 人， 公司监事以及公司高管列席本次会议，会议的通知、召开符合《公司法》、《公司章 程》及有关法律法规规定，会议决议合法有效。 二、董事会会议审议情况 会议审议并通过以下议案： 1、审议通过《通策医疗股份有限公司 2023 年半年度报告》和《通策医疗股份有 限公司 2023 年半年度报告摘要》 公司按照有关法律法规和上海证券交易所股票上市规则的要求编制 2023 年半年 度报告。具体内容详见公司同日在上海证券交易所网站（www.sse.com.cn）披露的《 ...

证券简称：通策医疗 证券代码：600763 编号：临 2023-025 通策医疗股份有限公司 关于召开 2022 年度暨 2023 年第一季度业绩 暨现金分红说明会的公告 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个别及连带责任。 重要内容提示： 会议召开时间：2023 年 05 月 08 日(星期一)下午 15:00-16:30 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：上证路演中心视频直播和网络互动 投资者可于 2023 年 04 月 26 日(星期三)至 05 月 05 日(星期五)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 lianghao@eetop.com 进行提问。公司将在说明会上对投资者普遍关注的问题进行回答。 通策医疗股份有限公司（以下简称"公司"）已于 2023 年 4 月 28 日发布公司 2022 年度报告，为便于广大投资者更全面深入地了解公司 2022 年度经营成果、财务 状况，公司计划于 2 ...

Business Expansion and Strategy - In 2022, Tongce Medical added 36 new dental medical institutions, with 17 established in that year alone, achieving breakeven faster than peers[3]. - The company aims to focus on the dental market in Zhejiang Province, targeting a "Double Hundred Plan" to establish 100 hospitals with 10 billion RMB in revenue[4]. - Tongce Medical's investment in HeRen Technology is part of a strategy to build a standardized hospital management system and enhance operational efficiency[4]. - The company has redefined its women's and children's health strategy to focus on non-profit models, leveraging its assets to participate in the Yihao Fund for risk mitigation[5]. - The dental implant procurement policy is expected to create a significant market demand surge in 2023, following a two-year educational campaign[5]. - Tongce Medical's long-term vision includes becoming a leading dental healthcare platform, with a focus on sustainable profitability and growth[3]. - The company emphasizes the importance of adapting to the national dental implant procurement policy to enhance service quality and affordability[5]. - The company aims to enhance accessibility to dental services, reflecting a mission to improve the quality of life for ordinary families[6]. - The company plans to leverage its extensive medical team to maintain rapid growth in the future, with over 1,000 medical staff reserved for new facilities[31]. - The company focuses on a "General Hospital + Branch Hospital" model to optimize resource allocation and reduce marketing costs[54]. - The company is expanding its presence in key regions such as the Yangtze River Delta and the Pearl River Delta, establishing large-scale dental hospital groups[82]. Financial Performance - In 2022, the company's operating revenue was approximately ¥2.72 billion, a decrease of 2.23% compared to 2021[21]. - The net profit attributable to shareholders was approximately ¥548 million, down 21.99% from the previous year[21]. - The net profit after deducting non-recurring gains and losses was approximately ¥525 million, reflecting a decrease of 21.73% year-on-year[21]. - The net cash flow from operating activities was approximately ¥670 million, a decline of 28.67% compared to 2021[21]. - The company's total assets increased by 4.03% year-on-year, reaching approximately ¥5.15 billion by the end of 2022[21]. - The basic earnings per share decreased to ¥1.71, down 21.92% from ¥2.19 in 2021[23]. - The company reported a total of ¥23 million in non-recurring gains and losses for 2022, with significant contributions from government subsidies and other income[25]. - The weighted average return on equity decreased to 17.57%, down 10.36 percentage points from the previous year[23]. - The company reported a total comprehensive income of CNY 597,629,978.66, down from CNY 816,601,546.51 in the previous year[194]. - The company reported a decrease in accounts payable from ¥173,533,005.21 in 2021 to ¥140,519,901.44 in 2022, a decline of about 19.03%[190]. Market Potential and Trends - The dental healthcare market in China is still in its infancy, with a vast potential for growth, particularly in Zhejiang Province[4]. - The dental service market in China reached approximately 110 billion yuan in 2022, with a projected compound annual growth rate (CAGR) of over 15% from 2023 to 2026[44]. - The prevalence of malocclusion in China is approximately 74%, indicating a potential patient base of around 1.04 billion people, with the orthodontic market expected to reach 66 billion yuan by 2025, growing at a CAGR of 14%[45]. - The penetration rate of dental implants among elderly individuals aged 65-74 is expected to increase, with a projected potential of 12.1 million implants by 2025[46]. - Over 50% of the population aged 12-74 shows signs of gum disease, highlighting a significant market for periodontal treatments[47]. - The dental caries rate among children under 5 years old is as high as 71.9%, indicating a growing demand in the pediatric dental market[47]. Operational Efficiency and Innovations - The company emphasizes its commitment to solving the issue of scalable services through organizational, technological, and business model innovations[6]. - The company has established a "Doctor Group + Hospital Platform" dual-driven core capability to enhance service quality and operational efficiency[54]. - The Ningbo Dental Hospital has developed into a group with 12 specialized dental institutions, emphasizing talent recruitment and innovation[50]. - The establishment of the Ningbo Doctor Innovation Station aims to enhance research and clinical capabilities, providing new opportunities for hospital development[50]. - The company is focused on integrating technology, engineering, art, and medical science in its operations[6]. - The company continues to implement the Amiba management philosophy, enhancing team diagnosis models to accurately reflect operational data, including monthly analysis of revenue and patient visits[87]. Governance and Compliance - The company has established a dedicated team for investor relations, facilitating communication through various channels including analyst and investor meetings[96]. - The company actively fulfills its information disclosure obligations, enhancing the quality and accuracy of its disclosures[96]. - The company has implemented measures to strengthen its internal control and risk management systems[96]. - The company has continuously improved its governance structure and decision-making mechanisms to ensure its independence as a listed entity[98]. - The company has not faced any situations of competing with its controlling shareholders or their other enterprises[98]. - The company has established a commitment to prioritize its interests in case of potential competition with related parties, ensuring operational independence[136]. Environmental Responsibility - The company has committed to carbon reduction measures, although specific metrics on CO2 equivalent emissions reduction were not provided[132]. - The company actively engages in energy-saving practices across its hospitals, contributing to the concept of a green hospital[133]. - The company has established a comprehensive environmental management network, adhering to various environmental protection laws and regulations, including the Environmental Protection Law and the Water Pollution Prevention Law[131]. - The company has implemented strict waste management protocols, including 15 systems for the classification and treatment of medical waste, effectively reducing environmental harm[131]. Future Outlook - The company aims for a performance growth of no less than 25% in 2023, focusing on high-quality development and strategic planning[83]. - The company plans to implement a "three-three" management model to enhance operational efficiency and resource allocation across its facilities[84]. - The company plans to launch the "Three Leaves Children's Oral Health Project" in 2023, which will include a dedicated operations department and a membership system to improve service quality[93]. - The company plans to invest approximately 4 billion yuan in acquiring a 19% stake in a technology company in 2023[123]. - The construction of the Hangzhou Oral Hospital headquarters and other projects is expected to require around 1 billion yuan in 2023[124].

Financial Performance - The company's Q1 2023 revenue reached ¥674,535,941.41, representing a year-on-year increase of 3.04%[4] - Net profit attributable to shareholders was ¥168,971,152.17, with a year-on-year increase of 1.49%[4] - Total operating revenue for Q1 2023 was 674,535,941.41 RMB, an increase of 3.1% compared to 654,632,302.73 RMB in Q1 2022[16] - Net profit for Q1 2023 reached 197,535,406.14 RMB, compared to 190,330,516.78 RMB in Q1 2022, marking an increase of 3.8%[17] - Earnings per share for Q1 2023 was 0.53 RMB, slightly up from 0.52 RMB in Q1 2022[17] Cash Flow - The net cash flow from operating activities was ¥156,768,252.79, showing a significant increase of 141.92% compared to the previous year[4] - Cash flow from operating activities in Q1 2023 was 615,794,420.54 RMB, compared to 583,150,305.67 RMB in Q1 2022, indicating a growth of 5.6%[17] - The net cash flow from operating activities for Q1 2023 was $156,768,252.79, an increase from $64,802,118.31 in Q1 2022, representing a growth of approximately 142.5%[18] - The cash inflow from operating activities totaled $627,885,029.71, compared to $589,571,939.02 in the same period last year, marking an increase of approximately 6.4%[18] - The company experienced a net increase in cash and cash equivalents of $332,063,079.51 in Q1 2023, contrasting with a decrease of -$109,303,293.92 in Q1 2022[19] Assets and Liabilities - The total assets at the end of Q1 2023 were ¥5,568,084,323.16, an increase of 8.02% from the end of the previous year[5] - Current assets totaled approximately ¥1.44 billion, up from ¥1.11 billion year-over-year, indicating a growth of around 29.3%[13] - The total liabilities as of Q1 2023 amounted to 1,752,319,733.77 RMB, up from 1,536,223,702.61 RMB in the previous year, reflecting a growth of 14.1%[15] - Long-term borrowings increased significantly to 280,000,000.00 RMB from 28,800,000.00 RMB in the previous year, indicating a rise of 871.0%[15] - The total equity attributable to shareholders of the parent company was 3,479,717,992.05 RMB, compared to 3,310,746,839.97 RMB in the previous year, an increase of 5.1%[15] Operational Highlights - The number of new clinics opened under the "Dandelion" brand reached 37, contributing ¥125,780,000 in revenue, a year-on-year growth of 60%[5] - The company expects to deliver 8 new hospitals for operation in 2023[5] - The company reported a significant increase in long-term equity investments, totaling approximately ¥245.58 million, up from ¥243.07 million[14] - The company has a strong shareholder base, with the top shareholder holding approximately 33.75% of the total shares[11] Cost and Expenses - Total operating costs for Q1 2023 were 459,481,476.70 RMB, up from 436,620,005.50 RMB in Q1 2022, reflecting a rise of 5.1%[16] - Research and development expenses for Q1 2023 totaled 11,077,832.40 RMB, an increase from 10,554,549.35 RMB in Q1 2022[16] Other Financial Metrics - The weighted average return on equity decreased by 0.64 percentage points to 4.98%[4] - The company reported a significant increase in long-term borrowings by 872.22% due to new bank loans[8] - The company has not reported any significant changes in its financing or margin trading activities as of the report date[11] - There are no significant reminders or alerts regarding the company's operational status during the reporting period[12]

Group 1: Acquisition Overview - Tongce Medical considers Heren Technology to be a highly undervalued company with outstanding capabilities in the medical information sector [1] - Heren serves top-tier hospitals in China, such as 301 Hospital and Tangdu Hospital, showcasing extensive experience in medical informationization [1] - The acquisition aims to enhance Tongce's professional capabilities and create higher value for clients and enterprises [1] Group 2: Financial Aspects - Tongce Medical has sufficient cash flow to fund the acquisition without the need for additional share issuance [1] - The company reported a cash flow of over 700 million in Q1 2022, which is comparable to the acquisition funds required [5] - Current interest-bearing liabilities are less than 100 million, indicating a strong financial position since the injection of 150 million in assets in 2006 [5] Group 3: Strategic Goals - The integration of Heren's IT team with Tongce Medical is expected to enhance service quality and operational efficiency [2] - The collaboration is based on shared values and aims to build a comprehensive ecosystem for medical services [4] - Tongce Medical will maintain its focus on oral healthcare while exploring investments in ophthalmology and medical informationization [3] Group 4: Information Technology Integration - The acquisition will facilitate the development of a unified electronic medical record system, enhancing patient-centered care [2] - Heren's cloud-based medical systems will allow for real-time data sharing among hospitals, improving service delivery [2] - The goal is to create a lifelong health record for patients, integrating various medical data for better healthcare management [4] Group 5: Future Collaboration and Market Position - The partnership with Heren is not exclusive, allowing Tongce to collaborate with other private medical service providers [5] - Tongce Medical aims to leverage Heren's expertise to break down traditional barriers in healthcare service delivery [4] - The merger is seen as a strategic move to enhance Tongce's market position in the medical information sector [5]

[Important Content Disclosure](index=1&type=section&id=Important%20Content%20Disclosure) This section confirms the authenticity and completeness of the quarterly report and its financial information, noting that the financial statements are unaudited [Report Authenticity and Audit Status](index=1&type=section&id=Report%20Authenticity%20and%20Audit%20Status) The company's board of directors, supervisory board, and senior management guarantee the truthfulness, accuracy, and completeness of this quarterly report and assume legal responsibility - The company's board of directors, supervisory board, directors, supervisors, and senior management guarantee the truthfulness, accuracy, and completeness of the quarterly report, free from false records, misleading statements, or major omissions, and assume individual and joint legal liabilities[3](index=3&type=chunk) - The company's head, chief accountant, and head of accounting department (accounting supervisor) guarantee the truthfulness, accuracy, and completeness of the financial information in the quarterly report[3](index=3&type=chunk) - The third-quarter financial statements are unaudited[3](index=3&type=chunk) [I. Key Financial Data](index=1&type=section&id=I.%20Key%20Financial%20Data) This section presents the company's key financial performance indicators, non-recurring gains and losses, and detailed explanations for significant changes in financial data during the reporting period [Key Accounting Data and Financial Indicators](index=1&type=section&id=%28I%29%20Key%20Accounting%20Data%20and%20Financial%20Indicators) This section provides the company's key accounting data and financial indicators for the third quarter and year-to-date, showing slight revenue growth, but double-digit declines in net profit attributable to shareholders and non-recurring net profit, a significant decrease in net cash flow from operating activities, and a decline in weighted average return on net assets [Key Indicators for Q3 and Year-to-Date](index=1&type=section&id=Key%20Indicators%20for%20Q3%20and%20Year-to-Date) Third-quarter operating revenue increased by 0.29% year-over-year, and year-to-date by 0.14%. Net profit attributable to shareholders decreased by 18.47% year-over-year for the current period and by 16.92% year-to-date. Net cash flow from operating activities decreased by 24.77% year-to-date Key Accounting Data and Financial Indicators for Q3 and Year-to-Date 2022 | Item | Current Period (RMB) | Change from Prior Year (%) | Year-to-Date (RMB) | Change from Prior Year Year-to-Date (%) | | :---------------------------------------------------------------- | :------------------- | :------------------------- | :----------------- | :-------------------------------------- | | Operating Revenue | 821,235,429.18 | 0.29 | 2,139,407,879.28 | 0.14 | | Net Profit Attributable to Shareholders of the Listed Company | 219,581,118.70 | -18.47 | 515,169,034.01 | -16.92 | | Net Profit Attributable to Shareholders, Excluding Non-Recurring Gains and Losses | 210,679,088.86 | -20.74 | 496,972,139.47 | -18.66 | | Net Cash Flow from Operating Activities | N/A | N/A | 511,756,276.32 | -24.77 | | Basic Earnings Per Share (RMB/share) | 0.69 | -17.86 | 1.61 | -16.58 | | Diluted Earnings Per Share (RMB/share) | 0.69 | -17.86 | 1.61 | -16.58 | | Weighted Average Return on Net Assets (%) | 6.72 | Decreased by 3.50 percentage points | 16.42 | Decreased by 8.79 percentage points | [Key Balance Sheet Indicators at Period End](index=2&type=section&id=Key%20Balance%20Sheet%20Indicators%20at%20Period%20End) As of the end of the reporting period, the company's total assets increased by 5.65% year-over-year, and total equity attributable to shareholders increased by 14.60% Key Balance Sheet Indicators at Q3 End 2022 | Item | Current Period End (RMB) | Prior Year End (RMB) | Change from Prior Year End (%) | | :-------------------------------------------- | :----------------------- | :------------------- | :----------------------------- | | Total Assets | 5,234,921,172.29 | 4,954,763,870.88 | 5.65 | | Total Equity Attributable to Shareholders of the Listed Company | 3,301,338,743.69 | 2,880,668,974.24 | 14.60 | [Explanation of Q3 2022 Performance](index=2&type=section&id=Explanation%20of%20Q3%202022%20Performance) The company pursued a counter-cyclical expansion strategy in the first three quarters of 2022, focusing on developing Dandelion branches, leading to staff expansion and rising labor costs, with new branches in their incubation period having lower net profit margins - The company implemented a counter-cyclical expansion strategy to prepare for the post-centralized procurement era, expanding productivity, with over **90% of experts supporting the rapid development of Dandelion hospitals**, aiming to become the leading dental hospital in their respective localities[6](index=6&type=chunk) - Dandelion branches contributed **RMB 298 million in operating revenue** during the reporting period, a **102% year-over-year increase**, but some are still operating at a loss due to being in the preparation or incubation period, with a net profit margin of only **8.5%**[6](index=6&type=chunk) - To achieve expansion, the company recruited over **1,000 medical and nursing professionals**, increasing Q3 labor costs by nearly **RMB 40 million**, which reduced current profit but built core competitiveness for future growth[6](index=6&type=chunk) - Centralized procurement policies enhanced awareness of dental implant services, leading to a significant increase in customer inquiries, but order volumes were affected by a wait-and-see sentiment, with future volume expected to increase[6](index=6&type=chunk) - Operating data for this reporting period includes the impact of the pandemic in the first half, with continued regional controls and lockdowns in Q3, indicating an ongoing impact of the pandemic on the company; macroeconomic uncertainties also led to insufficient consumer willingness[6](index=6&type=chunk) [Non-Recurring Gains and Losses Items and Amounts](index=3&type=section&id=%28II%29%20Non-Recurring%20Gains%20and%20Losses%20Items%20and%20Amounts) This section lists the company's non-recurring gains and losses for the third quarter and year-to-date, primarily including government grants, funds occupation fees, and custody fee income, which positively impacted net profit, though disposal of non-current assets resulted in some losses Non-Recurring Gains and Losses Items for Q3 and Year-to-Date 2022 | Item | Current Period Amount (RMB) | Year-to-Date Amount (RMB) | | :-------------------------------------------------------------------------------------------------------------------------------------- | :-------------------------- | :------------------------ | | Gains/Losses on Disposal of Non-Current Assets | -128,638.23 | -519,631.17 | | Government Grants Recognized in Current Profit/Loss | 2,664,266.26 | 7,813,724.16 | | Funds Occupation Fees Received from Non-Financial Enterprises Recognized in Current Profit/Loss | 3,920,222.22 | 11,632,833.34 | | Custody Fee Income from Entrusted Operations | 673,954.22 | 1,881,937.97 | | Other Non-Operating Income and Expenses Apart from the Above | 5,016,199.35 | 4,318,811.62 | | Less: Income Tax Impact | 2,978,039.50 | 6,201,961.97 | | Impact on Minority Interests (After Tax) | 265,934.48 | 728,819.41 | | Total | 8,902,029.84 | 18,196,894.54 | [Changes and Reasons for Key Accounting Data and Financial Indicators](index=4&type=section&id=%28III%29%20Changes%20and%20Reasons%20for%20Key%20Accounting%20Data%20and%20Financial%20Indicators) This section details the reasons for significant changes in various accounting data and financial indicators during the reporting period, primarily due to increased R&D investment, higher government grants, new hospital construction investments, increased accounts receivable, and higher labor costs and tax payments, collectively impacting the company's balance sheet structure and cash flow Changes and Reasons for Key Financial Indicators | Item Name | Change (%) | Primary Reason

[Company Overview and Core Financial Data](index=4&type=section&id=%E7%AC%AC%E4%BA%8C%E8%8A%82%20%E5%85%AC%E5%8F%B8%E7%AE%80%E4%BB%8B%E5%92%8C%E4%B8%BB%E8%A6%81%E8%B4%A2%E5%8A%A1%E6%8C%87%E6%A0%87) This section provides an overview of the company's key financial indicators and performance, highlighting revenue stability amidst a decline in net profit due to various operational challenges [Key Financial Indicators and Performance Overview](index=5&type=section&id=%E4%B8%83%E3%80%81%20%E5%85%AC%E5%8F%B8%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) In H1 2022, operating revenue remained stable at **¥1.318 billion**, but net profit attributable to shareholders declined **15.73%** to **¥296 million**, impacted by COVID-19, new branch incubation, and higher personnel costs Key Accounting Data | Key Accounting Data | Current Period (Jan-Jun) | Prior Period | YoY Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 1,318.17 million Yuan | 1,317.50 million Yuan | 0.05% | | Net Profit Attributable to Shareholders | 295.59 million Yuan | 350.77 million Yuan | -15.73% | | Non-Recurring Net Profit Attributable to Shareholders | 286.29 million Yuan | 341.69 million Yuan | -16.21% | | Net Cash Flow from Operating Activities | 260.41 million Yuan | 332.51 million Yuan | -21.68% | | Basic EPS (Yuan/share) | 0.92 | 1.09 | -15.60% | - **Key Reasons for Performance Decline**: - **COVID-19 Impact**: Existing hospitals saw a **5% YoY decrease** in outpatient visits and **6.8% YoY decrease** in operating revenue, with several hospitals experiencing varying degrees of suspension in Q2[14](index=14&type=chunk) - **New Branch Incubation**: "Dandelion" branches contributed **¥171 million** in revenue (**105% YoY growth**), but their net profit margin was only **5.5%**, dragging down overall profitability[14](index=14&type=chunk) - **Talent Reserve**: Reserving over **1,000 medical staff** for new hospital areas led to an increase in human resource costs exceeding **¥40 million**, impacting current period profit[14](index=14&type=chunk) [Management Discussion and Analysis of Operations](index=7&type=section&id=%E7%AC%AC%E4%B8%89%E8%8A%82%20%E7%AE%A1%E7%90%86%E5%B1%82%E8%AE%A8%E8%AE%BA%E4%B8%8E%E5%88%86%E6%9E%90) This section details the company's core dental medical services, its 'general hospital + branch' operating model, industry landscape, competitive advantages, H1 2022 operating results, and future multi-specialty platform strategy [Main Business and Operating Model](index=7&type=section&id=%E4%B8%80%E3%80%81%E6%8A%A5%E5%91%8A%E6%9C%9F%E5%86%85%E5%85%AC%E5%8F%B8%E6%89%80%E5%B1%9E%E8%A1%8C%E4%B8%9A%E5%8F%8A%E4%B8%BB%E8%90%A5%E4%B8%9A%E5%8A%A1%E6%83%85%E5%86%B5%E8%AF%B4%E6%98%8E) The company operates as a listed entity primarily focused on dental medical services, aiming to build a comprehensive dental group through a 'regional general hospital + branch' model, team-based diagnosis, optimized supply chain management, and a 'service as marketing' philosophy - The company's core operating model is "regional general hospital + branch," leveraging the general hospital's brand and technical advantages to support branch expansion and form regional hospital clusters, mitigating management and expansion risks inherent in the dental industry[19](index=19&type=chunk) - The company implements a team-based diagnosis model (horizontal and vertical) to address doctor resource shortages, providing one-stop services through interdisciplinary teams to enhance doctor efficiency and customer satisfaction[20](index=20&type=chunk) - The company established a supply chain company, adopting a "central kitchen" model for centralized procurement and logistics management, aiming for standardized, refined, and intelligent supply chain services to improve consumable management and cost control[21](index=21&type=chunk) [Industry Analysis and Core Competitiveness](index=9&type=section&id=%EF%BC%88%E4%B8%89%EF%BC%89%E8%A1%8C%E4%B8%9A%E6%83%85%E5%86%B5%E8%AF%B4%E6%98%8E) The dental medical industry has broad market prospects driven by policy support and rising health awareness; the company's core competitiveness lies in its unique 'general hospital + branch' model, talent pipeline, extensive management experience, and strong brand reputation - National policies, such as the "Healthy Oral Action Plan (2019-2025)," continue to guide social capital participation in oral disease prevention and treatment, providing a favorable environment for industry development[26](index=26&type=chunk)[27](index=27&type=chunk) International Comparison of Dental Industry Indicators | Country | China | USA | Japan | | :--- | :--- | :--- | :--- | | Dentists per 100,000 Population | 14.35 | 61 | 80 | | Annual Per Capita Oral Consumption (USD) | 16.7 USD | 474 USD | 246 USD | | Annual Market Growth | 20% | 6% | < 5% | - The company's core competitiveness includes: - **Development Model Barrier**: The "general hospital + branch" model and "doctor group + hospital platform" dual-wheel drive[29](index=29&type=chunk) - **Talent Resource Advantage**: Establishing doctor groups based on universities to form a talent pipeline[29](index=29&type=chunk) - **Rich Operating Experience**: Balancing efficiency, cost, and public welfare through refined management[30](index=30&type=chunk) - **Brand and Customer Advantage**: Several of its hospitals have a strong local reputation and are accelerating expansion through the "Dandelion" program[31](index=31&type=chunk) [Analysis of Operating Results](index=12&type=section&id=%E4%B8%89%E3%80%81%E7%BB%8F%E8%90%A5%E6%83%85%E5%86%B5%E7%9A%84%E8%AE%A8%E8%AE%BA%E4%B8%8E%E5%88%86%E6%9E%90) In H1 2022, total dental outpatient visits grew **6%** to **1.42 million**, driven by rapid expansion of 'Dandelion' branches with over **100%** revenue growth, while existing Zhejiang and out-of-province businesses saw varied impacts from COVID-19, and the company increased dental chair capacity to **2,423 units** H1 2022 Dental Medical Service Revenue by Region | Region | H1 2022 Dental Medical Service Revenue (10,000 Yuan) | YoY Growth Rate | | :--- | :--- | :--- | | Existing Hospitals (Zhejiang) | 97,077 | -7.1% | | Dandelion Branches (Zhejiang) | 16,660 | 100.2% | | Outside Zhejiang Province | 10,859 | -4.8% | | **Total** | **124,596** | **0.3%** | H1 2022 Main Business Revenue by Type | Business Type | H1 2022 Main Business Revenue (10,000 Yuan) | Revenue Share | YoY Growth | | :--- | :--- | :--- | :--- | | Implantology | 22,269 | 18% | 6.5% | | Orthodontics | 23,194 | 19% | 0.1% | | Pediatric Dentistry | 24,016 | 19% | -7.0% | | Restorative Dentistry | 20,072 | 16% | 2.5% | | General Dentistry | 35,045 | 28% | 0.9% | - "Dandelion" branches expanded rapidly, with **7 new openings** during the reporting period and an expected **8-10 more** by year-end; outpatient visits increased from **90,000 to 240,000**, a **166.7% YoY growth**, becoming a key driver of company growth[38](index=38&type=chunk)[39](index=39&type=chunk) [Company Strategy and Outlook](index=14&type=section&id=%E4%BA%8C%E3%80%81%E6%89%93%E9%80%A0%E5%A4%9A%E4%B8%93%E7%A7%91%E5%8C%BB%E7%96%97%E5%B9%B3%E5%8F%B0) The company plans to focus on its core dental business while acquiring a **29.75%** stake in Horen Technology to establish a multi-specialty medical platform, creating a dual-main business model of 'digital hospital construction' and 'specialty medical services' to expand its healthcare footprint and mitigate single-business risk, also actively fulfilling social responsibilities - The company plans to acquire a **29.75%** stake in Horen Technology (300550) to establish it as a second platform for non-dental businesses, developing a dual-main business model of "digital hospital construction + multi-specialty medical services"[41](index=41&type=chunk) - During the reporting period, the company actively fulfilled its social responsibilities by dispatching **102 medical personnel** to aid Shanghai's COVID-19 efforts for over **30 days**, completing over **1 million nucleic acid tests**[42](index=42&type=chunk) [Significant Matters](index=25&type=section&id=%E7%AC%AC%E5%85%AD%E8%8A%82%20%E9%87%8D%E8%A6%81%E4%BA%8B%E9%A1%B9) This section outlines the company's significant equity investment in Horen Technology, analysis of major subsidiaries' performance, and key contractual obligations including entrusted management, guarantees, and property purchases [Significant Equity Investments](index=17&type=section&id=(1)%20%E9%87%8D%E5%A4%A7%E7%9A%84%E8%82%A1%E6%9D%83%E6%8A%95%E8%B5%84) On May 15, 2022, the company signed an agreement to acquire a **29.75%** stake in Zhejiang Horen Technology Co., Ltd. (300550) for **¥769 million** in cash, becoming its largest shareholder, with the seller guaranteeing Horen Technology's net profit to be no less than **¥35 million**, **¥40 million**, and **¥45 million** for 2022-2024 respectively Horen Technology Acquisition Details | Item | Details | | :--- | :--- | | Target Company | Zhejiang Horen Technology Co., Ltd. (300550) | | Transaction Method | Cash Acquisition | | Acquisition Share Percentage | 29.75% | | Transaction Amount | 769.04 million Yuan | | Performance Commitment (Net Profit) | 2022: ≥35 million Yuan<br>2023: ≥40 million Yuan<br>2024: ≥45 million Yuan | [Analysis of Major Controlled and Investee Companies](index=19&type=section&id=(%E5%85%AD)%20%E4%B8%BB%E8%A6%81%E6%8E%A7%E8%82%A1%E5%8F%82%E8%82%A1%E5%85%AC%E5%8F%B8%E5%88%86%E6%9E%90) Several core dental hospitals contributed significantly to revenue and profit during the reporting period, with Hangzhou Dental Hospital Group and its Chenxi branch being most prominent, collectively contributing approximately **¥299 million** in net profit, alongside other regional core hospitals maintaining stable profitability Major Controlled and Investee Companies' Performance | Company Name | Operating Revenue (Yuan) | Net Profit (Yuan) | | :--- | :--- | :--- | | Hangzhou Dental Hospital Group Co., Ltd. | 325,571,722.41 | 208,820,232.09 | | Hangzhou Dental Hospital Group Chenxi Dental Hospital Co., Ltd. | 238,410,717.38 | 90,620,283.03 | | Zhuji Dental Hospital Co., Ltd. | 57,406,285.44 | 20,434,027.27 | | Ningbo Dental Hospital Group Co., Ltd. | 80,154,507.83 | 14,646,715.58 | [Significant Contracts and Commitments](index=30&type=section&id=%E5%8D%81%E4%B8%80%E3%80%81%E9%87%8D%E5%A4%A7%E5%90%88%E5%90%8C%E5%8F%8A%E5%85%B6%E5%B1%A5%E8%A1%8C%E6%83%85%E5%86%B5) The company has significant entrusted management, leasing, and guarantee contracts, including managing several 'Cunji' dental hospitals for a fee, long-term property leases for expansion, providing **¥88.8 million** in mortgage guarantees for a subsidiary, committing to future capital contributions for new subsidiaries, and signing a **¥490 million** property purchase contract for headquarters and hospital construction - The company manages several "Cunji" dental hospitals invested by related parties in Wuhan, Chongqing, and Xi'an, charging a **2%** management fee based on annual operating revenue, with **¥1.208 million** in management income recognized this period[84](index=84&type=chunk)[85](index=85&type=chunk) - The company provided a **¥88.8 million** mortgage guarantee for a bank loan to its subsidiary, Hangzhou Dental Hospital Group Co., Ltd., with collateral being buildings and structures with a book value of **¥318 million**[95](index=95&type=chunk)[387](index=387&type=chunk) - The company signed an agreement to purchase three properties in Zhejiang University Alumni Enterprise Headquarters Economic Park for a total of **¥490 million**, intended for its headquarters and Future Science City General Hospital construction; as of the reporting period end, **¥147 million** has been paid, with **¥343 million** remaining[381](index=381&type=chunk)[382](index=382&type=chunk) [Risk Factors](index=21&type=section&id=(%E4%B8%80)%20%E5%8F%AF%E8%83%BD%E9%9D%A2%E5%AF%B9%E7%9A%84%E9%A3%8E%E9%99%A9) This section identifies the company's major operating risks, including medical, market competition, and COVID-19 pandemic risks, and the strategies employed to mitigate them [Major Operating Risks](index=21&type=section&id=(%E4%B8%80)%20%E5%8F%AF%E8%83%BD%E9%9D%A2%E5%AF%B9%E7%9A%84%E9%A3%8E%E9%99%A9) The company faces major operating risks including medical malpractice, market competition, and the ongoing COVID-19 pandemic, which could impact outpatient services and financial performance, despite the company's efforts to mitigate risks through quality control and its strong position in the mid-to-high-end market - **Medical Risk**: Medical diagnosis and treatment processes inherently involve uncertainties and risks, which the company addresses by improving medical quality management standards and quality control systems[56](index=56&type=chunk) - **Competition Risk**: Increasing social capital inflow intensifies market competition; while the company holds a significant advantage in the mid-to-high-end market, its share in the low-end market is low, leading to growth uncertainties[57](index=57&type=chunk) - **COVID-19 Pandemic Risk**: Recurring local outbreaks and prevention policies may continue to affect patient visits, introducing uncertainties to the company's operating performance[58](index=58&type=chunk) [Financial Report Summary](index=39&type=section&id=%E7%AC%AC%E5%8D%81%E8%8A%82%20%E8%B4%A2%E5%8A%A1%E6%8A%A5%E5%91%8A) This section presents key consolidated financial data, analyzes significant changes in financial statement accounts, provides segment information, and details related party transactions during the reporting period [Key Consolidated Financial Statement Data](index=39&type=section&id=%E4%BA%8C%E3%80%81%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8) As of June 30, 2022, total assets were **¥5.201 billion** (+4.98%) and net assets attributable to shareholders **¥3.159 billion** (+9.67%); H1 operating revenue was **¥1.318 billion** (stable), net profit attributable to shareholders decreased **15.73%** to **¥296 million**, and net cash outflow from investing activities significantly increased to **¥237 million** Balance Sheet Items (Consolidated) | Balance Sheet Items (Consolidated) | 2022-06-30 (Yuan) | 2021-12-31 (Yuan) | Change | | :--- | :--- | :--- | :--- | | Total Assets | 5,201,324,777.81 | 4,954,763,870.88 | +4.98% | | Total Liabilities | 1,757,710,053.77 | 1,810,291,671.53 | -2.91% | | Equity Attributable to Owners of Parent Company | 3,159,149,108.39 | 2,880,668,974.24 | +9.67% | Income Statement Items (Consolidated) | Income Statement Items (Consolidated) | H1 2022 (Yuan) | H1 2021 (Yuan) | Change | | :--- | :--- | :--- | :--- | | Operating Revenue | 1,318,172,450.10 | 1,317,500,074.29 | +0.05% | | Operating Cost | 759,437,123.52 | 701,515,393.74 | +8.26% | | Net Profit Attributable to Parent Company Shareholders | 295,587,915.31 | 350,772,376.57 | -15.73% | Cash Flow Statement Items (Consolidated) | Cash Flow Statement Items (Consolidated) | H1 2022 (Yuan) | H1 2021 (Yuan) | Change | | :--- | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 260,411,191.10 | 332,513,305.49 | -21.68% | | Net Cash Flow from Investing Activities | -237,298,244.83 | -35,484,140.55 | -568.74% | | Net Cash Flow from Financing Activities | -111,946,599.36 | -128,217,379.65 | +12.69% | [Analysis of Major Financial Statement Account Changes](index=15&type=section&id=1%20%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8%E7%9B%B8%E5%85%B3%E7%A7%91%E7%9B%AE%E5%8F%98%E5%8A%A8%E5%88%86%E6%9E%90%E8%A1%A8) During the reporting period, several financial metrics showed significant changes, with operating costs rising **8.26%** due to new hospital construction and personnel reserves, net cash flow from operating activities decreasing **21.68%** due to increased human resource and tax payments, and net cash outflow from investing activities surging **568.74%** primarily for property acquisition and hospital renovations, while accounts receivable and construction in progress also significantly increased Financial Statement Account Changes | Account | Change (%) | Reason for Change | | :--- | :--- | :--- | | Operating Cost | 8.26% | Increased costs due to personnel reserves in existing hospitals and new staff for "Dandelion" branches' construction and operation | | Net Cash Flow from Operating Activities | -21.68% | Increased human resource expenditure due to "Dandelion" branch construction and personnel reserves, along with increased accounts receivable and tax payments | | Net Cash Flow from Investing Activities | -568.74% | Payment for Future Science City General Hospital property acquisition, increased hospital renovation investments, and prepayment for Horen Technology equity transfer | | Accounts Receivable | 72.45% | Primarily due to increased sales receivables from customers | | Construction in Progress | 33.36% | Primarily due to increased investment in new hospital construction projects | [Segment Information](index=157&type=section&id=6%E3%80%81%20%E5%88%86%E9%83%A8%E4%BF%A1%E6%81%AF) The company's operations are divided into three reportable segments: medical services, product sales, and management services & others, with medical services being the core, contributing **¥1.25 billion** in H1 2022 operating revenue, accounting for **94.8%** of total revenue Segment Performance | Item | Medical Services (Yuan) | Product Sales (Yuan) | Management Services & Others (Yuan) | Total (Yuan) | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 1,250,033,566.73 | 105,969,110.17 | 52,597,102.99 | 1,318,172,450.10 | | Operating Cost | 716,789,127.22 | 90,166,442.32 | 36,430,908.78 | 759,437,123.52 | [Related Parties and Related Party Transactions](index=146&type=section&id=%E5%8D%81%E4%BA%8C%E3%80%81%20%E5%85%B3%E8%81%94%E6%96%B9%E5%8F%8A%E5%85%B3%E8%81%94%E4%BA%A4%E6%98%93) During the reporting period, the company engaged in various related party transactions, including purchasing **¥2.45 million** in materials and labor from Hangzhou Yiya Digital Dental Co., Ltd., selling **¥17.53 million** in goods to Zhejiang Tongce Eye Hospital Investment Management Co., Ltd. (also collecting **¥7.71 million** in fund occupation fees), selling **¥9.69 million** to Ningbo ENT Hospital Co., Ltd., and providing management services to several related party-operated hospitals for a fee - The company purchased goods/received services from related parties, primarily Hangzhou Yiya Digital Dental Co., Ltd., totaling **¥2.4503 million**[364](index=364&type=chunk) - The company sold goods/provided services to related parties, including: selling **¥17.531 million** in goods to Zhejiang Tongce Eye Hospital Investment Management Co., Ltd. and collecting **¥7.7126 million** in fund occupation fees; selling **¥9.6906 million** in goods to Ningbo ENT Hospital Co., Ltd.; and providing management services to "Cunji" hospitals in Wuhan, Chongqing, Xi'an, and other cities, collecting management fees[365](index=365&type=chunk) - The company provided financial assistance (intercompany loans) to its associates, Zhejiang Tongce Eye Hospital Investment Management Co., Ltd. and Hangzhou Jiemu Equity Investment Management Co., Ltd., with end-of-period balances of **¥260 million** and **¥309 million**, respectively[271](index=271&type=chunk)[370](index=370&type=chunk)

[Financial and Operational Summary](index=2&type=section&id=I.%20Key%20Financial%20Data) [Key Financial Indicators](index=2&type=section&id=(I)%20Key%20Accounting%20Data%20and%20Financial%20Indicators) In Q3 2021 and the first three quarters, the company achieved robust growth in revenue and net profit, with year-to-date revenue increasing by 44.16% and net profit attributable to shareholders by 55.09%, indicating strong business momentum Key Financial Metrics | Indicator | Q3 2021 (RMB) | YoY Change | First Three Quarters 2021 (RMB) | YoY Change | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 818,880,220.58 | +12.44% | 2,136,380,294.87 | +44.16% | | Net Profit Attributable to Shareholders | 269,318,695.18 | +5.88% | 620,091,071.75 | +55.09% | | Net Profit Attributable to Shareholders (Excl. Non-recurring) | 265,819,823.86 | +6.20% | 607,514,156.17 | +56.69% | | Net Cash Flow from Operating Activities | N/A | N/A | 680,280,196.69 | +48.13% | | Basic Earnings Per Share (RMB/Share) | 0.84 | +6.33% | 1.93 | +54.40% | [Operational Data Analysis](index=3&type=section&id=1.%20Composition%20and%20Trends%20of%20Medical%20Service%20Revenue%20Inside%20and%20Outside%20Zhejiang%20Province) The company's business is highly concentrated in Zhejiang Province, contributing over 90% of revenue, where the 'main hospital + branch' model shows significant expansion, with branches outperforming the main hospital in revenue and outpatient volume, and core services like general dentistry, orthodontics, pediatrics, and implants achieving strong growth exceeding 37% - In the first three quarters of 2021, medical service revenue within Zhejiang Province accounted for **90.39%**, growing by **42.03%** year-over-year, while external revenue accounted for **9.61%**, growing by **37.72%**, indicating that intra-province business remains the core growth engine[6](index=6&type=chunk) - Within Zhejiang, branch medical service revenue increased by **46.75%** year-over-year, and outpatient visits grew by **43.53%**, both significantly higher than the regional main hospital's (Hangzhou Stomatological Hospital) growth rates of **32.70%** and **23.76%** respectively, demonstrating the effectiveness of the branch network expansion strategy[7](index=7&type=chunk)[9](index=9&type=chunk) Main Business Revenue by Type | Business Type | Main Business Revenue Jan-Sep 2021 (RMB 10,000) | Revenue Share | YoY Growth Rate | | :--- | :--- | :--- | :--- | | Implants | 33,101.36 | 16.47% | 46.49% | | Orthodontics | 43,635.62 | 21.71% | 37.89% | | Pediatrics | 40,904.28 | 20.35% | 41.64% | | General Dentistry | 83,367.41 | 41.47% | 41.65% | [Non-recurring Gains and Losses](index=4&type=section&id=(II)%20Non-recurring%20Gains%20and%20Losses%20Items%20and%20Amounts) In the first three quarters of 2021, the company's non-recurring gains and losses totaled RMB 12.577 million, primarily comprising government grants (RMB 5.426 million) and capital occupation fees from non-financial enterprises (RMB 11.633 million) Non-recurring Gains and Losses Items | Item | Amount from Year-Beginning to End of Reporting Period (RMB) | | :--- | :--- | | Government Grants Recognized in Current P&L | 5,426,188.14 | | Capital Occupation Fees from Non-financial Enterprises Recognized in Current P&L | 11,632,833.33 | | Custody Fees from Entrusted Operations | 1,640,543.92 | | **Total** | **12,576,915.58** | [Analysis of Financial Indicator Changes](index=4&type=section&id=(III)%20Analysis%20of%20Changes%20in%20Key%20Accounting%20Data%20and%20Financial%20Indicators) During the reporting period, the significant growth in the company's key financial indicators, including operating revenue, net profit, operating cash flow, earnings per share, and total assets, was primarily driven by the continuous increase in medical service revenue - Year-over-year growth rates for operating revenue, net profit attributable to parent, non-recurring net profit attributable to parent, net cash flow from operating activities, and basic and diluted earnings per share reached **44.16%**, **55.09%**, **56.69%**, **48.13%**, and **54.40%** respectively, primarily driven by increased medical service revenue during the period[12](index=12&type=chunk) - Total assets increased by **38.29%** from the beginning of the year, mainly due to increased profits from medical service revenue growth and the recognition of right-of-use assets upon adoption of new lease standards[12](index=12&type=chunk) [Shareholder Information](index=5&type=section&id=II.%20Shareholder%20Information) [Major Shareholder Holdings](index=5&type=section&id=(I)%20Total%20Number%20of%20Common%20Shareholders%2C%20Number%20of%20Preferred%20Shareholders%20with%20Restored%20Voting%20Rights%2C%20and%20Top%20Ten%20Shareholders'%20Holdings) As of the end of the reporting period, the company had 61,420 common shareholders, with Hangzhou Baoqun Industrial Group Co., Ltd. as the largest shareholder holding 33.75%, and the top ten shareholders including prominent institutional investors such as China Europe Medical Health Mixed Securities Investment Fund and Yinhua Rich Theme Mixed Securities Investment Fund Top Ten Shareholder Holdings | Shareholder Name | Number of Shares Held | Shareholding Percentage (%) | | :--- | :--- | :--- | | Hangzhou Baoqun Industrial Group Co., Ltd. | 108,232,000 | 33.75 | | Bao Zhengliang | 14,413,800 | 4.50 | | China Europe Medical Health Mixed Securities Investment Fund | 14,273,918 | 4.45 | | Zhejiang Cunji Medical Education Foundation | 9,619,200 | 3.00 | | Hong Kong Securities Clearing Company Limited | 7,922,594 | 2.47 | | Yinhua Rich Theme Mixed Securities Investment Fund | 4,500,000 | 1.40 | - As of the end of the reporting period, the total number of common shareholders was **61,420**[13](index=13&type=chunk) [Quarterly Financial Statements](index=7&type=section&id=IV.%20Quarterly%20Financial%20Statements) [Consolidated Balance Sheet](index=7&type=section&id=Consolidated%20Balance%20Sheet) As of September 30, 2021, the company's total assets reached RMB 4.238 billion, a 38.29% increase from the beginning of the year, and equity attributable to parent company shareholders grew by 28.87% to RMB 2.771 billion, with significant asset and liability increases partly due to the initial recognition of approximately RMB 600 million in right-of-use assets and corresponding lease liabilities under new leasing standards Consolidated Balance Sheet Summary | Item | September 30, 2021 (RMB) | December 31, 2020 (RMB) | Change Rate | | :--- | :--- | :--- | :--- | | Total Assets | 4,237,778,773.16 | 3,064,401,785.36 | +38.29% | | Total Liabilities | 1,206,027,423.48 | 716,016,706.49 | +68.43% | | Total Equity Attributable to Parent Company Owners | 2,770,866,957.24 | 2,150,129,168.45 | +28.87% | - Non-current assets include a new 'Right-of-Use Assets' account totaling **RMB 600,308,994.32**, and non-current liabilities include a new 'Lease Liabilities' account totaling **RMB 497,163,947.87**, primarily due to the adoption of new lease standards[17](index=17&type=chunk)[19](index=19&type=chunk) [Consolidated Income Statement](index=9&type=section&id=Consolidated%20Income%20Statement) In the first three quarters of 2021, the company achieved total operating revenue of RMB 2.136 billion, a 44.16% year-over-year increase, with total operating costs growing by 36.36% to RMB 1.357 billion, indicating faster revenue growth than cost growth, ultimately resulting in a net profit attributable to parent company shareholders of RMB 620 million, up 55.09%, demonstrating sustained profitability improvement Consolidated Income Statement Summary | Item | First Three Quarters 2021 (RMB) | First Three Quarters 2020 (RMB) | YoY Change | | :--- | :--- | :--- | :--- | | I. Total Operating Revenue | 2,136,380,294.87 | 1,481,919,118.47 | +44.16% | | II. Total Operating Costs | 1,356,786,467.13 | 995,026,320.14 | +36.36% | | III. Operating Profit | 811,121,499.15 | 518,623,261.66 | +56.40% | | V. Net Profit | 705,279,444.74 | 448,637,917.08 | +57.20% | | Net Profit Attributable to Parent Company Shareholders | 620,091,071.75 | 399,824,838.35 | +55.09% | [Consolidated Cash Flow Statement](index=11&type=section&id=Consolidated%20Cash%20Flow%20Statement) In the first three quarters of 2021, net cash flow from operating activities was RMB 680 million, a 48.13% increase year-over-year, largely aligning with profit growth and indicating high earnings quality, while net cash outflow from investing activities was RMB 122 million, primarily for fixed asset acquisition, and net cash outflow from financing activities was RMB 182 million, mainly for debt repayment and dividend distribution Consolidated Cash Flow Statement Summary | Item | First Three Quarters 2021 (RMB) | First Three Quarters 2020 (RMB) | YoY Change | | :--- | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 680,280,196.69 | 459,247,243.51 | +48.13% | | Net Cash Flow from Investing Activities | -121,604,050.06 | -126,459,236.41 | N/A | | Net Cash Flow from Financing Activities | -182,207,773.75 | -115,742,651.72 | N/A | [Explanation of New Lease Standard Adjustments](index=13&type=section&id=(III)%20Initial%20Adoption%20of%20New%20Lease%20Standards%20and%20Adjustments%20to%20Financial%20Statements%20at%20the%20Beginning%20of%20the%20First%20Year%20of%20Adoption%20(Effective%202021)) Effective January 1, 2021, the company adopted new lease standards, retrospectively adjusting its opening financial statements, which resulted in a simultaneous increase of RMB 471 million in total assets and liabilities, primarily due to the recognition of right-of-use assets and lease liabilities, with corresponding adjustments to prepayments and long-term deferred expenses, but no impact on total owner's equity Adjustments from Initial Adoption of New Lease Standards | Adjustment Item | Adjustment Amount (RMB) | Description | | :--- | :--- | :--- | | Right-of-Use Assets | +496,808,729.17 | New Non-current Asset | | Prepayments | -24,177,676.65 | Reclassified to Right-of-Use Assets, etc. | | Long-term Deferred Expenses | -1,928,756.41 | Reclassified to Right-of-Use Assets, etc. | | Non-current Liabilities Due Within One Year | +72,645,088.70 | New Current Liability | | Lease Liabilities | +398,057,207.41 | New Non-current Liability | | **Total Assets/Liabilities Adjustment** | **+470,702,296.11** | |