Financial Performance - The company's operating revenue for Q1 2023 was RMB 1,307,482,631.58, representing an increase of 11.13% compared to the same period last year[4]. - The net profit attributable to shareholders of the listed company was RMB 332,325,165.30, showing a slight increase of 0.68% year-on-year[4]. - The net profit attributable to shareholders after deducting non-recurring gains and losses was RMB 330,341,273.33, reflecting a growth of 1.30% compared to the previous year[4]. - The total operating revenue for Q1 2023 was approximately $1.31 billion, an increase from $1.18 billion in Q1 2022, representing a growth of about 11%[16]. - Net profit for Q1 2023 was approximately $332.33 million, slightly higher than $330.53 million in Q1 2022, showing a marginal increase of about 0.5%[17]. - The total profit for Q1 2023 was approximately $381.67 million, compared to $389.77 million in Q1 2022, indicating a decrease of about 2.8%[17]. Cash Flow and Investments - The net cash flow from operating activities decreased significantly by 51.41%, amounting to RMB 122,444,973.99, primarily due to higher procurement costs during the reporting period[8]. - The net cash flow from operating activities for Q1 2023 was approximately $122.44 million, down from $252.01 million in Q1 2022, a decrease of about 51%[19]. - The net cash inflow from investment activities was -90,259,769.30, compared to -188,971,631.95 in the previous period[20]. - The cash outflow for investment activities was 161,227,843.42, compared to 1,351,160,610.54 in the previous period[20]. - The cash inflow from investment activities was 70,968,074.12, compared to 1,162,188,978.59 in the previous period[20]. - The cash paid for the acquisition of fixed assets, intangible assets, and others was 39,429,198.90, compared to 185,825,053.64 in the previous period[20]. Assets and Liabilities - The total assets at the end of the reporting period were RMB 10,742,933,428.44, an increase of 7.32% from the end of the previous year[5]. - The total assets as of March 31, 2023, amounted to RMB 10,742,933,428.44, up from RMB 10,010,102,945.14 as of December 31, 2022, indicating a growth of about 7.3%[14]. - The total liabilities as of March 31, 2023, were RMB 4,243,620,026.59, compared to RMB 3,842,932,928.85 at the end of 2022, representing an increase of about 10.5%[14]. - Short-term borrowings increased to RMB 2,345,673,132.43 from RMB 1,956,863,361.92, which is an increase of approximately 19.8%[13]. Shareholder Information - The equity attributable to shareholders of the listed company was RMB 6,502,784,183.06, which is a 5.38% increase compared to the previous year[5]. - The equity attributable to shareholders of the parent company rose to RMB 6,502,784,183.06 from RMB 6,170,641,484.29, indicating an increase of approximately 5.4%[14]. - The total number of ordinary shareholders at the end of the reporting period was 21,253[9]. Earnings and Expenses - The basic earnings per share for the reporting period was RMB 0.21, while the diluted earnings per share was RMB 0.20, a decrease of 4.76%[5]. - The weighted average return on net assets was 5.24%, down by 0.72 percentage points from the previous year[5]. - Research and development expenses increased to approximately $67.64 million in Q1 2023 from $53.46 million in Q1 2022, reflecting a growth of about 26.5%[16]. - The company reported a tax expense of approximately $49.34 million for Q1 2023, down from $59.24 million in Q1 2022, a reduction of about 16.6%[17]. Other Financial Metrics - The company reported non-recurring gains of RMB 1,983,891.97 for the period, after accounting for tax effects[7]. - The company recorded other comprehensive income after tax of approximately -$1.30 million in Q1 2023, compared to -$597.61 thousand in Q1 2022, indicating a worsening of about 117%[17]. - Cash received from sales of goods and services in Q1 2023 was approximately $974.83 million, a decrease from $1.03 billion in Q1 2022, representing a decline of about 5.1%[19]. - The ending balance of cash and cash equivalents was 654,862,790.85, compared to 667,705,647.21 in the previous period[20].

Financial Performance - The company's operating revenue for 2022 was CNY 3,712,720,455, representing a 0.71% increase compared to 2021 [22]. - The net profit attributable to shareholders for 2022 was CNY 1,090,833,203.91, reflecting a 2.98% increase year-over-year [22]. - The net cash flow from operating activities decreased by 12.90% to CNY 595,445,673.26 in 2022 [22]. - The total assets at the end of 2022 reached CNY 10,010,102,945.14, a 21.82% increase from the previous year [22]. - The basic earnings per share for 2022 remained stable at CNY 0.67, while diluted earnings per share slightly decreased by 1.47% to CNY 0.67 [23]. - The weighted average return on equity for 2022 was 18.82%, down 6.47 percentage points from 2021 [24]. - The company reported a total of CNY 10,548,964.43 in non-recurring gains and losses for 2022 [30]. - The company achieved total operating revenue of CNY 371,272.05 million, a year-on-year increase of 0.71%, while total profit decreased by 1.53% to CNY 118,536.93 million [67]. - The net profit attributable to shareholders increased by 2.98% to CNY 109,083.32 million, with a net profit of CNY 108,028.42 million after deducting non-recurring gains and losses, reflecting a growth of 5.49% [67]. Research and Development - R&D investment amounted to 24,582.47 million RMB, representing 3.86% of operating revenue and 10.06% of net assets [123]. - The company's R&D investment as a percentage of operating revenue was 8.39%, higher than the industry average of 17,953.70 million RMB [125]. - The R&D investment capitalized ratio was 15.39%, indicating a reasonable alignment with the company's project development progress [126]. - Major R&D projects included RD-2021-NP006(Z) with an investment of 3,261.65 million RMB, showing a year-on-year increase of 268.40% [127]. - The company has 58 ongoing research projects, with 32 projects submitted for approval, focusing on high-demand therapeutic areas such as anti-infection and anti-tumor drugs [113]. - The company is focusing on expanding its product portfolio with new drug applications, particularly in the fields of antibiotics and oncology [117]. - The company has a strong pipeline with 9 projects currently under U.S. approval, indicating robust growth potential [119]. - The company is actively pursuing regulatory approvals in Europe for several products, enhancing its market reach [119]. Market Expansion and Strategy - The company is focused on entering the international pharmaceutical market with its capabilities [3]. - The company aims to establish a comprehensive commercial competitive capability in the U.S. market, focusing on both small molecule and large biological drugs [36]. - The company is expanding its product pipeline in the U.S. market to approximately 40 products, enhancing its market presence and profitability [34]. - The company is actively exploring the nucleic acid drug field and has developed platforms for small molecules, peptides, and complex formulations [59]. - The company is expanding its business in European and other global markets, leveraging its production and quality advantages to enhance its influence in the global heparin market [50]. - The company aims to provide differentiated CDMO services in the biopharmaceutical sector, capitalizing on its global regulatory experience to achieve higher value service revenues [52]. - The company is committed to expanding its market presence by rapidly increasing the number of its formulations in hospitals and boosting sales volume per hospital [149]. Corporate Governance and Compliance - The company emphasizes its commitment to the authenticity, accuracy, and completeness of the annual report, with all board members present at the meeting [4]. - The company has established specialized committees under the board, including an audit committee and a strategic committee [182]. - The company's governance practices comply with relevant laws and regulations, ensuring transparency and protection of shareholder rights [159]. - The company has actively engaged with minority shareholders to gather feedback and ensure their rights are upheld [160]. - The board of directors held six meetings during the year, with three conducted in person and three via communication methods [180]. Dividend Policy - The company plans to distribute a cash dividend of 1.15 CNY per 10 shares to all shareholders, pending approval at the 2022 annual general meeting [5]. - The company has a cash dividend policy that mandates a minimum of 10% of distributable profits to be distributed as cash dividends if conditions are met [194]. - The company reported a net profit attributable to ordinary shareholders of RMB 1,090,833,203.91, with a cash dividend amounting to RMB 185,963,610.74, representing 17.05% of the net profit [198]. - The company did not propose a cash profit distribution plan despite having positive profits available for distribution to shareholders [197]. Operational Highlights - The company has six sterile injection production lines approved by the US FDA, enhancing its production capacity [37]. - The company has established a strong position in the sterile injectable market, being one of the largest exporters of injectables in China, with a significant share of its formulation business coming from exports to the U.S. [94]. - The company has multiple sterile injectable production lines certified by the FDA, enhancing its competitive advantage in the international market [95]. - The company has successfully shortened the product development and approval cycle, with several products approved within approximately 10 months [95]. - The company has established a solid supply system with upstream raw material suppliers, enhancing operational efficiency [155]. Financial Position and Assets - As of December 31, 2022, the company reported total assets of CNY 1,001,010.29 million and equity attributable to shareholders of CNY 617,064.15 million [67]. - Cash and cash equivalents at the end of the period reached ¥1,388,512,343.62, accounting for 13.87% of total assets, a 110.84% increase compared to the previous period [89]. - Short-term borrowings increased to ¥1,956,863,361.92, representing 19.55% of total assets, a 24.59% increase from the previous period [90]. - The company reported a significant increase in other equity investments to ¥61,602,536.03, up 222.07% from ¥19,127,100.00 in the previous period [90]. Employee and Management - The total number of employees increased by 10% in 2022, reflecting the company's growth and expansion strategy [168]. - The total remuneration for directors, supervisors, and senior management during the reporting period amounted to 4.248 million yuan [174]. - The company has a performance evaluation system linked to employee roles and skills, promoting a culture of participation in management [191]. - The company has a training plan that includes differentiated courses for various employee levels, focusing on both technical and managerial skills [192].

Financial Performance - The company's operating revenue for Q3 2022 was ¥875,675,273.25, a decrease of 14.88% compared to the same period last year[4] - The net profit attributable to shareholders for Q3 2022 was ¥293,011,013.59, an increase of 1.33% year-on-year[4] - The net profit attributable to shareholders after deducting non-recurring gains and losses was ¥284,457,562.46, a decrease of 0.72% compared to the same period last year[4] - The basic earnings per share for Q3 2022 was ¥0.18, unchanged from the previous quarter[5] - The diluted earnings per share for Q3 2022 was also ¥0.18, reflecting a 5.88% increase compared to the same period last year[5] - The weighted average return on equity for Q3 2022 was 4.98%, a decrease of 1.73 percentage points year-on-year[5] - The net profit for the third quarter of 2022 was ¥904,845,162.80, compared to ¥845,424,873.37 in the third quarter of 2021, representing a 7% increase[22] - The total profit for the third quarter of 2022 was ¥1,050,013,815.96, compared to ¥975,438,736.30 in the same quarter of 2021, marking a 7.6% increase[22] Assets and Liabilities - The total assets at the end of Q3 2022 amounted to ¥9,880,183,453.50, representing a 20.24% increase from the end of the previous year[5] - The equity attributable to shareholders at the end of Q3 2022 was ¥6,016,173,464.26, an increase of 11.87% compared to the end of the previous year[5] - Total liabilities increased to RMB 3,864,057,563.03 from RMB 2,814,131,012.41, marking a rise of approximately 37.3%[19] - The company's total equity, including minority interests, was RMB 6,016,125,890.47, compared to RMB 5,402,757,039.30, indicating an increase of about 11.4%[20] Cash Flow - The net cash flow from operating activities for the year-to-date was ¥631,513,877.83, reflecting a significant increase of 156.89% due to increased sales collections[9] - Cash flow from operating activities for the first three quarters of 2022 was ¥3,023,579,375.42, significantly higher than ¥2,470,372,441.72 in the same period of 2021, showing improved cash generation[24] - Net cash flow from operating activities amounted to ¥631,513,877.83, a significant increase from ¥245,829,942.23 in the previous year, representing a growth of approximately 156.5%[25] - Net cash flow from financing activities was ¥357,359,861.61, a turnaround from a negative cash flow of -¥346,177,912.88 in the same period last year[26] Investments and Expenses - Total operating costs amounted to ¥1,821,077,069.00, up from ¥1,798,866,892.44, reflecting a 1.2% increase year-over-year[21] - Research and development expenses for the first three quarters of 2022 were ¥161,520,139.29, slightly up from ¥153,264,424.78 in the same period of 2021, indicating a focus on innovation[21] - The company reported a financial asset impairment loss of ¥3,384,819.01 in the third quarter of 2022, a recovery from a loss of ¥27,843,190.83 in the same quarter of 2021[22] - Cash paid to employees increased to ¥214,313,933.48 from ¥153,226,802.21, reflecting a rise of approximately 39.9%[25] - Cash outflow for taxes paid was ¥264,822,852.55, up from ¥162,258,331.57, indicating an increase of about 63.2% year-over-year[25] Tax and Other Income - The company received tax refunds amounting to ¥201,671,849.42, compared to ¥138,344,216.92 in the previous year, marking an increase of about 45.7%[25] - The company’s tax expenses for the third quarter of 2022 were ¥145,168,653.16, compared to ¥130,013,862.93 in the same quarter of 2021, reflecting a higher tax burden due to increased profits[22] - Other comprehensive income after tax for the third quarter of 2022 was ¥1,034,823.52, a recovery from a loss of ¥1,185,252.00 in the same quarter of 2021, indicating improved overall financial health[23] Inventory and Receivables - Inventory levels rose to RMB 5,534,436,220.46, compared to RMB 4,894,249,940.61 in the previous year, representing an increase of 13.1%[18] - The company’s accounts receivable stood at RMB 828,449,817.18, slightly down from RMB 837,304,413.97, showing a decrease of approximately 1.0%[16]

Financial Performance - The company reported a total revenue of 1.2 billion RMB for the first half of 2022, representing a year-on-year increase of 15%[9]. - The net profit attributable to shareholders was 300 million RMB, up 20% compared to the same period last year[9]. - The company's operating revenue for the first half of the year reached ¥1,975,323,375.33, representing a 12.79% increase compared to the same period last year[16]. - Net profit attributable to shareholders was ¥614,035,642.75, an increase of 10.53% year-over-year[16]. - The company achieved a revenue of 1,975.32 million yuan in the first half of 2022, representing a year-on-year growth of 12.79%[37]. - The net profit attributable to the parent company reached 614.04 million yuan, an increase of 10.53% compared to the previous year, driven by the growth in formulation sales[37]. - The company reported a total operating cash inflow of RMB 2,324,932,548.70, compared to RMB 1,885,390,155.93 in the previous year, marking an increase of about 23.3%[150]. Research and Development - The R&D expenditure increased by 25% year-on-year, amounting to 150 million RMB, reflecting the company's commitment to innovation[9]. - The R&D team consists of nearly 400 personnel, including around 60 with master's or doctoral degrees, enhancing the company's innovation capabilities[40]. - The company is committed to improving its original innovation capabilities and strengthening drug regulatory research to align with national health planning[23]. - The company is enhancing its research and development efforts for cost-effective medications, particularly in the field of mental health and long-acting injectables[23]. - The company is leveraging its strong R&D capabilities to enhance its product pipeline, focusing on key disease areas such as oncology and immunology[47]. Market Expansion - The company has expanded its user base by 10% in the first half of 2022, reaching a total of 1.5 million active users[9]. - The company is actively pursuing market expansion in Southeast Asia, aiming for a 15% market share by the end of 2023[9]. - The company is exploring global markets for its sterile injectables, aiming to expand its international presence[24]. - The company is expanding its business in Europe and other global markets, leveraging its production and quality advantages to enhance its influence in the global heparin market[31]. - The company has successfully entered the European and South American markets with its enoxaparin injection, utilizing local partnerships for market penetration[37]. Product Development - The company plans to launch three new products in the second half of 2022, focusing on innovative biopharmaceuticals[9]. - The product pipeline includes Daptomycin for Injection, indicated for complex skin and skin structure infections, and Vancomycin HCl for Injection, effective against severe infections caused by methicillin-resistant Staphylococcus aureus[28]. - The company is developing new products such as Ganirelix Injection for preventing premature LH surge in women undergoing controlled ovarian stimulation[28]. - The company reported a focus on expanding its product line to include innovative treatments for chronic diseases, such as Doxercalciferol Injection for secondary hyperparathyroidism in dialysis patients[27]. - The company is actively pursuing market expansion strategies, particularly in the area of oncology with products like Bendamustine Hydrochloride Injection for chronic lymphocytic leukemia and non-Hodgkin lymphoma[29]. Strategic Partnerships - The company has entered into a strategic partnership with a leading international pharmaceutical firm to enhance its distribution network[9]. - The company is exploring potential mergers and acquisitions to enhance its market position and expand its product portfolio[9]. - The company is exploring strategic partnerships and collaborations to accelerate the development and commercialization of its product pipeline[29]. Financial Position - The total assets at the end of the reporting period were ¥9,409,711,667.98, reflecting a 14.52% increase from the end of the previous year[16]. - The company's total assets reached approximately CNY 9.41 billion, an increase from CNY 8.22 billion at the beginning of the period, reflecting a growth of about 14.5%[134]. - The total liabilities increased to CNY 3.55 billion from CNY 2.81 billion, marking a rise of approximately 26.3%[134]. - The company's debt-to-asset ratio remains reasonable, indicating good credit status and the ability to repay debts through stock conversion or operational cash flow[133]. Environmental Responsibility - The company is listed as a key pollutant discharge unit in Nanjing, adhering to environmental regulations and promoting green development[73]. - The company has implemented strict pollution discharge standards, including the "Pharmaceutical Industry Air Pollutants Discharge Standard" and "Comprehensive Wastewater Discharge Standard"[74]. - The company has actively engaged in energy conservation and emission reduction initiatives as part of its corporate social responsibility[73]. - The company has established an emergency response plan for environmental incidents, filed with the local environmental protection bureau[82]. Risk Management - The company faces industry policy risks due to increasing regulatory scrutiny in the pharmaceutical sector, which could significantly impact future development[62]. - The company has established a comprehensive risk management system to enhance quality control and maintain product stability, particularly for heparin products[63]. - Rising raw material prices, particularly for crude heparin, pose a significant risk to production costs, influenced by supply-demand dynamics exacerbated by African swine fever[64]. Corporate Governance - The company appointed Qian Xiaojie as the new financial officer following the resignation of Huang Xiwei, who will continue as president and board secretary[69]. - The company did not propose any profit distribution or capital reserve transfer for the reporting period[70]. - The company has no significant related party transactions that have not been disclosed in temporary announcements[100].

Financial Performance - The company's operating revenue for Q1 2022 was ¥1,176,560,687.58, representing a year-on-year increase of 33.24%[4] - The net profit attributable to shareholders for the same period was ¥330,089,249.36, reflecting a growth of 20.96% compared to the previous year[4] - The net profit after deducting non-recurring gains and losses was ¥326,094,976.70, which is an increase of 23.68% year-on-year[4] - The basic and diluted earnings per share were both ¥0.27, up by 22.73% year-on-year[5] - The total operating revenue for Q1 2022 reached CNY 1,176,560,687.58, a significant increase of 33.3% compared to CNY 883,052,586.38 in Q1 2021[21] - The total operating costs for Q1 2022 were CNY 788 million, up from CNY 568 million in Q1 2021, indicating a rise of 38.7%[22] - The net profit for Q1 2022 was CNY 330.53 million, compared to CNY 273.22 million in Q1 2021, reflecting an increase of 21.0%[23] - The total comprehensive income for Q1 2022 was CNY 329.93 million, compared to CNY 274.71 million in Q1 2021, showing an increase of 20.1%[23] Cash Flow and Assets - The net cash flow from operating activities reached ¥252,013,310.86, showing a significant increase of 3,999.30% compared to the same period last year[4] - Current assets totaled CNY 7,337,484,043.53 as of March 31, 2022, up from CNY 6,929,829,957.54 at the end of 2021, reflecting a growth of approximately 5.9%[19] - Cash and cash equivalents increased to CNY 1,022,950,850.98 from CNY 658,552,787.15, marking a growth of 55.3% year-over-year[18] - The total cash inflow from operating activities in Q1 2022 was CNY 1.12 billion, compared to CNY 960.82 million in Q1 2021, reflecting an increase of 16.5%[25] - The total cash and cash equivalents at the end of the period amounted to 667,705,647.21 CNY, a decrease from 1,834,550,193.98 CNY at the end of the previous year[26] Assets and Liabilities - The total assets at the end of the reporting period were ¥8,772,844,820.78, an increase of 6.77% from the end of the previous year[5] - Total liabilities increased to CNY 3,047,055,052.83 from CNY 2,814,131,012.41, representing a rise of 8.3%[20] - The company's total assets reached CNY 8,772,844,820.78, an increase from CNY 8,216,888,051.71, reflecting a growth of 6.8%[20] - Non-current assets amounted to CNY 1,435,360,777.25, up from CNY 1,287,058,094.17, indicating an increase of 11.5%[19] Shareholder Information - The company had a total of 12,164 ordinary shareholders at the end of the reporting period, with the largest shareholder holding 27.20% of the shares[9] - The equity attributable to shareholders increased to ¥5,700,893,695.09, marking a growth of 6.01% compared to the previous year[5] - The total equity attributable to shareholders increased to CNY 5,700,893,695.09 from CNY 5,377,921,396.15, reflecting a growth of 6.0%[20] Product Development and Market Strategy - The increase in operating revenue was driven by the rapid growth in sales following the approval and launch of injection products[8] - The company received the drug registration certificate for injectable calcium levofolinate from the National Medical Products Administration and the FDA approval for furosemide injection, enhancing its product pipeline in the oncology sector[12] - Key products such as heparin sodium injection and nadroparin calcium injection have been shortlisted for centralized procurement in Guangdong Province and Inner Mongolia, indicating successful exploration of the centralized procurement sales model[13] - Overseas formulation sales increased by over 30% compared to the same period last year, with significant growth in Europe and other global markets, establishing overseas sterile injection sales as a key growth driver[14] - The company is implementing lean management practices to improve operational efficiency and product quality, focusing on systematic improvements across production, quality, research, registration, marketing, and sales[15] - The company has established a complete sales channel in the U.S. market and acquired the Meitheal team to enhance its marketing strategy and localize its operations in the U.S.[16] - The company is leveraging internet platforms to support sales partners and expand the number of formulations entering hospitals, aiming to increase sales volume in a competitive market[13] - The company is committed to a "zero defect" quality standard, ensuring that its products meet the highest global regulatory requirements, which is fundamental to its long-term competitiveness[16] - The company is enhancing its procurement strategy by deepening relationships with key suppliers and optimizing supply chain management to ensure stable raw material supply[16] - The company is utilizing third-party clinical representatives to promote products and gather real-time market feedback, effectively expanding its sales channels and hospital coverage[17] - The company plans to launch more consistency evaluation products in the coming years, strengthening its marketing team to adapt to market needs and policies[13] Research and Development - Research and development expenses for Q1 2022 amounted to CNY 53.46 million, an increase from CNY 33.91 million in Q1 2021, representing a growth of 57.6%[22] Tax and Expenses - The tax expenses for Q1 2022 were CNY 59.24 million, up from CNY 40.29 million in Q1 2021, indicating a rise of 47.1%[23]

Financial Performance - The company's operating revenue for 2021 was approximately ¥3.69 billion, representing a 26.48% increase compared to ¥2.91 billion in 2020[17]. - Net profit attributable to shareholders for 2021 was approximately ¥1.06 billion, a 31.41% increase from ¥806 million in 2020[17]. - The net cash flow from operating activities increased by 220.82% to approximately ¥683.63 million, primarily due to rapid expansion in formulation sales[17]. - The total assets at the end of 2021 were approximately ¥8.22 billion, a 6.43% increase from ¥7.72 billion at the end of 2020[17]. - The weighted average return on equity for 2021 was 25.29%, an increase of 0.83 percentage points from 24.46% in 2020[18]. - Basic earnings per share for 2021 were ¥0.87, reflecting a 31.82% increase from ¥0.66 in 2020[18]. - The net profit attributable to shareholders after deducting non-recurring gains and losses was approximately ¥1.02 billion, a 33.47% increase from ¥767 million in 2020[17]. - The company's net assets attributable to shareholders increased by 44.47% to approximately ¥5.38 billion at the end of 2021[17]. - The quarterly revenue for Q4 2021 was approximately ¥906.60 million, with a net profit of approximately ¥214.60 million[21]. - The total profit reached 1,203.75 million yuan, an increase of 31.61% compared to the previous year[27]. - The company achieved a revenue of 3,686.69 million yuan in 2021, representing a year-on-year growth of 26.48%[27]. Market Expansion and Product Development - The company is focused on expanding its international market presence and enhancing domestic pharmaceutical development[2]. - The company has established stable multi-product collaborations with several GPOs in the U.S., enhancing its market presence[26]. - The company has nearly 30 products operating in the U.S. market, positioning it among the mid-tier pharmaceutical sales teams[26]. - In 2021, the company received FDA approval for 11 ANDAs, the highest number for a domestic company in the U.S. market[29]. - The company is actively expanding its product registration and sales in nearly 30 countries, aiming for global market participation[27]. - The company is focusing on developing a comprehensive product pipeline that includes both generic and innovative drugs[29]. - The company aims to establish partnerships with high-quality Chinese pharmaceutical firms to expand its product offerings in the U.S. market[30]. - The company has successfully launched multiple products in China, including the first domestic product to pass consistency evaluation, significantly addressing the needs of leukemia patients[31]. - The company’s subsidiary Meitheal reported revenue of CNY 1.04 billion, representing over 50% growth year-on-year, driven by successful market penetration in the U.S.[35]. - The company has established a strong presence in the U.S. market with nearly 30 sterile injectable products approved by the FDA, enhancing its competitive position[35]. Research and Development - The company has nearly 400 R&D personnel, including around 60 with master's or doctoral degrees, enhancing its research capabilities[46]. - The company’s R&D expenses increased by 17.82% to CNY 220.95 million, reflecting its commitment to innovation[53]. - The company has a total of 66 ongoing research projects, with 34 projects already submitted for approval as of the end of 2021[97]. - Research and development expenses for the company reached 27,521.41 million RMB, reflecting a year-on-year growth of 24.28%[97]. - The company has established a dedicated biopharmaceutical business unit to enhance its capabilities in large molecule product development, production, quality, and registration[88]. - The company is enhancing its manufacturing capabilities by increasing production sites for key products like Bivalirudin in the U.S.[103]. Governance and Compliance - The company emphasizes strict compliance with information disclosure regulations, ensuring timely and accurate reporting to shareholders[130]. - The board of directors and supervisory board operated in accordance with legal and regulatory requirements, maintaining objective and scientific decision-making processes[130]. - The company has established a dedicated department for investor relations, enhancing communication with minority shareholders and ensuring their rights are protected[130]. - The company has not reported any significant differences in governance practices compared to regulatory requirements[129]. - The management team has extensive experience in both domestic and international markets, contributing to the company's strategic direction and operational efficiency[133]. - The company has engaged in related party transactions, which were confirmed in the board meeting[140]. Environmental Responsibility - The company has implemented a wastewater treatment facility with a daily processing capacity of approximately 400 tons at the API plant, which is currently operating normally[171]. - The company has established a comprehensive environmental emergency response plan, which was filed with the local environmental protection authority[174]. - The company has conducted third-party monitoring of wastewater, waste gas, and noise, with all pollution indicators meeting the discharge standards[175]. - The company has adhered to the latest solid waste law requirements by posting hazardous waste information and identification signs at its facilities[177]. - The company has received environmental impact approvals for various projects, including the injectable drug production line and the anti-tumor product upgrade project[179]. Risk Management - The company faces industry policy risks due to increasing regulatory measures in the pharmaceutical sector, which could impact its future development[124]. - The company is exposed to raw material price fluctuations, particularly due to the impact of African swine fever on heparin raw material prices, which could affect production costs[124]. - The company is actively working to mitigate risks related to sudden events and natural disasters by implementing a business continuity plan[126]. - The company is focused on reducing exchange rate risks associated with its overseas business primarily settled in USD, employing strategies like natural hedging and shortening sales cycles[126]. Shareholder Engagement - The company plans to implement a stock incentive plan for 2021, which was discussed in the board meetings[139]. - The company has a cash dividend policy that mandates a minimum of 10% of distributable profits to be distributed in cash if conditions are met[153]. - The company held its annual general meeting on May 17, 2021, where several key resolutions were passed, including the approval of the 2020 annual financial report and profit distribution plan[130]. - The annual profit distribution led to significant shareholding increases for key executives, with Tang Yongqun's shares increasing by 56,784,364 and Xie Juhua's by 78,050,228[132].

Financial Performance - The company's operating revenue for Q3 2021 was ¥1,028,802,901.82, representing a year-on-year increase of 34.92%[4] - The net profit attributable to shareholders for Q3 2021 was ¥289,176,194.88, reflecting a growth of 41.30% compared to the same period last year[4] - The net profit attributable to shareholders after deducting non-recurring gains and losses for Q3 2021 was ¥286,514,905.94, an increase of 53.53% year-on-year[4] - The basic earnings per share for Q3 2021 was ¥0.10, up 42.86% from the previous year[5] - Total operating revenue for Q3 2021 reached ¥2,780,097,098.91, an increase from ¥2,158,370,025.18 in the same period last year, representing a growth of approximately 29%[30] - Total operating costs for Q3 2021 were ¥1,798,866,892.44, up from ¥1,477,005,628.88 year-over-year, indicating a rise of about 22%[30] - The net profit for Q3 2021 was approximately ¥845.42 million, an increase of 38.7% compared to ¥609.20 million in Q3 2020[31] - The total profit for Q3 2021 reached ¥975.44 million, up 39.9% from ¥697.56 million in the same period last year[31] - The basic earnings per share for Q3 2021 was ¥0.69, compared to ¥0.51 in Q3 2020, reflecting a growth of 35.3%[32] - The operating profit for Q3 2021 was approximately ¥964.37 million, an increase of 43.5% from ¥672.01 million in Q3 2020[31] Assets and Liabilities - The total assets at the end of the reporting period were ¥8,362,409,903.85, an increase of 8.32% compared to the end of the previous year[5] - The total assets as of Q3 2021 were ¥8,362,409,903.85, up from ¥7,720,360,460.30 in the same quarter last year, marking a growth of about 8.3%[29] - Total liabilities decreased to ¥3,892,048,235.84 in Q3 2021 from ¥3,975,799,969.17 in the previous year, showing a reduction of approximately 2.1%[29] - The total equity attributable to shareholders increased to ¥4,448,005,600.38 in Q3 2021, compared to ¥3,722,438,519.79 in the same period last year, representing a growth of about 19.5%[29] Cash Flow - The company reported a net cash flow from operating activities of ¥245,829,942.23 for the year-to-date[5] - Cash flow from operating activities for the first three quarters of 2021 was ¥2.74 billion, an increase of 24.5% from ¥2.20 billion in the same period of 2020[33] - The net cash flow from investing activities in Q3 2021 was approximately ¥326.16 million, a significant improvement from a net outflow of ¥73.75 million in Q3 2020[36] - The company reported a net cash flow from financing activities of -¥346.18 million in Q3 2021, compared to a positive cash flow of ¥610.91 million in Q3 2020[36] - The company recorded a cash and cash equivalents balance of ¥717.22 million at the end of Q3 2021, up from ¥221.75 million at the end of Q3 2020[36] - The company reported a significant increase in cash and cash equivalents, reaching approximately CNY 738.34 million as of September 30, 2021, compared to CNY 493.55 million at the end of 2020, representing a growth of 49.7%[27] Research and Development - Research and development expenses for Q3 2021 amounted to ¥153,264,424.78, compared to ¥144,129,619.86 in the previous year, reflecting an increase of approximately 6%[30] - The company has established a comprehensive knowledge system for R&D and registration, enhancing its efficiency in product development and approval[17] - The company has established a standardized R&D and registration document management system, significantly improving the efficiency of product development and approval processes[23] Market Strategy and Expansion - The company plans to continue expanding its market presence and investing in new product development to sustain growth[9] - The company is expanding its product pipeline through both self-developed and externally sourced formulations to enhance market position and opportunities[20] - The company aims to leverage its compliance production capabilities to participate in global competition, focusing on the U.S. market as a breakthrough point[17] - The acquisition of the Meitheal team in the U.S. has strengthened the company's marketing channels and local market understanding, positioning it for growth in the sterile injection market[24] - The company is utilizing third-party clinical representatives to expand its sales channels and improve market penetration, effectively increasing sales scale in existing markets[25] Production and Quality Management - The new production line approved by the FDA increased the output of water injection formulations by over 300% and freeze-dried formulations by over 400%[16] - The company has five sterile formulation production lines approved by the FDA, positioning it as one of the few domestic companies with such certification[16] - The company has received approval for the production of new products at additional sites, with some products already granted approval by the FDA, enhancing production capabilities[22] - The company has implemented lean management practices to improve operational efficiency across production, quality, R&D, registration, marketing, and sales, aiming for zero defects in product quality[23] - The company aims to maintain high product standards by adhering to FDA regulations and continuously improving internal quality standards, ensuring competitiveness in global markets[23] Financial Investments - The company reported a net investment income of ¥13,999,306.87 for Q3 2021, significantly higher than ¥3,426,754.95 in the same quarter of the previous year[30] - The company’s long-term equity investments rose to ¥6,458,479.72 in Q3 2021, compared to ¥3,258,879.55 in the same period last year, reflecting an increase of about 98%[28] - The company’s goodwill stood at ¥118,246,373.89 in Q3 2021, slightly up from ¥117,556,457.24 in the previous year, indicating a marginal increase of about 0.6%[28]

Financial Performance - The company's operating revenue for the first half of the year reached ¥1,751,294,197.09, representing a 25.47% increase compared to the same period last year[18]. - Net profit attributable to shareholders was ¥555,521,170.76, marking a 36.00% increase year-over-year[18]. - Basic earnings per share increased to ¥0.59, up 34.09% from ¥0.44 in the same period last year[19]. - The company achieved a weighted average return on equity of 13.88%, an increase of 0.79 percentage points compared to the previous year[19]. - The total assets of the company increased to ¥8,705,277,388.60, reflecting a 12.76% growth compared to the end of the previous year[18]. - The company achieved significant sales in the first half of 2021, meeting domestic demand for its products and leveraging its speed advantage in the US and China markets to capture the market for injectable drug consistency evaluations[26]. - The company reported a total of 835,293,671.44 CNY in accounts receivable, an increase from 783,312,186.00 CNY year-over-year, indicating higher sales on credit[146]. - The company reported a total cash inflow from financing activities of CNY 2,028,943,537.01, compared to CNY 2,216,440,387.50 in the same period last year, reflecting a decrease of approximately 8.5%[163]. International Expansion - The company reported a significant focus on international capabilities to penetrate the global pharmaceutical market[2]. - The company emphasizes international quality to drive domestic pharmaceutical development[2]. - In the U.S. market, the company achieved nearly $100 million in annual sales for injectable products, with quarterly sales exceeding $40 million[25]. - The company has nearly 30 sterile injectables approved by the FDA, contributing to significant sales growth of over 60% in the U.S. market compared to the previous year[25]. - The company is focused on expanding its business in Europe and other global markets, enhancing its regulatory understanding and influence in the global heparin market[26]. - The company’s export business for sterile injectables accounted for over 60% of its overall formulation business, positioning it as one of the largest exporters of injectables in China[30]. Research and Development - The company has a strong R&D team of over 300 people, including 52 with master's or doctoral degrees, and has received FDA approval for 7 products, capturing approximately 10% of the U.S. market share for several injection products[44]. - The company ranks first among Chinese enterprises in the speed of obtaining FDA approvals for injectable generic drugs, with a significant increase in R&D investment leading to improved registration efficiency[38]. - The company has established a standardized R&D and registration document management system to enhance product development and approval speed[52]. - The company is investing in new product development and technology innovation, which involves significant upfront costs and long approval cycles[64]. Risk Management - The company has detailed potential risks related to future plans and development strategies in the report[6]. - The company faces risks from industry policy changes, which may impact its operational model and competitive landscape[59]. - International trade friction poses a risk, particularly as the company exports a significant portion of its products to the US, EU, and Japan[60]. - The company has a high customer concentration risk, with the top five customers accounting for 65.93% of total revenue[66]. - The company is exposed to foreign exchange risks due to a high proportion of revenue generated from exports denominated in foreign currencies[65]. Environmental Responsibility - The company is listed as a key pollutant discharge unit in Nanjing, with no environmental pollution accidents or exceedances reported during the reporting period[75]. - The company has implemented pollution prevention measures, including dual treatment for exhaust gas and improvements to wastewater discharge systems[78]. - The company has established an emergency response plan for environmental incidents, filed with the Nanjing Jiangbei New District Management Committee[81]. - The company reported no administrative penalties due to environmental issues during the reporting period[85]. Corporate Governance - The board of directors and management guarantee the accuracy and completeness of the semi-annual report[3]. - There are no non-operational fund occupations by controlling shareholders or related parties[5]. - The company confirmed that there were no violations or penalties involving its directors, supervisors, senior management, controlling shareholders, or actual controllers[96]. - The company has committed to not engaging in any competitive business activities with its related parties[93]. Financial Management - The report is unaudited, and the management has confirmed the financial report's authenticity[4]. - Cash and cash equivalents at the end of the period reached ¥1,103,033,271.20, a 123.49% increase from ¥493,553,116.59, mainly due to cash receipts and matured investments[54]. - The company has implemented lean management practices to enhance operational efficiency and reduce management costs[52]. - The company aims to maximize sales while minimizing expenses, focusing on accurate information and decision-making to improve overall efficiency[52]. Shareholder Information - The total share capital increased from 934,160,533 shares to 936,136,641 shares during the reporting period, an increase of 1,976,108 shares[112]. - The largest shareholder, Xie Juhua, held 260,167,427 shares, representing 27.79% of the total shares, with 24,800,000 shares pledged[118]. - The company has implemented multiple stock incentive plans, with the latest plan initiated on June 22, 2021, which includes a 12, 24, and 36-month lock-up period for the granted restricted shares[116]. - The company approved the unlocking of 1,098,241 restricted shares, resulting in a decrease in limited shares and an increase in unrestricted shares by the same amount[111].

[Definitions](index=4&type=section&id=Section%201.%20Definitions) This chapter defines key terms, company abbreviations, partners, and regulatory bodies used in the report, providing a foundational understanding of its content - The chapter provides definitions for specialized terms, company abbreviations, partners, and regulatory bodies used throughout the report[9](index=9&type=chunk)[10](index=10&type=chunk) [Company Profile and Key Financial Indicators](index=5&type=section&id=Section%202.%20Company%20Profile%20and%20Key%20Financial%20Indicators) [Company Basic Information](index=5&type=section&id=Company%20Information) This chapter outlines the company's basic business registration, contact details, disclosure channels, and stock overview, clarifying its legal entity and investor communication pathways - The company's full name is Nanjing King-Friend Biochemical Pharmaceutical Co., Ltd., with stock abbreviation 'King-Friend' and stock code **603707**, listed on the Shanghai Stock Exchange[11](index=11&type=chunk)[15](index=15&type=chunk) [Key Financial Data and Indicators for the Past Three Years](index=6&type=section&id=Key%20Accounting%20Data%20and%20Financial%20Indicators%20for%20the%20Past%20Three%20Years) In 2020, the company achieved robust financial growth, with operating revenue up **18.03%** and net profit attributable to shareholders up **33.25%**, total assets expanded by **52.02%**, and profitability metrics significantly improved Key Accounting Data for the Past Three Years (Unit: CNY) | Key Accounting Data | 2020 | 2019 | YoY Change (%) | 2018 | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 2,914,880,930.50 | 2,469,669,305.11 | 18.03 | 1,700,330,667.14 | | Net Profit Attributable to Shareholders of Listed Company | 806,122,185.11 | 604,961,604.92 | 33.25 | 424,549,136.66 | | Net Profit Attributable to Shareholders of Listed Company (Excluding Non-recurring Items) | 767,277,360.29 | 587,364,048.60 | 30.63 | 411,166,740.79 | | Net Cash Flow from Operating Activities | -565,848,347.40 | -841,381,294.60 | 32.75 | 62,368,493.94 | | **Asset Status** | **End of 2020** | **End of 2019** | **Period-end YoY Change (%)** | **End of 2018** | | Net Assets Attributable to Shareholders of Listed Company | 3,722,438,519.79 | 2,966,492,802.68 | 25.48 | 2,421,112,751.62 | | Total Assets | 7,720,360,460.30 | 5,078,419,276.66 | 52.02 | 3,402,323,291.73 | Key Financial Indicators for the Past Three Years | Key Financial Indicators | 2020 | 2019 | YoY Change (%) | 2018 | | :--- | :--- | :--- | :--- | :--- | | Basic EPS (CNY/share) | 0.86 | 0.65 | 32.31 | 0.45 | | Diluted EPS (CNY/share) | 0.87 | 0.65 | 33.85 | 0.46 | | Weighted Average ROE (%) | 24.46 | 22.52 | Increased by 1.94 percentage points | 19.12 | - In 2020, net cash flow from operating activities remained negative but improved by **32.75%** compared to 2019, primarily due to decreased raw material purchases, with the negative balance mainly influenced by increased accounts receivable from expanded preparation sales and higher inventory levels[18](index=18&type=chunk) [Quarterly Key Financial Data for 2020](index=7&type=section&id=Quarterly%20Key%20Financial%20Data%20for%202020) The company's 2020 quarterly operating revenue and net profit attributable to shareholders remained relatively stable, though net cash flow from operating activities was negative for the first three quarters, slightly improving in Q4, reflecting full-year business expansion-driven capital pressure Quarterly Key Financial Data for 2020 (Unit: CNY) | Indicator | Q1 | Q2 | Q3 | Q4 | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 734,151,941.80 | 661,668,655.98 | 762,549,427.40 | 756,510,905.32 | | Net Profit Attributable to Shareholders of Listed Company | 204,403,725.60 | 204,071,041.01 | 204,650,846.41 | 192,996,572.09 | | Net Cash Flow from Operating Activities | -90,491,766.00 | -229,168,679.05 | -242,453,881.92 | -3,734,020.43 | [Non-Recurring Gains and Losses Items and Amounts](index=8&type=section&id=Non-Recurring%20Gains%20and%20Losses%20Items%20and%20Amounts) In 2020, the company's total non-recurring gains and losses amounted to **CNY 38.84 million**, primarily from government subsidies and investment income, a significant increase from **CNY 17.60 million** in 2019 Non-Recurring Gains and Losses Items (Unit: CNY) | Non-Recurring Gains and Losses Item | 2020 Amount | 2019 Amount | 2018 Amount | | :--- | :--- | :--- | :--- | | Government Subsidies | 37,967,430.46 | 12,738,908.38 | 6,882,125.08 | | Transactional Financial Assets Related Gains and Losses | 8,150,774.77 | 7,741,535.91 | 8,225,853.80 | | **Total** | **38,844,824.82** | **17,597,556.32** | **13,382,395.87** | [Company Business Overview](index=10&type=section&id=Section%203.%20Company%20Business%20Overview) [Main Business, Operating Model, and Industry Overview](index=10&type=section&id=Main%20Business%2C%20Operating%20Model%2C%20and%20Industry%20Overview) The company's core business spans R&D, production, and sales of full-range heparin products, anti-tumor, and other sterile injectables, alongside CDMO services, with rapid growth in high-end overseas preparations, particularly in the US market, establishing it as a leading Chinese injectable exporter - The company's core business strategy involves a full-industry chain layout based on heparin products, expanding into high-value sterile injectables (e.g., anti-tumor drugs) and CDMO services[26](index=26&type=chunk) - The company is a leading domestic injectable exporter, possessing four US FDA-certified production lines, with preparation export business accounting for over **50%** of its total preparation business[36](index=36&type=chunk) - The company is one of the world's major high-quality heparin API suppliers, having established long-term stable cooperative relationships with international mainstream preparation enterprises such as Pfizer and Sanofi[37](index=37&type=chunk)[46](index=46&type=chunk) - 2020 performance growth was primarily driven by the commercialization of R&D achievements, explosive growth in overseas preparation sales (US subsidiary Meitheal's revenue increased by **785.53%**), steady growth in domestic preparation business (**25%**), and high gross margins in the API business (benefiting from strategic inventory)[39](index=39&type=chunk)[41](index=41&type=chunk) [Core Competitiveness Analysis](index=16&type=section&id=Core%20Competitiveness%20Analysis) The company's core competitiveness lies in R&D and registration, market sales, production quality, customer resources, procurement, and integrated supply chain, boasting FDA-certified R&D, efficient global filing capabilities, a strong US sales network via Meitheal, advanced manufacturing technology, and strategic raw material procurement - **R&D and Registration Advantage**: The company possesses an FDA-certified R&D center, with an average of **10** ANDA approvals per year over the past three years, ranking as the top Chinese enterprise in terms of R&D approval speed in the US[42](index=42&type=chunk) - **Market and Sales Advantage**: Through the acquisition of US Meitheal, the company established localized marketing channels, directly engaging major purchasers like GPOs and IDNs, achieving rapid expansion in the US market[43](index=43&type=chunk) - **Production and Quality Advantage**: The company operates four FDA-audited sterile preparation production lines, mastering high-end technologies like fully enclosed isolation, with a production management system meeting regulatory requirements of major global pharmaceutical markets[45](index=45&type=chunk) - **Procurement and Integration Advantage**: The company employs an innovative 'centralized elution' procurement model and has built strategic crude heparin inventory since 2015, effectively mitigating raw material price fluctuation risks, with a complete heparin API to preparation industry chain layout ensuring long-term stable profitability[47](index=47&type=chunk) [Management Discussion and Analysis of Operations](index=19&type=section&id=Section%204.%20Management%20Discussion%20and%20Analysis%20of%20Operations) [Overview of Operations](index=19&type=section&id=Overview%20of%20Operations) In 2020, the company achieved **CNY 2.915 billion** in operating revenue, up **18.03%**, and **CNY 797 million** in net profit, up **31.41%**, primarily driven by strong preparation business growth, which exceeded **50%** of revenue, with 14 US ANDA approvals and Meitheal's revenue surging **785.53%**, while effectively managing foreign exchange losses - In 2020, the company's preparation revenue share exceeded **50%** for the first time, becoming the primary driver of performance growth[50](index=50&type=chunk) - Significant R&D achievements include **14** US FDA ANDA approvals during the reporting period, making the company the Chinese domestic manufacturer with the most US injectable ANDAs[49](index=49&type=chunk) - US subsidiary Meitheal's sales revenue achieved substantial growth, increasing by **785.53%** compared to 2019, with operating revenue approaching **USD 100 million**[50](index=50&type=chunk) - The company's heparin and low molecular weight heparin preparations achieved a rapid market share of **20%** in the US within just one year of launch, with sales performance nearing **30 million units**[50](index=50&type=chunk) - Despite significant fluctuations in USD and EUR exchange rates, the company, through precise capital operations, limited full-year exchange losses to **CNY 1.66 million**, significantly below the industry average for comparable foreign trade revenue[51](index=51&type=chunk) [Analysis of Main Business](index=23&type=section&id=Analysis%20of%20Main%20Business) In 2020, the company's main business revenue reached **CNY 2.911 billion**, up **18%**, with preparation business revenue surging **93.48%** to **50.63%** of total, surpassing raw materials, while standard heparin raw material gross margin significantly increased by **14.39 percentage points** to **56.14%** despite a **14.42%** revenue decline, and foreign market gross margin improved due to economies of scale Main Business by Product (Unit: CNY) | By Product | Operating Revenue | Operating Cost | Gross Margin (%) | Operating Revenue YoY Change (%) | Operating Cost YoY Change (%) | Gross Margin YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Standard Heparin API | 1,304,154,037.51 | 572,029,524.10 | 56.14 | -14.42 | -35.56 | Increased by 14.39 percentage points | | Preparations | 1,474,123,032.87 | 532,317,590.05 | 63.89 | 93.48 | 154.38 | Decreased by 8.65 percentage points | | CDMO and Others | 133,050,494.92 | 89,861,343.47 | 32.46 | -26.70 | -14.91 | Decreased by 9.36 percentage points | Main Business by Region (Unit: CNY) | By Region | Operating Revenue | Operating Cost | Gross Margin (%) | Operating Revenue YoY Change (%) | Operating Cost YoY Change (%) | Gross Margin YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Domestic | 971,026,990.25 | 305,757,452.62 | 68.51 | 39.07 | 90.03 | Decreased by 10.97 percentage points | | International | 1,940,300,575.05 | 888,451,004.99 | 54.21 | 9.53 | -14.85 | Increased by 31.91 percentage points | Production and Sales Volume Analysis | Main Product | Unit | Production Volume | Sales Volume | Production Volume YoY Change (%) | Sales Volume YoY Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Standard Heparin API | 100 million units | 40,044.93 | 22,980.88 | -5.93 | -44.77 | | Preparations | 10,000 units | 6,872.98 | 5,982.68 | 101.53 | 114.09 | [Analysis of Assets and Liabilities](index=27&type=section&id=Analysis%20of%20Assets%20and%20Liabilities) As of year-end 2020, total assets reached **CNY 7.72 billion**, up **52.02%**, driven by a **36.15%** increase in inventory, a **1393.39%** surge in transactional financial assets, and a **101.37%** rise in accounts receivable due to sales growth, with short-term borrowings up **55.84%** to support business expansion, indicating a rapid growth phase Major Balance Sheet Items Change Analysis (Unit: CNY) | Item Name | Current Period-end Amount | Previous Period-end Amount | Change Ratio (%) | Main Reason | | :--- | :--- | :--- | :--- | :--- | | Transactional Financial Assets | 845,794,154.61 | 56,635,833.33 | 1,393.39 | Due to purchase of redeemable demand wealth management products | | Accounts Receivable | 783,312,186.00 | 388,990,075.28 | 101.37 | Due to sales growth | | Inventory | 4,457,423,902.01 | 3,273,856,779.15 | 36.15 | Due to increased raw material prices and higher inventory for overseas business expansion | | Short-term Borrowings | 2,132,430,038.42 | 1,368,366,370.23 | 55.84 | Due to increased short-term bank borrowings | [Analysis of Industry Operating Information](index=29&type=section&id=Analysis%20of%20Industry%20Operating%20Information) This chapter analyzes the pharmaceutical industry's policy environment, market conditions for key products, and R&D progress, highlighting national medical insurance negotiations and centralized drug procurement as key trends impacting industry profits and market structure, while the company's R&D investment grew **15.84%** to **CNY 221 million** in 2020, with 56 ongoing projects and 14 US ANDA approvals, demonstrating strong R&D and registration capabilities - Industry Trend: National medical insurance catalog negotiations and centralized drug procurement continue to advance, with price reduction as the main theme, accelerating industry innovation and market consolidation, benefiting leading enterprises[75](index=75&type=chunk) Key Products Approved for Listing During the Reporting Period | Product Name | Application Country | Approval Date | | :--- | :--- | :--- | | Doxercalciferol Injection | USA | 2020年2月7日 | | Heparin Sodium Injection | USA | 2020年2月24日 | | Bortezomib for Injection | USA | 2020年3月22日 | | Dalteparin Sodium Injection | China | 2020年5月26日 | | Busulfan Injection | USA | 2020年10月23日 | | Gemcitabine Hydrochloride Injection | USA | 2020年12月12日 | | Cisatracurium Besilate Injection | China | 2020年12月22日 | R&D Investment (Unit: CNY) | Item | Amount | | :--- | :--- | | Expensed R&D Investment for Current Period | 187,532,206.16 | | Capitalized R&D Investment for Current Period | 33,916,295.47 | | **Total R&D Investment** | **221,448,501.63** | | Total R&D Investment as % of Operating Revenue | 7.60 | | Number of R&D Personnel | 306 | | Proportion of Capitalized R&D Investment (%) | 15.32 | [Discussion and Analysis of Future Development](index=40&type=section&id=Discussion%20and%20Analysis%20of%20Future%20Development) The company anticipates continued growth in global heparin and anti-tumor markets, aiming to become a top-tier international biopharmaceutical enterprise by consolidating heparin leadership, diversifying product lines, and achieving vertical integration, with strategic plans including synchronized US-China R&D, strengthening raw material market position, building robust domestic sales, achieving overseas preparation sales breakthroughs via Meitheal, and ensuring successful fundraising project implementation, while acknowledging risks like policy changes, quality control, raw material prices, and market shifts - **Development Strategy**: Aspiring to be a 'first-class international biopharmaceutical enterprise,' consolidating heparin product advantages, expanding other pharmaceutical product lines, and achieving product diversification and vertical production integration[109](index=109&type=chunk) - **Operating Plan**: - **R&D**: Adhere to synchronized US-China R&D and dual-filing strategies, increase R&D investment, and establish an efficient R&D pace - **Marketing**: Build a strong marketing team, embrace centralized procurement policies, and leverage internet platforms to expand domestic market coverage - **Overseas**: Rely on US subsidiary Meitheal to achieve new breakthroughs in overseas preparation sales - **Capacity**: Advance convertible bond fundraising projects, construct high-end preparation production lines, and enhance high-end manufacturing capabilities[111](index=111&type=chunk)[112](index=112&type=chunk) - **Key Risks**: The company faces industry policy risks (e.g., centralized procurement, medical insurance cost control), product quality control risks, raw material (crude heparin) price increase risks, and risks from changes in the heparin preparation market landscape[114](index=114&type=chunk)[115](index=115&type=chunk)[116](index=116&type=chunk) [Significant Matters](index=44&type=section&id=Section%205.%20Significant%20Matters) [Profit Distribution and Dividends](index=44&type=section&id=Proposed%20Profit%20Distribution%20or%20Capital%20Reserve%20to%20Share%20Capital%20Plan%20for%20Common%20Shares) The company's 2020 profit distribution plan proposes a cash dividend of **CNY 1.5** (tax inclusive) and 3 bonus shares per 10 shares, continuing its three-year trend of cash dividends and capital increases, with 2020 cash dividends representing **17.38%** of net profit attributable to shareholders, compared to **35.63%** in 2019 - 2020 Profit Distribution Plan: A cash dividend of **CNY 1.5** (tax inclusive) and **3** bonus shares per **10** shares[5](index=5&type=chunk) Dividend Distribution Plans for the Past Three Years | Dividend Year | Bonus Shares per 10 Shares (shares) | Cash Dividend per 10 Shares (CNY) (tax incl.) | Capitalized Shares per 10 Shares (shares) | Cash Dividend Amount (CNY 10,000) | Ratio to Net Profit Attributable to Shareholders (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | 2020 | 3 | 1.5 | 0 | 14,012.41 | 17.38 | | 2019 | 0 | 3 | 3 | 21,557.45 | 35.63 | | 2018 | 0 | 1.5 | 3 | 8,290.09 | 19.53 | [Equity Incentive Plan](index=48&type=section&id=Company%20Equity%20Incentive%20Plan) During the reporting period, the company implemented its 2020 Restricted Stock Incentive Plan and completed partial unlocking of the 2018 plan, while also repurchasing and canceling some granted restricted shares due to employee departures or unmet performance targets - Disclosed the 'King-Friend 2020 Restricted Stock Incentive Plan (Draft),' proposing to grant no more than **227,000 shares**[129](index=129&type=chunk) - Completed the second unlocking of the initial grant and the first unlocking of the reserved portion of the 2018 Restricted Stock Incentive Plan, totaling **881,762 shares** listed for circulation[129](index=129&type=chunk) [Guarantees](index=51&type=section&id=Guarantees) During the reporting period, all external guarantees were for subsidiaries, with a total year-end guarantee balance of **CNY 321 million**, representing **8.58%** of the company's net assets, primarily supporting the operations and development of Hong Kong King-Friend, Meitheal, and Nanjing Jianzhi Ziming Total Company Guarantees | Item | Amount (CNY) | | :--- | :--- | | Total Guarantees to Subsidiaries During Reporting Period | 509,529,441.00 | | Total Guarantees to Subsidiaries at Period-end | 321,286,076.00 | | Total Guarantees as % of Company Net Assets (%) | 8.58 | [Convertible Corporate Bonds](index=60&type=section&id=Convertible%20Corporate%20Bonds) In 2020, the company successfully issued two convertible corporate bonds: 'King-Friend Convertible Bond' (**CNY 503 million**) and 'KF20 Convertible Bond' (**CNY 780 million**), with 'King-Friend Convertible Bond' listed in May 2020 and experiencing minor conversions, while its conversion price was adjusted due to equity incentives and profit distribution - On April 23, 2020, publicly issued 'King-Friend Convertible Bond' with a total amount of **CNY 503 million**, code **113579**[155](index=155&type=chunk) - On December 17, 2020, publicly issued 'KF20 Convertible Bond' with a total amount of **CNY 780 million**, code **113614**[157](index=157&type=chunk) - The conversion price of 'King-Friend Convertible Bond' was adjusted from an initial **CNY 54.97/share** to **CNY 42.05/share** due to the implementation of equity incentives and 2019 equity distribution[162](index=162&type=chunk) [Share Changes and Shareholder Information](index=63&type=section&id=Section%206.%20Common%20Share%20Changes%20and%20Shareholder%20Information) [Common Share Capital Changes](index=63&type=section&id=Common%20Share%20Capital%20Changes) During the reporting period, the company's total share capital increased from **718.47 million shares** to **934.16 million shares**, primarily due to the 2019 profit distribution plan (3 bonus shares per 10 shares), 2020 restricted stock grants, repurchase and cancellation of some restricted shares, and minor convertible bond conversions - The company's total share capital increased from **718.47 million shares** at the beginning of the period to **934.16 million shares** at the end of the period[165](index=165&type=chunk) - The primary reason for the increase in share capital was the transfer of **3** bonus shares per **10** shares from capital reserves to all shareholders, totaling **216 million shares**[166](index=166&type=chunk) [Shareholders and Actual Controllers](index=66&type=section&id=Shareholders%20and%20Actual%20Controllers) As of year-end 2020, the company had **19,017** shareholders, with the top three being Xie Juhua (**27.85%**), Jiangsu Coastal Development Group Co., Ltd. (**21.80%**), and TANG YONGQUN (**20.26%**), with Xie Juhua and TANG YONGQUN, mother and son, acting in concert as the actual controllers Top Ten Shareholders' Holdings | Shareholder Name | Shares Held at Period-end | Proportion (%) | | :--- | :--- | :--- | | Xie Juhua | 260,167,427 | 27.85 | | Jiangsu Coastal Development Group Co., Ltd. | 203,647,922 | 21.80 | | TANG YONGQUN | 189,281,212 | 20.26 | | Huang Xiwei | 41,807,229 | 4.48 | | Fullgoal Optimized Flexible Allocation Mixed Fund (LOF) | 19,190,346 | 2.05 | - The company's actual controllers are Xie Juhua, TANG YONGQUN (Tang Yongqun), and Ding Ying, with Xie Juhua and TANG YONGQUN being mother and son, having signed a concerted action agreement[175](index=175&type=chunk)[179](index=179&type=chunk)[182](index=182&type=chunk) [Directors, Supervisors, Senior Management, and Employees](index=72&type=section&id=Section%208.%20Directors%2C%20Supervisors%2C%20Senior%20Management%2C%20and%20Employees) [Holdings and Remuneration of Directors, Supervisors, and Senior Management](index=72&type=section&id=Changes%20in%20Holdings%20and%20Remuneration) During the reporting period, the company's core management maintained stable shareholdings, with changes primarily from the annual profit distribution plan; Chairman Tang Yongqun's total pre-tax remuneration was **CNY 1.5 million**, and Director and Deputy General Manager Huang Xiwei's was **CNY 1.11 million**, supported by a performance-linked compensation and assessment mechanism Core Management Remuneration (Unit: CNY 10,000) | Name | Position | Total Pre-tax Remuneration from Company During Reporting Period | | :--- | :--- | :--- | | Tang Yongqun | Chairman, General Manager | 150 | | Huang Xiwei | Director, Deputy General Manager, CFO, Board Secretary | 111 | | Wu Guiping | Deputy General Manager | 36.25 | [Employee Information](index=75&type=section&id=Employee%20Information) As of the reporting period end, the company and its main subsidiaries had **953** employees, with technical and production personnel comprising **38.6%** and **37.7%** respectively, and over **56%** holding bachelor's degrees or higher, reflecting the company's emphasis on high-caliber talent Employee Professional Composition | Professional Category | Number of People | | :--- | :--- | | Production Personnel | 359 | | Sales Personnel | 64 | | Technical Personnel | 368 | | Financial Personnel | 23 | | Administrative Personnel | 139 | | **Total** | **953** | Employee Education Level | Education Level Category | Number of People | | :--- | :--- | | PhD | 10 | | Master's | 74 | | Bachelor's | 454 | | Associate Degree | 262 | | Below Associate Degree | 153 | | **Total** | **953** | [Corporate Governance](index=76&type=section&id=Section%209.%20Corporate%20Governance) [Overview of Corporate Governance](index=76&type=section&id=Explanation%20of%20Corporate%20Governance%20Related%20Matters) During the reporting period, the company strictly adhered to laws and regulations like the Company Law and Securities Law, continuously improving its corporate governance structure, establishing and effectively implementing standardized systems for shareholders, board of directors, supervisory board, information disclosure, and investor relations, ensuring compliant and transparent operations while safeguarding all shareholders' interests - The company's governance structure is sound, operating strictly in accordance with relevant laws and regulations, ensuring the standardized operation of the general meeting of shareholders, board of directors, and supervisory board, and fulfilling information disclosure obligations truthfully, accurately, completely, and timely[199](index=199&type=chunk)[200](index=200&type=chunk) [Financial Report](index=80&type=section&id=Section%2011.%20Financial%20Report) [Audit Report](index=80&type=section&id=Audit%20Report) Zhongtianyun Certified Public Accountants (Special General Partnership) audited the company's 2020 financial statements, issuing a standard unqualified audit opinion, affirming that the financial statements fairly represent the company's financial position and operating results in all material respects, with 'revenue recognition' identified as a key audit matter due to its significance and rapid growth - The auditing firm is Zhongtianyun Certified Public Accountants (Special General Partnership), which issued a standard unqualified audit opinion[209](index=209&type=chunk)[210](index=210&type=chunk) - The key audit matter is 'revenue recognition,' for which auditors performed procedures including internal control testing, analytical procedures, contract examination, cut-off testing, and confirmations[212](index=212&type=chunk)[213](index=213&type=chunk)[214](index=214&type=chunk) [Financial Statements](index=83&type=section&id=Financial%20Statements) This chapter includes the company's 2020 consolidated and parent company balance sheets, income statements, cash flow statements, and statements of changes in owners' equity, detailing the financial position at period-end, full-year operating results, and cash flow [Notes to Financial Statements](index=102&type=section&id=Notes%20to%20Financial%20Statements) Notes to the financial statements provide detailed explanations of financial statement items, including the company's basic information, basis of preparation, significant accounting policies and estimates, and specific notes on major consolidated financial statement items, indicating the company adopted new revenue standards from January 1, 2020, and disclosing related party transactions, share-based payments, and financial instrument risks - The company adopted the Ministry of Finance's revised 'Accounting Standard for Business Enterprises No. 14 – Revenue' starting January 1, 2020[323](index=323&type=chunk) - The company's revenue recognition principles are: domestic sales are recognized upon customer receipt, and export sales are recognized upon obtaining customs declaration forms[314](index=314&type=chunk) - The company faces primary financial risks including market risk (foreign exchange risk, interest rate risk), credit risk, and liquidity risk, and has implemented corresponding management and monitoring measures[487](index=487&type=chunk)[488](index=488&type=chunk) [Reference Documents Catalog](index=205&type=section&id=Section%2012.%20Reference%20Documents%20Catalog) - Reference documents include original financial statements bearing the signatures and seals of the legal representative, chief financial officer, and head of accounting, as well as the original audit report bearing the seal of the accounting firm and signatures and seals of certified public accountants[539](index=539&type=chunk)