一、 决策程序 公司董事会已在本次董事会会议召开之前，向我们提供了《关于 公司 2023 年半年度募集资金存放与实际使用情况的专项报告的议案》 的相关资料，并进行了必要的沟通，符合《公司章程》及相关制度的 规定。 二、 独立意见 我们认为：公司 2023 年半年度募集资金存放与实际使用情况符 合中国证监会、上海证券交易所关于上市公司募集资金存放与使用的 相关规定，不存在募集资金存放和使用违规的情形。公司编制的《山 东步长制药股份有限公司 2023 年半年度募集资金存放与实际使用情 况的专项报告》内容真实、准确、完整，客观地反映了公司募集资金 存放和使用的实际情况，不存在虚假记载、误导性陈述和重大遗漏， 公司募集资金管理不存在违规情形。 （本页以下无正文） 山东步长制药股份有限公司独立董事 关于公司 2023 年半年度募集资金存放与实际使用情况的 专项报告的独立意见 根据《中华人民共和国公司法》、《中华人民共和国证券法》、中 国证监会《上市公司独立董事规则》、《山东步长制药股份有限公司章 程》（以下简称"《公司章程》"）、《山东步长制药股份有限公司独立董 事工作制度》等有关规定，我们作为山东步长制药股份有限公司 ...

证券代码：603858 证券简称：步长制药 公告编号：2023-137 山东步长制药股份有限公司 关于控股子公司药品氟康唑胶囊通过仿制药 一致性评价的公告 本公司董事会及全体董事保证公告内容不存在虚假记载、误导性陈述或 者重大遗漏，并对其内容的真实性、准确性和完整性承担法律责任。 山东步长制药股份有限公司（以下简称"公司"）于近日获悉，公司控股子 公司辽宁奥达制药有限公司（以下简称"辽宁奥达"）收到国家药品监督管理局 核准签发的关于氟康唑胶囊的《药品补充申请批准通知书》。该药品通过仿制药 质量和疗效一致性评价，现就相关情况公告如下： 一、药品基本情况 药品名称：氟康唑胶囊 剂型：胶囊剂 规格：50mg 注册分类：化学药品 申请内容：仿制药质量和疗效一致性评价；变更制剂处方中的辅料；变更制 剂生产工艺；变更生产批量；变更注册标准 上市许可持有人：辽宁奥达制药有限公司 营口市路南高新技术产业开发区 生产企业：辽宁奥达制药有限公司 营口市路南高新技术产业开发区 受理号：CYHB2250142 通知书编号：2023B04136 审批结论：根据《中华人民共和国药品管理法》、《国务院关于改革药品医疗 器械审评审批制度的意 ...

证券代码：603858 证券简称：步长制药 公告编号：2023-135 山东步长制药股份有限公司 关于全资子公司获得药品注册证书的公告 本公司董事会及全体董事保证本公告内容不存在任何虚假记载、误导性陈述 或者重大遗漏，并对其内容的真实性、准确性和完整性承担法律责任。 截至本公告日，公司在普瑞巴林胶囊项目上投入的研发费用约为 1,205.63 万元。 三、风险提示 公司高度重视药品研发，并严格控制药品研发、制造及销售环节的质量及安 全，本次获得普瑞巴林胶囊的《药品注册证书》有利于公司优化产品结构，继续 保持稳定的生产能力，满足市场需求，对公司的未来经营产生积极影响。 由于医药产品具有高科技、高风险、高附加值的特点，药品获得《药品注册 证书》后生产和销售容易受到一些不确定性因素的影响，后续公司将依据要求积 极展开相关工作，敬请广大投资者谨慎决策，注意防范投资风险。 特此公告。 | 药品名称 | 普瑞巴林胶囊 | | --- | --- | | 主要成分 | 普瑞巴林 | | 剂型 | 胶囊剂 | | 规格 | 75mg 150mg | | 申请事项 | 药品注册(境内生产) | | 注册分类 | 化学药品 4 类 ...

Financial Performance - The company's operating revenue for 2022 was approximately ¥14.95 billion, a decrease of 5.15% compared to ¥15.76 billion in 2021[17]. - The net profit attributable to shareholders for 2022 was approximately -¥1.53 billion, representing a decline of 231.63% from a profit of ¥1.16 billion in 2021[17]. - The basic earnings per share for 2022 was -¥1.3831, a decrease of 231.64% compared to ¥1.0507 in 2021[18]. - The company reported a net cash flow from operating activities of approximately ¥2.76 billion, an increase of 108.68% from ¥1.32 billion in 2021[17]. - The total assets at the end of 2022 were approximately ¥21.95 billion, down 7.99% from ¥23.86 billion at the end of 2021[17]. - The company reported a total revenue of CNY 10,107,277,375.36 in the cardiovascular sector, reflecting a year-over-year decrease of 9.43%[76]. - The gross margin for the cardiovascular sector was 78.73%, which decreased by 3.55% compared to the previous year[76]. - The company reported a total revenue of 2.5 billion RMB for the year 2022, representing a year-on-year growth of 15%[111]. - The net profit attributable to shareholders was 500 million RMB, an increase of 10% compared to the previous year[111]. Dividend and Shareholder Returns - The company plans to distribute a cash dividend of 9.60 RMB per 10 shares, totaling 1,061,800,939.20 RMB (including tax) based on a total share capital of 1,106,042,645 shares as of December 31, 2022[4]. - The company has not proposed any capital reserve conversion into share capital or bonus shares in the profit distribution plan[4]. - The total pre-tax remuneration for the board members during the reporting period amounted to CNY 1,517.65 million[109]. Audit and Compliance - The company has received a standard unqualified audit report from the accounting firm Xin Yong Zhong He[3]. - The board of directors has confirmed that all members attended the board meeting, ensuring the integrity of the annual report[3]. - The company has confirmed that there are no instances of more than half of the directors being unable to guarantee the authenticity, accuracy, and completeness of the annual report[5]. - The company has established a governance structure compliant with relevant laws, ensuring independent operation of the board and management without major violations[104]. Research and Development - The company applied for 51 new patents and successfully obtained 56 patents, including 20 invention patents, in 2022, enhancing its innovation capabilities[25]. - The company is developing 12 biological products targeting major diseases, with some already in clinical phases I or III, and has 4 vaccine products on the market, with 5 more in development[25]. - The company has 215 products under research as of December 2022, including 11 traditional Chinese medicines, 182 chemical drugs, 17 biological drugs, and 5 medical devices[98]. - The company invested CNY 512 million in R&D in 2022, a decrease of 19.25% year-over-year, representing 3.43% of total revenue[77]. Market and Product Strategy - The company is focusing on expanding its product line in traditional Chinese medicine and biopharmaceuticals, aiming to become one of China's leading pharmaceutical companies[24]. - The company plans to leverage modern scientific methods to develop new traditional Chinese medicines and enhance the internationalization of its products[31]. - The company is actively pursuing new drug registrations, with 18 products currently under review, including treatments for diabetes and epilepsy[80]. - The company aims to strengthen its marketing capabilities by building its own academic promotion team to improve market access and clinical application[70]. Environmental Responsibility - The company invested CNY 1,053.80 million in environmental protection during the reporting period[148]. - The company has established a comprehensive internal control system, with no significant deficiencies reported during the period[144]. - The total annual emissions of nitrogen oxides were 0.51 tons, with a concentration of 64 mg/m³[151]. - The company reported no exceedances of pollutant discharge standards during the year[152]. Corporate Governance - The company has conducted its annual shareholder meetings in accordance with legal requirements, with all proposed resolutions being approved[107]. - The company has maintained a robust governance structure, ensuring the protection of minority shareholders' rights[139]. - The company has established a salary management system based on fairness, market principles, strategic orientation, and economic principles[135]. Strategic Acquisitions and Investments - The company plans to invest in establishing multiple subsidiaries, including Bichang Health Industry in Xi'an and Changsha Zhongce Biotechnology, to enhance its market competitiveness[25]. - The company has made significant equity investments, including ¥80 million in Shandong Buchang Health Industry and ¥499.80 million in Changsha Zhongce Biotechnology[90]. - The company plans to invest in Aobushandian Technology Co., Ltd., focusing on internet drug trading services[90]. Challenges and Risks - The company has outlined various risks in its operations, including industry and management risks, in the management discussion and analysis section[5]. - The company faces risks related to drug price reductions due to national policies, which may significantly impact bidding and pricing, compressing profit margins[101]. - The company recognizes the competitive pressure from international pharmaceutical giants and aims to enhance its capabilities in R&D, production, and marketing[100].

关于召开 2022 年度业绩说明会的公告 证券代码：603858 证券简称：步长制药 公告编号：2023-079 本公司董事会及全体董事保证本公告内容不存在任何虚假记载、误导性陈述 或者重大遗漏，并对其内容的真实性、准确性和完整性承担法律责任。 山东步长制药股份有限公司 重要内容提示： 山东步长制药股份有限公司（以下简称"公司"）已于 2023 年 4 月 28 日发 布公司《2022 年年度报告（修订版）》，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 2023 年 6 月 1 日上午 11:00-12:00 举行 2022 年度业绩说明会，就投资者关心的问题进行交流。 一、说明会类型 董事会秘书：蒲晓平先生 财务总监：王宝才先生 本次投资者说明会以网络互动形式召开，公司将针对 2022 年度的经营成果 及财务指标的具体情况与投资者进行互动交流和沟通，在信息披露允许的范围内 就投资者普遍关注的问题进行回答。 二、说明会召开的时间、地点 会议召开时间：2023 年 6 月 1 日(星期四)上午 11:00-12:00 会议召开地点：上海证券交易所上证路演中心（网址：htt ...

Financial Performance - The company's operating revenue for 2022 was approximately ¥14.95 billion, a decrease of 5.15% compared to ¥15.76 billion in 2021[16]. - The net profit attributable to shareholders for 2022 was approximately -¥1.66 billion, representing a decline of 228.51% from a profit of ¥1.29 billion in 2021[16]. - The company reported a basic earnings per share of -¥1.4980 for 2022, a decrease of 228.52% from ¥1.1656 in 2021[17]. - The total assets at the end of 2022 were approximately ¥21.95 billion, down 8.48% from ¥23.99 billion at the end of 2021[16]. - The net assets attributable to shareholders decreased by 14.30% to approximately ¥12.36 billion at the end of 2022, compared to ¥14.42 billion at the end of 2021[16]. - The company reported quarterly revenues of ¥3.20 billion, ¥3.90 billion, ¥4.21 billion, and ¥3.65 billion for Q1, Q2, Q3, and Q4 of 2022 respectively[19]. - The net profit attributable to shareholders in Q4 2022 was -¥2.92 billion, significantly impacting the annual performance[19]. - The company reported non-recurring gains and losses totaling CNY 71,863,342.83 in 2022, down from CNY 98,651,544.67 in 2021[20]. Dividend and Shareholder Returns - The company plans to distribute a cash dividend of RMB 9.60 per 10 shares, totaling RMB 1,061,800,939.20, based on a total share capital of 1,106,042,645 shares as of December 31, 2022[4]. - There are no plans for capital reserve conversion into share capital or issuance of bonus shares in the current profit distribution plan[4]. - The company has proposed a three-year shareholder dividend return plan for 2022-2024, indicating a commitment to shareholder value[105]. Audit and Compliance - The company has received a standard unqualified audit report from Xinyong Zhonghe Accounting Firm[3]. - The board of directors has confirmed that all members attended the board meeting, ensuring the integrity of the annual report[2]. - The company has not reported any non-operating fund occupation by controlling shareholders or related parties[5]. - The company has not indicated any significant changes in its operational strategy or market expansion plans in the current report[5]. - The company has not disclosed any violations of decision-making procedures regarding external guarantees[5]. - The company has not faced any penalties from securities regulatory agencies in the past three years[119]. - The company has not reported any significant changes in accounting policies that would impact its financial status or operational results[178]. Research and Development - The company applied for 51 new patents and successfully obtained 56 patents, including 20 invention patents in 2022[25]. - The company is actively expanding its product line, with 12 biological products under development, some of which have entered clinical phases I or III[25]. - The company is focusing on expanding its market presence in the cardiovascular and gynecological medication sectors, which are projected to grow due to increasing demand[31]. - The company is actively engaged in R&D across various fields, including traditional Chinese medicine, chemical drugs, and biological products, with 12 biological products currently in development, some in clinical phases I or III[47]. - The company has established a robust R&D model combining independent innovation and external technical cooperation[76]. - The company is committed to addressing unmet medical needs, particularly in chronic diseases such as Alzheimer's and diabetes[79]. Market and Competitive Landscape - The overall revenue of China's pharmaceutical manufacturing industry in 2021 was CNY 3,243.18 billion, with a year-on-year growth of 19.1%[27]. - The profit of the pharmaceutical manufacturing industry in 2021 reached CNY 687.63 billion, a year-on-year increase of 67.3%[27]. - The company is positioned to benefit from national policies promoting traditional Chinese medicine, which is expected to enhance its market presence internationally[66]. - The company is exploring strategic partnerships to accelerate the development and commercialization of its new products[78]. - The company is focused on modernizing traditional Chinese medicine through the application of advanced production techniques and evidence-based medicine[98]. Environmental and Social Responsibility - The company invested 1,053.80 million RMB in environmental protection during the reporting period[147]. - The company has established a comprehensive internal control system, with no significant deficiencies reported during the period[143]. - The company has achieved administrative approvals for multiple environmental protection projects, ensuring compliance with environmental regulations[156]. - Total charitable contributions amounted to CNY 11.6945 million, with CNY 4.014 million in cash donations and CNY 7.6805 million in material donations[166]. - The company emphasizes its commitment to social responsibility and sustainable development, although it does not publish a separate ESG report[166]. Governance and Management - The company has established a governance structure compliant with relevant laws, ensuring independent operation of the board and management[103]. - The company has maintained a stable leadership team, with most executives serving since at least 2012[109]. - The total remuneration for all directors, supervisors, and senior management in 2022 amounted to 15.1765 million yuan[118]. - The company has a clear succession plan, with several executives holding dual roles in different subsidiaries[109]. - The company has not reported any significant changes in shareholding among its directors and executives during the reporting period[107]. Financial Management and Investments - The company has engaged in non-principal guaranteed floating income financial management, with amounts of 10,000,000.00 RMB, 95,000,000.00 RMB, and 100,000,000.00 RMB from different banks[192]. - The company reported a total of 1.1 billion RMB in structured deposit products, with an average interest rate of 2.85% across various banks[193]. - The company plans to continue expanding its financial product offerings, focusing on structured deposits and derivatives[193]. - The company has successfully recovered all principal amounts from structured deposits, totaling approximately 1.1 billion RMB[193]. - The company has established partnerships with multiple banks to diversify its financial product offerings and enhance market presence[195].

Financial Performance - The company's operating revenue for 2022 was approximately CNY 14.95 billion, a decrease of 5.15% compared to 2021[16]. - The net profit attributable to shareholders for 2022 was approximately -CNY 1.66 billion, representing a decline of 228.51% year-over-year[16]. - The basic earnings per share for 2022 was -CNY 1.4980, a decrease of 228.52% compared to the previous year[17]. - The company reported a net cash flow from operating activities of approximately CNY 2.76 billion, an increase of 108.68% from 2021[16]. - The total assets at the end of 2022 were approximately CNY 21.95 billion, down 8.48% from the previous year[16]. - The company's key products, including Naoxin capsules and Danhong injection, generated a total revenue of CNY 9,481 million in 2022, reflecting their established market presence[23]. - The company reported a total revenue of CNY 10,107,277,375.36 in the cardiovascular sector, reflecting a year-over-year decrease of 9.43%[75]. - The gross margin for the cardiovascular sector was 78.73%, which decreased by 3.55% compared to the previous year[75]. Dividend and Shareholder Returns - The company plans to distribute a cash dividend of RMB 9.60 per 10 shares, totaling RMB 1,061,800,939.20, based on a total share capital of 1,106,042,645 shares as of December 31, 2022[4]. - The board has approved a dividend payout of 0.2 CNY per share, reflecting a commitment to returning value to shareholders[114]. Audit and Compliance - The company has received a standard unqualified audit report from the accounting firm Xin Yong Zhong He[3]. - The board of directors has ensured the authenticity, accuracy, and completeness of the annual report[2]. - The company has not faced any situations where more than half of the directors cannot guarantee the authenticity of the annual report[5]. - The company has not reported any significant changes in accounting policies that would impact its financial status or operational results[178]. - The company has not faced any issues related to non-standard audit opinions from its accounting firm[176]. Research and Development - The company applied for 51 new patents and successfully obtained 56 patents, including 20 invention patents, indicating a strong focus on innovation and R&D[24]. - The company is actively developing 12 biological products targeting major diseases, with some already in clinical phases I or III, showcasing its commitment to advancing in the biopharmaceutical sector[24]. - The company invested CNY 512 million in R&D in 2022, a decrease of 19.25% year-over-year, representing 3.43% of total revenue[76]. - The company has 215 products under research as of December 2022, including 11 traditional Chinese medicines, 182 chemical drugs, 17 biological drugs, and 5 medical devices[96]. Market Strategy and Expansion - The company is focusing on expanding its market presence in the cardiovascular medication sector, which is expected to grow due to the increasing prevalence of related diseases[31]. - The company plans to invest in establishing several subsidiaries, including Bichang Health Industry and Changsha Zhongce Biotechnology, to expand its market presence and enhance competitiveness[24]. - The company is exploring partnerships and collaborations to enhance its research capabilities and expedite the development of new therapies[78]. - The company plans to enhance its production capacity by expanding its production base to meet the growing demand for its products[97]. Environmental and Social Responsibility - The company invested 1,053.80 million RMB in environmental protection during the reporting period[147]. - The company has established a comprehensive internal control system, with no significant deficiencies reported during the period[143]. - Total charitable contributions amounted to CNY 11.6945 million, with CNY 4.014 million in cash donations and CNY 7.6805 million in material donations[166]. - The company has not engaged in poverty alleviation or rural revitalization efforts during the reporting period[168]. Financial Management and Investments - The company has entrusted financial management with a total amount of 4,136,170,000.00 RMB, with an outstanding balance of 400,000,000.00 RMB[191]. - The company reported a total of 1.1 billion RMB in structured deposit products, with an average interest rate of 2.85% across various banks[193]. - The company has diversified its investment strategy by incorporating structured deposits with embedded financial derivatives, improving overall yield[193]. - The company aims to maintain a conservative investment approach while seeking opportunities for growth in the financial market[193]. Governance and Management - The total pre-tax remuneration for the board members during the reporting period amounted to CNY 1,517.65 million[108]. - The company has a total of 13 board members, with 5 independent directors[107]. - The company has undergone changes in its executive team, with some members having left during the reporting period[107]. - The remuneration for directors and senior management is determined based on performance evaluation systems and business innovation capabilities[118].

Financial Performance - The company's operating revenue for Q1 2023 was RMB 3,514,950,369.96, representing a year-on-year increase of 9.83%[4] - The net profit attributable to shareholders was RMB 455,269,033.72, with a growth of 5.91% compared to the previous year[4] - The net profit attributable to shareholders after deducting non-recurring gains and losses was RMB 376,959,406.85, showing a significant increase of 34.80%[4] - Total revenue for Q1 2023 reached CNY 3,514,950,369.96, an increase of 9.79% compared to CNY 3,200,498,122.98 in Q1 2022[14] - Net profit for Q1 2023 was CNY 435,939,044.03, compared to CNY 410,806,616.97 in Q1 2022, indicating an increase of 6.09%[16] - Basic earnings per share for Q1 2023 were CNY 0.4116, compared to CNY 0.3886 in Q1 2022, reflecting an increase of 5.15%[16] Cash Flow - The net cash flow from operating activities was negative at RMB -87,014,604.71, a decline of 123.21% year-on-year[4] - In Q1 2023, the net cash flow from operating activities was -87,014,604.71, a significant decrease compared to 374,953,344.07 in Q1 2022[18] - Total cash inflow from operating activities was 3,411,358,272.84, down from 3,530,450,625.36 in the previous year, reflecting a decline of approximately 3.4%[18] - Cash outflow from operating activities increased to 3,498,372,877.55, compared to 3,155,497,281.29 in Q1 2022, marking an increase of about 10.9%[18] - The cash flow from operating activities showed a negative trend, indicating potential challenges in revenue generation and cost management[18] Assets and Liabilities - Total assets at the end of the reporting period were RMB 22,271,783,971.82, reflecting a 1.46% increase from the end of the previous year[5] - The company's total assets as of March 31, 2023, amounted to CNY 22,271,783,971.82, up from CNY 21,951,881,623.86 at the end of 2022[13] - Current assets totaled CNY 9,259,730,285.58, an increase of 2.97% from CNY 8,991,494,886.64 at the end of 2022[13] - The company's total liabilities decreased to CNY 9,531,548,863.51 from CNY 9,676,829,976.05, a reduction of 1.50%[13] - The company reported a decrease in contract liabilities to CNY 275,774,012.34 from CNY 376,521,161.31, a decline of 26.74%[13] Shareholder Information - The number of ordinary shareholders at the end of the reporting period was 72,160[8] - The largest shareholder, Bichang (Hong Kong) Holdings Limited, holds 490,957,202 shares, accounting for 44.39% of the total shares[9] Government Subsidies and R&D - The company received government subsidies amounting to RMB 101,936,895.00, which are closely related to its normal business operations[6] - Research and development expenses for Q1 2023 were CNY 36,838,151.85, down from CNY 46,066,527.20 in Q1 2022, a decrease of 20.06%[16] Cash Flow from Investing and Financing Activities - The net cash flow from investing activities was -318,401,004.85, worsening from -146,993,360.40 in the same quarter last year[18] - Cash inflow from investing activities totaled 19,278,470.42, a significant increase from 5,193,438.24 in Q1 2022[18] - Cash outflow from financing activities was 675,587,797.54, down from 1,240,142,706.01 in Q1 2022, indicating a reduction of approximately 45.6%[18] - The net cash flow from financing activities was -134,225,310.34, slightly worse than -113,329,667.90 in the previous year[19] - The ending cash and cash equivalents balance was 1,581,662,776.52, an increase from 1,477,898,809.50 in Q1 2022[19] - The company reported a total cash inflow from financing activities of 541,362,487.20, down from 1,126,813,038.11 in the previous year[18]

[Definitions](index=4&type=section&id=%E7%AC%AC%E4%B8%80%E8%8A%82%20%E9%87%8A%E4%B9%89) This section provides definitions of key terms used in the report [Company Profile and Key Financial Indicators](index=5&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 basic information and key financial performance metrics for the reporting period [Company Information](index=5&type=section&id=%E5%85%AC%E5%8F%B8%E4%BF%A1%E6%81%AF) This chapter provides the company's basic business registration details, including its Chinese and English names, legal representative, registered address, and contact information - The company's full name is Shandong Buchang Pharmaceuticals Co., Ltd., with stock code **603858**, and its legal representative is Zhao Tao[11](index=11&type=chunk)[15](index=15&type=chunk) [Key Accounting Data and Financial Indicators](index=6&type=section&id=%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) During the reporting period, the company's operating revenue decreased by **3.90%** year-on-year, and net profit attributable to shareholders decreased by **13.50%**, while net cash flow from operating activities significantly increased by **148.56%**, indicating strong cash recovery capability Key Financial Performance Indicators | Indicator | Current Period (Jan-Jun) | Prior Period | YoY Change (%) | | :--- | :--- | :--- | :--- | | **Operating Revenue** | 7.098 billion yuan | 7.386 billion yuan | -3.90% | | **Net Profit Attributable to Shareholders** | 818 million yuan | 946 million yuan | -13.50% | | **Net Profit Attributable to Shareholders After Non-Recurring Items** | 644 million yuan | 813 million yuan | -20.85% | | **Net Cash Flow from Operating Activities** | 1.425 billion yuan | 573 million yuan | 148.56% | | **Basic Earnings Per Share (yuan/share)** | 0.7399 | 0.8554 | -13.50% | | **Weighted Average Return on Net Assets (%)** | 5.52% | 6.67% | Decrease of 1.15 percentage points | [Non-Recurring Gains and Losses Items and Amounts](index=6&type=section&id=%E9%9D%9E%E7%BB%8F%E5%B8%B8%E6%80%A7%E6%8D%9F%E7%9B%8A%E9%A1%B9%E7%9B%AE%E5%92%8C%E9%87%91%E9%A2%9D) During the reporting period, the company's total non-recurring gains and losses amounted to **175 million yuan**, primarily from government grants recognized in current profit or loss, totaling **229 million yuan** Non-Recurring Gains and Losses | Non-Recurring Gain/Loss Item | Amount (yuan) | | :--- | :--- | | Gains/Losses from Disposal of Non-Current Assets | -563,556.84 | | Government Grants Recognized in Current Profit or Loss | 228,951,904.01 | | Net Other Non-Operating Income and Expenses | -5,202,565.98 | | Income Tax Impact | -45,621,731.46 | | Impact on Minority Interests (After Tax) | -2,974,308.22 | | **Total** | **174,589,741.51** | [Management Discussion and Analysis](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 provides management's discussion and analysis of the company's operations, financial condition, and industry trends [Explanation of Industry and Main Business During the Reporting Period](index=7&type=section&id=%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 primarily engages in the R&D, production, and sales of traditional Chinese medicine, focusing on cardiovascular and cerebrovascular diseases while expanding into biopharmaceuticals and vaccines. Core products include Naoxintong Capsule and Wenxin Granule. During the reporting period, China's pharmaceutical manufacturing industry showed restorative growth, with biological drug manufacturing growing fastest, and the traditional Chinese medicine sector maintaining steady growth supported by policies. The cardiovascular and cerebrovascular and gynecological medication markets are the company's main strongholds, with market sizes continuously expanding - The company's core business is traditional Chinese medicine (TCM), based on the 'Brain-Heart Co-treatment Theory', focusing on cardiovascular and cerebrovascular diseases and gynecological medications. Six core products (Naoxintong Capsule, Wenxin Granule, Danhong Injection, Guhong Injection, Compound Brain Peptide Ganglioside Injection, Compound Qupeptide Injection) generated a combined revenue of **3.973 billion yuan** in the first half of 2022[22](index=22&type=chunk) Pharmaceutical Manufacturing Sub-Industry Revenue in 2021 | Pharmaceutical Manufacturing Sub-Industry | 2021 Operating Revenue (billion yuan) | YoY Growth (%) | | :--- | :--- | :--- | | Biological Drug Manufacturing | 59.181 billion yuan | 113.8% | | Traditional Chinese Medicine Production | 48.622 billion yuan | 11.9% | | Chemical Pharmaceutical Preparation Manufacturing | 84.087 billion yuan | 8.1% | | **Total** | **324.318 billion yuan** | **19.1%** | - Cardiovascular and cerebrovascular disease medications represent the largest category in the TCM market, accounting for **33.29%** of market share in 2021. The gynecological medication market size is also expanding with increased female self-care awareness[31](index=31&type=chunk)[32](index=32&type=chunk)[33](index=33&type=chunk) [Analysis of Core Competencies During the Reporting Period](index=11&type=section&id=%E6%8A%A5%E5%91%8A%E6%9C%9F%E5%86%85%E6%A0%B8%E5%BF%83%E7%AB%9E%E4%BA%89%E5%8A%9B%E5%88%86%E6%9E%90) The company's core competitiveness is multifaceted: product advantages include four well-known exclusive varieties like Naoxintong Capsule, leading in cardiovascular and cerebrovascular traditional Chinese medicine market share; patent advantages include **403** valid patents; scale advantages position it fourth among China's top 100 traditional Chinese medicine enterprises; additionally, significant advantages in brand, marketing, R&D, management, and team form a comprehensive competitive barrier - The company's four core products (Naoxintong Capsule, Wenxin Granule, Danhong Injection, Guhong Injection) achieved combined sales revenue of **3.43 billion yuan** in the first half of 2022. Among these, Naoxintong, Wenxin, and Danhong, all exclusive varieties, ranked among the top 20 in the cardiovascular and cerebrovascular TCM market share in 2021[37](index=37&type=chunk)[38](index=38&type=chunk) - As of the end of the reporting period, the company held **403** valid patents, with most leading products being exclusive varieties. Additionally, the company has **221** products under research and development, covering traditional Chinese medicine, chemical drugs, and biological drugs[41](index=41&type=chunk) - The company's R&D strategy covers three major areas: traditional Chinese medicine, chemical drugs, and biological drugs. In biological drugs, **16** products are under development, with some having entered Phase II or Phase III clinical trials, covering oncology and osteoporosis[46](index=46&type=chunk) - The company's core marketing advantage lies in specialized academic promotion guided by the 'Brain-Heart Co-treatment Theory', converting academic strengths into market advantages through academic exchanges and evidence-based medicine research[45](index=45&type=chunk) [Discussion and Analysis of Operations](index=15&type=section&id=%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 the first half of 2022, the company achieved operating revenue of **7.098 billion yuan**, a **3.90%** year-on-year decrease, and net profit attributable to shareholders of **818 million yuan**, a **13.50%** year-on-year decrease. The company continued its strategy of 'focusing on major industries and cultivating major varieties', maintaining stable core product revenue, actively developing various types of drugs, and improving its comprehensive health industry chain layout, with **20** new patent applications and **28** granted patents during the reporting period Key Financial Indicators (Jan-Jun 2022) | Financial Indicator | Jan-Jun 2022 | YoY Change | | :--- | :--- | :--- | | Operating Revenue | 7.098 billion yuan | -3.90% | | Net Profit Attributable to Shareholders | 818 million yuan | -13.50% | - The company's six core products (Naoxintong Capsule, Wenxin Granule, Danhong Injection, Guhong Injection, Compound Brain Peptide Ganglioside Injection, Compound Qupeptide Injection) generated a combined revenue of **3.973 billion yuan** in the first half of the year, demonstrating a prominent market position[51](index=51&type=chunk) - The company is advancing R&D in traditional Chinese medicine, chemical drugs, biological drugs, and vaccines. In biological drugs, **16** products are under development, with some in Phase II-III clinical trials; in vaccines, **4** products are already available, and **5** are under development[53](index=53&type=chunk) [Main Business Analysis](index=16&type=section&id=%E4%B8%BB%E8%90%A5%E4%B8%9A%E5%8A%A1%E5%88%86%E6%9E%90) During the reporting period, the company's operating cost increased by **18.53%** year-on-year, while R&D expenses significantly decreased by **41.79%**, primarily due to reduced expensed R&D expenditures. Net cash flow from operating activities increased by **148.56%** year-on-year, mainly benefiting from reduced procurement and selling expenses Key Income Statement Items | Account | Current Period (billion yuan) | Prior Period (billion yuan) | Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 7.098 billion yuan | 7.386 billion yuan | -3.90 | | Operating Cost | 2.303 billion yuan | 1.943 billion yuan | 18.53 | | Selling Expenses | 3.331 billion yuan | 3.722 billion yuan | -10.51 | | R&D Expenses | 99.6 million yuan | 171 million yuan | -41.79 | | Net Cash Flow from Operating Activities | 1.425 billion yuan | 573 million yuan | 148.56 | [Analysis of Assets and Liabilities](index=16&type=section&id=%E8%B5%84%E4%BA%A7%E3%80%81%E8%B4%9F%E5%80%BA%E6%83%85%E5%86%B5%E5%88%86%E6%9E%90) As of the end of the reporting period, the company's total assets were **24.072 billion yuan**, a slight increase of **0.36%** from the beginning of the period. The asset structure changed, with cash and cash equivalents significantly increasing by **48.71%** due to increased operating cash flow, and financial assets held for trading growing by **63.15%**; on the liability side, short-term borrowings significantly decreased by **46.37%**, while non-current liabilities due within one year notably increased by **134.31%** Key Balance Sheet Items and Changes | Item Name | Period-End Balance (billion yuan) | Change from Prior Year-End (%) | Primary Reason | | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 1.811 billion yuan | 48.71% | Increase in net cash flow from operating activities | | Financial Assets Held for Trading | 813 million yuan | 63.15% | Increase in wealth management product balance | | Other Receivables | 420 million yuan | 109.17% | Increase in government grants receivable | | Short-term Borrowings | 695 million yuan | -46.37% | Decrease in bank short-term borrowings | | Non-current Liabilities Due Within One Year | 755 million yuan | 134.31% | Increase in long-term borrowings due within one year | [Analysis of Investment Status](index=17&type=section&id=%E6%8A%95%E8%B5%84%E7%8A%B6%E5%86%B5%E5%88%86%E6%9E%90) During the reporting period, the company actively engaged in external equity investments, establishing several new subsidiaries including Buchang Health Industry (Xi'an) Co., Ltd. and Changsha Zhongce Biotechnology, and participating in the subscription of investment fund shares such as Suzhou Yuanhe Puhua to optimize its industrial layout - The company invested in establishing several subsidiaries, including Buchang Health Industry (Xi'an), Changsha Zhongce Biotechnology, and Buchang (Beijing) Property Management Co., Ltd[57](index=57&type=chunk)[58](index=58&type=chunk) - The company, as a limited partner, plans to subscribe for **50 million yuan** in Suzhou Yuanhe Puhua partnership shares and **100 million yuan** in Hainan Sanya Yuhai partnership shares[59](index=59&type=chunk)[60](index=60&type=chunk) [Analysis of Major Holding and Invested Companies](index=19&type=section&id=%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) During the reporting period, three major wholly-owned subsidiaries—Shaanxi Buchang Pharmaceutical, Tonghua Guhong Pharmaceutical, and Shandong Danhong Pharmaceutical—all achieved profitability, with Shaanxi Buchang Pharmaceutical reporting the highest net profit of **266 million yuan** Analysis of Major Holding and Invested Companies | Company Name | Net Assets (million yuan) | Net Profit (million yuan) | Main Business Revenue (million yuan) | | :--- | :--- | :--- | :--- | | Shaanxi Buchang Pharmaceutical | 971.3558 million yuan | 265.8133 million yuan | 1.3600819 billion yuan | | Tonghua Guhong Pharmaceutical | 321.0703 million yuan | 187.8676 million yuan | 290.5811 million yuan | | Shandong Danhong Pharmaceutical | 128.6331 million yuan | 129.32 million yuan | 786.0119 million yuan | [Potential Risks](index=19&type=section&id=%E5%8F%AF%E8%83%BD%E9%9D%A2%E5%AF%B9%E7%9A%84%E9%A3%8E%E9%99%A9) The company faces multiple risks, including competition from international pharmaceutical giants, the long-term nature of traditional Chinese medicine modernization, management challenges from company expansion, risks associated with high product concentration, drug price reduction policy risks, and significant goodwill impairment risk arising from acquisitions (goodwill amounting to **4.997 billion yuan**) - Product concentration risk: Five exclusive varieties, including Naoxintong Capsule and Wenxin Granule, contribute significantly to the company's performance, and any major change in their production or sales could substantially impact results[63](index=63&type=chunk) - Policy risk: With the promotion of medical insurance cost control and centralized volume-based procurement policies, the company faces the risk of losing drug tenders or significant price reductions[64](index=64&type=chunk) - Goodwill impairment risk: High goodwill of **4.997 billion yuan** resulted from the acquisitions of Jilin Tiancheng Pharmaceutical and Tonghua Guhong Pharmaceutical; if future operations do not meet expectations, there is a risk of significant impairment, which would directly affect the company's current profit[68](index=68&type=chunk) [Corporate Governance](index=22&type=section&id=%E7%AC%AC%E5%9B%9B%E8%8A%82%20%E5%85%AC%E5%8F%B8%E6%B2%BB%E7%90%86) This section outlines the company's corporate governance structure and practices, including shareholder meetings and management changes [Overview of Shareholders' Meeting](index=22&type=section&id=%E8%82%A1%E4%B8%9C%E5%A4%A7%E4%BC%9A%E6%83%85%E5%86%B5%E7%AE%80%E4%BB%8B) During the reporting period, the company held its 2021 Annual General Meeting of Shareholders on **June 28, 2022** - The company held its 2021 Annual General Meeting of Shareholders on **June 28, 2022**[69](index=69&type=chunk) [Changes in Company Directors, Supervisors, and Senior Management](index=22&type=section&id=%E5%85%AC%E5%8F%B8%E8%91%A3%E4%BA%8B%E3%80%81%E7%9B%91%E4%BA%8B%E3%80%81%E9%AB%98%E7%BA%A7%E7%AE%A1%E7%90%86%E4%BA%BA%E5%91%98%E5%8F%98%E5%8A%A8%E6%83%85%E5%86%B5) During the reporting period, the company's senior management team underwent changes, with Vice President Liu Luxiang and Director and Vice President Li Weijun resigning due to personal reasons. Concurrently, Wang Baocai was elected as a non-independent director of the Fourth Board of Directors - Vice President Liu Luxiang and Director and Vice President Li Weijun resigned[70](index=70&type=chunk)[71](index=71&type=chunk) - Wang Baocai was elected as a non-independent director of the company's Fourth Board of Directors[71](index=71&type=chunk) [Environmental and Social Responsibility](index=23&type=section&id=%E7%AC%AC%E4%BA%94%E8%8A%82%20%E7%8E%AF%E5%A2%83%E4%B8%8E%E7%A4%BE%E4%BC%9A%E8%B4%A3%E4%BB%BB) This section details the company's environmental protection measures and social responsibility initiatives [Environmental Information](index=23&type=section&id=%E7%8E%AF%E5%A2%83%E4%BF%A1%E6%81%AF%E6%83%85%E5%86%B5) The company and its major subsidiaries, as key pollutant-discharging entities, disclosed detailed information on emissions, construction and operation of pollution control facilities, environmental impact assessment permits, and emergency plans. All subsidiaries have established environmental management systems, with wastewater and exhaust gas treated to meet discharge standards, and regular self-monitoring conducted; no administrative penalties for environmental issues were received during the reporting period - The company and its major subsidiaries, including Shandong Kang'ai Pharmaceutical, Baoding Tianhao Pharmaceutical, and Liaoning Aoda Pharmaceutical, are all listed as key pollutant-discharging entities[73](index=73&type=chunk) - All subsidiaries have constructed wastewater treatment plants and exhaust gas treatment facilities, with pollutant discharge concentrations and total amounts complying with national and local standards, and no exceedances were reported during the period[74](index=74&type=chunk)[76](index=76&type=chunk)[78](index=78&type=chunk) - All subsidiaries strictly implement the 'Three Simultaneities' environmental protection system for construction projects, have developed and filed emergency response plans for environmental incidents, and regularly organize training and drills[83](index=83&type=chunk)[86](index=86&type=chunk) [Significant Matters](index=34&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 covers significant events and matters affecting the company, including commitments, related party transactions, and major contracts [Fulfillment of Commitments](index=34&type=section&id=%E6%89%BF%E8%AF%BA%E4%BA%8B%E9%A1%B9%E5%B1%A5%E8%A1%8C%E6%83%85%E5%86%B5) During the reporting period, the company's controlling shareholder, actual controller, and other related parties strictly fulfilled long-term effective commitments made during the initial public offering, such as avoiding horizontal competition, with no breaches observed - The company's controlling shareholder Buchang (Hong Kong), actual controller Zhao Tao, and other shareholders holding over **5%** equity, including Shoucheng International (Hong Kong), have all issued long-term valid 'Commitments to Avoid Horizontal Competition' and strictly fulfilled them during the reporting period[96](index=96&type=chunk)[97](index=97&type=chunk) [Significant Related Party Transactions](index=38&type=section&id=%E9%87%8D%E5%A4%A7%E5%85%B3%E8%81%94%E4%BA%A4%E6%98%93) The company disclosed its estimated routine related party transactions for 2022, primarily involving the purchase of goods and acceptance of services from related parties. During the reporting period, significant purchases were made from Shaanxi Yusheng Printing Co., Ltd., totaling **38.5265 million yuan**. Additionally, the company plans to jointly invest with related parties to establish a controlling subsidiary, Aobu Lightning Technology Co., Ltd Major Related Party Transactions | Related Party | Related Party Transaction Content | 2022 Estimated (million yuan) | Current Period Amount (million yuan) | | :--- | :--- | :--- | :--- | | Shaanxi Yusheng Printing Co., Ltd. | Purchase of Goods, Acceptance of Services, etc. | 360 million yuan | 38.5265 million yuan | | Guizhou Mingshuai Liquor Sales Co., Ltd. | Purchase of Goods, Acceptance of Services, etc. | 120 million yuan | 7.7094 million yuan | | Jilin Sichang Pharmaceutical Co., Ltd. | Purchase of Goods, Acceptance of Services, etc. | 100 million yuan | 0 | | Shaanxi International Business Institute | Joint Application for Science and Technology Projects | 200 million yuan | 0 | - The company plans to invest **1.56 million yuan** with related parties to jointly establish a controlling subsidiary, Aobu Lightning Technology Co., Ltd., with a **78%** equity stake[109](index=109&type=chunk) [Significant Contracts and Their Performance](index=40&type=section&id=%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) During the reporting period, the company had no external guarantees. Guarantees for subsidiaries were performed normally, with a total outstanding guarantee balance of **1.143 billion yuan** at period-end, representing **7.70%** of the company's net assets. Of this, debt guarantees provided to guaranteed parties with a debt-to-asset ratio exceeding **70%** amounted to **1.014 billion yuan** Guarantee Information | Guarantee Situation | Amount (million yuan) | | :--- | :--- | | Total Guarantees Provided to Subsidiaries During the Period | 415 million yuan | | Total Guarantees Provided to Subsidiaries at Period-End | 1.1429629 billion yuan | | Proportion of Total Guarantees to Company's Net Assets (%) | 7.70% | | Debt Guarantees Provided to Guaranteed Parties with Debt-to-Asset Ratio Exceeding 70% | 1.0137779 billion yuan | [Changes in Share Capital and Shareholder Information](index=42&type=section&id=%E7%AC%AC%E4%B8%83%E8%8A%82%20%E8%82%A1%E4%BB%BD%E5%8F%98%E5%8A%A8%E5%8F%8A%E8%82%A1%E4%B8%9C%E6%83%85%E5%86%B5) This section provides information on changes in the company's share capital and details of its shareholders [Changes in Share Capital](index=42&type=section&id=%E8%82%A1%E6%9C%AC%E5%8F%98%E5%8A%A8%E6%83%85%E5%86%B5) During the reporting period, there were no changes in the company's total share capital or share structure - During the reporting period, there were no changes in the company's total share capital or share structure[113](index=113&type=chunk) [Shareholder Information](index=42&type=section&id=%E8%82%A1%E4%B8%9C%E6%83%85%E5%86%B5) As of the end of the reporting period, the company had **82,919** common shareholders. The top two shareholders are Buchang (Hong Kong) Holdings Limited and Shoucheng International (Hong Kong) Limited, holding **43.01%** and **7.25%** respectively, both ultimately controlled by Zhao Tao Top Shareholders | Shareholder Name | Shares Held at Period-End | Proportion (%) | | :--- | :--- | :--- | | Buchang (Hong Kong) Holdings Limited | 490,957,202 | 43.01 | | Shoucheng International (Hong Kong) Limited | 82,742,400 | 7.25 | | Shandong Buchang Pharmaceuticals Co., Ltd. Repurchase Special Account | 35,537,965 | 3.11 | | Hong Kong Securities Clearing Company Limited | 25,877,300 | 2.27 | | Liu Shaoluan | 24,520,000 | 2.15 | - The actual controller of controlling shareholder Buchang (Hong Kong) and second largest shareholder Shoucheng International (Hong Kong) is Zhao Tao[116](index=116&type=chunk) [Preferred Shares Related Information](index=44&type=section&id=%E7%AC%AC%E5%85%AB%E8%8A%82%20%E4%BC%98%E5%85%88%E8%82%A1%E7%9B%B8%E5%85%B3%E6%83%85%E5%86%B5) This section addresses any matters related to the company's preferred shares [Preferred Shares Related Information](index=44&type=section&id=%E4%BC%98%E5%85%88%E8%82%A1%E7%9B%B8%E5%85%B3%E6%83%85%E5%86%B5) During the reporting period, there were no preferred shares related matters for the company - Not applicable[119](index=119&type=chunk) [Bonds Related Information](index=44&type=section&id=%E7%AC%AC%E4%B9%9D%E8%8A%82%20%E5%80%BA%E5%88%B8%E7%9B%B8%E5%85%B3%E6%83%85%E5%86%B5) This section addresses any matters related to the company's bonds and debt financing instruments [Bonds Related Information](index=44&type=section&id=%E5%80%BA%E5%88%B8%E7%9B%B8%E5%85%B3%E6%83%85%E5%86%B5) During the reporting period, the company had no corporate bonds, company bonds, non-financial enterprise debt financing instruments, or convertible corporate bonds related matters - Not applicable[119](index=119&type=chunk) [Financial Statements](index=45&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 the company's financial statements, including accounting policies, notes to financial items, and related party transactions [Company Overview](index=57&type=section&id=%E5%85%AC%E5%8F%B8%E5%9F%BA%E6%9C%AC%E6%83%85%E5%86%B5) This section details the company's historical evolution, from its establishment as a domestic limited liability company in **2001**, through multiple equity transfers, capital increases, and changes in enterprise type, culminating in its listing on the Shanghai Stock Exchange in **2016**. The company operates in the pharmaceutical manufacturing industry, with its main business encompassing the production of various drug formulations such as tablets, capsules, and granules - The company was listed on the Shanghai Stock Exchange on **November 18, 2016**, with stock code **603858**[150](index=150&type=chunk) - As of the end of the reporting period, the company's consolidated financial statements covered a total of **59** subsidiaries and sub-subsidiaries, with **1** new addition during the period[151](index=151&type=chunk) [Basis of Financial Statement Preparation](index=61&type=section&id=%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8%E7%9A%84%E7%BC%96%E5%88%B6%E5%9F%BA%E7%A1%80) The company's financial statements are prepared on a going concern basis, in accordance with the 'Accounting Standards for Business Enterprises' and related regulations issued by the Ministry of Finance, accurately and completely reflecting the company's financial position and operating results - The financial statements are prepared on a going concern basis, and in accordance with the 'Accounting Standards for Business Enterprises'[152](index=152&type=chunk)[153](index=153&type=chunk) [Significant Accounting Policies and Estimates](index=61&type=section&id=%E9%87%8D%E8%A6%81%E4%BC%9A%E8%AE%A1%E6%94%BF%E7%AD%96%E5%8F%8A%E4%BC%9A%E8%AE%A1%E4%BC%B0%E8%AE%A1) This chapter elaborates on the company's significant accounting policies and estimates, covering business combinations, consolidated financial statement preparation, financial instruments, inventories, long-term equity investments, fixed assets, intangible assets, revenue recognition, and government grants, providing a foundation for understanding the financial statements. During the reporting period, the company changed the depreciation period for buildings and structures, which are fixed assets, as an accounting estimate change - Revenue recognition policy: The company recognizes revenue when customers obtain control of the related goods or services, typically considering product pickup as the completion of performance obligations[202](index=202&type=chunk) - R&D expenditure capitalization policy: Expenditures incurred after obtaining the National Medical Products Administration's 'Clinical Trial Approval' until obtaining the new drug certificate, and meeting capitalization conditions, are recognized as intangible assets[191](index=191&type=chunk) - Change in accounting estimates: To more fairly reflect asset conditions, the company changed the depreciation period for buildings and structures, applying the prospective method, effective **January 1, 2022**. This change is expected to reduce depreciation expense by approximately **5.23 million yuan** and increase total profit by approximately **5.23 million yuan** in 2022[214](index=214&type=chunk) [Taxation](index=83&type=section&id=%E7%A8%8E%E9%A1%B9) The company's main taxes include VAT and corporate income tax. The parent company's corporate income tax rate is **25%**, but several subsidiaries enjoy preferential tax rates of **15%** or lower due to their high-tech enterprise qualifications, Western Development policy eligibility, or status as small and micro enterprises - Multiple subsidiaries enjoy tax incentives: Shandong Danhong Pharmaceutical, Liaoning Aoda Pharmaceutical, Tonghua Guhong Pharmaceutical, Jilin Tiancheng Pharmaceutical, and Baoding Tianhao Pharmaceutical are high-tech enterprises, subject to a reduced corporate income tax rate of **15%**[219](index=219&type=chunk)[220](index=220&type=chunk) - Shaanxi Buchang Pharmaceutical and Qionglai Tianyin Pharmaceutical enjoy Western Development tax incentives, subject to a reduced corporate income tax rate of **15%**[220](index=220&type=chunk) - Additionally, several other subsidiaries qualify as small and micro enterprises, enjoying corresponding income tax preferential policies[221](index=221&type=chunk) [Notes to Consolidated Financial Statements](index=85&type=section&id=%E5%90%88%E5%B9%B6%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8%E9%A1%B9%E7%9B%AE%E6%89%B9%E6%B3%A8) This chapter provides detailed notes on key items in the consolidated financial statements. Cash and cash equivalents at period-end totaled **1.811 billion yuan**, including **44.74 million yuan** in restricted funds. Inventories had a book value of **3.092 billion yuan** at period-end, a decrease from the beginning of the period. Goodwill had an original book value of **5.147 billion yuan**, with no changes. During the reporting period, the company received total government grants of **229 million yuan** Consolidated Balance Sheet Key Items | Balance Sheet Item | Period-End Balance (billion yuan) | Beginning Balance (billion yuan) | | :--- | :--- | :--- | | Cash and Cash Equivalents | 1.811 billion yuan | 1.218 billion yuan | | Accounts Receivable | 1.429 billion yuan | 1.531 billion yuan | | Inventories | 3.092 billion yuan | 3.834 billion yuan | | Construction in Progress | 3.082 billion yuan | 2.821 billion yuan | | Goodwill | 5.133 billion yuan | 5.133 billion yuan | | Short-term Borrowings | 695 million yuan | 1.295 billion yuan | | Accounts Payable | 2.004 billion yuan | 2.433 billion yuan | - As of the end of the period, the total book value of assets with restricted ownership or use rights was **1.014 billion yuan**, primarily including cash and cash equivalents for bill deposits, accounts receivable financing pledged for loans, fixed assets, intangible assets, construction in progress, and long-term equity investments[352](index=352&type=chunk) - During the reporting period, the total government grants recognized in current profit or loss amounted to **229 million yuan**, mainly enterprise support funds from Mehekou City Finance Bureau and other sources[326](index=326&type=chunk)[328](index=328&type=chunk)[329](index=329&type=chunk) [Related Parties and Related Party Transactions](index=143&type=section&id=%E5%85%B3%E8%81%94%E6%96%B9%E5%8F%8A%E5%85%B3%E8%81%94%E4%BA%A4%E6%98%93) The company's controlling shareholder is Buchang (Hong Kong) Holdings Limited, with Zhao Tao as the ultimate controlling party. During the reporting period, the company engaged in transactions such as purchasing and selling goods and accepting services with multiple related parties, with the largest procurement amount from Shaanxi Yusheng Printing Co., Ltd. Additionally, the company provided financing guarantees for several subsidiaries and borrowed **60 million yuan** from related party Jilin Sichang Pharmaceutical Co., Ltd - Current period related party procurement transactions amounted to **47.9055 million yuan**, primarily for purchasing packaging materials from Shaanxi Yusheng Printing Co., Ltd., totaling **38.5265 million yuan**[389](index=389&type=chunk) - The company provided loan guarantees for several subsidiaries, including Tonghua Guhong Pharmaceutical and Sichuan Luzhou Buchang Biopharmaceutical[391](index=391&type=chunk) - Subsidiary Tonghua Tianshi Pharmaceutical borrowed **60 million yuan** from related party Jilin Sichang Pharmaceutical Co., Ltd[395](index=395&type=chunk)