[Important Notice, Table of Contents, and Definitions](index=2&type=section&id=Item%201%20Important%20Notice%2C%20Table%20of%20Contents%2C%20and%20Definitions) [Important Notice and Risk Disclosure](index=2&type=section&id=1.1%20Important%20Notice%20and%20Risk%20Disclosure) This section highlights the annual report's accuracy and completeness, warning investors of risks including policy changes, market fluctuations, rising costs, depreciation, environmental issues, drug quality, and goodwill impairment, while disclosing the 2019 profit distribution plan - The company's Board of Directors, Supervisory Board, and senior management guarantee the annual report's truthfulness, accuracy, and completeness, free from false records, misleading statements, or major omissions[2](index=2&type=chunk) - The company may face risks from industry policy changes, market fluctuations, rising production costs, profit decline due to increased fixed asset depreciation, environmental concerns, drug quality issues, and impairment of assets like goodwill[2](index=2&type=chunk) - The profit distribution plan approved by the Board of Directors is to distribute a cash dividend of **4.25 yuan (tax inclusive) per 10 shares** to all shareholders, with no bonus shares or capital reserve conversions[2](index=2&type=chunk) [Table of Contents and Definitions](index=3&type=section&id=1.2%20Table%20of%20Contents%20and%20Definitions) This section provides a detailed table of contents for easy navigation and defines common terms to ensure accurate and consistent understanding of the report's information - The report's table of contents includes 13 main chapters such as Company Profile, Business Overview, Management Discussion and Analysis, Significant Events, Share Changes and Shareholder Information, and Financial Report[3](index=3&type=chunk) - The definitions section clarifies terms for entities like 'Company,' 'This Company,' 'Kelun Pharmaceutical,' and industry-specific terms such as 'Infusion,' 'GMP,' 'Essential Drugs,' and 'OTC'[4](index=4&type=chunk)[5](index=5&type=chunk)[6](index=6&type=chunk) [Company Profile and Key Financial Indicators](index=7&type=section&id=Item%202%20Company%20Profile%20and%20Key%20Financial%20Indicators) [Company Information and Contact Details](index=7&type=section&id=2.1%20Company%20Information%20and%20Contact%20Details) This section provides the company's basic registration details, stock code, legal representative, addresses, website, email, and contact information for key personnel, ensuring transparent disclosure Company Basic Information | Indicator | Content | | :--- | :--- | | Stock Abbreviation | Kelun Pharmaceutical | | Stock Code | 002422 | | Stock Exchange | Shenzhen Stock Exchange | | Company Chinese Name | Sichuan Kelun Pharmaceutical Co., Ltd. | | Legal Representative | Liu Gexin | | Registered Address | South 2nd Road, Industrial Development Zone, Xindu Satellite City, Chengdu | | Office Address | No. 36 Baihua West Road, Qingyang District, Chengdu | Contact Persons and Details | Position | Name | Contact Address | Phone | Fax | Email | | :--- | :--- | :--- | :--- | :--- | :--- | | Board Secretary | Feng Hao | No. 36 Baihua West Road, Qingyang District, Chengdu | (028) 82860516 / 82860678 | (028) 86132515 | fengh@kelun.com | | Securities Affairs Representative | Huang Xin | No. 36 Baihua West Road, Qingyang District, Chengdu | (028) 82860516 / 82860678 | (028) 86132515 | sherry@kelun.com | [Information Disclosure and Registration Changes](index=7&type=section&id=2.2%20Information%20Disclosure%20and%20Registration%20Changes) This section specifies the company's designated information disclosure media and website, noting no significant changes in organizational code, main business, or controlling shareholder since listing, indicating operational stability - The company's designated information disclosure media are Securities Times, Shanghai Securities News, Securities Daily, China Securities Journal, and the designated website is Juchao Information Network (http://www.cninfo.com.cn)[9](index=9&type=chunk) - Since its listing, the company's organizational code, main business, and controlling shareholders have remained unchanged[10](index=10&type=chunk) [Accounting Firm and Key Financial Indicators](index=8&type=section&id=2.3%20Accounting%20Firm%20and%20Key%20Financial%20Indicators) This section discloses the company's accounting firm and presents key accounting data and financial indicators for 2019 and prior years, including revenue, net profit, and cash flow, with explanations for accounting policy changes, quarterly data, and non-recurring gains/losses Company's Appointed Accounting Firm | Accounting Firm Name | KPMG Huazhen LLP (Special General Partnership) | | :--- | :--- | | Office Address | 8th Floor, East 2 Office Building, Oriental Plaza, No. 1 East Chang'an Street, Beijing | | Signing Accountants | Fang Haijie, Huang Feng | 2019 Key Accounting Data and Financial Indicators (Restated) | Indicator | 2019 (yuan) | 2018 Restated (yuan) | Year-on-Year Change (Restated) | | :--- | :--- | :--- | :--- | | Operating Revenue | 17,636,267,044.00 | 16,351,790,239.00 | 7.86% | | Net Profit Attributable to Shareholders of Listed Company | 937,855,128.00 | 1,212,944,249.00 | -22.68% | | Net Profit Attributable to Shareholders of Listed Company (Excluding Non-recurring Gains/Losses) | 789,648,162.00 | 1,112,990,089.00 | -29.05% | | Net Cash Flow from Operating Activities | 2,216,737,639.00 | 2,953,506,967.00 | -24.95% | | Basic Earnings Per Share (yuan/share) | 0.66 | 0.85 | -22.35% | | Weighted Average Return on Net Assets | 7.21% | 9.81% | -2.60% | | Total Assets (Year-end) | 31,485,373,711.00 | 29,360,882,983.00 | 7.24% | | Net Assets Attributable to Shareholders of Listed Company (Year-end) | 13,188,050,856.00 | 12,763,475,429.00 | 3.33% | 2019 Quarterly Key Financial Indicators | Indicator | Q1 (yuan) | Q2 (yuan) | Q3 (yuan) | Q4 (yuan) | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 4,287,832,327.00 | 4,634,367,274.00 | 4,035,752,086.00 | 4,678,315,357.00 | | Net Profit Attributable to Shareholders of Listed Company | 335,687,672.00 | 392,576,696.00 | 186,005,823.00 | 23,584,937.00 | | Net Profit Attributable to Shareholders of Listed Company (Excluding Non-recurring Gains/Losses) | 317,356,926.00 | 326,427,993.00 | 166,093,342.00 | -20,230,099.00 | | Net Cash Flow from Operating Activities | 542,592,001.00 | 957,588,574.00 | 601,270,196.00 | 115,286,868.00 | 2019 Non-recurring Gains and Losses Items and Amounts | Item | 2019 Amount (yuan) | Explanation | | :--- | :--- | :--- | | Gains/Losses from Disposal of Non-current Assets | -9,485,431.00 | Primarily net losses from disposal of fixed assets and intangible assets | | Government Grants Included in Current Profit/Loss | 209,385,529.00 | Includes enterprise technology innovation subsidies, government awards, technology transformation funds, etc. | | Fund Occupancy Fees Received from Non-financial Enterprises Included in Current Profit/Loss | 1,106,315.00 | Primarily interest on funds occupied by minority shareholders of some non-wholly owned subsidiaries | | Other Non-operating Income and Expenses Apart from the Above | -15,885,228.00 | Primarily donation expenses | | Less: Income Tax Impact | 32,019,359.00 | | | Minority Interest Impact (After Tax) | 4,894,860.00 | | | **Total** | **148,206,966.00** | | [Business Overview](index=11&type=section&id=Item%203%20Business%20Overview) [Main Business and Operating Model](index=11&type=section&id=3.1%20Main%20Business%20and%20Operating%20Model) The company primarily engages in R&D, production, and sales of 25 dosage forms of pharmaceuticals, including large and small volume injections, powders, tablets, and capsules, as well as antibiotic intermediates, APIs, and pharmaceutical packaging materials, covering various clinical applications. It employs scientific procurement, production, and sales models, ensuring product quality and cost efficiency through strict quality control, lean manufacturing, and an extensive national marketing network - The company operates in the pharmaceutical manufacturing industry, primarily engaged in the R&D, production, and sales of 25 dosage forms of pharmaceuticals, including large volume injections (infusions), small volume injections (ampoules), sterile powder injections, as well as antibiotic intermediates, APIs, and pharmaceutical packaging materials[19](index=19&type=chunk) - As of December 31, 2019, the company owned **578 varieties** across **993 specifications** of pharmaceutical products, with **124 drugs** listed in the National Essential Drug List (2018 Edition) and **256 drugs** in the National Medical Insurance Catalog (2019 Edition)[19](index=19&type=chunk) - The company's operating model includes: procurement (GMP quality audit, centralized bidding procurement), production ("cost from design" concept, make-to-order lean production, environmental priority), and sales ("market structure-oriented, customer-centric" professional marketing network)[19](index=19&type=chunk)[20](index=20&type=chunk) [Industry Development and Company Position](index=12&type=section&id=3.2%20Industry%20Development%20and%20Company%20Position) In 2019, the pharmaceutical industry faced complex market conditions due to "three medical reforms," making innovation and cost control critical. The company holds a global advantage in infusions, recognized as a manufacturing single-champion enterprise, and has a comprehensive antibiotic industry chain. Significant R&D investment in national innovation platforms has led to numerous patent authorizations, fostering a virtuous cycle of "generic-driven innovation, innovation-driven future" - In 2019, large-scale industrial enterprises in pharmaceutical manufacturing achieved **2.39 trillion yuan** in operating revenue, a **7.4% year-on-year increase**, and **311.95 billion yuan** in total profit, a **5.9% year-on-year increase**[20](index=20&type=chunk) - The company was recognized by the Ministry of Industry and Information Technology as a Manufacturing Single-Champion Demonstration Enterprise for its global leadership in large volume infusions, and its independently developed Keli Bag® won a National Science and Technology Progress Award[20](index=20&type=chunk) - The company has built a comprehensive advantage in the antibiotic sector, from intermediates to APIs to preparations, with its subsidiary Yili Chuanling resolving environmental issues in the antibiotic fermentation industry, earning the Xinjiang Uygur Autonomous Region Science and Technology Progress First Prize[20](index=20&type=chunk) - The company has invested over **5 billion yuan** in R&D innovation, established five national-level innovation platforms, and as of December 31, 2019, had applied for **3,856 patents** and received **2,459 patent authorizations**[20](index=20&type=chunk) [Core Competitiveness Analysis](index=13&type=section&id=3.3%20Core%20Competitiveness%20Analysis) The company's core competitiveness is comprehensive, primarily reflected in its strategic decision-making and execution, clear development strategy, matching capital and resource strength, talent and technology synergy driving innovation, and strong team replication capabilities, all supporting its stable growth and market influence - The company's core competitiveness comprises five key capabilities: strategic decision-making and execution, a firm and clear development strategy, matching capital conditions and resource strength, talent and technology synergy highlighting innovation advantages, and strong team replication capabilities[23](index=23&type=chunk) - Through keen insight into the development environment and foresight of industry trends, the company has seized multiple historic opportunities and formed a "three-engine driven" development strategy[23](index=23&type=chunk)[24](index=24&type=chunk) - After its listing, the company initiated **tens of billions of yuan** in investment to provide capital for the "three-engine driven" strategy and established a specialized industrial base in Yili to address upstream issues in the antibiotic industry chain[24](index=24&type=chunk) - The company attracted over **1,000 PhDs and Masters** to build a research team of over **2,000 people**, establishing a centralized R&D system centered on the Chengdu Central Research Institute, making innovation a core competency[24](index=24&type=chunk) [Management Discussion and Analysis](index=15&type=section&id=Item%204%20Management%20Discussion%20and%20Analysis) [Overview and Performance Drivers](index=15&type=section&id=4.1%20Overview%20and%20Performance%20Drivers) In 2019, amidst "three medical reforms," the company adhered to its "three-engine driven, innovation-led growth" strategy, achieving steady development through increased R&D investment, optimized marketing, strengthened cost control, and enhanced external collaborations. During the reporting period, R&D investment reached **1.351 billion yuan**, a **21.24% year-on-year increase**, securing multiple clinical and marketing approvals for generic and innovative drugs - The company adhered to policy guidance, maintaining strong strategic focus on its "three-engine driven, innovation-led growth" strategy, and adjusted tactics to actively respond to market competition[25](index=25&type=chunk) - During the reporting period, the company's R&D investment reached **1.351 billion yuan**, a **21.24% year-on-year increase**, accounting for **7.66%** of sales revenue[25](index=25&type=chunk) - The company achieved approval for **13 generic drugs** and multiple clinical applications, with **41 generic drugs** continuously approved for market launch over three years, **16 varieties** passing consistency evaluation, and **2 innovative drugs** undergoing US-China clinical studies[25](index=25&type=chunk) - The company optimized its business, promotion, and commercial systems, strengthened academic promotion, expanded market coverage, and launched its OTC business development[25](index=25&type=chunk) - The company focused on "cost control from design, management, and excavation," reducing overall costs by improving processes, promoting intelligent manufacturing, optimizing manufacturing flows, and strengthening full industry chain competitive advantages[25](index=25&type=chunk) [Main Business Analysis](index=15&type=section&id=4.2%20Main%20Business%20Analysis) In 2019, net profit attributable to shareholders decreased by **22.68%** year-on-year, mainly due to price declines at Yili Chuanling, continuous R&D investment, and increased sales promotion expenses. Significant progress was made in drug research, with multiple generic and innovative drugs approved or in clinical stages. Infusion product sales grew steadily, with parenteral nutrition infusions rapidly increasing. Non-infusion preparations saw significant revenue growth, but antibiotic intermediates and APIs experienced substantial declines in revenue and net profit due to intensified market competition. International business achieved high growth - During the reporting period, the company achieved a net profit attributable to shareholders of **938 million yuan**, a **22.68% decrease** compared to the previous year[26](index=26&type=chunk) - The decline in net profit was primarily due to: a significant drop in Yili Chuanling product prices due to intensified market competition; continuous growth in R&D investment as the company vigorously pursued its "innovation-driven" strategy; and increased sales promotion efforts, including market development and maintenance fees, market management fees, academic promotion fees, and transportation costs[26](index=26&type=chunk)[27](index=27&type=chunk) - In drug research, as of April 15, 2020, **41 excellent generic drugs** were continuously approved for market launch, **16** passed generic drug consistency evaluation; **31 varieties** entered clinical stages (including **11 innovative drugs**), and **2 varieties** initiated international clinical studies[27](index=27&type=chunk) - Infusion product sales reached **4.517 billion bags/bottles**, generating operating revenue of **10.46 billion yuan**, a **5.86% year-on-year increase**. Parenteral nutrition infusion products achieved annual sales revenue of **391 million yuan**, a **180.67% year-on-year increase**[33](index=33&type=chunk) - The non-infusion sector achieved sales revenue of **6.836 billion yuan**, a **9.51% year-on-year increase**. Of this, antibiotic intermediates and APIs sales revenue was **3.108 billion yuan**, a **5.64% year-on-year decrease**; Yili Chuanling's net profit decreased by **89.08%** year-on-year. Non-infusion preparations achieved annual sales revenue of **3.678 billion yuan**, a **28.73% year-on-year increase**[33](index=33&type=chunk) Sales Performance of Key Newly Approved and Consistency Evaluation Varieties | Item | Product Name | 2019 Sales Revenue (ten thousand yuan) | 2018 Sales Revenue (ten thousand yuan) | | :--- | :--- | :--- | :--- | | Parecoxib Sodium for Injection | Keruishu | 51,950 | 13,455 | | Escitalopram Oxalate Tablets | Bailuote | 32,926 | 20,802 | | Multi-chamber Bag Infusion Products | Duote, Duomengjie, etc. | 38,767 | 13,896 | | Zoledronic Acid | Kemigu | 3,353 | 363 | | Vitamin B6 Injection (Plastic Ampoule) | | 2,297 | 531 | | Others | | 32,048 | 28,930 | | **Total** | | **161,341** | **77,977** | - International business achieved overseas sales revenue of **1.241 billion yuan**, a **70.15% year-on-year increase**. Kazakhstan Kelun's main business revenue and sales volume increased by **46.03%** and **59.24%** year-on-year, respectively[34](index=34&type=chunk)[35](index=35&type=chunk) [Revenue and Cost](index=20&type=section&id=4.2.1%20Revenue%20and%20Cost) In 2019, the company's total operating revenue was **17.636 billion yuan**, a **7.86% year-on-year increase**, with pharmaceutical manufacturing accounting for **98.07%**. Infusion and non-infusion products were the main revenue sources, and international business revenue grew by **69.99%**. Total operating cost was **7.023 billion yuan**, a **6.21% year-on-year increase**. Pharmaceutical manufacturing gross margin was **61.04%**, and non-infusion product gross margin was **46.06%**, up **3.38%** year-on-year Operating Revenue Composition (2019) | Category | 2019 Amount (yuan) | Proportion of Operating Revenue | 2018 Amount (yuan) | Proportion of Operating Revenue | Year-on-Year Change | | :--- | :--- | :--- | :--- | :--- | :--- | | **Total Operating Revenue** | **17,636,267,044.00** | **100%** | **16,351,790,239.00** | **100%** | **7.86%** | | **By Industry:** | | | | | | | Pharmaceutical Manufacturing | 17,295,958,602.00 | 98.07% | 16,122,801,494.00 | 98.60% | 7.28% | | Other | 340,308,442.00 | 1.93% | 228,988,745.00 | 1.40% | 48.61% | | **By Product:** | | | | | | | Infusion | 10,459,749,802.00 | 59.31% | 9,880,449,499.00 | 60.42% | 5.86% | | Non-infusion | 6,836,208,800.00 | 38.76% | 6,242,351,995.00 | 38.18% | 9.51% | | **By Region:** | | | | | | | International Business | 1,240,952,261.00 | 7.04% | 730,009,438.00 | 4.46% | 69.99% | Operating Cost Composition (2019) | Product Category | Item | 2019 Amount (yuan) | Proportion of Operating Cost | 2018 Amount (yuan) | Proportion of Operating Cost | Year-on-Year Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Infusion Products | Operating Cost | 3,051,100,495.00 | 43.45% | 2,847,559,492.00 | 43.06% | 7.15% | | Non-infusion | Operating Cost | 3,687,419,936.00 | 52.51% | 3,578,306,215.00 | 54.12% | 3.05% | | Other Businesses | Operating Cost | 284,036,163.00 | 4.04% | 186,286,263.00 | 2.82% | 52.47% | | **Pharmaceutical Manufacturing** | **Operating Cost** | **6,738,520,431.00** | **95.96%** | **6,425,865,707.00** | **97.18%** | **4.87%** | - During the reporting period, the company established **16 new subsidiaries**, including Yili Jianing, Kelun Innovation, Botan Bio, Kelun Hong Kong Pharmaceutical Technology, and Sichuan Jiaxun, and acquired equity in Yunnan Kelun Medical Trade, while deregistering Henan Kelun Medical Trade and Yili Jianing[41](index=41&type=chunk) - The company's top five customers accounted for **2.008 billion yuan** in sales, representing **11.39%** of total annual sales; the top five suppliers accounted for **1.116 billion yuan** in purchases, representing **20.52%** of total annual purchases[42](index=42&type=chunk)[43](index=43&type=chunk) [Expenses](index=23&type=section&id=4.2.2%20Expenses) In 2019, the company's selling, administrative, and R&D expenses all increased, with R&D expenses showing the largest growth at **41.53%** year-on-year, reflecting sustained investment in its innovation-driven strategy. Financial expenses decreased by **9.35%** year-on-year, primarily due to optimized financing structure Changes in Various Expenses (2019) | Item | 2019 (yuan) | 2018 (yuan) | Year-on-Year Change | Explanation for Significant Change | | :--- | :--- | :--- | :--- | :--- | | Selling Expenses | 6,550,305,225.00 | 5,987,227,180.00 | 9.40% | Company strengthened product promotion, increasing market development and maintenance fees, market management fees, and academic promotion fees. | | Administrative Expenses | 951,143,512.00 | 807,089,520.00 | 17.85% | Primarily due to expanded production scale and continuous technological upgrades, increasing salaries, repair fees, depreciation, and amortization. | | Financial Expenses | 572,462,588.00 | 631,502,893.00 | -9.35% | Company strengthened capital management and optimized financing structure, leading to a decrease in financial expenses. | | R&D Expenses | 1,285,866,923.00 | 908,554,050.00 | 41.53% | Company continued to vigorously promote its "innovation-driven" strategy, increasing R&D expenses. | [R&D Investment](index=23&type=section&id=4.2.3%20R%26D%20Investment) In 2019, the company's R&D investment reached **1.351 billion yuan**, a **21.24% year-on-year increase**, accounting for **7.66%** of operating revenue, with R&D personnel increasing to **3,165**. The company focused on unmet global and Chinese clinical needs, advancing both generic and innovative drug pipelines, securing multiple clinical and marketing approvals. The R&D capitalization rate significantly decreased due to strategic adjustments or discontinuation of some R&D projects, with related development expenditures transferred to current profit/loss - The company's R&D investment amounted to **1.351 billion yuan**, a **21.24% year-on-year increase**, representing **7.66%** of operating revenue. The number of R&D personnel reached **3,165**, a **22.06% year-on-year increase**[48](index=48&type=chunk) - The capitalized amount of R&D investment was **65.0862 million yuan**, accounting for **4.82%** of total R&D investment, a **71.58% year-on-year decrease**, primarily because some R&D projects were adjusted in 2019, and **141 million yuan** of incurred development expenditures were transferred to current profit/loss[48](index=48&type=chunk) - The company initiated **482 drug research projects** targeting unmet global and Chinese clinical needs, including **364 generic drugs**, **22 improved innovative drugs**, **49 innovative small molecule drugs**, and **47 biotechnological drugs**[46](index=46&type=chunk) - During the reporting period, **2 innovative drugs** were approved for clinical trials, and **1** received FDA approval and initiated US Phase I clinical studies; **38 drugs** were submitted for production approval; and **15 drugs** were approved for market launch[47](index=47&type=chunk) [Cash Flow](index=24&type=section&id=4.2.4%20Cash%20Flow) In 2019, the company's net cash flow from operating activities was **2.217 billion yuan**, a **24.95% year-on-year decrease**. Net cash flow from investing activities was **-1.359 billion yuan**, with net outflow increasing by **41.74%**, mainly due to increased investments in associates and reduced net cash inflow from maturing wealth management products. Net cash flow from financing activities was **-468 million yuan**, with net outflow decreasing by **66.13%**, primarily due to increased net financing and proceeds from the partial equity transfer of subsidiary Yili Chuanling Cash Flow Situation (2019) | Item | 2019 (yuan) | 2018 (yuan) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 2,216,737,639.00 | 2,953,506,967.00 | -24.95% | | Net Cash Flow from Investing Activities | -1,359,333,081.00 | -958,999,598.00 | 41.74% | | Net Cash Flow from Financing Activities | -467,989,776.00 | -1,381,885,491.00 | -66.13% | | Net Increase in Cash and Cash Equivalents | 391,630,254.00 | 612,318,163.00 | -36.04% | - Net cash flow from investing activities increased its net outflow by **41.74%** compared to the previous year, mainly due to increased investments in associates and reduced net cash inflow from maturing wealth management products[50](index=50&type=chunk) - Net cash flow from financing activities decreased its net outflow by **66.13%** compared to the previous year, primarily due to increased net financing and proceeds from the partial equity transfer of subsidiary Yili Chuanling[50](index=50&type=chunk) - The net profit for this reporting period was **1.022 billion yuan**, while net cash flow from operating activities was **2.217 billion yuan**, a difference of **1.195 billion yuan**, mainly due to significant non-cash costs such as depreciation, amortization, and financial expenses[50](index=50&type=chunk) [Non-Main Business Analysis](index=25&type=section&id=4.3%20Non-Main%20Business%20Analysis) In 2019, investment income was the primary profit contributor from non-main businesses, reaching **174 million yuan**, accounting for **13.85%** of total profit, indicating sustainability. Asset impairment losses and non-operating expenses (mainly donations) constituted the main non-main business costs, which are not sustainable Non-Main Business Analysis (2019) | Item | Amount (yuan) | Proportion of Total Profit | Explanation for Formation | Sustainability | | :--- | :--- | :--- | :--- | :--- | | Investment Income | 174,046,116.00 | 13.85% | Primarily investment income from associates. | Yes | | Asset Impairment | 130,763,971.00 | 10.41% | Primarily credit impairment losses and inventory impairment losses. | No | | Non-operating Income | 6,103,107.00 | 0.49% | | No | | Non-operating Expenses | 26,685,980.00 | 2.12% | Primarily donation expenses and fixed asset disposal losses. | No | [Asset and Liability Status Analysis](index=25&type=section&id=4.4%20Asset%20and%20Liability%20Status%20Analysis) At the end of 2019, the company's total assets were **31.485 billion yuan**, a **7.24% year-on-year increase**. Accounts receivable and long-term equity investments increased, while inventory rose due to Yili Chuanling's full production and increased raw material reserves. On the liability side, short-term borrowings increased, and non-current liabilities due within one year surged by **13.43%**, mainly due to reclassification of bonds payable, leading to a corresponding decrease in bonds payable. Some of the company's monetary funds, fixed assets, land use rights, and accounts receivable financing were restricted Significant Changes in Asset Composition (End of 2019) | Item | Year-end 2019 Amount (yuan) | Proportion of Total Assets | Year-start 2019 Amount (yuan) | Proportion of Total Assets | Change in Proportion | Explanation for Significant Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Accounts Receivable | 6,480,658,727.00 | 20.58% | 5,676,619,197.00 | 19.34% | 1.24% | Operating revenue growth led to a corresponding increase in accounts receivable. | | Inventory | 3,386,228,102.00 | 10.75% | 2,973,433,077.00 | 10.13% | 0.62% | Yili Chuanling's full production, increased agricultural product procurement; raw material reserves for consistency evaluation products. | | Long-term Equity Investment | 2,762,445,854.00 | 8.77% | 2,306,300,350.00 | 7.86% | 0.91% | Increased investment in associates. | | Non-current Liabilities Due Within One Year | 5,244,344,993.00 | 16.66% | 948,468,719.00 | 3.23% | 13.43% | Due to reclassification of bonds payable to non-current liabilities due within one year. | | Bonds Payable | 1,344,814,915.00 | 4.27% | 4,579,130,930.00 | 15.60% | -11.33% | Due to reclassification to non-current liabilities due within one year. | - As of December 31, 2019, other monetary funds of **55.5089 million yuan** were restricted as letter of credit deposits and other deposits[56](index=56&type=chunk)[361](index=361&type=chunk) - The company used fixed assets with an original value of **925 million yuan** and land use rights of **119 million yuan** as collateral to obtain **128 million yuan** in long-term borrowings and **290 million yuan** in short-term borrowings from the Export-Import Bank of China[56](index=56&type=chunk)[57](index=57&type=chunk)[394](index=394&type=chunk) - Subsidiary Yili Chuanling used fixed assets with a net value of **379 million yuan** as collateral to obtain a **300 million yuan** three-year loan from Industrial Financial Leasing Co., Ltd., with a year-end balance of **182 million yuan**[57](index=57&type=chunk)[394](index=394&type=chunk) [Investment Status Analysis](index=27&type=section&id=4.5%20Investment%20Status%20Analysis) In 2019, the company's investment amounted to **3.17 billion yuan**, a **17.72% year-on-year increase**. No significant equity or non-equity investments occurred, but the company sold a total of **11.51%** equity in its subsidiary Yili Chuanling to several institutions and individuals for a total of **512 million yuan**. Additionally, the financial performance of major controlled and associated companies, including Yili Chuanling and Shisiyyao Group, was disclosed - The investment amount for the reporting period was **3.16958 billion yuan**, compared to **2.69247 billion yuan** in the same period last year, representing a change of **17.72%**[58](index=58&type=chunk) - The company sold a total of **11.51%** equity in Yili Chuanling to seven institutions and individuals, including Shouguang Huining Chiyuan Investment Partnership, for a total transaction price of **512 million yuan**, based on appraisal value, with no significant impact on the company[61](index=61&type=chunk)[62](index=62&type=chunk) Financial Data of Major Controlled and Associated Companies (2019) | Company Name | Company Type | Main Business | Registered Capital (yuan) | Total Assets (yuan) | Net Assets (yuan) | Operating Revenue (yuan) | Operating Profit (yuan) | Net Profit (yuan) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Yili Chuanling | Subsidiary | API Intermediates | 4,000,000,000.00 | 9,901,944,608.00 | 4,444,414,482.00 | 3,066,201,386.00 | 86,268,884.00 | 65,482,462.00 | | Hunan Kelun | Subsidiary | Large Volume Injections, Powder Injections, Capsules | 82,000,000.00 | 2,924,051,909.00 | 1,590,852,277.00 | 2,737,706,786.00 | 337,466,843.00 | 289,516,184.00 | | Botai Bio | Subsidiary | Pharmaceutical R&D, Production, Sales | 100,000,000.00 | 217,592,783.00 | -978,214,685.00 | 5,657,470.00 | -836,572,296.00 | -889,776,842.00 | | Shisiyyao Group | Associate | Large Volume Injections | HKD 200,000,000.00 | 7,882,248,776.00 | 5,609,481,135.00 | 4,107,161,693.00 | | 922,836,711.00 | - During the reporting period, the company established **16 new subsidiaries**, acquired equity in Yunnan Kelun Medical Trade, and deregistered Henan Kelun Medical Trade and Yili Jianing, with no significant impact on overall production, operations, or performance[64](index=64&type=chunk) [Company's Future Development Outlook](index=30&type=section&id=4.6%20Company%27s%20Future%20Development%20Outlook) The company anticipates continued growth in the pharmaceutical market and plans to maintain its "three-engine driven, innovation-led growth" strategy, leading in infusions, antibiotics, and innovative R&D. The 2020 operating plan focuses on R&D innovation, marketing system improvement, production efficiency enhancement, and international business expansion. Additionally, the company identified and addressed five major risks: industry policy, market, environmental, R&D investment, and quality control, with detailed countermeasures to ensure sustainable development - Global pharmaceutical expenditure is projected to exceed **1.5 trillion US dollars** by 2023, with China becoming the world's second-largest pharmaceutical market, driven by an aging population and urbanization expanding drug demand[65](index=65&type=chunk) - The company will continue to implement its "three-engine driven, innovation-led growth" development strategy, maintaining absolute leadership in the infusion sector, building a comprehensive competitive advantage across the antibiotic industry chain, and accumulating driving forces through R&D system construction and diversified technological innovation[66](index=66&type=chunk) - The 2020 operating plan includes: continuous increase in R&D innovation investment to build a globally competitive innovation-oriented international pharmaceutical enterprise; improving marketing system construction to accelerate market access for generic and innovative drugs and fully expand the OTC market; promoting intelligent manufacturing to enhance Yili Chuanling's cost control capabilities; actively expanding global markets, promoting exports to regulated markets, and accelerating US-China synchronized clinical projects[67](index=67&type=chunk) - The company faces risks from industry policy changes, intensified market competition, stricter environmental requirements, high investment and long cycles in new drug R&D, and full life cycle quality control of pharmaceuticals[67](index=67&type=chunk)[68](index=68&type=chunk) - Countermeasures include: timely adjustment of corporate strategic deployment and enhancing core competitiveness through R&D innovation; optimizing production processes and strengthening market price analysis; increasing environmental protection investment; establishing US-China R&D systems and strengthening international cooperation; adopting advanced quality management methods and establishing a full life cycle quality management system[67](index=67&type=chunk)[68](index=68&type=chunk) [Significant Events](index=33&type=section&id=Item%205%20Significant%20Events) [Profit Distribution and Capital Reserve to Share Capital Conversion](index=33&type=section&id=5.1%20Profit%20Distribution%20and%20Capital%20Reserve%20to%20Share%20Capital%20Conversion) The company's 2019 profit distribution plan proposes a cash dividend of **4.25 yuan (tax inclusive) per 10 shares**, totaling an estimated **602.65 million yuan**, representing **64.26%** of the 2019 net profit attributable to shareholders. The company's cash dividend policy over the past three years complies with its articles of association, with complete decision-making procedures and full protection of minority shareholder interests - The company's 2019 profit distribution plan is: to distribute a cash dividend of **4.25 yuan (tax inclusive) per 10 shares** to all shareholders, with no capital reserve conversion or bonus shares[72](index=72&type=chunk) - The estimated total cash dividend is **602.65296 million yuan**, accounting for **64.26%** of the 2019 net profit attributable to shareholders of the listed company in the consolidated financial statements[73](index=73&type=chunk) Company's Cash Dividend Situation for Ordinary Shares in the Last Three Years | Dividend Year | Cash Dividend Amount (Tax Inclusive) (yuan) | Net Profit Attributable to Ordinary Shareholders of Listed Company in Consolidated Financial Statements for the Dividend Year (yuan) | Proportion of Cash Dividend Amount to Net Profit Attributable to Ordinary Shareholders of Listed Company in Consolidated Financial Statements | | :--- | :--- | :--- | :--- | | 2019 | 602,652,960.00 | 937,855,128.00 | 64.26% | | 2018 | 300,057,875.82 | 1,212,944,249.00 | 24.74% | | 2017 | 300,906,057.00 | 748,544,187.00 | 40.20% | [Fulfillment of Commitments](index=35&type=section&id=5.2%20Fulfillment%20of%20Commitments) During the reporting period, Mr. Liu Gexin, the company's controlling shareholder and de facto controller, strictly fulfilled all commitments made during the initial public offering or refinancing regarding horizontal competition, related-party transactions, and fund occupation, with no violations - The company's controlling shareholder and de facto controller, Liu Gexin, strictly fulfilled his commitments regarding horizontal competition, related-party transactions, and fund occupation during the reporting period[77](index=77&type=chunk) - Liu Gexin committed not to directly or indirectly participate in any business or activity that competes with the company's main business, and to have priority purchase rights for potential competing businesses[77](index=77&type=chunk) [Changes in Accounting Policies and Consolidation Scope](index=36&type=section&id=5.3%20Changes%20in%20Accounting%20Policies%20and%20Consolidation%20Scope) During the reporting period, the company changed its accounting policies in accordance with new accounting standards issued by the Ministry of Finance, retrospectively adjusting relevant financial statement items. Concurrently, the scope of consolidated financial statements changed due to the establishment of new subsidiaries, equity acquisitions, and subsidiary deregistrations - In 2019, the company implemented the revised new financial instruments standards and the 2019 general enterprise financial statement format revisions issued by the Ministry of Finance, retrospectively adjusting the presentation of relevant financial statements[78](index=78&type=chunk)[313](index=313&type=chunk) - During the reporting period, the company established **16 new subsidiaries**, including Yili Jianing, Kelun Innovation, Botan Bio, Kelun Hong Kong Pharmaceutical Technology, and Sichuan Jiaxun, acquired equity in Yunnan Kelun Medical Trade, and deregistered Henan Kelun Medical Trade and Yili Jianing[78](index=78&type=chunk)[127](index=127&type=chunk) [Implementation of Equity Incentive Plans](index=37&type=section&id=5.4%20Implementation%20of%20Equity%20Incentive%20Plans) During the reporting period, the company implemented its 2016 and 2018 restricted stock incentive plans. The second lifting of restrictions for the 2016 plan was completed, with some unvested shares repurchased and cancelled. The first lifting of restrictions for the 2018 plan was also completed, with some ineligible shares repurchased and cancelled, ensuring the effectiveness and compliance of the incentive mechanisms - The company's 2016 restricted stock incentive plan's second restricted period expired and the conditions for lifting restrictions were met, with these restricted shares listed for trading on April 2, 2019[83](index=83&type=chunk)[85](index=85&type=chunk) - The company's 2018 restricted stock incentive plan's first restricted period expired and the conditions for lifting restrictions were met, with these restricted shares listed for trading on September 26, 2019[84](index=84&type=chunk)[85](index=85&type=chunk) - The company approved and completed the repurchase and cancellation of some restricted shares that did not meet the conditions for lifting restrictions[83](index=83&type=chunk)[84](index=84&type=chunk)[85](index=85&type=chunk) [Significant Related-Party Transactions and Guarantees](index=38&type=section&id=5.5%20Significant%20Related-Party%20Transactions%20and%20Guarantees) During the reporting period, the company engaged in routine purchase and sale of goods and services with related parties such as HengHui Starch, Kelun Medical Trade Group, and Kelun Doushan; some transaction amounts slightly exceeded or fell below estimates but remained within a reasonable range. The company provided a **400 million yuan** joint liability guarantee for its subsidiary Yili Chuanling, and also received approximately **2.58 billion yuan** in guarantees from its controlling shareholder and related parties. Additionally, the company conducted **1.52 billion yuan** in entrusted wealth management, with no overdue unrecovered amounts at period-end Related-Party Transactions Related to Daily Operations (Purchases of Goods/Receipt of Services) | Related Party | Related Transaction Content | Current Period Amount (yuan) | Approved Transaction Limit (ten thousand yuan) | Exceeded Transaction Limit | | :--- | :--- | :--- | :--- | :--- | | HengHui Starch | Entrusted Processing / Material Procurement | 83,462,609.00 | 11,800 | No | | HengHui Starch | Purchase of Goods | 33,797,389.00 | 2,800 | Yes | | Kelun Doushan | Material Procurement | 54,443,985.00 | 4,750 | Yes | | Kelun Medical Equipment | Material Procurement | 54,812,585.00 | 7,600 | No | | Yibei Coal | Material Procurement | 7,226,100.00 | 5,000 | No | Related-Party Transactions Related to Daily Operations (Sales of Goods/Provision of Services) | Related Party | Related Transaction Content | Current Period Amount (yuan) | Prior Period Amount (yuan) | | :--- | :--- | :--- | :--- | | Kelun Medical Trade Group | Sales of Goods / Provision of Services | 986,028,115.00 | 978,023,820.00 | | North China Pharmaceutical | Sales of Goods | 88,856,424.00 | 243,208,208.00 | | HengHui Starch | Sales of Goods | 47,352,084.00 | 44,150,369.00 | | Shisiyyao Group | Sales of Goods | 18,549,034.00 | 5,318,621.00 | Company's Guarantees for Subsidiaries (2019) | Guaranteed Party Name | Guarantee Limit (ten thousand yuan) | Actual Guarantee Amount (ten thousand yuan) | Guarantee Type | Guarantee Period | Fulfilled | | :--- | :--- | :--- | :--- | :--- | :--- | | Yili Chuanling | 5,000 | 5,000 | Joint Liability Guarantee | 1 Year | No | | Yili Chuanling | 10,000 | 10,000 | Joint Liability Guarantee | 1 Year | No | | Yili Chuanling | 20,000 | 20,000 | Joint Liability Guarantee | 1 Year | No | | Yili Chuanling | 5,000 | 5,000 | Joint Liability Guarantee | 1 Year | No | | **Total Approved Guarantee Limit for Subsidiaries in Reporting Period** | **40,000** | **40,000** | | | | | **Total Approved Guarantee Limit for Subsidiaries at End of Reporting Period** | **40,000** | **40,000** | | | | Company as Guaranteed Party (2019) | Guarantor | Guarantee Amount (yuan) | Guarantee Start Date | Guarantee End Date | Guarantee Fulfilled | | :--- | :--- | :--- | :--- | :--- | | Liu Gexin, Pan Hui, Zhong Ying | 200,000,000.00 | 2019-02-28 | 2020-02-28 | No | | Liu Gexin, Pan Hui | 100,000,000.00 | 2019-03-28 | 2020-03-27 | No | | Liu Gexin, Zhong Ying, Pan Hui | 150,000,000.00 | 2019-03-29 | 2020-03-29 | No | | Liu Gexin, Pan Hui | 199,900,000.00 | 2018-11-07 | 2021-11-06 | No | | Liu Gexin, Pan Hui | 182,432,997.00 | 2018-07-27 | 2021-07-27 | No | - The company's actual total guarantee amount accounts for **3.03%** of its net assets[95](index=95&type=chunk) Overview of Entrusted Wealth Management During Reporting Period | Specific Type | Source of Entrusted Funds | Amount of Entrusted Wealth Management (ten thousand yuan) | Unmatured Balance (ten thousand yuan) | Overdue Unrecovered Amount (ten thousand yuan) | | :--- | :--- | :--- | :--- | :--- | | Bank Wealth Management Products | Own Funds | 45,000 | 0 | 0 | | Other Categories | Own Funds | 107,000 | 0 | 0 | | **Total** | | **152,000** | **0** | **0** | [Social Responsibility and Environmental Protection](index=44&type=section&id=5.6%20Social%20Responsibility%20and%20Environmental%20Protection) The company actively fulfills its social responsibilities, publishing the "2019 Social Responsibility Report" and investing **4.121 million yuan** in targeted poverty alleviation, helping **992 impoverished individuals** across various sectors including industry, education, health, and ecology. As a key polluting unit, the company's pollutant emissions were all within standards, and it continued to increase environmental protection investments, promoting green development, with multiple subsidiaries recognized as "Environmental Integrity Enterprises" and "National Green Factories" - The company prepared the "2019 Social Responsibility Report," detailing its efforts in corporate governance, integrity management, safe production, employee rights, energy conservation and emission reduction, and social welfare[100](index=100&type=chunk) - The company invested **4.121 million yuan** in targeted poverty alleviation, helping **992 registered impoverished individuals** escape poverty, covering industrial development, education, health, ecological protection, basic living support, and social poverty alleviation[108](index=108&type=chunk) - The company and its subsidiaries are designated key polluting units by environmental protection authorities, with all pollutant emissions within standards[112](index=112&type=chunk)[113](index=113&type=chunk)[114](index=114&type=chunk)[115](index=115&type=chunk)[116](index=116&type=chunk) - The company and its subsidiaries/branches have established comprehensive emergency response mechanisms for environmental pollution incidents, developed "Emergency Plans for Sudden Environmental Incidents," and equipped corresponding emergency supplies[118](index=118&type=chunk) - Sichuan Kelun Pharmaceutical Co., Ltd., Guang'an Branch, and Henan Kelun were awarded the "Environmental Integrity Enterprise" title, while Sichuan Kelun Pharmaceutical Co., Ltd. and Yili Chuanling were recognized as "National Green Factories"[119](index=119&type=chunk) [Other Significant Events](index=53&type=section&id=5.7%20Other%20Significant%20Events) During the reporting period, several of the company's generic drugs (e.g., Citalopram Hydrobromide Capsules, Fluconazole Tablets, Cefalexin Capsules) were the first in China to pass consistency evaluation and receive approval. The innovative drug KL060332 Capsules received a clinical trial notice, and SKB264 received FDA approval to initiate US Phase I clinical studies. The company's ultra-short-term financing bonds and medium-term notes were approved for registration, and plans are underway to promote its wholly-owned subsidiary Yili Chuanling to the capital market. Additionally, the company completed capital operations such as subsidiary equity transfers and capital increases - The company's Citalopram Hydrobromide Capsules, Fluconazole Tablets, Cefalexin Capsules, and other generic drugs were the first in China to pass consistency evaluation and obtain drug registration approvals[122](index=122&type=chunk)[123](index=123&type=chunk) - The innovative drug KL060332 Capsules, developed by the company's controlling subsidiary Botai Bio, received a clinical trial notice from the National Medical Products Administration, and KLUS Pharma Inc.'s antibody-drug conjugate SKB264 received FDA approval and initiated US Phase I clinical studies[123](index=123&type=chunk)[124](index=124&type=chunk) - The company received a "Notice of Acceptance of Registration" from the National Association of Financial Market Institutional Investors, approving the registration of its ultra-short-term financing bonds and medium-term notes[123](index=123&type=chunk) - The company's wholly-owned subsidiary Yili Chuanling plans to implement an employee stock ownership plan and introduce external high-quality investors, followed by a shareholding system reform, with future plans to promote Yili Chuanling to the capital market when appropriate[124](index=124&type=chunk) - The company transferred **11.51%** of Yili Chuanling's equity but did not lose control over Yili Chuanling and its subsidiaries[127](index=127&type=chunk) [Share Changes and Shareholder Information](index=60&type=section&id=Item%206%20Share%20Changes%20and%20Shareholder%20Information) [Share Changes](index=60&type=section&id=6.1%20Share%20Changes) In 2019, the company's total share capital slightly decreased, with restricted shares decreasing and unrestricted shares increasing, primarily due to changes in executive lock-up shares, lifting of restrictions on equity incentive shares, and partial share repurchases and cancellations. The company completed its 2019 first extraordinary general meeting-approved share repurchase plan and continues to implement new repurchase plans Share Changes (2019) | Share Category | Number of Shares Before Change (shares) | Proportion | Increase/Decrease in This Change (shares) | Number of Shares After Change (shares) | Proportion | | :--- | :--- | :--- | :--- | :--- | :--- | | I. Restricted Shares | 410,400,632 | 28.50% | -4,039,916 | 406,360,716 | 28.22% | | II. Unrestricted Shares | 1,029,444,868 | 71.50% | 3,980,476 | 1,033,425,344 | 71.78% | | **III. Total Shares** | **1,439,845,500** | **100.00%** | **-59,440** | **1,439,786,060** | **100.00%** | - Share changes were due to variations in lock-up shares of current and former executives, executive share increases, partial lifting of restrictions on 2016 and 2018 equity incentive shares, and partial share repurchases and cancellations[133](index=133&type=chunk) - The share repurchase plan approved by the 2019 first extraordinary general meeting has been completed, with **8,807,897 shares** actually purchased for a total transaction amount of **199 million yuan**[134](index=134&type=chunk) - As of the end of the reporting period, the company had repurchased **3,139,400 shares** under the repurchase plan approved by the Board of Directors on December 6, 2019, with a total payment of **72.828 million yuan**[134](index=134&type=chunk) Changes in Restricted Shares (2019) | Shareholder Name | Restricted Shares at Beginning of Period (shares) | Restricted Shares Increased in Current Period (shares) | Restricted Shares Released in Current Period (shares) | Restricted Shares at End of Period (shares) | Reason for Restriction | | :--- | :--- | :--- | :--- | :--- | :--- | | Liu Gexin | 284,346,210 | | | 284,346,210 | In-service Director Lock-up | | Pan Hui | 114,135,709 | | | 114,135,709 | Former Director, Senior Executive Lock-up | | Feng Hao | 192,750 | 26,250 | | 219,000 | In-service Senior Executive Lock-up | | Lai Degui | 201,900 | 15,000 | | 216,900 | In-service Senior Executive Lock-up | | Others | 5,132,049 | | 4,066,466 | 1,065,583 | Equity Incentive Restriction | [Securities Issuance and Listing](index=62&type=section&id=6.2%20Securities%20Issuance%20and%20Listing) During the reporting period, the company issued its 2019 Public Corporate Bonds (First Tranche) to Qualified Investors, raising **850 million yuan**, which began trading on April 30, 2019. The company's total share capital and shareholder structure changed due to share repurchases and cancellations Securities Issuance During Reporting Period (Excluding Preferred Shares) | Name of Stock and Derivative Securities | Issue Date | Issue Price (or Interest Rate) | Issue Amount (yuan) | Listing Date | Approved Listing and Trading Amount (yuan) | | :--- | :--- | :--- | :--- | :--- | :--- | | Sichuan Kelun Pharmaceutical Co., Ltd. 2019 Public Corporate Bonds (First Tranche) to Qualified Investors | 2019-04-23 | 4.50% | 850,000,000 | 2019-04-30 | 850,000,000 | - Changes in the company's total share capital and shareholder structure were primarily due to the cancellation of ungranted restricted shares in the dedicated share repurchase account, leading to a reduction in share capital and capital reserves[139](index=139&type=chunk) [Shareholders and Actual Controller Information](index=63&type=section&id=6.3%20Shareholders%20and%20Actual%20Controller%20Information) As of the end of the reporting period, the company had **42,653 ordinary shareholders**. Mr. Liu Gexin is the controlling shareholder and de facto controller, holding **26.33%** directly and indirectly controlling some shares through Chongqing International Trust Co., Ltd. – Chuangying Investment No. 10 Collective Fund Trust Plan, an acting-in-concert party. Among the top ten shareholders, Liu Gexin and Pan Hui are major shareholders, with their shares partially pledged - At the end of the reporting period, the total number of ordinary shareholders was **42,653**[143](index=143&type=chunk) Shareholding of Shareholders Holding 5% or More or Top 10 Shareholders (End of 2019) | Shareholder Name | Shareholder Nature | Shareholding Percentage | Number of Shares Held at End of Reporting Period (shares) | Number of Restricted Shares Held (shares) | Number of Unrestricted Shares Held (shares) | Share Status | Number of Pledged or Frozen Shares (shares) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Liu Gexin | Domestic Natural Person | 26.33% | 379,128,280 | 284,346,210 | 94,782,070 | Pledged | 178,060,000 | | Pan Hui | Domestic Natural Person | 10.57% | 152,180,946 | 114,135,709 | 38,045,237 | Pledged | 89,469,998 | | Hong Kong Securities Clearing Company Limited | Overseas Legal Person | 2.58% | 37,122,857 | | 37,122,857 | | | | Cheng Zhipeng | Domestic Natural Person | 1.83% | 26,289,798 | | 26,289,798 | Pledged | 4,140,000 | - The company's controlling shareholder and de facto controller is Mr. Liu Gexin, a Chinese national with no overseas residency, serving as the company's Chairman[147](index=147&type=chunk)[148](index=148&type=chunk) - Mr. Liu Sicuan, son of Mr. Liu Gexin, is the settlor of Chongqing International Trust Co., Ltd. – Chuangying Investment No. 10 Collective Fund Trust Plan, which has an acting-in-concert relationship with Mr. Liu Gexin[142](index=142&type=chunk)[148](index=148&type=chunk) [Preferred Shares Information](index=66&type=section&id=Item%207%20Preferred%20Shares%20Information) [Preferred Shares Situation](index=66&type=section&id=7.1%20Preferred%20Shares%20Situation) During the reporting period, the company did not issue any preferred shares - The company had no preferred shares during the reporting period[151](index=151&type=chunk) [Convertible Corporate Bonds Information](index=67&type=section&id=Item%208%20Convertible%20Corporate%20Bonds%20Information) [Convertible Corporate Bonds Situation](index=67&type=section&id=8.1%20Convertible%20Corporate%20Bonds%20Situation) During the reporting period, the company did not issue any convertible corporate bonds - The company had no convertible corporate bonds during the reporting period[152](index=152&type=chunk) [Directors, Supervisors, Senior Management, and Employees](index=68&type=section&id=Item%209%20Directors%2C%20Supervisors%2C%20Senior%20Management%2C%20and%20Employees) [Changes in Shareholdings and Appointments of Directors, Supervisors, and Senior Management](index=68&type=section&id=9.1%20Changes%20in%20Shareholdings%20and%20Appointments%20of%20Directors%2C%20Supervisors%2C%20and%20Senior%20Management) This section details the shareholding changes of the company's directors, supervisors, and senior management during the reporting period, along with their appointment status, gender, age, term of office, and main professional background. During the reporting period, He Guosheng was elected as a director, Pan Hui and Deng Xuheng resigned, and Ding Nanchao was appointed as deputy general manager, maintaining a stable management team with new additions Shareholding Changes of Directors, Supervisors, and Senior Management (2019) | Name | Position | Shares Held at Beginning of Period (shares) | Shares Increased in Current Period (shares) | Shares Held at End of Period (shares) | | :--- | :--- | :--- | :--- | :--- | | Liu Gexin | Chairman | 379,128,280 | | 379,128,280 | | Liu Sicuan | Director; General Manager | 6,854,986 | | 6,854,986 | | Feng Hao | Deputy General Manager & Board Secretary | 257,000 | 35,000 | 292,000 | | Lai Degui | Deputy General Manager & CFO | 269,200 | 20,000 | 289,200 | | Pan Hui | Director; Deputy General Manager (Resigned) | 152,180,946 | | 152,180,946 | | Deng Xuheng | Deputy General Manager (Resigned) | 60,000 | | 60,000 | Changes in Company Directors, Supervisors, and Senior Management | Name | Position Held | Type | Date | Reason | | :--- | :--- | :--- | :--- | :--- | | He Guosheng | Director | Appointment | 2019-04-12 | Elected as non-independent director at the company's 2018 Annual General Meeting | | Pan Hui | Director, Deputy General Manager | Resignation | 2020-02-27 | Resigned as company director and deputy general manager due to work arrangements | | Deng Xuheng | Deputy General Manager | Dismissal | 2019-12-20 | Resigned as company deputy general manager due to Yili Chuanling's independent development and capital operations | | Ding Nanchao | Deputy General Manager | Appointment | 2020-04-24 | Approved for appointment as company deputy general manager at the 28th meeting of the Sixth Board of Directors | - Mr. Liu Gexin serves as the company's Chairman and Party Secretary, holds a postgraduate degree, is a senior engineer, and founded Kelun Pharmaceutical Factory in 1996, serving as Chairman ever since[156](index=156&type=chunk) - Mr. Wang Jingyi serves as the company's Director, Deputy General Manager, Global R&D President, Chief Scientist, and Dean of the Pharmaceutical Research Institute, leading teams in developing and launching multiple significant drugs[157](index=157&type=chunk) [Remuneration of Directors, Supervisors, and Senior Management](index=74&type=section&id=9.2%20Remuneration%20of%20Directors%2C%20Supervisors%2C%20and%20Senior%20Management) The company implements an annual salary system for directors, supervisors, and senior management, with remuneration decisions approved by the Remuneration and Assessment Committee and then submitted to the Board of Directors or Shareholders' Meeting. Annual salary standards are determined based on annual operating performance, position level, performance, and market benchmarks. In 2019, the total pre-tax remuneration for the company's directors, supervisors, and senior management was **22.345 million yuan** - Directors' remuneration is reviewed by the Remuneration and Assessment Committee, then submitted to the Board of Directors for approval, and finally approved by the Shareholders' Meeting; supervisors' remuneration is reviewed by the Supervisory Board and submitted to the Shareholders' Meeting for approval; senior management remuneration is reviewed by the Remuneration and Assessment Committee and submitted to the Board of Directors for approval[166](index=166&type=chunk) - The company implements an annual salary system for directors, supervisors, and senior management, with annual salary standards determined based on annual operating performance, position level, performance, and reference to industry compensation levels[166](index=166&type=chunk) Remuneration of Company Directors, Supervisors, and Senior Management (2019) | Name | Position | Total Pre-tax Remuneration from Company (ten thousand yuan) | | :--- | :--- | :--- | | Liu Gexin | Chairman | 200 | | Liu Sicuan | Director, General Manager | 160 | | Wang Jingyi | Director, Deputy General Manager | 800 | | Pan Hui | Director, Deputy General Manager (Resigned) | 120 | | Deng Xuheng | Deputy General Manager (Resigned) | 97 | | **Total** | | **2,234.5** | [Company Employee Information](index=75&type=section&id=9.3%20Company%20Employee%20Information) As of the end of 2019, the company had a total of **20,242 employees**, with production personnel forming the largest group. The majority of employees hold college degrees or below, with a significant proportion also holding bachelor's, master's, and doctoral degrees. The company has established a performance-oriented compensation system based on job value and is systematically optimizing its talent development system, aiming to become Kelun College, providing ample learning opportunities and development platforms for employees Company Employee Count and Professional Structure (2019) | Indicator | Number of People | | :--- | :--- | | Total Number of Employees | 20,242 | | Production Personnel | 12,423 | | Sales Personnel | 1,455 | | Technical Personnel | 4,685 | | Financial Personnel | 333 | | Administrative Personnel | 1,346 | Employee Education Level (2019) | Education Level Category | Number of People | | :--- | :--- | | College Degree or Below | 14,595 | | Bachelor's Degree | 4,270 | | Master's Degree | 1,156 | | Doctoral Degree | 221 | - The company has established a compensation system that effectively supports its business operations and human resource development strategy, reflecting a performance orientation based on job value, strengthening incentives, and striving to keep employee income at a high level within the local industry[171](index=171&type=chunk) - Aiming to build Kelun College, the company has systematically optimized its talent development system, adhering to three major principles: "strategy-guided," "layered training," and "learning-application consistency," and has improved platforms such as new employee training, internal trainer team building, and the E-learning online learning system[172](index=172&type=chunk) [Corporate Governance](index=77&type=section&id=Item%2010%20Corporate%20Governance) [Basic Status of Corporate Governance](index=77&type=section&id=10.1%20Basic%20Status%20of%20Corporate%20Governance) The company strictly adheres to relevant laws and regulations to improve its corporate governance structure, establishing sound internal management and control systems. It operates independently from its controlling shareholder and de facto controller in terms of business, assets, personnel, organization, and finance, ensuring autonomous operations. The Board of Directors and Supervisory Board are properly constituted and their specialized committees function effectively. The company prioritizes stakeholder interests and has established a comprehensive information disclosure system - The company continuously improves its corporate governance structure and establishes sound internal management and control systems in accordance with the Company Law, Securities Law, and Corporate Governance Standards[174](index=174&type=chunk) - The company is strictly separated and independent from its controlling shareholder, de facto controller, and other enterprises controlled by them in terms of business, assets, personnel, organization, and finance, possessing complete procurement, production, and sales systems[176](index=176&type=chunk) - The company's Board of Directors consists of **9 members**, including **3 independent directors**, and has established four specialized committees: Audit, Nomination, Remuneration and Assessment, and Strategy, with directors diligently performing their duties[174](index=174&type=chunk) - The company's Supervisory Board comprises **3 supervisors**, including **1 employee supervisor**, who oversee the Board of Directors' decision-making processes, resolutions, and the company's legal operations[174](index=174&type=chunk) - The company designates Securities Times, Shanghai Securities News, Securities Daily, China Securities Journal, and Juchao Information Network as its information disclosure media, ensuring all shareholders receive timely company information[174](index=174&type=chunk) [Performance of Independent Directors and Board Specialized Committees](index=79&type=section&id=10.2%20Performance%20of%20Independent%20Directors%20and%20Board%20Specialized%20Committees) During the reporting period, the company's independent directors actively attended Board and Shareholder meetings, offering independent opinions on significant matters, all of which were adopted. The Board's specialized committees also operated effectively, reviewing company strategy, finance, remuneration, and nomination matters, providing professional support for Board decisions and enhancing corporate governance Attendance of Independent Directors at Board and Shareholder Meetings (2019) | Independent Director Name | Number of Board Meetings to Attend in Current Reporting Period | Number of In-person Board Meetings Attended | Number of Board Meetings Attended by Communication | Number of Board Meetings Attended by Proxy | Number of Board Meetings Missed | Number of Shareholder Meetings Attended | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Wang Guangji | 13 | 0 | 13 | 0 | 0 | 0 | | Zhang Tao | 13 | 1 | 12 | 0 | 0 | 0 | | Li Yuedong | 13 | 0 | 13 | 0 | 0 | 1 | - During the reporting period, independent directors raised no objections to company matters, and their reasonable suggestions were all adopted by the company[180](index=180&type=chunk)[181](index=181&type=chunk) - The Board's Strategy Committee held **5 meetings** to study matters such as company project investments, capital increases, and subsidiary establishments[182](index=182&type=chunk) - The Board's Audit Committee held **6 meetings** to regularly understand the company's financial status and operating conditions, review financial information and its disclosure, and examine the internal control system and its implementation[183](index=183

四川科伦药业股份有限公司 2018 年第三季度报告正文 证券代码：002422 证券简称：科伦药业 公告编号：2018-111 四川科伦药业股份有限公司 2018 年第三季度报告正文 1 四川科伦药业股份有限公司 2018 年第三季度报告正文 第一节 重要提示 公司董事会、监事会及董事、监事、高级管理人员保证季度报告内容的真 实、准确、完整，不存在虚假记载、误导性陈述或者重大遗漏，并承担个别和 连带的法律责任。 所有董事均已出席了审议本次季报的董事会会议。 公司负责人刘革新、主管会计工作负责人赖德贵及会计机构负责人(会计主 管人员)黄俊声明：保证季度报告中财务报表的真实、准确、完整。 2 四川科伦药业股份有限公司 2018 年第三季度报告正文 第二节 公司基本情况 一、主要会计数据和财务指标 公司是否需追溯调整或重述以前年度会计数据 □ 是 √ 否 | | 本报告期末 | 上年度末 | | 本报告期末比上年度末增减 | | --- | --- | --- | --- | --- | | 总资产（元） | 29,065,218,038.00 | | 27,988,160,462.00 | 3.85% | | 归 ...

四川科伦药业股份有限公司 2018 年半年度报告全文 四川科伦药业股份有限公司 2018 年半年度报告 2018 年 08 月 1 四川科伦药业股份有限公司 2018 年半年度报告全文 第一节 重要提示、目录和释义 公司董事会、监事会及董事、监事、高级管理人员保证半年度报告内容的 真实、准确、完整，不存在虚假记载、误导性陈述或重大遗漏，并承担个别和 连带的法律责任。 公司负责人刘革新、主管会计工作负责人赖德贵及会计机构负责人(会计主 管人员)黄俊声明：保证本半年度报告中财务报告的真实、准确、完整。 所有董事均已出席了审议本报告的董事会会议。 公司2018年半年度报告所涉及未来计划等前瞻性陈述不构成公司对投资者 的实质承诺，投资者及相关人士均应当对此保持足够的风险认识，并且应当理 解计划、预测与承诺之间的差异。 公司可能面临行业政策变化和市场风险、生产要素上涨的风险、固定资产 折旧增加导致利润下降的风险、环保风险、药品质量风险、商誉等资产的减值 风险等，敬请广大投资者注意投资风险。详细内容见本报告"第四节 十、公司 面临的风险及应对措施"。 公司计划不派发现金红利，不送红股，不以公积金转增股本。 2 | 目录 ...

四川科伦药业股份有限公司 2018 年半年度报告全文 四川科伦药业股份有限公司 2018 年半年度报告 2018 年 08 月 1 四川科伦药业股份有限公司 2018 年半年度报告全文 第一节 重要提示、目录和释义 公司董事会、监事会及董事、监事、高级管理人员保证半年度报告内容的 真实、准确、完整，不存在虚假记载、误导性陈述或重大遗漏，并承担个别和 连带的法律责任。 公司负责人刘革新、主管会计工作负责人赖德贵及会计机构负责人(会计主 管人员)黄俊声明：保证本半年度报告中财务报告的真实、准确、完整。 所有董事均已出席了审议本报告的董事会会议。 公司2018年半年度报告所涉及未来计划等前瞻性陈述不构成公司对投资者 的实质承诺，投资者及相关人士均应当对此保持足够的风险认识，并且应当理 解计划、预测与承诺之间的差异。 公司可能面临行业政策变化和市场风险、生产要素上涨的风险、固定资产 折旧增加导致利润下降的风险、环保风险、药品质量风险、商誉等资产的减值 风险等，敬请广大投资者注意投资风险。详细内容见本报告"第四节 十、公司 面临的风险及应对措施"。 | 目录 | | --- | | 2018 | 年半年度报告 2 | ...