Financial Performance - The company's operating revenue for Q1 2021 was ¥223,082,273.77, representing a 47.70% increase compared to ¥151,034,346.90 in the same period last year[7]. - Net profit attributable to shareholders was ¥1,018,515.83, a significant turnaround from a loss of ¥43,650,138.12, marking a 102.33% improvement[7]. - Basic earnings per share improved to ¥0.0045 from a loss of ¥0.2095, indicating a 102.15% increase[7]. - The company's revenue for the reporting period was 223.08 million, an increase of 47.70% compared to the same period last year, primarily due to the recovery of pharmaceutical sales following the control of the COVID-19 pandemic and increased sales of new products such as Sincalide and Rivaroxaban tablets[20]. - The company's net loss for the period was CNY 51,847,163.56, an improvement from a loss of CNY 77,037,479.23 in the previous year[42]. - The total profit for the first quarter was CNY 5,506,915.76, a significant improvement from a loss of CNY 45,869,462.36 in the prior year[46]. Cash Flow - The net cash flow from operating activities reached ¥15,554,487.31, compared to a negative cash flow of ¥17,385,577.38 in the previous year, reflecting a 189.47% increase[7]. - The company's cash flow from operating activities was 15.55 million, an increase of 189.47% year-on-year, primarily due to increased cash received from sales of goods and government subsidies[19]. - The net cash flow from operating activities for Q1 2021 was ¥15,554,487.31, a significant improvement compared to a net outflow of ¥17,385,577.38 in Q1 2020[54]. - Total cash inflow from investment activities was ¥1,400.00, while cash outflow was ¥9,221,527.50, resulting in a net cash flow of -¥9,220,127.50 for Q1 2021[54]. - Cash inflow from financing activities totaled ¥13,880,000.00, with cash outflow amounting to ¥53,802,683.06, leading to a net cash flow of -¥39,922,683.06[55]. - The ending balance of cash and cash equivalents as of the end of Q1 2021 was ¥146,598,939.52, down from ¥180,187,262.77 at the beginning of the period[55]. Assets and Liabilities - Total assets at the end of the reporting period were ¥1,744,408,505.07, down 3.12% from ¥1,800,518,724.44 at the end of the previous year[7]. - The total assets of the company as of January 1, 2021, were adjusted to ¥1,802,128,428.44, reflecting a minor increase due to the new leasing standards[60]. - Total liabilities amounted to CNY 927,906,148.41, with current liabilities totaling CNY 489,898,577.78 and non-current liabilities at CNY 438,007,570.63[62]. - The total equity attributable to shareholders was CNY 687,099,034.95, while total equity reached CNY 872,612,576.03[62]. - The total amount of other payables was CNY 124,380,275.13, reflecting the company's short-term obligations[62]. Shareholder Information - The total number of ordinary shareholders at the end of the reporting period was 12,169[10]. - The top shareholder, Weng Zanguo, holds 6.92% of the shares, amounting to 15,772,409 shares[10]. - The company did not engage in any repurchase transactions among the top shareholders during the reporting period[11]. Research and Development - Research and development expenses for Q1 2021 were CNY 9,721,554.14, slightly down from CNY 9,910,106.85 in the previous year, indicating a focus on cost management[45]. - The company incurred research and development expenses of CNY 2,992,647.76, down from CNY 4,281,186.85 in the previous year[49]. Risks and Strategies - The company faces significant risks from industry policy changes, drug price reductions, and potential product exits from the National Medical Insurance Directory, which could adversely affect its revenue and profitability[23][24]. - The company is actively working to expand its OTC market and enhance its product structure to mitigate risks associated with price reductions and policy changes in the pharmaceutical industry[22]. Investment and Capital Expenditure - Total funds raised in the current quarter amounted to 13,358.06 million yuan, with a cumulative investment of 2,010.75 million yuan[27]. - The company has committed to invest 14,000 million yuan in various projects, with 9.74% of the total funds utilized so far[28]. - The company plans to temporarily use 50 million yuan of idle raised funds to supplement working capital, with a repayment period not exceeding 12 months[28]. Other Financial Metrics - The company's operating costs for the reporting period were 70.83 million, an increase of 43.44% compared to the same period last year, mainly due to the increase in operating revenue[18]. - The company's other income for the reporting period was 8.08 million, an increase of 422.08% year-on-year, primarily due to an increase in government subsidies received[18]. - The company's investment income for the reporting period was -0.30 million, an increase of 85.45% compared to the same period last year, mainly due to increased long-term equity investment income accounted for using the equity method[18].

Financial Performance - The company reported a loss of 262.37 million yuan, primarily due to key products being removed from the National Medical Insurance Directory and the impact of the COVID-19 pandemic[4]. - The company's operating revenue for 2020 was ¥848,072,527.70, a decrease of 25.07% compared to ¥1,131,801,411.20 in 2019[18]. - The net profit attributable to shareholders was -¥262,367,450.85, representing a decline of 5,053.33% from ¥5,296,788.44 in the previous year[18]. - The net cash flow from operating activities was -¥20,877,122.80, a decrease of 129.98% compared to ¥69,631,646.50 in 2019[18]. - The total assets at the end of 2020 were ¥1,800,518,724.44, a slight decrease of 0.08% from ¥1,802,029,245.48 at the end of 2019[18]. - The net assets attributable to shareholders decreased by 15.78% to ¥687,099,034.95 from ¥815,885,921.17 in 2019[18]. - The company reported a basic earnings per share of -¥1.2305, a significant drop of 4,944.49% from ¥0.0254 in 2019[18]. - The company recorded a total of ¥31,585,171.58 in government subsidies, down from ¥50,693,893.90 in 2019[24]. - The company’s quarterly revenue for Q4 2020 was ¥248,463,411.44, showing a recovery trend compared to previous quarters[21]. Research and Development - During the reporting period, the company obtained 3 drug registration approvals and 4 supplementary applications for drug consistency evaluations[4]. - The company plans to focus on high-end generic drug research and development, increasing R&D investment and optimizing product structure[4]. - The company has a professional R&D team and a comprehensive technical innovation system, with most projects being independently developed[43]. - The company added 3 invention patents and 9 utility model patents during the reporting period, reflecting its commitment to innovation[44]. - The company has established a high-level drug research institute to enhance its drug development capabilities, with six key products passing consistency evaluations[44]. - The company plans to focus on innovation in chemical and traditional Chinese medicine during the 13th Five-Year Plan period, aiming to enhance drug quality and reduce costs[33]. Market and Industry Trends - The health product market is expected to grow significantly due to rising disposable income and an aging population, alongside increased government support for health initiatives[34]. - The overall pharmaceutical industry is undergoing a transformation with stricter regulations and a focus on supply-side reforms, leading to market consolidation[32]. - The company has faced challenges in the maternal and infant health product sector due to declining birth rates, impacting market size[34]. - The company anticipates a recovery in the pharmaceutical industry as the COVID-19 vaccine rollout progresses, driven by ongoing demand for quality medical resources[102]. - The pharmaceutical industry is undergoing reforms aimed at improving the healthcare system and increasing insurance payment levels, which may benefit the company[100]. Strategic Initiatives - The company has established a development strategy centered on high-end pharmaceuticals, with precision medicine and health food as auxiliary sectors[37]. - The company will focus on high-end pharmaceutical development, with an emphasis on innovative drugs and generics, to enhance its core competitiveness and risk resistance[103]. - The company will increase its R&D investment in high-end generics and innovative drugs, establishing a technical center and enhancing project selection processes[104]. - The company is actively adapting to industry changes, including the implementation of national medical reform policies and centralized procurement strategies[49]. - The company has streamlined its marketing team and reorganized its structure to better respond to market pressures and enhance competitiveness[49]. Risks and Challenges - The company faces risks including industry policy changes, new drug development risks, price reduction risks, and goodwill impairment risks[4]. - The company has faced uncertainty regarding its ability to continue as a going concern, as indicated by the negative net profits over the past year[18]. - The company is facing ongoing risks related to product exits from the National Medical Insurance Directory, which could severely impact profitability if additional key products are affected[107]. - The company faces risks from industry policy changes, including drug price reductions due to national healthcare reforms, which may impact profitability[106]. Corporate Governance and Compliance - The company has maintained compliance with all regulatory requirements regarding share transfers and management[120]. - The company has not engaged in any business activities that directly or indirectly compete with its operations during the restriction period[122]. - The commitments made by the controlling shareholders regarding non-competition and conflict of interest have been strictly followed[121]. - The company has not experienced any major litigation or arbitration matters during the reporting period[132]. - The company has not engaged in any major related party transactions during the reporting period[135]. Shareholder and Capital Structure - The company will not distribute cash dividends, issue bonus shares, or increase capital using reserves[5]. - The company has set a shareholder return plan for 2021-2023, committing to distribute at least 10% of the distributable profit in cash annually, with a cumulative distribution of at least 30% over any three consecutive years[112]. - The company’s stock was listed on the Shenzhen Stock Exchange on October 14, 2020, following the issuance[182]. - The company’s financial metrics, including earnings per share and net asset value per share, were impacted by the changes in share capital due to the issuance[176]. - The total number of shareholders at the end of the reporting period was 13,052, an increase from 12,169 at the end of the previous month[185]. Social Responsibility and Environmental Compliance - The company actively participates in social responsibility, donating RMB 2 million worth of medicines to support epidemic prevention efforts[154]. - The company has established an emergency response plan for environmental incidents, which has been filed with the local environmental protection department[160]. - The company operates two steam boilers using clean energy, achieving compliance with emissions standards[158]. - The company has a wastewater treatment facility with a capacity of 150 m³/day, ensuring compliance with local discharge standards[158].

山西仟源医药集团股份有限公司 2020 年第三季度报告全文 山西仟源医药集团股份有限公司 2020 年第三季度报告 2020 年 10 月 1 山西仟源医药集团股份有限公司 2020 年第三季度报告全文 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。 公司负责人赵群、主管会计工作负责人贺延捷及会计机构负责人(会计主管 人员)刘雅莉声明：保证季度报告中财务报表的真实、准确、完整。 2 山西仟源医药集团股份有限公司 2020 年第三季度报告全文 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） | 1,908,959,686.58 | 1,802,029,245.48 | | 5.93% | | 归属于上市公司股东的净资产 | 825,7 ...

Financial Performance - The company's operating revenue for the first half of 2020 was ¥394,615,196.44, a decrease of 29.28% compared to ¥557,987,571.52 in the same period last year[18]. - The net profit attributable to shareholders of the listed company was -¥75,229,590.64, representing a decline of 278.56% from a profit of ¥42,131,311.99 in the previous year[18]. - The net cash flow from operating activities was -¥23,831,317.61, down 152.41% from ¥45,466,808.83 in the same period last year[18]. - The basic earnings per share were -¥0.3611, a decrease of 278.50% compared to ¥0.2023 in the previous year[18]. - The net profit after deducting non-recurring gains and losses was -¥88,536,400.58, a decline of 1,181.72% from ¥8,184,777.29 in the previous year[18]. - The company reported a revenue of 394.62 million yuan, a year-on-year decrease of 29.28%[29]. - The net profit attributable to shareholders was -75.23 million yuan, a year-on-year decline of 278.56%[29]. - The decline in net profit was primarily due to reduced sales of anti-infection and respiratory drugs impacted by the COVID-19 pandemic[29]. - The company achieved a significant reduction in sales expenses by 17.12%, decreasing from ¥316,920,862.82 to ¥262,677,007.97[46]. - The company reported a total comprehensive loss of CNY 75,383,758.46 for the first half of 2020, compared to a comprehensive income of CNY 43,473,182.34 in the first half of 2019[152]. Assets and Liabilities - Total assets at the end of the reporting period were ¥1,890,865,453.19, an increase of 4.93% from ¥1,802,029,245.48 at the end of the previous year[18]. - The net assets attributable to shareholders of the listed company decreased by 9.22% to ¥740,656,330.53 from ¥815,885,921.17 at the end of the previous year[18]. - The balance of trading financial assets at the end of the period was CNY 8 million, an increase of 100% compared to the beginning of the period[33]. - The balance of accounts receivable financing decreased by 71.48% to CNY 10.05 million, mainly due to a reduction in settled payments using acceptance bills[33]. - The total liabilities rose from ¥869,426,545.30 to ¥946,389,939.10, indicating an increase of approximately 8.9%[143]. - The company's total liabilities decreased to CNY 489,092,086.93 in the first half of 2020 from CNY 501,450,543.18 in the first half of 2019[148]. - Short-term borrowings increased significantly from ¥99,155,592.25 to ¥163,150,022.78, representing a rise of about 64.6%[143]. Research and Development - The company is focusing on innovation and development of high-value clinical drugs to remain competitive in the market[31]. - The company completed the consistency evaluation for six key products, enhancing its competitive edge in the market[35]. - The company acquired Jiayi Pharmaceutical, significantly improving its R&D capabilities for high-end generic drugs[35]. - The company has received clinical trial approval for multiple projects, including 盐酸莫西沙星 and 罗氟司特项目, which are currently in the clinical trial preparation stage[44]. - Research and development expenses remained stable at CNY 22,826,717.43 in the first half of 2020, slightly down from CNY 22,905,367.36 in the same period of 2019[149]. Market and Industry Trends - The pharmaceutical industry is undergoing significant regulatory changes, impacting market dynamics and company performance[30]. - The company plans to enhance its market expansion and product development strategies in response to industry trends[31]. - The company faces risks from industry policy changes, including drug price controls and the impact of the national medical insurance directory on sales revenue[69]. - The company has experienced a significant decline in revenue and net profit since the withdrawal of its main product from the national medical insurance directory, which could adversely affect future performance[71]. - The COVID-19 pandemic has negatively impacted the company's production and sales due to logistics disruptions and workforce challenges[72]. Corporate Governance and Management - The company successfully completed the restructuring of its board of directors and management personnel during the reporting period, focusing on improving management efficiency and risk prevention capabilities[43]. - The company completed the election and appointment of the fourth board of directors, including the election of Zhao Qun as chairman and the appointment of Zhong Hairong as president[109]. - The company held its first extraordinary general meeting on February 11, 2020, with an investor participation rate of 35.27%[76]. - The annual general meeting for 2019 took place on June 30, 2020, with a participation rate of 28.94%[76]. Environmental and Social Responsibility - The company donated RMB 2 million worth of medicines to support epidemic prevention efforts against COVID-19[110]. - The company has a wastewater treatment facility with a capacity of 150 m³/day, utilizing biochemical treatment methods to meet local discharge standards[101]. - The company has installed an online monitoring system for wastewater discharge, ensuring real-time data upload to environmental monitoring platforms[104]. - The company has committed to environmental protection measures, including a comprehensive emergency response plan for environmental incidents[103]. Financial Management - The company plans to raise ¥140 million through a simplified procedure to fund the production line upgrade project for 300 million solid dosage forms, drug R&D projects, and repay bank loans, enhancing its core competitiveness[44]. - The financial expenses increased by 237.97% to ¥24,147,670.41 due to an increase in bank loans and financial debts during the reporting period[46]. - The company incurred interest expenses of approximately ¥12,900,000 due to financial liabilities related to investments in Nantong Hengjia Pharmaceutical Co., Ltd.[47]. - The company has made progress in its consistency evaluation work, with several products, including 盐酸氨溴索分散片 and 盐酸氟西汀胶囊, having passed the evaluation[45]. Shareholder Information - The company reported a total of 208,308,000 shares outstanding, with 82.08% (170,985,748 shares) being unrestricted shares and 17.92% (37,322,252 shares) being restricted shares[116]. - The largest shareholder, Weng Zanguo, holds 19,921,409 shares, representing 9.56% of the total shares[121]. - The company has a total of 2 steam boilers with a combined capacity of 6 tons/hour, using clean energy to ensure emissions meet standards[102]. - The company has received multiple industry development support funds, with announcements made on January 2, March 31, and June 12, 2020[112].

Financial Performance - Total revenue for Q1 2020 was ¥151,034,346.90, a decrease of 40.40% compared to ¥253,398,317.43 in the same period last year[7] - Net profit attributable to shareholders was -¥43,650,138.12, representing a decline of 319.75% from ¥19,863,649.43 in the previous year[7] - Basic and diluted earnings per share were both -¥0.2095, a decrease of 319.60% compared to ¥0.0954 in the same period last year[7] - The company reported a loss of 43.65 million yuan in Q1 2020, primarily due to the impact of the COVID-19 pandemic and the withdrawal of key products from the National Medical Insurance Directory[30] - The net profit for Q1 2020 was -9,355,447.09 CNY, compared to a profit of 13,933,533.03 CNY in the same period last year, representing a significant decline[51] - Operating profit for Q1 2020 was -9,238,075.50 CNY, down from 12,781,670.54 CNY in Q1 2019[50] - The total comprehensive income for Q1 2020 was -9,355,447.09 CNY, compared to 13,933,533.03 CNY in the same period last year[51] Cash Flow - Net cash flow from operating activities was -¥17,385,577.38, down 270.10% from ¥10,220,918.95 in Q1 2019[7] - The net cash flow from operating activities was CNY -17.39 million, a decrease of 270.10% compared to the same period last year, primarily due to reduced cash received from sales and government subsidies[22] - Cash flow from operating activities was -17,385,577.38 CNY, a decrease from 10,220,918.95 CNY in the previous year[54] - Cash flow from investing activities generated a net inflow of 6,673,267.72 CNY, recovering from a net outflow of -29,674,301.21 CNY in the previous year[54] - Cash flow from financing activities resulted in a net inflow of 21,109,697.64 CNY, compared to a net outflow of -21,815,661.11 CNY in the same period last year[55] - The net cash flow from investment activities was -11,131,189.13 CNY for Q1 2020, compared to -19,881,927.20 CNY in Q1 2019, indicating an improvement of approximately 44% year-over-year[58] - The net cash flow from financing activities was -30,665,935.40 CNY in Q1 2020, compared to an inflow of 8,313,087.07 CNY in Q1 2019, showing a significant decline[58] Assets and Liabilities - Total assets at the end of the reporting period were ¥1,895,651,032.66, an increase of 5.20% from ¥1,802,029,245.48 at the end of the previous year[7] - The company's total liabilities increased to 920.35 million yuan from 869.43 million yuan, reflecting a rise in short-term borrowings[38] - The company's total liabilities decreased to CNY 466,728,521.90 from CNY 501,450,543.18[45] - The total assets were reported at 1,802,029,245.48 CNY, consistent with the previous year's figures[62] - The company's equity attributable to shareholders decreased to 772.24 million yuan from 815.89 million yuan, indicating a decline in retained earnings[39] - The company's equity attributable to shareholders was 815,885,921.17 CNY, unchanged from the previous year[62] Shareholder Information - The total number of ordinary shareholders at the end of the reporting period was 15,803[11] - The top three shareholders collectively hold 20.80% of the company's shares, indicating a concentrated ownership structure[12] - The company did not engage in any repurchase transactions among the top shareholders during the reporting period[12] - The company has committed to not transferring or entrusting the management of its directly or indirectly held shares for 36 months from the date of its stock listing[26] - The commitment includes a restriction on transferring more than 25% of directly or indirectly held shares during the tenure of the relevant personnel and for six months after leaving[27] - The company has not encountered any violations of commitments made by its major shareholders and management as of the end of the reporting period[28] Operational Challenges and Strategies - The company's operating revenue for the first quarter was CNY 151.03 million, a decrease of 40.40% compared to the same period last year, primarily due to the impact of the COVID-19 pandemic and the withdrawal of key products from the National Medical Insurance Directory[23] - The company continues to focus on enhancing sales of key products and adjusting product structure in response to the challenges posed by the pandemic and healthcare reforms[24] - The company faces risks including industry policy changes, new drug development risks, and the impact of the COVID-19 pandemic, and is taking measures to maintain normal operations[25] - The company is focusing on new product development and market expansion strategies to recover from the current financial challenges[30] Other Financial Metrics - Research and development expenses for Q1 2020 were CNY 9,910,106.85, down from CNY 11,370,986.94 year-on-year[45] - The company reported a significant increase in financial expenses, totaling CNY 12,376,269.42, compared to CNY 3,750,759.38 in the previous period[45] - Other income for Q1 2020 was CNY 1,547,133.37, down from CNY 2,387,087.32 year-on-year[45] - The company experienced a credit impairment loss of CNY -3,496,955.37, compared to CNY -4,356,055.61 in the previous year[45] - The company has not reported any significant changes in user data or performance metrics in the first quarter[27] - There are no new product launches or technological developments mentioned in the report[28] Compliance and Commitments - The company has not encountered any violations of commitments made by its major shareholders and management as of the end of the reporting period[28] - The commitments made by the actual controller regarding the non-use of company funds have been strictly adhered to[28] - There are no overdue commitments that have not been fulfilled as of the reporting period[29] - The company has not implemented any share buyback or reduction through centralized bidding during the reporting period[26] - The company has not undergone an audit for the Q1 2020 report[66] - The company has adopted new revenue and leasing standards starting from 2020, but the impact on prior periods is not applicable[65]

Financial Performance - The company's operating revenue for 2019 was CNY 1,131,801,411.20, a decrease of 0.41% compared to CNY 1,136,495,667.79 in 2018[15]. - The net profit attributable to shareholders for 2019 was CNY 5,296,788.44, down 26.85% from CNY 7,241,080.66 in 2018[15]. - The net profit attributable to shareholders after deducting non-recurring gains and losses was CNY -59,400,126.06, an increase of 335.52% compared to CNY -13,638,855.14 in 2018[15]. - The net cash flow from operating activities increased by 81.14% to CNY 69,631,646.50 from CNY 38,440,743.90 in 2018[15]. - The total assets at the end of 2019 were CNY 1,802,029,245.48, representing a 20.48% increase from CNY 1,495,710,196.93 at the end of 2018[15]. - The net assets attributable to shareholders at the end of 2019 were CNY 815,885,921.17, a 2.10% increase from CNY 799,091,885.14 at the end of 2018[15]. - The basic earnings per share for 2019 were CNY 0.0254, down 27.01% from CNY 0.0348 in 2018[15]. - The weighted average return on equity for 2019 was 0.65%, a decrease of 0.25% from 0.90% in 2018[15]. Revenue Breakdown - The company achieved operating revenue of 1,131.80 million yuan, a year-on-year decrease of 0.41%[27]. - The pharmaceutical segment revenue reached ¥1.06 billion, accounting for 93.92% of total revenue, with a year-on-year growth of 1.19%[54]. - The healthcare food segment saw a significant decline of 51.55%, with revenue dropping to ¥18.35 million[54]. - The anti-allergy drug segment experienced a revenue increase of 25.46%, reaching ¥160.75 million[59]. - Revenue from the children's medication segment grew by 26.87%, totaling ¥97.53 million[59]. - The Northeast region contributed ¥91.24 million, reflecting a growth of 4.12% year-on-year[55]. - The East China region generated ¥416.04 million, with a year-on-year increase of 7.03%[55]. Challenges and Risks - The company faces risks including industry policy risks and potential product delisting from the National Medical Insurance Directory[4]. - The company reported a significant decline in revenue for its main products in Q4 2019 due to changes in the medical insurance catalog[28]. - The company is facing pressures from new medical reform policies, including centralized procurement and price reductions, which may impact short-term growth[29]. - The company faces risks from policy changes, including drug price controls and the potential impact of products exiting the National Medical Insurance Directory, which could significantly affect revenue[102]. - The company plans to mitigate risks associated with drug price reductions and bad debts by improving financial management and enhancing credit control measures[103]. Investments and Acquisitions - The company has recognized goodwill impairment for subsidiaries due to declining market conditions and increased promotional efforts[28]. - The company’s equity assets increased by 346.69% compared to the beginning of the year, primarily due to the acquisition of a 49% stake in Jiayi Pharmaceutical[31]. - The company signed a cooperation agreement with Lize Fund and Zhang Yu to jointly invest in Jiangsu Jiayi Pharmaceutical Co., acquiring a 49% stake, which is expected to enhance the company's drug research and innovation capabilities[45]. - The company established Nantong Hengjia Pharmaceutical Co., Ltd. in November 2019, holding a 42% stake, which was later increased to 71% through a voting rights agreement[66]. - The company approved the establishment of a new subsidiary and the investment in Jiangsu Jiayi Pharmaceutical Co., Ltd. during the reporting period[160]. Research and Development - The company has established a comprehensive technology innovation system, with significant investment in R&D and advanced research centers in Shanghai Zhangjiang and Aoyibao[38]. - The company achieved consistency evaluation for several generic drugs, enhancing market competitiveness and receiving support in drug procurement and medical insurance payments[38]. - The company added 3 invention patents, 16 utility model patents, and 1 design patent during the reporting period, reflecting its commitment to innovation[39]. - The company plans to focus on technological innovation to meet clinical needs and ensure drug safety throughout the research, production, and sales processes[97]. - The company will continue to invest in R&D, integrating existing teams to form a senior research institute, with a focus on controllable raw materials and high-demand clinical needs[100]. Corporate Governance and Compliance - The company has a complete corporate governance structure and actively fulfills information disclosure obligations to protect stakeholders' rights[146]. - The company has fulfilled all commitments made by actual controllers, shareholders, and related parties during the reporting period[113]. - The commitments made regarding avoiding competition and conflicts of interest have been strictly followed[114]. - The company has ensured that no funds have been occupied by controlling shareholders or related parties in a non-operating manner[116]. - The company implemented changes in accounting policies effective from January 1, 2020, which do not materially affect total assets, liabilities, net assets, operating income, or net profit[120]. Social Responsibility and Community Engagement - The company has actively engaged in social responsibility by donating materials to support pandemic relief efforts[107]. - The company donated pharmaceuticals worth 2 million RMB to support COVID-19 prevention efforts in February 2020[148]. - The company has been recognized for its participation in social welfare initiatives, supporting education, culture, and healthcare[149]. Employee and Management Information - The total remuneration for directors, supervisors, and senior management in 2019 amounted to CNY 5.27 million[196]. - The company employed a total of 1,305 staff, with 401 in production, 401 in sales, and 227 in technical roles[199]. - The number of employees with a master's degree or above is 54, while those with a bachelor's degree total 337[200]. - The company has a total of 953 employees in its main subsidiaries[199]. - The total number of employees with a high school education or below is 519[200].

山西仟源医药集团股份有限公司 2019 年第三季度报告全文 山西仟源医药集团股份有限公司 2019 年第三季度报告 2019 年 10 月 1 山西仟源医药集团股份有限公司 2019 年第三季度报告全文 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。 公司负责人赵群、主管会计工作负责人贺延捷及会计机构负责人(会计主管 人员)刘雅莉声明：保证季度报告中财务报表的真实、准确、完整。 2 山西仟源医药集团股份有限公司 2019 年第三季度报告全文 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） | 1,559,986,318.91 | 1,495,710,196.93 | | 4.30% | | 归属于上市公司股东的净资产 | 838,5 ...

Financial Performance - Total revenue for the first half of 2019 was CNY 557,987,571.52, an increase of 3.23% compared to CNY 540,504,880.48 in the same period last year[17]. - Net profit attributable to shareholders was CNY 42,131,311.99, representing a significant increase of 142.04% from CNY 17,406,852.28 year-on-year[17]. - Basic earnings per share rose to CNY 0.2023, a 141.99% increase compared to CNY 0.0836 in the same period last year[17]. - The company's revenue increased by 3.23% year-on-year, while net profit attributable to shareholders rose by 142.04%[28]. - The company's main business income for the reporting period was 555.66 million yuan, reflecting a year-on-year growth of 3.54%[40]. - The net profit attributable to shareholders for the reporting period was 42.13 million RMB, an increase of 142.04% compared to the same period last year[48]. - The company reported a significant increase in income tax expenses, which surged by 149.32% to RMB 6,563,799.25 due to higher profit totals compared to the previous year[47]. - The total comprehensive income for the first half of 2019 was CNY 26.00 million, down from CNY 28.13 million in the first half of 2018, reflecting a decrease of approximately 7.5%[152]. Cash Flow and Investments - Net cash flow from operating activities reached CNY 45,466,808.83, up 171.18% from CNY 16,766,315.89 in the previous year[17]. - The net cash flow from investing activities improved by 87.66%, with a loss of RMB 4,312,399.05 compared to a loss of RMB 34,934,919.97 in the previous year[47]. - The net cash flow from financing activities showed a significant decline of 353.01%, resulting in a loss of RMB 73,497,430.89 compared to a loss of RMB 16,224,403.34 in the previous year[47]. - The cash flow from investing activities showed a net outflow of CNY 4.31 million in the first half of 2019, an improvement from a net outflow of CNY 34.93 million in the same period of 2018[156]. - The cash flow from financing activities resulted in a net outflow of CNY 73.50 million in the first half of 2019, compared to a net outflow of CNY 16.22 million in the first half of 2018[156]. Assets and Liabilities - Total assets decreased by 5.06% to CNY 1,419,963,353.57 from CNY 1,495,710,196.93 at the end of the previous year[17]. - Total liabilities decreased from CNY 564,470,458.53 to CNY 457,416,592.83, a reduction of approximately 18.9%[138]. - Total equity increased from CNY 931,239,738.40 to CNY 962,546,760.74, an increase of about 3.4%[138]. - Current assets decreased from CNY 634,862,447.61 as of December 31, 2018, to CNY 604,821,053.74 as of June 30, 2019, representing a decline of approximately 4.9%[136]. - Total liabilities to equity ratio improved, reflecting a stronger financial position as total liabilities decreased while equity increased[143]. Research and Development - The company is focusing on "consistency evaluation" in its R&D projects, with ongoing research and development of generic drugs[41]. - Research and development investment decreased by 5.53% to RMB 25,659,677.27, down from RMB 27,160,301.59 in the previous year[47]. - The company is actively developing new products and enhancing market investment, contributing to the significant growth in net profit[28]. - The company has several ongoing R&D projects, including the Moxifloxacin Hydrochloride project, which is in the clinical trial preparation stage[42]. Market and Operational Strategy - The company adopted a "sales-driven production" model, aligning production plans with market demand and sales forecasts[27]. - The company has expanded its marketing network, covering thousands of pharmaceutical companies and over ten thousand grassroots medical terminals across the country[34]. - The company plans to continue focusing on market expansion and new product development to drive future growth[148]. - The company is committed to improving accounts receivable management to reduce the risk of bad debts as sales scale increases[70]. Risk Management - The company disclosed potential operational risks and corresponding countermeasures in its report[4]. - The company’s management is closely monitoring industry policy changes to proactively manage operational risks[67]. - The pharmaceutical industry is experiencing pressure on profit margins due to ongoing national medical reforms, which may lead to price reductions for the company's products[68]. Shareholder and Corporate Governance - The company plans not to distribute cash dividends or issue bonus shares[5]. - The company did not conduct an audit for the semi-annual financial report[78]. - There were no significant litigation or arbitration matters during the reporting period[80]. - The company has not undergone any changes in its controlling shareholder or actual controller during the reporting period[120]. Environmental Compliance - The company has a wastewater treatment facility with a capacity of 150 m³/day, ensuring compliance with local discharge standards[98]. - The company has installed online monitoring systems for wastewater discharge, with data uploaded to environmental monitoring platforms[101]. - The company has no significant environmental violations reported during the period[96]. Miscellaneous - The company has made commitments regarding non-competition and non-occupancy of company funds, which are being honored[77]. - The company has no preferred shares outstanding during the reporting period[123]. - The company has a total of 10 subsidiaries, including Zhejiang Hailisheng Pharmaceutical Co., Ltd. and Wuhan Qianyuan E-commerce Co., Ltd.[187].

[Important Notice](index=2&type=section&id=Item%201.%20Important%20Notice) The board, supervisors, and management affirm the quarterly report's accuracy and completeness, with a note on an independent director's proxy attendance - The company's board of directors, supervisory board, and senior management guarantee the truthfulness, accuracy, and completeness of the quarterly report content and assume legal responsibility[3](index=3&type=chunk) - The company's principal officer, the person in charge of accounting work, and the head of the accounting department declare that the financial statements are **true, accurate, and complete**[4](index=4&type=chunk) - Independent Director Wang Jun did not personally attend the board meeting due to personal reasons and has authorized Huang Juan to attend on his behalf[5](index=5&type=chunk) [Company Basic Information](index=3&type=section&id=Item%202.%20Company%20Basic%20Information) [Key Accounting Data and Financial Indicators](index=3&type=section&id=I.%20Key%20Accounting%20Data%20and%20Financial%20Indicators) Net profit attributable to shareholders and basic EPS surged over **170%** in Q1 2019, driven by significant government subsidies despite a **6.32%** decline in total operating revenue 2019 Q1 Key Accounting Data and Financial Indicators | Indicator | Current Period (CNY) | Prior Year Same Period (CNY) | Period-over-Prior Year Change | | :--- | :--- | :--- | :--- | | Total Operating Revenue | 253,398,317.43 | 270,500,994.29 | -6.32% | | Net Profit Attributable to Shareholders of Listed Company | 19,863,649.43 | 7,317,083.24 | 171.47% | | Net Profit Attributable to Shareholders of Listed Company (Excluding Non-Recurring Gains/Losses) | 1,461,476.66 | 5,048,557.63 | -71.05% | | Net Cash Flow from Operating Activities | 10,220,918.95 | 5,372,758.75 | 90.24% | | Basic Earnings Per Share (CNY/share) | 0.0954 | 0.0351 | 171.79% | | Diluted Earnings Per Share (CNY/share) | 0.0954 | 0.0351 | 171.79% | | Weighted Average Return on Net Assets | 2.46% | 0.89% | 1.57% | | **Key Asset and Liability Indicators as of 2019 Q1 End** | | | | | Total Assets | 1,455,251,349.40 | 1,495,710,196.93 | -2.70% | | Net Assets Attributable to Shareholders of Listed Company | 818,955,534.57 | 799,091,885.14 | 2.49% | 2019 Q1 Non-Recurring Gains and Losses Items and Amounts | Item | Amount from Year-Beginning to Period End (CNY) | Explanation | | :--- | :--- | :--- | | Gains/Losses from Disposal of Non-Current Assets (including write-off of impairment provisions) | -746,792.44 | | | Government Subsidies Included in Current Profit/Loss (excluding those closely related to business and enjoyed at fixed/quantitative standards) | 21,637,287.32 | | | Other Non-Operating Income and Expenses Apart from the Above | -1,414.50 | | | Less: Income Tax Impact | 2,636,485.83 | | | Minority Interest Impact (after tax) | -149,578.22 | | | Total | 18,402,172.77 | -- | [Total Shareholders and Top Ten Shareholders' Holdings at Period End](index=4&type=section&id=II.%20Total%20Shareholders%20and%20Top%20Ten%20Shareholders'%20Holdings%20at%20Period%20End) As of the period end, the company had **13,284** common shareholders; the top three, acting in concert, held **26.86%** and were actual controllers, with most shares pledged Total Common Shareholders at Period End | Indicator | Quantity | | :--- | :--- | | Total Common Shareholders | 13,284 | | Total Preferred Shareholders with Restored Voting Rights (if any) | 0 | Top 10 Shareholders' Holdings | Shareholder Name | Shareholder Nature | Holding Percentage | Number of Shares Held (shares) | Number of Restricted Shares Held (shares) | Share Status | Number Pledged or Frozen (shares) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Weng Zhanguo | Domestic Natural Person | 11.91% | 24,808,209 | 18,606,157 | Pledged | 21,607,839 | | Zhao Qun | Domestic Natural Person | 8.54% | 17,791,692 | 13,343,769 | Pledged | 14,233,268 | | Zhang Zhenbiao | Domestic Natural Person | 6.41% | 13,343,768 | 10,007,826 | Pledged | 13,002,634 | | Jiang Changlong | Domestic Natural Person | 4.79% | 9,984,000 | 0 | - | - | | Tianjin Hongtai Investment Management Partnership (Limited Partnership) | Domestic Non-State-Owned Legal Person | 2.63% | 5,487,635 | 0 | - | - | | Zhang Tonghui | Domestic Natural Person | 2.02% | 4,213,464 | 0 | - | - | | Cui Jinying | Domestic Natural Person | 1.85% | 3,858,240 | 0 | - | - | | Xuan Hang | Domestic Natural Person | 1.68% | 3,503,716 | 0 | - | - | | Duan Suxin | Domestic Natural Person | 1.49% | 3,112,700 | 0 | - | - | | Zhang Wei | Domestic Natural Person | 1.42% | 2,949,276 | 0 | - | - | - Weng Zhanguo, Zhao Qun, and Zhang Zhenbiao are parties acting in concert, collectively holding **26.86%** of the company's shares and serving as its joint actual controllers; Tianjin Hongtai is a partnership controlled by Weng Zhanguo[11](index=11&type=chunk) Changes in Restricted Shares at Period End | Shareholder Name | Restricted Shares at Period Beginning (shares) | Shares Released from Restriction in Current Period (shares) | Shares Added to Restriction in Current Period (shares) | Restricted Shares at Period End (shares) | Reason for Restriction | Proposed Release Date | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Weng Zhanguo | 18,606,157 | 0 | 0 | 18,606,157 | Executive Lock-up | Only 25% of shares held by executives can be unlocked annually during their tenure | | Zhao Qun | 13,343,769 | 0 | 0 | 13,343,769 | Executive Lock-up | Only 25% of shares held by executives can be unlocked annually during their tenure | | Zhang Zhenbiao | 10,007,826 | 0 | 0 | 10,007,826 | Executive Lock-up | Only 25% of shares held by executives can be unlocked annually during their tenure | | Zhong Hairong | 1,691,394 | 0 | 0 | 1,691,394 | Executive Lock-up | Only 25% of shares held by executives can be unlocked annually during their tenure | | Yu Junxian | 1,036,800 | 0 | 0 | 1,036,800 | Executive Lock-up | Only 25% of shares held by executives can be unlocked annually during their tenure | | Zuo Xuemin | 959,850 | 0 | 0 | 959,850 | Executive Lock-up | Only 25% of shares held by executives can be unlocked annually during their tenure | | Zhang Zhenyu | 712,800 | 178,200 | 0 | 534,600 | Executive Lock-up | Only 25% of shares held by executives can be unlocked annually during their tenure | | Pan Wei | 60,750 | 0 | 0 | 60,750 | Executive Lock-up | Only 25% of shares held by executives can be unlocked annually during their tenure | | Total | 46,419,346 | 178,200 | 0 | 46,241,146 | -- | -- | [Significant Events](index=6&type=section&id=Item%203.%20Significant%20Events) This section details significant changes in financial data, business operations, and risk factors, along with the status of commitments and compliance matters [Significant Changes in Key Financial Data and Indicators and Their Reasons During the Reporting Period](index=6&type=section&id=I.%20Significant%20Changes%20in%20Key%20Financial%20Data%20and%20Indicators%20and%20Their%20Reasons%20During%20the%20Reporting%20Period) Significant changes in financial data across balance sheet, income statement, and cash flow statement were driven by increased financial product purchases, higher borrowing costs, increased bad debt provisions, and substantial government subsidies [(I) Balance Sheet Items](index=6&type=section&id=(I)%20Balance%20Sheet%20Items) Other current assets increased by **78.27%** due to wealth management product purchases, while taxes payable decreased by **44.23%** due to reduced VAT - Other current assets balance at period end was **CNY 40.20 million**, an increase of **78.27%** from the beginning of the year, primarily due to the purchase of wealth management products during the reporting period[15](index=15&type=chunk) - Taxes payable balance at period end was **CNY 24.61 million**, a decrease of **44.23%** from the beginning of the year, primarily due to a reduction in VAT payable[15](index=15&type=chunk) [(II) Income Statement Items](index=6&type=section&id=(II)%20Income%20Statement%20Items) Income statement items saw significant changes, including a **66.53%** rise in financial expenses, a **489.97%** surge in asset impairment losses, and substantial increases in other income and non-operating income due to government subsidies - Taxes and surcharges during the reporting period were **CNY 3.28 million**, a decrease of **33.69%** from the same period last year, primarily due to reduced urban construction tax, education surcharges, and local education surcharges[15](index=15&type=chunk) - Financial expenses during the reporting period were **CNY 3.75 million**, an increase of **66.53%** from the same period last year, primarily due to increased bank borrowings[15](index=15&type=chunk) - Asset impairment losses during the reporting period were **CNY 4.99 million**, an increase of **489.97%** from the same period last year, primarily due to increased provision for bad debts[15](index=15&type=chunk) - Other income during the reporting period was **CNY 2.39 million**, an increase of **1,091.68%** from the same period last year, primarily due to increased government subsidies received[15](index=15&type=chunk) - Investment income during the reporting period was **CNY 0.42 million**, an increase of **240.89%** from the same period last year, primarily due to increased investment income from associates[15](index=15&type=chunk) - Non-operating income during the reporting period was **CNY 19.25 million**, an increase of **140.43%** from the same period last year, primarily due to increased government subsidies received[15](index=15&type=chunk) [(III) Cash Flow Statement Items](index=6&type=section&id=(III)%20Cash%20Flow%20Statement%20Items) Operating cash flow significantly increased by **90.24%** due to government subsidies, while net cash outflow from investing activities rose by **113.91%** due to increased wealth management product purchases - Net cash inflow from operating activities during the reporting period was **CNY 10.22 million**, an increase of **90.24%** from the same period last year, primarily due to increased government subsidies received[16](index=16&type=chunk) - Net cash outflow from investing activities during the reporting period was **CNY 29.67 million**, a decrease (i.e., increased outflow) of **113.91%** from the same period last year, primarily due to increased cash payments for investments (purchase of wealth management products)[16](index=16&type=chunk) [Business Review and Outlook](index=6&type=section&id=II.%20Business%20Review%20and%20Outlook) Despite a **6.32%** revenue decline due to lower health product sales, net profit attributable to shareholders surged **171.47%** from government subsidies, while the company actively manages various operational and industry risks [Specific Factors Driving Changes in Business Revenue During the Reporting Period](index=6&type=section&id=Specific%20Factors%20Driving%20Changes%20in%20Business%20Revenue%20During%20the%20Reporting%20Period) Total operating revenue decreased by **6.32%** to **CNY 253.40 million** due to declining health product sales, but net profit attributable to shareholders grew **171.47%** to **CNY 19.86 million** due to a **CNY 18 million** government subsidy - During the reporting period, the company achieved operating revenue of **CNY 253.40 million**, a decrease of **6.32%** from the same period last year, primarily due to a decline in the health product business[17](index=17&type=chunk) - The company's net profit attributable to shareholders was **CNY 19.86 million**, an increase of **171.47%** from the same period last year, primarily due to its wholly-owned subsidiary, Tibet Qianyuan Pharmaceutical Co., Ltd., receiving an **CNY 18 million** industrial development support fund[17](index=17&type=chunk) [Execution of Annual Operating Plan During the Reporting Period](index=7&type=section&id=Execution%20of%20Annual%20Operating%20Plan%20During%20the%20Reporting%20Period) The company progressed according to its 2019 operating plan, focusing on key product sales, market strategy adjustments, and cost control to address healthcare reform challenges - The company proceeded with various tasks in an orderly manner according to the operating plan formulated at the beginning of 2019, with no significant changes[18](index=18&type=chunk) - Facing national healthcare system reforms, the company strengthened sales of key products, adjusted market strategies, improved operational management efficiency and market competitiveness, and effectively controlled operating costs[18](index=18&type=chunk) [Significant Risk Factors Adversely Affecting the Company's Future Operations, Major Difficulties in Company Operations, and Countermeasures](index=7&type=section&id=Significant%20Risk%20Factors%20Adversely%20Affecting%20the%20Company's%20Future%20Operations,%20Major%20Difficulties%20in%20Company%20Operations,%20and%20Countermeasures) The company faces six major risks, including policy changes, R&D, drug price reductions, rising costs, goodwill impairment, and accounts receivable bad debts, addressed by strategic and operational countermeasures - **Industry Policy Risk**: Deepening national healthcare system reforms and various pharmaceutical reform policies (e.g., "two-invoice system," medical insurance payments, centralized procurement) will profoundly impact the pharmaceutical industry; the company must constantly monitor and actively respond, promoting an outward-looking development strategy[18](index=18&type=chunk) - **New Drug and Generic Drug Consistency Evaluation R&D Risk**: Pharmaceutical R&D involves high investment, long cycles, and high risks, with increasingly stringent regulatory requirements, posing risks of R&D failure or prolonged cycles; the company will improve R&D capabilities, carefully select projects, and concentrate efforts on key projects[19](index=19&type=chunk) - **Drug Price Reduction Risk**: Medical insurance cost control and volume-based procurement policies lead to a decline in the average profit margin of the pharmaceutical industry, and the company's products face price reduction pressure; the company will strengthen capital, budget, and cost control management, and reduce costs through group procurement[19](index=19&type=chunk) - **Raw Material Cost Increase Risk**: National requirements for drug production standards and environmental protection standards are increasing, which may lead to a reduction in raw material manufacturers and price increases; the company will fully implement lean production to improve efficiency and reduce production costs[19](index=19&type=chunk) - **Goodwill Impairment Risk**: The company has increased subsidiaries through mergers and acquisitions, and if future operating performance does not meet expectations, it still faces goodwill impairment risk; the company has taken measures such as increasing marketing investment and strengthening group integration[20](index=20&type=chunk) - **Accounts Receivable Bad Debt Risk**: Expanding sales scale leads to continuous growth in accounts receivable, and if management is inadequate, it may lead to extended collection periods, reduced turnover, and bad debt losses; the company will strengthen accounts receivable management, improve internal control systems, and intensify collection efforts[20](index=20&type=chunk) [Analysis and Explanation of Progress, Impact, and Solutions for Significant Events](index=7&type=section&id=III.%20Analysis%20and%20Explanation%20of%20Progress,%20Impact,%20and%20Solutions%20for%20Significant%20Events) There were no significant event developments requiring explanation during the reporting period - The company had no analysis or explanation of the progress, impact, and solutions for significant events during the reporting period[21](index=21&type=chunk) [Unfulfilled Commitments by Actual Controllers, Shareholders, Related Parties, Acquirers, and the Company During the Reporting Period](index=8&type=section&id=IV.%20Unfulfilled%20Commitments%20by%20Actual%20Controllers,%20Shareholders,%20Related%20Parties,%20Acquirers,%20and%20the%20Company%20During%20the%20Reporting%20Period) Actual controllers, directors, and senior management consistently fulfilled or are fulfilling commitments regarding share lock-ups, non-competition, fund occupation, and housing provident fund contributions Unfulfilled Commitments During the Reporting Period | Commitment Source | Promising Party | Commitment Type | Summary of Commitment Content | Commitment Date | Commitment Period | Fulfillment Status | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Commitments Made During Initial Public Offering or Refinancing | Weng Zhanguo, Zhao Qun, Zhang Zhenbiao | Share Lock-up Commitment | Not to transfer shares within 36 months after listing, not to transfer more than 25% annually during tenure, not to transfer within six months after resignation | August 19, 2011 | From commitment date until fulfillment | As of the end of the reporting period, the promising parties strictly adhered to their commitments, with no violations | | Commitments Made During Initial Public Offering or Refinancing | Zhang Zhenyu | Share Lock-up Commitment | Not to transfer shares within 36 months after listing, not to transfer more than 25% annually during related party tenure, not to transfer within six months after resignation | August 19, 2011 | From commitment date until fulfillment. Zhang Zhenyu is currently fulfilling | As of the end of the reporting period, the promising party strictly adhered to the commitment, with no violations | | Commitments Made During Initial Public Offering or Refinancing | Zuo Xuemin (resigned), Yu Junxian, Pan Wei | Share Lock-up Commitment | Not to transfer shares within 36 months after listing, not to transfer more than 25% annually during tenure, not to transfer within six months after resignation | August 19, 2011 | From commitment date until fulfillment | As of the end of the reporting period, the promising parties strictly adhered to their commitments, with no violations | | Commitments Regarding Non-Competition, Related Party Transactions, and Fund Occupation | Weng Zhanguo, Zhao Qun, Zhang Zhenbiao | Non-Competition and Conflict of Interest Commitment Letter | Not to invest in or control enterprises that directly or indirectly compete with Qianyuan Pharmaceutical, and not to engage in competitive businesses | August 19, 2011 | From commitment date until fulfillment | As of the end of the reporting period, the promising parties strictly adhered to their commitments, with no violations | | Commitments Regarding Non-Competition, Related Party Transactions, and Fund Occupation | Weng Zhanguo, Zhao Qun, Zhang Zhenbiao | Commitment Letter to Regulate Related Party Transactions and Not Occupy Company Funds | Not to use the position of actual controller to directly or indirectly occupy company funds | August 19, 2011 | From commitment date until fulfillment | As of the end of the reporting period, the promising parties strictly adhered to their commitments, with no violations | | Other Commitments | Weng Zhanguo, Zhao Qun, Zhang Zhenbiao | Housing Provident Fund Supplementary Payment Commitment | To bear the supplementary payment obligations and penalty losses arising from not paying housing provident fund for some employees in previous years | August 19, 2011 | Long-term effective | As of the end of the reporting period, the promising parties strictly adhered to their commitments, with no violations | | Commitments Made During Initial Public Offering or Refinancing | Weng Zhanguo, Zhao Qun, Zhang Zhenbiao, Zhong Hairong | Share Lock-up Commitment | Non-publicly issued shares subscribed shall not be transferred within 36 months from the date of issuance completion | September 01, 2015 | September 3, 2018 | Fulfilled | | Commitments Made During Initial Public Offering or Refinancing | Tianjin Hongtai Investment Management Partnership (Limited Partnership) | Share Lock-up Commitment | Non-publicly issued shares subscribed shall not be transferred within 36 months from the date of issuance completion | September 01, 2015 | September 3, 2018 | Fulfilled | [Comparison Table of Funds Raised Usage](index=11&type=section&id=V.%20Comparison%20Table%20of%20Funds%20Raised%20Usage) There was no disclosure required regarding the use of raised funds during the reporting period - The company had no comparison table of funds raised usage during the reporting period[26](index=26&type=chunk) [Warning and Explanation of Potential Cumulative Net Profit Loss or Significant Change Compared to the Same Period Last Year from Year-Beginning to End of Next Reporting Period](index=11&type=section&id=VI.%20Warning%20and%20Explanation%20of%20Potential%20Cumulative%20Net%20Profit%20Loss%20or%20Significant%20Change%20Compared%20to%20the%20Same%20Period%20Last%20Year%20from%20Year-Beginning%20to%20End%20of%20Next%20Reporting%20Period) The company did not forecast a cumulative net profit loss or significant change from the year-beginning to the end of the next reporting period - The company did not have a situation during the reporting period where the cumulative net profit from the beginning of the year to the end of the next reporting period was expected to be a loss or undergo significant change compared to the same period last year[26](index=26&type=chunk) [Irregular External Guarantees](index=11&type=section&id=VII.%20Irregular%20External%20Guarantees) There were no irregular external guarantees during the reporting period - The company had no irregular external guarantees during the reporting period[26](index=26&type=chunk) [Non-Operating Funds Occupied by Controlling Shareholders and Their Related Parties from the Listed Company](index=11&type=section&id=VIII.%20Non-Operating%20Funds%20Occupied%20by%20Controlling%20Shareholders%20and%20Their%20Related%20Parties%20from%20the%20Listed%20Company) There were no non-operating funds occupied by controlling shareholders or their related parties from the listed company during the reporting period - The company had no non-operating funds occupied by controlling shareholders or their related parties from the listed company during the reporting period[27](index=27&type=chunk) [Financial Statements](index=12&type=section&id=Item%204.%20Financial%20Statements) This section presents the consolidated and parent company financial statements, including balance sheets, income statements, and cash flow statements, along with adjustment explanations and audit status [1. Consolidated Balance Sheet](index=12&type=section&id=1.%20Consolidated%20Balance%20Sheet) As of March 31, 2019, consolidated total assets slightly decreased by **2.70%** to **CNY 1.455 billion**, with current liabilities declining by **11.95%** and total owner's equity increasing by **1.37%** Consolidated Balance Sheet Key Data | Item | March 31, 2019 (CNY) | December 31, 2018 (CNY) | Change Percentage | | :--- | :--- | :--- | :--- | | Total Assets | 1,455,251,349.40 | 1,495,710,196.93 | -2.70% | | Total Current Assets | 602,485,602.01 | 634,862,447.61 | -5.09% | | Total Non-Current Assets | 852,765,747.39 | 860,847,749.32 | -0.94% | | Total Liabilities | 511,215,954.97 | 564,470,458.53 | -9.43% | | Total Current Liabilities | 350,924,058.34 | 398,551,613.73 | -11.95% | | Total Non-Current Liabilities | 160,291,896.63 | 165,918,844.80 | -3.40% | | Total Owner's Equity | 944,035,394.43 | 931,239,738.40 | 1.37% | | Total Owner's Equity Attributable to Parent Company | 818,955,534.57 | 799,091,885.14 | 2.49% | [2. Parent Company Balance Sheet](index=15&type=section&id=2.%20Parent%20Company%20Balance%20Sheet) As of March 31, 2019, parent company total assets increased by **1.47%** to **CNY 1.121 billion**, with current assets growing **10.62%** and total owner's equity rising **1.86%** Parent Company Balance Sheet Key Data | Item | March 31, 2019 (CNY) | December 31, 2018 (CNY) | Change Percentage | | :--- | :--- | :--- | :--- | | Total Assets | 1,121,385,857.72 | 1,105,169,657.83 | 1.47% | | Total Current Assets | 202,553,167.81 | 183,107,246.51 | 10.62% | | Total Non-Current Assets | 918,832,689.91 | 922,062,411.32 | -0.35% | | Total Liabilities | 357,015,035.05 | 354,732,368.19 | 0.64% | | Total Current Liabilities | 269,023,488.59 | 261,740,821.73 | 2.78% | | Total Non-Current Liabilities | 87,991,546.46 | 92,991,546.46 | -5.48% | | Total Owner's Equity | 764,370,822.67 | 750,437,289.64 | 1.86% | [3. Consolidated Income Statement](index=18&type=section&id=3.%20Consolidated%20Income%20Statement) In Q1 2019, consolidated total operating revenue decreased by **6.32%**, but net profit attributable to parent company owners surged **171.47%** to **CNY 19.86 million**, primarily due to significant non-operating income from government subsidies Consolidated Income Statement Key Data | Item | Current Period Amount (CNY) | Prior Period Amount (CNY) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Total Operating Revenue | 253,398,317.43 | 270,500,994.29 | -6.32% | | Total Operating Costs | 251,163,724.03 | 265,321,959.06 | -5.34% | | Operating Profit | 4,963,040.12 | 5,079,348.77 | -2.30% | | Total Profit | 23,546,355.85 | 12,487,730.00 | 88.56% | | Net Profit | 20,795,656.03 | 9,470,701.77 | 119.58% | | Net Profit Attributable to Parent Company Owners | 19,863,649.43 | 7,317,083.24 | 171.47% | | Basic Earnings Per Share (CNY/share) | 0.0954 | 0.0351 | 171.79% | [4. Parent Company Income Statement](index=20&type=section&id=4.%20Parent%20Company%20Income%20Statement) In Q1 2019, parent company operating revenue decreased by **22.11%**, yet net profit significantly increased by **384.35%** to **CNY 13.93 million**, driven by higher investment and other income Parent Company Income Statement Key Data | Item | Current Period Amount (CNY) | Prior Period Amount (CNY) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Operating Revenue | 54,390,095.09 | 69,831,879.11 | -22.11% | | Operating Profit | 12,781,670.54 | 3,421,863.40 | 273.55% | | Total Profit | 13,781,670.54 | 2,914,889.74 | 372.82% | | Net Profit | 13,933,533.03 | 2,876,768.52 | 384.35% | | Basic Earnings Per Share (CNY/share) | 0.0669 | 0.0138 | 384.78% | [5. Consolidated Cash Flow Statement](index=22&type=section&id=5.%20Consolidated%20Cash%20Flow%20Statement) In Q1 2019, net cash flow from operating activities increased by **90.24%** to **CNY 10.22 million**, while net cash outflow from investing activities rose **113.91%** to **CNY 29.67 million** due to increased wealth management product purchases Consolidated Cash Flow Statement Key Data | Item | Current Period Amount (CNY) | Prior Period Amount (CNY) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 10,220,918.95 | 5,372,758.75 | 90.24% | | Net Cash Flow from Investing Activities | -29,674,301.21 | -13,872,603.39 | -113.91% | | Net Cash Flow from Financing Activities | -21,815,661.11 | -24,432,976.04 | 10.71% | | Net Increase in Cash and Cash Equivalents | -41,269,043.37 | -32,932,820.68 | -25.31% | | Cash and Cash Equivalents at Period End | 106,326,305.13 | 115,674,178.66 | -8.17% | [6. Parent Company Cash Flow Statement](index=24&type=section&id=6.%20Parent%20Company%20Cash%20Flow%20Statement) In Q1 2019, parent company net operating cash flow increased by **98.12%** to **CNY 9.98 million**, while net investing cash outflow surged **549.50%** to **CNY 19.88 million**, and financing cash flow turned positive to **CNY 8.31 million** Parent Company Cash Flow Statement Key Data | Item | Current Period Amount (CNY) | Prior Period Amount (CNY) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 9,977,973.92 | 5,036,221.69 | 98.12% | | Net Cash Flow from Investing Activities | -19,881,927.20 | -3,061,130.66 | -549.50% | | Net Cash Flow from Financing Activities | 8,313,087.07 | -31,023,193.89 | Turned from negative to positive | | Net Increase in Cash and Cash Equivalents | -1,590,866.21 | -29,048,102.86 | 94.53% | | Cash and Cash Equivalents at Period End | 16,842,524.07 | 4,753,192.37 | 254.34% | [Explanation of Financial Statement Adjustments](index=26&type=section&id=II.%20Explanation%20of%20Financial%20Statement%20Adjustments) The company did not retrospectively adjust or restate prior-year accounting data, nor did it adjust initial financial statements or comparative data due to new accounting standards adoption - The company did not retrospectively adjust or restate prior-year accounting data[7](index=7&type=chunk) - The company did not adjust the initial financial statements for the first year of implementation of new financial instrument standards, new revenue standards, or new lease standards[56](index=56&type=chunk) - The company did not retrospectively adjust prior comparative data due to the first-time implementation of new financial instrument standards or new lease standards[56](index=56&type=chunk) [III. Audit Report](index=26&type=section&id=III.%20Audit%20Report) This quarterly report is unaudited - The company's first quarterly report is unaudited[56](index=56&type=chunk)

Financial Performance - The company's operating revenue for 2018 was CNY 1,136,495,667.79, representing a 21.04% increase compared to CNY 938,927,986.26 in 2017[16]. - The net profit attributable to shareholders decreased by 66.59% to CNY 7,241,080.66 from CNY 21,673,419.09 in the previous year[16]. - The net profit attributable to shareholders after deducting non-recurring gains and losses was CNY -13,638,855.14, a decline of 519.64% compared to CNY 3,250,098.68 in 2017[16]. - The net cash flow from operating activities was CNY 38,440,743.90, down 4.15% from CNY 40,103,878.52 in 2017[16]. - The total assets at the end of 2018 were CNY 1,495,710,196.93, a decrease of 1.51% from CNY 1,518,593,270.43 at the end of 2017[16]. - The net assets attributable to shareholders decreased by 2.50% to CNY 799,091,885.14 from CNY 819,585,507.27 in 2017[16]. - The weighted average return on net assets was 0.90%, down from 2.67% in 2017[16]. - The company reported a non-recurring gain of CNY 20,879,935.80 in 2018, compared to CNY 18,423,320.41 in 2017, indicating an increase of approximately 7.9% year-over-year[22]. - The company reported a non-recurring loss from the disposal of non-current assets amounting to CNY -355,577.31 in 2018[22]. - The company declared cash dividends of CNY 4,166,160 for the year 2018, which represents 57.54% of the net profit attributable to ordinary shareholders[105]. Revenue Breakdown - The pharmaceutical segment generated ¥1,050,396,357.60, accounting for 92.42% of total revenue, with a year-on-year growth of 43.92%[50]. - The revenue from anti-infection drugs reached ¥529,567,728.16, which is 46.60% of total revenue, showing a significant increase of 66.08% compared to the previous year[53]. - The revenue from health food products decreased by 56.36% to ¥37,879,257.35, down from ¥86,807,462.05 in 2017[50]. - The revenue from the North China region was ¥202,076,018.01, representing a 45.25% increase compared to the previous year[52]. Operational Challenges - The company experienced a decline in sales revenue from maternal health products due to a decrease in the birth rate and price increases, impacting overall performance[28]. - The pharmaceutical industry is undergoing significant regulatory changes, including the two-invoice system and price controls, which are reshaping market dynamics[29]. - The company faces risks related to industry policy changes, new drug development, and rising raw material costs[4]. - The birth population in China decreased to 15.23 million in 2018, marking a decline of approximately 200,000 from the previous year, which may impact the target customer base for maternal and infant health products[30]. Research and Development - R&D expenses increased significantly compared to the previous year, reflecting the company's commitment to consistency evaluation and new drug development[28]. - The total R&D investment for the year was 70,118,942.07 yuan, a 54.45% increase year-on-year, representing 6.17% of total revenue[66]. - The R&D efforts in 2019 will concentrate on "consistency evaluation" products, with a focus on key technologies and raw materials, while also exploring new product development strategies to mitigate pricing impacts from centralized procurement policies[91]. - The company established advanced R&D centers in Zhangjiang, Shanghai, and Aobang, Hangzhou, focusing on the development of generic drugs and achieving significant progress in quality and efficacy consistency evaluations[37]. Marketing and Sales Strategy - The company is focused on enhancing its marketing efforts and product promotion to drive revenue growth amid a challenging industry environment[28]. - The company has adopted a "sales-driven production" model, aligning production plans with sales forecasts to enhance efficiency[27]. - The marketing department strengthened product strategies and academic brand building, improving sales and management efficiency[41]. - The company has implemented a direct sales model to hospitals, bypassing traditional distribution channels, in response to regulatory changes[27]. Corporate Governance and Management - The company has established a comprehensive quality management system across all stages from procurement to after-sales, ensuring compliance with GMP standards[36]. - The company has a detailed human resource management system to ensure employee development and performance evaluation[134]. - The company has a governance structure that complies with relevant laws and regulations, ensuring proper operation and management[185]. - The company has a structured process for approving remuneration plans through the board and shareholders' meeting[177]. Environmental and Social Responsibility - The company actively participates in social welfare and has supported local education, culture, and health initiatives[135]. - Shanxi Qianyuan's total nitrogen discharge is 0.4557 tons/year, with a concentration of 8.508 mg/L, below the standard of 70 mg/L[139]. - The company has established an emergency response plan for environmental incidents, filed with the local environmental protection authority[141]. - The company has installed an online monitoring system at the wastewater discharge outlet, ensuring real-time data upload to environmental monitoring platforms[139]. Shareholder Information - The company’s total share capital is 208,308,000 shares, with 155,517,271 shares (74.66%) being unrestricted and 52,790,729 shares (25.34%) being restricted[154]. - The largest shareholder, Weng Zanguo, holds 11.91% of the shares, totaling 24,808,209 shares, with 6,202,052 shares pledged[158]. - The company has maintained a consistent dividend payout ratio over the past three years, reflecting its commitment to returning value to shareholders[105]. - The company has not undergone any changes in its controlling shareholders during the reporting period[160]. Employee and Management Structure - The total number of employees in the company is 1,665, with 521 in the parent company and 1,144 in major subsidiaries[179]. - The company has established a performance incentive and evaluation system for its directors, supervisors, and senior management, ensuring transparency in the performance assessment process[188]. - The company emphasizes training with a comprehensive annual training plan aimed at enhancing employee skills and capabilities[182]. - The company has a diverse board with members holding various educational backgrounds, including EMBA and accounting qualifications, enhancing its governance[171].