湖南尔康制药股份有限公司 2021 年第三季度报告 证券代码：300267 证券简称：尔康制药 公告编号：2021-051 湖南尔康制药股份有限公司 2021 年第三季度报告 重要内容提示： 1、董事会、监事会及董事、监事、高级管理人员保证季度报告的真实、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。 | | 本报告期 | 本报告期比上年同期 | 年初至报告期末 | 年初至报告期末 | | --- | --- | --- | --- | --- | | | | 增减 | | 比上年同期增减 | | 营业收入（元） | 748,899,557.46 | 29.34% | 1,581,332,220.69 | -11.23% | | 归属于上市公司股东的净利润（元） | 53,194,814.70 | -53.84% | 156,481,273.07 | -13.73% | | 归属于上市公司股东的扣除非经常性 损益的净利润（元） | 40,947,988.42 | 45.13% | 130,365,345.06 | 61.88% | | 经营活动产生的现金流量净额（元） | — ...

Group 1: Event Details - The company will participate in the "2021 Hunan Listed Companies Investor Online Reception Day" on September 24, 2021 [1] - The event will be held online through the platform provided by Shenzhen Panorama Network Co., Ltd. [1] - Investors can access the event via the "Panorama Roadshow" website [1] Group 2: Company Representatives - The company's Vice General Manager and Board Secretary, Mr. Gu Jishun, will be present for the online communication [1] - Ms. Fan Yi, the Securities Affairs Representative, will also participate in the event [1] Group 3: Investor Engagement - The event aims to enhance interaction and communication with investors [1] - The company encourages widespread participation from investors [1]

Strategic Development - The company plans to enhance its strategic layout by further developing the "Belt and Road" business system, particularly in composite excipients and pharmaceutical intermediates [8]. - The company aims to improve production efficiency and quality while ensuring a stable supply of key raw materials as it expands capacity in pharmaceutical intermediates and composite excipients [9]. - The company will focus on market development and marketing efforts to convert capacity expansion into improved profitability [9]. - The company is committed to maintaining compliance with GMP standards and optimizing its quality management system [11]. - The company continues to focus on the research and development of pharmaceutical excipients, raw materials, and finished drugs, maintaining its position as a leading enterprise in the domestic pharmaceutical excipients market [36]. - The company is leveraging its technological advantages to expand into the global high-end pharmaceutical market, aligning with international standards [43]. - The company is focusing on the integration of raw materials and formulations to enhance operational efficiency and reduce costs [43]. Financial Performance - The company's operating revenue for the first half of 2021 was ¥832,432,663.23, a decrease of 30.76% compared to the same period last year [29]. - The net profit attributable to shareholders of the listed company was ¥103,286,458.37, an increase of 56.13% year-on-year [29]. - The net profit after deducting non-recurring gains and losses was ¥89,417,356.64, representing a 70.91% increase compared to the previous year [29]. - The net cash flow from operating activities was ¥157,267,075.66, a significant improvement from a negative cash flow of ¥396,755,593.14 in the same period last year, marking a 139.64% increase [29]. - The basic earnings per share increased to ¥0.0501, up 56.07% from ¥0.0321 in the previous year [29]. - The total assets at the end of the reporting period were ¥6,500,574,278.72, a slight decrease of 0.71% from the end of the previous year [29]. - The net assets attributable to shareholders of the listed company were ¥5,764,353,978.21, a minor decrease of 0.04% compared to the previous year [29]. - The company achieved additional sales revenue of ¥10,615.06 million from overseas intermediate projects, contributing a gross profit of ¥3,096.87 million [29]. - The sales revenue from traditional Chinese medicine reached ¥4,669.37 million, with a gross profit increase of ¥2,281.16 million compared to the previous year [29]. Risk Management - The company is aware of the risks posed by macroeconomic policy changes and will strengthen its research on industry policies to adapt to new developments [6]. - The company will implement measures to mitigate foreign exchange risks due to increasing overseas projects and raw material procurement [12]. - The company acknowledges the management challenges posed by its expanding international business and will enhance its management structure and risk control measures [8]. - The company recognizes the potential impact of regulatory changes on the pharmaceutical industry and will adapt its strategies accordingly [6]. - The company emphasizes the importance of product quality management to prevent risks associated with drug production, storage, and transportation [11]. - The company is monitoring raw material supply and price fluctuations to maintain stable production operations [79]. - The company has been closely monitoring the COVID-19 pandemic and has adjusted its operational strategies to mitigate its impact on production and employee safety [80]. Investment and Expansion - The company has established several new subsidiaries, including a new company focused on starch products with an investment of ¥30,000,000.00 [67]. - The company invested CNY 70 million in a sulfanilamide project in Cambodia, which has commenced production as of the end of the reporting period [118]. - A total of CNY 180.4025 million was allocated for the construction of a 10,000-ton annual production project for aniline in Cambodia, with preliminary installation and debugging completed [118]. - The company established a wholly-owned subsidiary, Erkang Trading, in January 2021 with a registered capital of CNY 5 million, focusing on food sales in the Hunan Free Trade Zone [119]. - The company is investing CNY 65 million in a new adhesive project in Cambodia, which is in the equipment installation and debugging phase [120]. - An additional CNY 70 million is being invested in a basic chemical project in Cambodia to ensure stable supply for related projects, also in the installation phase [120]. Compliance and Environmental Responsibility - The company is classified as a key pollutant discharge unit and has implemented measures to ensure compliance with environmental standards [88]. - The company has established a wastewater treatment facility and a waste gas treatment system to ensure emissions meet regulatory requirements [89]. - The company has not faced any administrative penalties related to environmental issues during the reporting period [90]. - The company emphasizes its commitment to product safety and quality management, aiming to enhance customer satisfaction and protect consumer rights [91]. - The company has not experienced any major safety or environmental incidents during the reporting period [92]. Shareholder and Equity Information - The total number of ordinary shareholders was 36,014, indicating a stable shareholder base [131]. - The total number of shares was 2,062,604,870, with 31.15% being limited shares and 68.85% being unrestricted shares [127]. - The largest shareholder, Shuai Fangwen, holds 41.38% of the shares, amounting to 853,574,906 shares, with a significant portion pledged [131]. - The company plans to optimize its asset structure and improve management efficiency through various equity transfers and mergers [122][123]. - The company has increased its investment in Shenzhen Yongqing Water Co., Ltd. by 50 million RMB, acquiring a 4.7506% stake [122]. Research and Development - The company has received the first-class award for technological progress from Hunan Province for its plant starch capsule development project [47]. - The company is actively involved in the development of new pharmaceutical excipients and has established a national-level research platform for excipients [46]. - The company has participated in the drafting and formulation of pharmaceutical excipient standards, contributing to industry regulations [46]. - The company plans to enhance its research and development efforts, focusing on innovative drug formulations and delivery systems [172]. - The company is exploring potential mergers and acquisitions to strengthen its market presence and diversify its product offerings [172].

Financial Performance - The company's operating revenue for Q1 2021 was ¥383,793,068.50, a decrease of 12.99% compared to the same period last year[8] - Net profit attributable to shareholders was ¥53,028,821.97, representing a significant increase of 145.07% year-over-year[8] - The net profit after deducting non-recurring gains and losses was ¥42,468,087.51, up 167.28% from the previous year[8] - Basic and diluted earnings per share rose to ¥0.0257, reflecting a growth of 144.76% compared to the previous year[8] - The company's financial expenses increased by 101.29% to 1.29 million yuan due to a decrease in exchange gains[20] - Investment income rose by 120.64% to 5.45 million yuan, primarily due to increased returns from financial products[20] - The sales revenue from pharmaceutical excipients was 185.60 million yuan, down 38.50% year-on-year[23] - The sales revenue from raw materials increased by 10.60% to 105.56 million yuan[24] - The sales revenue from finished drugs surged by 163.00% to 61.50 million yuan[24] - Total operating revenue for Q1 2021 was CNY 383,793,068.50, a decrease from CNY 441,084,902.73 in the previous period[52] - Net profit for Q1 2021 was CNY 56,853,356.28, compared to CNY 19,757,684.92 in the same period last year, representing a significant increase[54] Cash Flow and Assets - The net cash flow from operating activities improved to ¥82,294,323.13, a turnaround from a negative cash flow of ¥141,872,633.41 in the same period last year, marking a 158.05% increase[8] - The company's cash and cash equivalents increased to CNY 1,036,105,939.24 from CNY 882,820,386.78, representing a growth of about 17.38%[43] - The company's inventory as of March 31, 2021, was CNY 785,359,798.51, up from CNY 756,059,316.99, marking an increase of about 3.93%[43] - The cash flow from operating activities showed improvement, contributing to the overall financial health[54] - The net cash flow from operating activities was ¥82,294,323.13, a recovery from a negative cash flow of -¥141,772,650.93 in the previous period[62] - The cash inflow from investment activities totaled ¥1,257,468,268.82, a significant increase from ¥498,780,992.82 in the previous period[62] - The ending balance of cash and cash equivalents was 437,045,885.06, a decrease from 566,349,879.44 at the beginning of the period[66] Shareholder Information - The total number of shareholders at the end of the reporting period was 35,713[13] - The largest shareholder, Shuai Fangwen, holds 41.38% of the shares, with a total of 853,574,906 shares[13] - The total equity attributable to the owners of the parent company was CNY 5,842,289,388.68, compared to CNY 5,766,463,090.69, showing a slight increase of approximately 1.31%[46] Investments and Projects - The company invested CNY 70 million in Cambodia for the construction of a sulfanilamide project, enhancing its advantages in the pharmaceutical raw material sector[31] - A total of CNY 180.4025 million was allocated for a project in Cambodia to produce 10,000 tons of aniline, aimed at enriching the product line and reducing production costs[31] - The company established a wholly-owned subsidiary in the Yueyang area of the Hunan Free Trade Zone with an investment of CNY 5 million, focusing on the sale of pre-packaged and bulk food products[33] - The company has established a new holding subsidiary, Sukang Bio, with an investment of USD 35 million in Lianyungang, Jiangsu Province[35] Risk Management and Compliance - The company is closely monitoring industry policy changes, particularly in the pharmaceutical sector, to adapt its product structure and maintain quality control[28] - The company is addressing risks related to raw material supply and price fluctuations by strengthening market monitoring and adjusting inventory management[29] - The company is implementing measures to mitigate the impact of the COVID-19 pandemic on its operations, including adjusting strategies and ensuring employee safety[29] - The company is committed to complying with environmental regulations and enhancing internal standards to manage waste produced during the manufacturing process[30] - The company has no reported violations regarding external guarantees during the reporting period[36] - The company has not engaged in any non-operating fund occupation by controlling shareholders or related parties during the reporting period[37] Financial Position - Total assets at the end of the reporting period were ¥6,824,009,355.88, an increase of 4.23% from the end of the previous year[8] - The total current liabilities rose to CNY 890,447,995.59 from CNY 691,509,423.15, indicating an increase of approximately 28.73%[45] - Total liabilities rose to CNY 1,262,112,120.07 from CNY 1,005,024,207.19, indicating an increase in financial obligations[50] - The equity attributable to shareholders increased to CNY 4,258,078,041.51 from CNY 4,209,542,897.07[50] Other Financial Metrics - The company reported non-recurring gains of ¥10,560,734.46, primarily from government subsidies and asset disposals[10][11] - The company recorded a decrease in sales expenses to ¥8,271,607.51 from ¥9,228,326.73, reflecting improved cost management[57] - The financial income from interest increased to ¥5,602,012.76 compared to ¥1,203,408.45 in the previous period, indicating better financial management[57] - The company did not undergo an audit for the first quarter report[68] - The company did not apply the new leasing standards for the first quarter of 2021[67]

Dividend Distribution - The company plans to distribute a cash dividend of 0.50 CNY per 10 shares (including tax) to all shareholders, based on a total share capital of 2,062,604,870 shares [17]. - The total cash dividend distributed was RMB 103,130,243.50, which corresponds to a dividend of RMB 0.50 per 10 shares [191]. - The cash dividend amount accounted for 51.00% of the net profit attributable to shareholders for the year 2020 [191]. - The total cash dividend, including other methods, was RMB 187,025,189.52, representing 92.49% of the net profit attributable to shareholders [191]. - The company has maintained a consistent cash dividend distribution policy over the past three years [191]. Financial Performance - The company's operating revenue for 2020 was CNY 2,382,275,010.61, a decrease of 13.19% compared to CNY 2,744,341,005.69 in 2019 [35]. - The net profit attributable to shareholders for 2020 was CNY 202,223,912.92, representing an increase of 27.38% from CNY 158,755,199.47 in 2019 [35]. - The net profit after deducting non-recurring gains and losses was CNY 83,358,134.00, a decrease of 41.38% compared to CNY 142,210,484.52 in 2019 [35]. - The net cash flow from operating activities was CNY 178,527,341.01, down 59.95% from CNY 445,815,848.97 in 2019 [35]. - Basic earnings per share for 2020 were CNY 0.0980, an increase of 27.27% from CNY 0.0770 in 2019 [35]. - Total assets attributable to shareholders at the end of 2020 were CNY 6,546,796,225.98, an increase of 5.28% from CNY 6,218,281,217.96 at the end of 2019 [35]. - The company's net assets as of the end of 2020 were CNY 5,766,463,090.69, a slight decrease of 0.90% from CNY 5,818,987,557.59 in 2019 [35]. Business Operations and Strategy - The company has developed into a leading domestic pharmaceutical excipient enterprise, expanding its strategic layout to enhance its supply chain, particularly in excipients and pharmaceutical intermediates [10]. - The company aims to improve production efficiency and quality while managing supply and sales effectively to convert capacity expansion into enhanced profitability [11]. - The company emphasizes strict quality management throughout the production process to ensure compliance with GMP standards, thereby mitigating potential quality risks [16]. - The company is actively monitoring national pharmaceutical policies and industry trends to adapt its strategies and mitigate risks associated with macroeconomic changes [7]. - The company is enhancing its management structure by introducing high-end, specialized management talent and consulting services to optimize organizational efficiency [10]. - The company is expanding its international business, which is expected to increase the proportion of overseas revenue, thus exposing it to foreign exchange risks [17]. - The company is committed to continuous research and development of new products and technologies to meet market demands and enhance competitiveness [10]. - The company is focused on improving its internal control systems and management practices to respond effectively to policy changes and market dynamics [7]. - The company is pursuing a "Belt and Road" operational framework to further its strategic expansion and international presence [10]. Research and Development - The company has established a strong R&D focus on new excipients and formulations to meet evolving market requirements [49]. - The company plans to enhance R&D efforts in starch and starch capsule products, focusing on high-end pharmaceutical excipients and traditional Chinese medicine [168]. - The company is committed to improving human resource management to attract and retain high-end talent amid industry adjustments [170]. Market Trends and Challenges - The pharmaceutical industry is experiencing a trend towards improved drug quality and pricing, driven by the "volume-based procurement" policy, which is expected to enhance the market position of high-quality raw material suppliers [158]. - The company faces risks from macro policy adjustments that may impact the pharmaceutical industry and will adapt its strategies accordingly [170]. - The company is aware of the ongoing impact of the COVID-19 pandemic on its operations and is adjusting strategies to minimize adverse effects [177]. Asset Management and Investments - The company reported a significant increase in the cost of other products by 266.96%, primarily due to increased sales of 75% ethanol disinfectant and gel during the pandemic [94]. - The company has a total of 368.44 million RMB in changed purposes for raised funds, accounting for 3.09% of the total [126]. - The company has implemented strict management of raised funds, ensuring quality while reducing procurement costs through market research and negotiations [142]. - The company has not reported any issues or situations regarding the use and disclosure of raised funds [142]. Compliance and Governance - The company is committed to complying with national environmental policies and regulations, enhancing internal control standards, and monitoring key pollution discharge points [185]. - The company strictly adhered to commitments regarding competition and related transactions, ensuring no actions that could harm the interests of minority shareholders [195]. - There were no non-operating fund occupations by the controlling shareholder or its affiliates during the reporting period [197]. - The company reported no changes in accounting policies or significant accounting errors during the reporting period [198].

Financial Performance - Net profit attributable to shareholders was ¥115,242,837.23, representing a significant increase of 221.56% year-on-year[8]. - Operating revenue for the reporting period was ¥579,022,695.09, a decrease of 3.24% compared to the same period last year[8]. - Basic earnings per share increased to ¥0.0561, up 222.41% from the same period last year[8]. - The company reported a net profit of ¥28,215,184 after deducting non-recurring gains and losses, a decrease of 17.28% year-on-year[8]. - The weighted average return on net assets was 2.00%, an increase of 1.38% compared to the previous year[8]. - The total operating revenue for the third quarter was CNY 579,022,695.09, compared to CNY 598,406,663.87 in the previous period[48]. - The net profit for the third quarter reached 114,353,710.33 yuan, significantly up from 33,985,925.01 yuan year-over-year, representing an increase of 236.5%[50]. - The operating profit for the quarter was 126,697,880.63 yuan, compared to 43,237,024.72 yuan in the previous year, marking an increase of 194.5%[50]. - The basic and diluted earnings per share for the quarter were both 0.0561 yuan, compared to 0.0174 yuan in the same period last year, reflecting a growth of 222.5%[51]. - Net profit for the current period is $175,785,146.84, up 9.5% from $160,566,045.75 in the previous period[58]. Assets and Liabilities - Total assets at the end of the reporting period reached ¥6,663,557,788.94, an increase of 7.16% compared to the previous year[8]. - Non-current assets totaled CNY 3,933,352,855.13, an increase from CNY 3,464,285,340.09 year-over-year[42]. - Current liabilities increased significantly to CNY 749,686,093.31 from CNY 269,993,404.91[41]. - Total liabilities amounted to CNY 805,389,588.63, compared to CNY 365,120,138.53 in the previous period[41]. - Owner's equity totaled CNY 5,858,168,200.31, slightly up from CNY 5,853,161,079.43 year-over-year[42]. - Total assets reached CNY 6,663,557,788.94, up from CNY 6,218,281,217.96 in the previous year[42]. - The company's equity totaled CNY 5,853,161,079.43, with total equity attributable to shareholders at CNY 5,818,987,557.59[74]. Cash Flow - The net cash flow from operating activities was ¥294,001,027.72, a remarkable increase of 5,306.13% compared to the previous year[8]. - Net cash flow from operating activities decreased by 132.06 million RMB, a decline of 450.67%, mainly due to reduced sales leading to lower cash receipts[22]. - Net cash flow from financing activities increased by 309.98 million RMB, a growth of 1,312.88%, primarily due to an increase in short-term bank loans[22]. - The total cash inflow from operating activities was CNY 2,254,875,314.49, a decrease of 5% compared to CNY 2,373,691,005.71 in the previous period[63]. - The net cash flow from operating activities was negative at CNY -102,754,565.42, compared to a positive CNY 29,302,592.68 in the same period last year[63]. - Cash inflow from financing activities was CNY 840,999,970.00, compared to CNY 100,000,000.00 in the previous period[65]. - The net cash flow from financing activities improved to CNY 286,366,967.45 from CNY -23,610,414.59 year-over-year[65]. Investments and Projects - The company completed the acquisition of 100% equity in Wuzhi Weikang Biochemical Pharmaceutical Co., Ltd. for ¥58 million, leading to adjustments in comparative data[8]. - The company has completed an investment of 55.36 million RMB in the sulfanilamide project, which is expected to enhance its raw material drug production capabilities[25]. - The company has invested 177.55 million RMB in the aniline project, aimed at enriching its product line and reducing production costs[25]. - The company has established a joint venture, Hunan Juzhi Pharmaceutical Technology Co., Ltd., with a registered capital of 21 million RMB, in which it holds a 70% stake[25]. - The company reported a significant increase in cash received from investment recoveries, totaling CNY 3,297,900,000.00 compared to CNY 686,100,000.00 previously[65]. Expenses - Sales expenses decreased by 93.44 million RMB, a decline of 52.26%, primarily due to reduced promotional service fees for finished drugs[21]. - Management expenses increased by 46.43 million RMB, a growth of 34.58%, mainly due to increased legal fees, depreciation, and amortization of intangible assets[21]. - Research and development expenses were 7,013,869.34 yuan, down from 13,950,850.89 yuan, indicating a reduction of 49.7%[50]. - Research and development expenses for the current period are $31,993,235.55, a decrease of 21.2% from $40,554,738.16 in the previous period[57]. Shareholder Information - The total number of ordinary shareholders at the end of the reporting period was 41,199[12]. - The top shareholder, Shuai Fangwen, holds 41.44% of the shares, with 641,004,754 shares pledged[13]. - The company has completed the repurchase of 19,999,970 shares, accounting for 0.9696% of the total share capital, with a total transaction amount of approximately 83.89 million RMB[26][29]. Compliance and Governance - The company has not made any adjustments to its cash dividend policy during the reporting period, maintaining a clear and reasonable profit distribution plan[30]. - The company has not reported any non-compliance issues regarding external guarantees during the reporting period[31]. - The company has not experienced any significant changes in net profit compared to the same period last year[31].

Group 1: Event Details - The company will participate in the "2020 Investor Online Collective Reception Day" on September 11, 2020, from 15:00 to 17:00 [1] - The event will be held online through the platform provided by Shenzhen Panorama Network Co., Ltd. [1] - Investors can access the event via the "Panorama Roadshow" website [1] Group 2: Company Representatives - The company's Vice General Manager and Board Secretary, Mr. Gu Jishun, will be present for the online communication [1] - Ms. Fan Yi, the securities affairs representative, will also participate in the event [1] Group 3: Purpose and Assurance - The event aims to enhance interaction and communication with investors, allowing them to gain a deeper understanding of the company [1] - The company guarantees that the information disclosed is true, accurate, and complete, with no false records or misleading statements [1]

Financial Performance - The company's operating revenue for the first half of 2020 was CNY 1,202,263,533.30, a decrease of 11.00% compared to the same period last year[35]. - The net profit attributable to shareholders of the listed company was CNY 66,152,650.32, representing a decline of 48.81% year-on-year[35]. - The net profit after deducting non-recurring gains and losses was CNY 52,319,338.44, down 57.58% from the previous year[35]. - The net cash flow from operating activities was CNY -396,755,593.14, indicating a significant decrease of 1,235.22% compared to the same period last year[35]. - The total assets at the end of the reporting period were CNY 6,876,561,955.44, an increase of 10.59% from the end of the previous year[35]. - The net assets attributable to shareholders of the listed company were CNY 5,739,912,817.39, a slight decrease of 1.36% compared to the previous year[35]. - The basic earnings per share for the reporting period was CNY 0.0321, down 48.80% year-on-year[35]. - The weighted average return on net assets was 1.14%, a decrease of 1.14% compared to the previous year[35]. - In the first half of 2020, the company achieved operating revenue of CNY 120,226.35 million, a decrease of 11.00% compared to the same period last year[69]. - The net profit attributable to shareholders was CNY 6,615.27 million, down 48.81% year-on-year[69]. - Sales revenue from pharmaceutical excipients was CNY 93,531.21 million, a decline of 6.40% year-on-year[69]. - The company reported a 14.21% increase in sales revenue for pharmaceutical solvents, reaching CNY 8,629.09 million[69]. - Sales revenue from modified starch and starch capsule series products grew by 40.80%, totaling CNY 2,522.19 million[69]. - The company’s raw material drug sales revenue increased by 14.05%, amounting to CNY 16,969.82 million[69]. - The company's finished drug sales revenue reached CNY 51.93 million, a decrease of 73.06% compared to the same period last year[70]. - Sales revenue from the injection of sulbactam sodium was CNY 8.83 million, down 94.76% year-on-year, due to its removal from the national medical insurance catalog and the impact of the pandemic[70]. - Other finished drugs generated sales revenue of CNY 32.42 million, an increase of 33.87% year-on-year, while new traditional Chinese medicine sales contributed CNY 10.67 million[70]. - Other business revenue surged to CNY 45.32 million, a growth of 347.52% year-on-year, driven by increased demand for disinfectant products during the pandemic[70]. Business Expansion and Strategy - The company is expanding its business into the pharmaceutical intermediates sector, aiming to reduce raw material costs through vertical integration[10]. - The company has implemented a "Belt and Road" operational framework to enhance its market presence and adapt to industry changes[9]. - The company plans to explore traditional Chinese medicine by integrating related businesses into its operations[10]. - The company is actively optimizing its organizational structure and management systems to support sustainable growth[9]. - The company has developed a range of pharmaceutical excipients, including medicinal solvents and stabilizers, to enhance drug stability and efficacy[48]. - The company produces active pharmaceutical ingredients (APIs) such as sulfanilamide and hydroquinone, which are essential for antibacterial and antiseptic applications[53]. - The finished drug segment includes products like injectable sulbactam sodium and various traditional Chinese medicines, contributing to the company's revenue stream[54]. - The company has adopted a "sales-driven production" model, ensuring production plans align with market demand and inventory levels[55]. - The company is focusing on the development of new excipients and stabilizers to improve the performance of cardiovascular drugs[48]. - The company is actively responding to rising raw material prices by increasing inventory levels to mitigate supply chain risks[55]. - The company’s finished drug distribution is primarily through direct sales and distribution channels, enhancing market reach[55]. Quality Control and Risk Management - The management emphasizes the importance of strict quality control throughout the production process to mitigate risks associated with product quality[13]. - The company acknowledges potential risks associated with capacity expansion and is taking measures to manage inventory effectively[9]. - The company is committed to enhancing its internal control systems to respond effectively to macroeconomic and policy changes in the pharmaceutical industry[6]. - The company is facing challenges due to policy changes in the pharmaceutical industry, leading to adjustments in product structure and a decline in performance compared to the previous year[57]. - The implementation of new drug registration and production supervision regulations is expected to reshape the competitive landscape of the pharmaceutical industry[57]. - The company is closely monitoring the COVID-19 pandemic and has adjusted its operational strategies to mitigate its impact on production and employee safety[120]. - The company is assessing changes in consumer habits and market demand post-pandemic to adjust its operational strategies and product structure[123]. - The company faces risks related to raw material supply and price fluctuations, which may impact profitability[119]. - The company plans to strengthen production and sales management to mitigate risks associated with new investment projects[118]. - The company anticipates an increase in accounts receivable due to business expansion and new product promotion, which may raise the risk of bad debts[123]. Legal and Compliance Issues - A total of 936 plaintiffs have filed lawsuits against the company for securities false statement liability, involving an amount of 82.136 million RMB, which has formed an estimated liability[137]. - The Hunan Provincial Intermediate People's Court has made first-instance judgments on 916 cases and mediated 20 cases, with the company required to compensate a total of 81,107,271.73 RMB to the plaintiffs[137]. - The company has completed compensation for 935 cases as of August 12, 2020[137]. - The company is involved in three small lawsuits and arbitration cases with a total amount of 138.009 million RMB, currently in the execution stage[140]. - The company has maintained compliance with commitments made regarding competition and related party transactions during the reporting period[132]. - The half-year financial report has not been audited[135]. Investments and Acquisitions - The company completed the acquisition of 100% equity of Wuzhi Weikang for CNY 58 million on May 8, 2020[32]. - The company established a wholly-owned subsidiary with an investment of CNY 10 million to create an international trade platform[71]. - A 51% stake in Guangyu Limin was acquired for CNY 4.05 million, marking a strategic move to expand into traditional Chinese medicine[70]. - The company has invested CNY 82 million in entrusted financial management, with an outstanding balance of CNY 40 million[106]. - The company has no derivative investments or entrusted loans during the reporting period[107][112]. - The company signed a cooperation intention agreement to acquire up to 10% equity in Suma Biotechnology, but the agreement was terminated due to valuation disagreements[173]. - The company plans to invest 180.4 million RMB in a project in Cambodia to produce 10,000 tons of aniline, with 110.02 million RMB already invested, and trial production is expected in Q4 2020[178]. Environmental Compliance - The company has obtained pollution discharge permits for all its projects and conducts regular environmental impact assessments[169]. - The company has implemented a self-monitoring plan for environmental compliance, with monthly third-party testing of wastewater and air emissions[172]. - The company reported no significant environmental incidents during the reporting period[169]. - The company has a total of 1 discharge outlet for chemical oxygen demand and nitrogen oxides, with emissions meeting regulatory standards[169]. - The company is facing increased environmental regulations and is committed to complying with national policies and enhancing internal control standards for pollution monitoring[123]. Shareholder and Corporate Governance - The company has approved an employee stock ownership plan, acquiring 19,999,970 shares, representing 0.9696% of the total share capital[143]. - The company has signed an equity acquisition agreement to purchase 100% of Wuzhi Weikang Biochemical Pharmaceutical Co., Ltd. for 58 million RMB, with a book value of 54.823 million RMB and an assessed value of 64.8842 million RMB[151]. - The controlling shareholder has provided a joint liability guarantee for the company's bank credit limit of up to 1.6 billion RMB, with a guarantee amount of 831.0706 million RMB as of June 30, 2020[152]. - The company has appointed Gu Jishun as the new board secretary and deputy general manager, with 26,850 shares under lock-up conditions[193]. - The total number of restricted shares at the end of the period is 642,429,941 shares, with 7,367,460 shares released from restrictions during the period[196]. - The largest shareholder, Shuai Fangwen, holds 41.44% of the shares, totaling 854,673,006 shares, with 641,004,754 shares under lock-up conditions[197].

Financial Performance - Total revenue for Q1 2020 was ¥441,084,902.73, a decrease of 41.46% compared to ¥753,522,958.41 in the same period last year[7] - Net profit attributable to shareholders was ¥23,690,082.71, down 72.26% from ¥85,414,694.79 year-on-year[7] - Net profit excluding non-recurring items was ¥17,940,657.33, a decline of 78.12% from ¥81,994,988.97 in the previous year[7] - Basic earnings per share decreased by 72.22% to ¥0.0115 from ¥0.0414 year-on-year[7] - Operating revenue for the reporting period decreased by 31,243.81 million CNY, a drop of 41.46%, primarily due to the impact of the pandemic on production plans and sales[19] - The net cash flow from operating activities decreased by 8,537.02 million CNY, a decline of 151.09%, attributed to reduced sales collections due to the pandemic[20] - Sales revenue from pharmaceutical excipients was 30,241.55 million CNY, down 45.39% year-on-year[21] - Sales revenue from finished drugs decreased by 2,338.43 million CNY, a decline of 76.27% year-on-year[24] - The company achieved sales revenue of 1,691.36 million CNY from ethanol disinfectant products during the reporting period[25] - The company reported a decrease in research and development expenses to CNY 11,432,004.38 from CNY 11,959,105.09 year-over-year[64] - The total comprehensive income for the first quarter was CNY 12,203,604.72, reflecting a significant decline from CNY 51,459,712.64 in the previous year[70] Cash Flow and Assets - Net cash flow from operating activities was -¥141,872,633.41, representing a 151.09% increase in cash outflow compared to -¥56,502,439.68 in the same period last year[7] - The company's cash and cash equivalents decreased by 53,392.69 million CNY, a decline of 40.45%, mainly due to increased purchases of bank wealth management products[18] - Cash and cash equivalents decreased significantly from CNY 1,319,957,780.74 to CNY 786,030,903.66, a decline of about 40.5%[54] - The cash flow from investment activities showed a net outflow of CNY 141,872,633.41, compared to a net outflow of CNY 56,502,439.68 in the previous year[73] - The cash flow from financing activities resulted in a net inflow of CNY 317,917,333.33, compared to CNY 99,396,800.00 in the same period last year[74] - The total cash and cash equivalents at the end of the period decreased to 386,122,476.37 CNY from 949,953,334.22 CNY, reflecting a net decrease of 559,660,273.75 CNY[77] Shareholder Information - The total number of ordinary shareholders at the end of the reporting period was 48,682[11] - The largest shareholder, Shuai Fangwen, holds 41.44% of the shares, amounting to 854,673,006 shares, with 641,004,754 shares pledged[11] - The company's equity attributable to shareholders increased slightly from CNY 5,758,877,787.68 to CNY 5,800,711,575.75, a growth of approximately 0.7%[57] Investments and Projects - The company plans to accelerate the production of pharmaceutical intermediates such as aminophenol and p-nitrophenol, aiming for project completion in the first half of the year[27] - The company has obtained production qualifications for 9 new raw materials and has passed CDE approval for 3 additional raw materials, enhancing its raw material drug portfolio[28] - The establishment of a joint venture for industrial hemp research is underway, with an investment fund planned not to exceed 52.5 million yuan[32] - The joint venture for the Yunnan Haner Industrial Hemp Research Center has been registered, focusing on the application of new pharmaceutical excipients[33] - The company has invested 7 million yuan in a sulfanilamide project in Cambodia, focusing on strategic raw material development[37] - The acquisition of a 51% stake in Tibet Changdu Guangyu Limin Pharmaceutical Co., Ltd. was completed for 4.05 million yuan, marking a step towards expanding traditional Chinese medicine business[37] - The establishment of a wholly-owned subsidiary for international trade in Changsha was completed with an investment of 10 million yuan[37] Risk Management - Risks related to raw material supply and price fluctuations are being managed through market monitoring and inventory management strategies[30] - The company is addressing potential risks from accounts receivable increases due to business expansion and new product promotions by enhancing credit management policies[31] - The company is closely monitoring industry policy changes that may impact the pharmaceutical manufacturing sector, adjusting its product structure accordingly[29] Compliance and Governance - The company has committed to not engaging in any competitive business activities that may conflict with its main operations, ensuring compliance with relevant laws and regulations[42] - The company has pledged to avoid any financial transactions that could lead to the occupation of its funds or assets by related parties, maintaining a fair market trading environment[43] - The company has strictly adhered to its commitments regarding related party transactions, ensuring the protection of minority shareholders' rights[43] Fundraising and Financial Management - The company has outlined its fundraising usage in a detailed report, ensuring transparency in financial management[44] - The total amount of raised funds used for project changes reached CNY 5,626.67 million, accounting for 2.90% of the total raised funds[46] - The company has implemented strict management of raised funds, ensuring quality while reducing procurement costs through market research and negotiations[47] - All unused raised funds are stored in a special account for raised funds[47] - The company has not reported any issues or situations in the use and disclosure of raised funds[47] Production Capacity and Operations - The annual production capacity of starch hollow capsules is set at 70 billion units, while the modified starch project aims for 40,000 tons[47] - As of March 31, 2020, the construction of the starch hollow capsule project is expected to reach operational status by April 30, 2020, despite delays due to the pandemic[46] - The total investment for the modified starch project was adjusted from CNY 250,346.00 million to CNY 250,580.44 million[46] - The project implementation involves collaboration with subsidiaries in both China and Cambodia[46] - The company has adjusted the production主体 for the modified starch project to Erkang Biological Starch Co., Ltd.[47]

Financial Performance - The company's operating revenue for 2019 was CNY 2,744,341,005.69, representing a 16.56% increase compared to CNY 2,354,485,579.21 in 2018[32]. - The net profit attributable to shareholders for 2019 was CNY 161,530,199.47, a decrease of 25.42% from CNY 216,579,339.26 in the previous year[32]. - The net profit after deducting non-recurring gains and losses was CNY 144,985,484.52, down 44.93% from CNY 263,292,410.44 in 2018[32]. - The net cash flow from operating activities increased significantly by 259.83% to CNY 445,815,848.97 from CNY 123,894,781.22 in 2018[32]. - The total assets at the end of 2019 were CNY 6,143,768,563.96, a 1.57% increase from CNY 6,048,680,388.79 at the end of 2018[32]. - The net assets attributable to shareholders increased by 2.86% to CNY 5,758,877,787.68 from CNY 5,598,971,555.76 in 2018[32]. - The basic earnings per share for 2019 was CNY 0.0783, down 25.43% from CNY 0.1050 in the previous year[32]. - The company reported a total of CNY 16,544,714.95 in non-recurring gains for 2019, compared to a loss of CNY 46,713,071.18 in 2018[38]. - The company’s weighted average return on equity for 2019 was 2.85%, down from 3.95% in 2018[32]. - The company reported a total revenue of 1.5 billion RMB for the fiscal year 2019, representing a year-over-year increase of 12%[100]. - The net profit for the year was 300 million RMB, which is a 15% increase compared to the previous year[100]. Production and Capacity Expansion - The company reported a significant increase in production capacity due to the completion of fundraising projects, leading to a substantial boost in output for its main products[9]. - The company plans to invest in the production of pharmaceutical intermediates to reduce raw material costs, while also expanding into traditional Chinese medicine[10]. - The company is focusing on enhancing its management structure and optimizing organizational frameworks to adapt to the complexities of its growing business[9]. - The company aims to mitigate risks associated with production and sales management as it expands capacity, ensuring strict quality control and effective sales strategies[9]. - The company is committed to improving its quality management system to prevent potential risks related to drug quality throughout the production and storage processes[12]. - The company is implementing a strategic plan to extend its business along the pharmaceutical supply chain, enhancing its market presence[9]. - The company is focused on expanding its product variety and optimizing its product structure to ensure sustainable development amid industry pressures[56]. - The company is adapting its sales structure in response to the evolving pharmaceutical industry landscape, including policy changes and market demands[56]. - The company employs a "sales-driven production" model to align production plans with sales forecasts and inventory levels[53]. Research and Development - The company is focusing on the development of new drug formulations and delivery systems, including starch-based soft capsules and enteric-coated capsules[66]. - The company has introduced innovative methods for synthesizing active pharmaceutical ingredients, such as apicillin and tigecycline[66]. - The ongoing research and development efforts are expected to drive future revenue growth and market expansion[66]. - The company plans to leverage its patent portfolio to explore potential partnerships and collaborations in the pharmaceutical industry[66]. - The strategic focus on innovation and technology is aligned with the company's long-term growth objectives[66]. - The company is actively engaged in research and development of new products, including a series of starch-based capsules and films, which may enhance its product offerings in the pharmaceutical market[69]. - The company is focusing on the production of starch-based capsules, which aligns with current trends towards more natural and biodegradable pharmaceutical packaging[75]. - The company is committed to independent research and development, as evidenced by its patent filings[78]. - The company is exploring new strategies for market expansion and product development in the pharmaceutical industry[82]. Regulatory Compliance and Risk Management - The company acknowledges the ongoing litigation risks, with 901 lawsuits filed against it for securities false statements, affecting its profit outlook[13]. - The company is actively monitoring policy changes in the pharmaceutical industry to ensure compliance and adapt its internal management practices accordingly[6]. - The company aims to maintain compliance with evolving regulatory requirements to ensure continued operational success[79]. - The company faces risks from industry policy changes and fundraising project uncertainties, which may impact its market position and profitability[194]. - The company faces risks from raw material supply and price fluctuations due to macroeconomic factors, which may impact profitability[195]. - Environmental regulations are becoming stricter, and the company is committed to complying with national policies and enhancing internal control standards[195]. - The increase in accounts receivable due to business expansion raises the risk of bad debts, prompting the company to strengthen credit management policies[195]. Product Portfolio and Market Expansion - The company has a diverse product portfolio, including key drugs such as Amoxicillin and Theophylline, with specific registration numbers listed[89]. - The company is focused on expanding its product offerings and has successfully registered new drugs, indicating a commitment to research and development[89]. - The company aims to enhance its market presence through strategic approvals and product registrations, which may lead to increased revenue streams[89]. - The company is committed to enhancing its product quality and stability of supply in response to the increasing demands from finished drug manufacturers[185]. - The integration of raw materials and formulations is expected to drive long-term partnerships and stability in supply chains within the pharmaceutical industry[185]. - The company recognizes the importance of having a diverse product line and is focused on expanding its market share in the raw material drug sector[185]. - The company will enhance the role of the National Pharmaceutical Excipients Engineering Technology Research Center, focusing on the research of pharmaceutical excipients, safety, functionality, and quality standards improvement[186]. Investments and Financial Management - Long-term equity investments increased by 318.86% due to the addition of a new joint venture, Yiyang Tongyi Pharmaceutical Partnership[57]. - The company has established a partnership with Yiyang High-tech Industry Development Investment Group to create a pharmaceutical investment platform, with a total investment of ¥15 million from Yiyang High-tech and ¥14.4 million from the company[114]. - The company plans to achieve the operational status of the modified starch project by April 30, 2020, after construction is nearly complete[161]. - The company has temporarily supplemented working capital with idle raised funds amounting to 20,000 million yuan, which was returned to the special account by March 4, 2016[162]. - The company has effectively managed idle raised funds, ensuring they are stored in a dedicated account to generate interest income[165]. - The company has not encountered any issues or situations regarding the use and disclosure of raised funds[165]. - The company has not reported any significant changes in the feasibility of the projects funded by raised capital[166].