Financial Performance - The company's operating revenue for Q3 2022 was ¥403,699,656.59, representing a 31.08% increase compared to the same period last year[4]. - The net profit attributable to shareholders for Q3 2022 was ¥82,205,026.83, an increase of 8.26% year-on-year[4]. - The net profit attributable to shareholders after deducting non-recurring gains and losses was ¥78,505,975.55, up 7.48% from the previous year[4]. - The company's basic earnings per share for Q3 2022 were ¥0.93, reflecting a 1.09% increase year-on-year[4]. - Total operating revenue for the period reached CNY 1,004,272,176.87, a 30.2% increase from CNY 770,346,983.57 in the previous period[29]. - Net profit attributable to shareholders of the parent company was CNY 202,837,956.65, compared to CNY 156,074,589.73 in the same period last year, reflecting a 29.9% increase[30]. - Basic earnings per share increased to CNY 2.30 from CNY 1.90, representing a 21.1% growth[31]. Cash Flow - The company's cash flow from operating activities for the year-to-date was ¥258,481,192.79, a 38.09% increase compared to the same period last year[11]. - The net cash flow from operating activities for Q3 2022 was ¥258,481,192.79, an increase from ¥187,183,581.68 in Q3 2021, representing a growth of approximately 38%[33]. - Total cash outflow from operating activities amounted to ¥743,279,515.56, compared to ¥560,355,964.56 in the same period last year, indicating a rise of about 32.5%[33]. - The net cash flow from investing activities was -¥242,106,777.66, a significant increase in outflow compared to -¥30,893,551.13 in Q3 2021[33]. - Cash inflow from financing activities was ¥20,000,000.00, down from ¥101,200,000.00 in Q3 2021, reflecting a decrease of approximately 80.3%[33]. - The total cash outflow from financing activities was ¥206,731,168.79, compared to ¥131,436,597.75 in the previous year, marking an increase of about 57%[33]. - The net increase in cash and cash equivalents was -¥170,382,111.77, contrasting with an increase of ¥125,954,296.02 in Q3 2021[33]. - The ending balance of cash and cash equivalents was ¥509,778,164.37, compared to ¥163,173,139.35 at the end of Q3 2021, showing a significant increase[33]. Assets and Liabilities - The total assets at the end of Q3 2022 were ¥1,771,030,391.59, reflecting a 4.99% increase from the end of the previous year[4]. - Total current assets decreased from CNY 984.42 million to CNY 892.74 million, a decline of approximately 9.3%[26]. - Total assets increased from CNY 1.69 billion to CNY 1.77 billion, reflecting a growth of about 5.1%[27]. - The total liabilities decreased to CNY 269,849,358.43 from CNY 342,351,345.70, a reduction of 21.2%[30]. - The total equity attributable to shareholders of the parent company increased to CNY 1,501,181,033.16 from CNY 1,344,492,935.02, reflecting a growth of 11.6%[30]. Expenses - Research and development expenses for Q3 2022 amounted to ¥90,447,355.09, a 45.26% increase year-on-year, indicating increased investment in R&D[9]. - The company reported a significant increase in sales expenses, totaling ¥342,715,262.71, which is a 36.98% rise compared to the previous year[9]. - Total operating costs amounted to CNY 759,480,791.26, up 31.0% from CNY 579,705,999.57 year-on-year[30]. - The company paid ¥267,379,097.90 in employee compensation, up from ¥196,680,210.52 in the same quarter last year, representing an increase of approximately 36%[33]. - Tax payments totaled ¥110,263,063.76, compared to ¥68,634,467.34 in Q3 2021, indicating a rise of about 60.5%[33]. - The company reported cash outflows related to other operating activities of ¥265,485,835.83, an increase from ¥214,356,982.03 in the previous year, reflecting a growth of approximately 23.9%[33]. Shareholder Information - The total number of common shareholders at the end of the reporting period is 17,572, with the largest shareholder, Liu Jidong, holding 28.58% of the shares[12]. - The top ten shareholders collectively hold 25,175,500 shares, with the second-largest shareholder being the Fortune Tianhui Selected Growth Mixed Securities Investment Fund, holding 4.22%[12]. - Liu Jidong has 18,881,625 restricted shares, which are subject to a 25% annual unlock[14]. - Liu Jidong's shares are pledged, with 3,530,000 shares under pledge status[12]. - The company has not disclosed any relationships or concerted actions among the top ten shareholders[15]. - The company has not identified any financing or margin trading activities among the top ten common shareholders[15]. - The total number of restricted shares at the beginning of the period was 20,411,325, with 9,167 shares added during the period[15]. Corporate Governance - The company appointed Li Chunhua as a non-independent director following the resignation of Liu Gaozhi[18]. - The company appointed Gao E as the new General Manager, succeeding Liu Jidong, who remains as Chairman[19]. Regulatory and Project Updates - The company received approval for the Moxifloxacin Hydrochloride Eye Drops, with the drug approval number H20227050[21]. - The company signed a project investment agreement with the Shenyang Free Trade Zone Management Committee[22]. - The company approved the unlocking of 709,800 shares under the 2018 restricted stock incentive plan for 46 participants[23]. - The company approved the vesting of 460,400 shares under the 2021 restricted stock incentive plan for 91 participants[24]. - The company was re-certified as a high-tech enterprise, allowing it to enjoy a 15% corporate income tax rate for three years[25]. Liabilities and Financial Obligations - The company experienced a 77.81% increase in current non-current liabilities due to an increase in lease liabilities[8]. - The company reported a short-term loan of CNY 100 million from the central bank[27]. - Accounts payable decreased from CNY 13.31 million to CNY 10.95 million, a reduction of approximately 17.7%[27].

Financial Performance - The company's operating revenue for the reporting period was ¥600,572,520.28, representing a 29.89% increase compared to ¥462,364,536.98 in the same period last year[13]. - Net profit attributable to shareholders was ¥120,632,929.82, a 50.53% increase from ¥80,138,288.36 year-on-year[13]. - The net cash flow from operating activities was ¥134,532,268.56, up 69.09% from ¥79,560,572.90 in the previous year[13]. - The basic earnings per share increased to ¥1.37, up 38.38% from ¥0.99 in the same period last year[13]. - The company's gross profit margin for the pharmaceutical manufacturing segment was 79.20%, with a year-on-year increase of 1.72%[58]. - The total comprehensive income for the first half of 2022 was CNY 120,632,929.82, compared to CNY 87,981,145.43 in the same period of 2021, indicating a growth of approximately 37%[145]. - The company reported a significant increase in investment income, which reached CNY 5,633,428.87, compared to CNY 1,253,794.91 in the previous year[144]. Dividend Distribution - The company plans to distribute a cash dividend of 5.00 CNY per 10 shares to all shareholders, based on a total of 88,094,682 shares[2]. - The company reported a cash dividend of 5.00 CNY per 10 shares, totaling 44,047,341.00 CNY, which represents 100.00% of the total profit distribution[89]. - The company has committed to not using reserve funds for capital increase or issuing bonus shares, ensuring the protection of shareholder interests[90]. Research and Development - The company is focused on developing new products and technologies in the ophthalmic pharmaceutical sector[6]. - Research and development investment increased by 67.07% to ¥82,100,999.25 from ¥49,140,362.90 in the previous year, indicating a strong commitment to innovation[57]. - The company has established a high-level research team with over 42% of members holding master's or doctoral degrees, collaborating with several prestigious universities[38]. - The company is focusing on the development of new products, including Atropine Eye Drops, which are currently in Phase III clinical trials[38]. - The company has implemented a comprehensive internal management system for its R&D center to ensure sustainable and standardized development[38]. Market and Industry Outlook - The Chinese ophthalmic drug market grew from ¥15.1 billion in 2016 to ¥18.8 billion in 2020, with a compound annual growth rate (CAGR) of 5.7%[32]. - The market is projected to reach ¥44 billion by 2025 and ¥116.6 billion by 2030[32]. - The company aims to expand its marketing channels to cover all prefecture-level cities and is focusing on grassroots market needs, utilizing digital marketing strategies[39]. Risk Management - The management has emphasized the importance of risk awareness regarding future plans and performance forecasts[2]. - The report includes a section detailing the risks faced by the company and corresponding countermeasures[2]. - The company acknowledges the impact of the COVID-19 pandemic on hospital operations and is taking emergency management measures to minimize adverse effects on its business[82]. - The company is facing risks from rising raw material costs and is implementing measures to control procurement costs and improve production efficiency[79]. Environmental Compliance - The company reported that all monitored pollutants from wastewater discharge met the standards set by the "Comprehensive Wastewater Discharge Standards" (GB8978-1996) and "Liaoning Province Comprehensive Wastewater Discharge Standards" (DB 21/1627-2008)[101]. - The company’s emissions of nitrogen oxides were recorded at 33.5 mg/m³, which is within the limits of the "Boiler Air Pollutants Emission Standards" (GB13271-2014)[101]. - The company has established a standard hazardous waste storage area, with hazardous waste being treated by qualified units[101]. Corporate Governance - The company appointed Gao E as the new General Manager and Yang Qiang as the Deputy General Manager to enhance governance structure[117]. - The independent directors have consistently expressed agreement with the company's stock incentive plans and related adjustments[92][94]. - The company has established a wholly-owned subsidiary, Shenyang Keqi Pharmaceutical Co., Ltd., with a registered capital of CNY 30 million[73]. Financial Position - Total assets at the end of the reporting period were ¥1,693,476,662.93, a slight increase of 0.39% from ¥1,686,844,280.72 at the end of the previous year[13]. - The total liabilities decreased to CNY 226,816,469.86 from CNY 342,351,345.70, a decline of approximately 33.8%[141]. - Owner's equity increased to CNY 1,466,660,193.07 from CNY 1,344,492,935.02, reflecting a growth of about 9.1%[141]. Share Capital Changes - The company issued 5,763,282 shares to specific investors on January 18, 2022, increasing total shares from 82,332,600 to 88,094,682[121]. - The company’s total share capital was adjusted to 8,809.4682 million yuan after the completion of the stock repurchase in July 2022[95]. - The company has conducted multiple rounds of stock repurchase and cancellation, including 64,600 shares in May 2020 and 32,800 shares in May 2021, impacting the total share capital accordingly[93][94]. Community Engagement - Over 20,000 students received free eye health screenings during the first half of 2022, and the company has launched various educational initiatives to promote eye health awareness[40]. - The company donated over 4 million yuan to support education, health, and rural revitalization projects in Anhui Province during the reporting period[105].

Financial Performance - The company's revenue for Q1 2022 was CNY 301,958,988.82, representing a 45.73% increase compared to CNY 207,199,852.20 in the same period last year[3] - Net profit attributable to shareholders for Q1 2022 was CNY 74,168,573.48, a significant increase of 123.36% from CNY 33,206,280.03 in the previous year[3] - The net cash flow from operating activities reached CNY 103,314,893.79, up 118.32% from CNY 47,323,461.01 in the same period last year[3] - The company reported a basic earnings per share of CNY 0.84, which is a 110.00% increase compared to CNY 0.40 in the previous year[3] - The total operating revenue for the first quarter was 301,958,988.82 CNY, an increase of 45.6% compared to 207,199,852.20 CNY in the same period last year[22] - The net profit for the first quarter of 2022 was CNY 74,168,573.48, a 97.6% increase compared to CNY 37,543,286.84 in the same period last year[23] - Operating profit reached CNY 87,958,734.62, up 110.8% from CNY 41,711,645.63 year-on-year[23] - Revenue from sales of goods and services amounted to CNY 313,334,689.40, compared to CNY 213,664,991.62 in the previous year, reflecting a growth of 46.7%[25] - Total comprehensive income for the period was CNY 74,168,573.48, compared to CNY 37,543,286.84 in the same quarter last year, marking a significant increase[24] Assets and Liabilities - Total assets at the end of the reporting period were CNY 1,683,347,867.31, a slight decrease of 0.21% from CNY 1,686,844,280.72 at the end of the previous year[3] - The total assets amounted to 1,683,347,867.31 CNY, slightly down from 1,686,844,280.72 CNY at the beginning of the year[21] - The total liabilities decreased to 259,956,416.46 CNY from 342,351,345.70 CNY, a reduction of 24.1%[21] Cash Flow - The net cash flow from investing activities was CNY -52,486,090.96, reflecting a 175.28% increase in cash outflows for fixed asset purchases[8] - The company repaid bank loans, resulting in a cash flow from financing activities of CNY -102,567,434.93, a decrease of 658.39% compared to the previous year[8] - The cash and cash equivalents at the end of the period were 634,657,660.68 CNY, down from 686,360,276.14 CNY at the beginning of the year, a decrease of 7.5%[19] - The company incurred a total of CNY 122,567,434.93 in cash outflows from financing activities, compared to CNY 61,631,596.98 in the previous year[27] Research and Development - The company's R&D expenses increased by 37.58% due to higher clinical trial costs during the reporting period[6] - Research and development expenses increased to CNY 22,312,058.34, up from CNY 20,024,595.26, indicating a focus on innovation[23] Shareholder Information - The company issued 5,763,282 A-shares at a price of RMB 104.05 per share, raising a total of RMB 599,669,492.10, with a net amount of RMB 580,179,086.77 after deducting issuance costs[15] - The registered capital increased from RMB 82.33 million to RMB 88.10 million following the issuance of new shares[15] - The company reported a total of 20,879,325 restricted shares at the beginning of the period, with 5,772,449 shares remaining restricted at the end of the period[14] - The company has 18,881,625 restricted shares held by executive Liu Jidong, which are subject to a 25% annual unlock[12] - The company has a total of 468,000 restricted shares for other incentive plan participants, which remain locked[14] - The company has 961,076 shares held by Citic Lyon Asset Management, which are also subject to lock-up[13] - The company has not disclosed any related party relationships among its top shareholders[11] Corporate Developments - The company received the High-tech Enterprise Certificate, allowing it to enjoy a reduced corporate income tax rate of 15% for three years[18] - The company appointed a new non-independent director, Li Chunhua, following the resignation of Liu Gaozhi[17] Operating Costs - The total operating costs for the first quarter were 214,113,341.19 CNY, up from 166,430,260.09 CNY, reflecting a year-over-year increase of 28.7%[22] - The accounts receivable increased to 111,705,036.16 CNY from 108,148,643.62 CNY, showing a growth of 2.4%[19] - The inventory balance rose to 105,139,260.39 CNY, compared to 92,330,953.24 CNY at the start of the year, indicating an increase of 14.0%[19] Audit Information - The company did not conduct an audit for the first quarter report[28]

Financial Performance - The company's operating revenue for the first half of 2021 was CNY 462,364,536.98, representing a 95.25% increase compared to CNY 236,806,949.82 in the same period last year[13]. - The net profit attributable to shareholders of the listed company reached CNY 80,138,288.36, a significant increase of 423.27% from CNY 15,314,817.56 in the previous year[13]. - The net profit after deducting non-recurring gains and losses was CNY 82,099,519.99, up 459.79% from CNY 14,666,022.60 year-on-year[13]. - The net cash flow from operating activities was CNY 79,560,572.90, which is a 412.80% increase compared to CNY 15,515,061.50 in the same period last year[13]. - The basic earnings per share for the reporting period was CNY 0.99, reflecting a 421.05% increase from CNY 0.19 in the previous year[13]. - The total profit amounted to ¥98,992,472.43, reflecting a significant increase of 560.10% year-on-year, with net profit attributable to shareholders reaching ¥80,138,288.36, a growth of 423.27%[28]. - The company's revenue for the reporting period reached ¥462,364,536.98, representing a year-on-year growth of 95.25%[28]. Dividend Distribution - The company reported a cash dividend of 2.5 RMB per 10 shares for all shareholders, based on a total of 82,332,600 shares[2]. - The board of directors has approved the profit distribution plan, reflecting the company's commitment to returning value to shareholders[2]. - The company plans to distribute a cash dividend of 2.50 RMB per 10 shares, totaling 20,583,150 RMB, which represents 100% of the profit distribution[64]. - The company distributed cash dividends of RMB 2.50 per 10 shares, totaling RMB 20,591,350 for the 2020 fiscal year, approved on May 11, 2021[79]. - For the first half of 2021, the company proposed a cash dividend of RMB 2.50 per 10 shares, totaling RMB 20,583,150, pending shareholder approval[79]. Research and Development - The company is actively engaged in research and development of new drugs, which is crucial for future growth and market expansion[5]. - The company continues to focus on the development of ophthalmic drugs and technologies, with plans for market expansion and new product launches in the future[12]. - The company has a strong focus on research and development, maintaining a leading position in the domestic ophthalmic drug market[21]. - The company has multiple products in various stages of clinical research, including SQ-727 and SQ-729, which are in clinical research phases targeting fungal treatment and myopia progression, respectively[35]. - The company has received clinical trial approval for SQ-708, aimed at preventing and treating immune rejection after corneal transplantation[29]. - SQ-729, which controls the progression of myopia in children, has obtained a clinical trial notification[29]. - Research and development expenses rose by 47.69% to ¥49,140,362.90, reflecting increased investment in R&D activities[42]. Compliance and Governance - The financial report ensures the accuracy and completeness of the data presented, with all board members present for the meeting[2]. - The report includes a commitment to transparency, with all financial statements signed and stamped by responsible parties[4]. - The company is focused on maintaining compliance with regulatory requirements set by the National Medical Products Administration[5]. - The company maintains a robust governance structure, ensuring clear responsibilities and checks among the shareholders' meeting, board of directors, supervisory board, and management[78]. - The company emphasizes investor communication through various channels, including its official website and investor relations platforms, to protect the rights of all shareholders[78]. - The company has not engaged in any significant litigation or arbitration matters during the reporting period[85]. - The company has not reported any discrepancies between financial reports prepared under international accounting standards and Chinese accounting standards during the reporting period[15]. Environmental Responsibility - The company has been identified as a key pollutant discharge unit by environmental protection authorities[69]. - The company reported compliance with wastewater discharge standards, with key pollutants such as SS at 19 mg/L, BOD5 at 35.6 mg/L, and COD at 109 mg/L, all within regulatory limits[70]. - The total nitrogen (TN) concentration was measured at 11.5 mg/L, and ammonia nitrogen (NH3-N) at 3.17 mg/L, both adhering to the established discharge standards[70]. - The company has established a self-built wastewater treatment facility that processes wastewater before discharge into the municipal network, ensuring environmental compliance[71]. - The company has received multiple environmental protection acceptance opinions for its production base and R&D center upgrades, indicating ongoing commitment to environmental standards[72]. - No administrative penalties were reported for environmental issues during the reporting period, reflecting the company's adherence to regulations[76]. Market and Industry Trends - The pharmaceutical industry in China has shown a growth trend, with the total revenue of the pharmaceutical industry reaching ¥2,239.54 billion in 2020, an increase of ¥162.28 billion from 2019[25]. - The ophthalmic drug market in China is significantly underdeveloped compared to the U.S., with a market size of $28 billion (approximately ¥193 billion) in 2019, compared to $15 billion in the U.S.[27]. - The company has a compound annual growth rate (CAGR) of 8% in the ophthalmic drug market from 2015 to 2019, with expectations to reach 17.8% CAGR from 2019 to 2030[27]. Risk Management - The company emphasizes the importance of understanding the risks associated with future plans and performance forecasts, highlighting the need for investor awareness[2]. - The management discussion section outlines potential risks and the company's strategies to mitigate them, which are detailed in the report[3]. - The company faces risks of slowing performance growth and potential underperformance due to increased competition and new medical policies in the pharmaceutical industry[55]. - The company is investing in the ophthalmology service sector, but the returns from these investments will take time to materialize, leading to increased depreciation costs[55]. - R&D projects may not meet expectations due to the lengthy and unpredictable nature of new drug development, potentially increasing short-term operating costs[56]. - Rising raw material costs and supply shortages pose risks, prompting the company to develop new suppliers and manage energy consumption to mitigate cost increases[57]. - The implementation of stricter drug production standards and regulations necessitates enhanced quality control throughout the product lifecycle[58]. Shareholder Information - The total number of shares is 82,365,400, with 26.21% being restricted shares and 73.79% being unrestricted shares[99]. - The total number of ordinary shareholders at the end of the reporting period was 10,910, with no preferred shareholders regaining voting rights[102]. - Liu Jidong holds 30.57% of the shares, totaling 25,175,500 shares, with 18,881,625 shares under lock-up[102]. - The total number of restricted shares at the beginning of the period was 21,589,375, with 677,250 shares released during the period[101]. - The company has a total of 20,912,525 restricted shares remaining at the end of the period[101]. - The largest shareholder, Liu Jidong, has 6,293,875 unrestricted shares[103]. - The second-largest shareholder, Tongshi Investment Co., Ltd., holds 4,469,587 shares, with a decrease of 2,391,000 shares during the period[102]. Financial Reporting and Accounting - The company adheres to the accounting standards set by the Ministry of Finance, ensuring the accuracy and completeness of its financial reporting[142]. - The company's financial statements are prepared based on the principle of going concern, indicating ongoing operations[141]. - The company consolidates financial statements based on control, including all subsidiaries, reflecting the overall financial status, operating results, and cash flows of the group[146]. - The company recognizes revenue when it fulfills performance obligations in contracts, which occurs when customers gain control of the related goods or services[192]. - Revenue is measured based on the transaction price allocated to each performance obligation, considering factors like variable consideration and significant financing components[193]. - The company recognizes short-term employee benefits as liabilities and expenses in the period in which services are provided[185]. - The company recognizes retirement benefits when it can no longer withdraw the benefits offered or when it incurs costs related to restructuring[188].

Financial Performance - The company's revenue for Q1 2021 was CNY 207,199,852.20, representing a 150.52% increase compared to CNY 82,709,557.13 in the same period last year[3]. - Net profit attributable to shareholders was CNY 33,206,280.03, a significant turnaround from a loss of CNY 10,434,874.81, marking a 418.22% increase[3]. - The total profit for the period was CNY 41,389,626.49, marking a significant growth of 465.73% year-over-year[14]. - The company's operating revenue for Q1 2021 reached CNY 207,199,852.20, representing a 150.52% increase compared to the same period last year[11]. - The net profit for Q1 2021 reached CNY 37.54 million, compared to a net loss of CNY 11.96 million in Q1 2020, indicating a turnaround in profitability[38]. - The total comprehensive income for Q1 2021 was CNY 37.54 million, compared to a comprehensive loss of CNY 11.96 million in the same quarter of the previous year[38]. - The company's total profit for Q1 2021 was CNY 41.39 million, a significant improvement from a total loss of CNY 11.32 million in Q1 2020[38]. Cash Flow - The net cash flow from operating activities reached CNY 47,323,461.01, up 1,952.97% from CNY 2,305,122.35 in the previous year[3]. - Cash flow from operating activities for Q1 2021 was CNY 213.66 million, compared to CNY 114.65 million in the same period last year, showing a growth of 86.5%[42]. - The total cash inflow from operating activities was CNY 225,964,344.43, compared to CNY 115,835,528.57 in the previous year, representing an increase of approximately 95.4%[43]. - The net increase in cash and cash equivalents for the period was CNY 46,573,721.67, compared to a decrease of CNY 15,099,326.45 in the previous year, indicating a turnaround in cash flow[44]. - Cash inflow from financing activities totaled CNY 80,000,000.00, up from CNY 31,655,517.24 in the previous year, marking an increase of approximately 152%[44]. - The net cash flow from financing activities was CNY 18,368,403.02, compared to CNY 10,369,238.50 in the previous year, reflecting a growth of about 76.5%[44]. Assets and Liabilities - Total assets at the end of the reporting period were CNY 1,045,502,579.94, an increase of 8.26% from CNY 965,701,210.74 at the end of the previous year[3]. - The company's cash and cash equivalents increased by 125.13% to CNY 83,792,565.00, primarily due to increased operating income and short-term borrowings[10]. - Total current liabilities increased to CNY 224,505,880.41 from CNY 212,493,430.91, marking an increase of approximately 5.7%[31]. - The company's total liabilities reached CNY 313,506,508.26, up from CNY 271,642,000.91, representing an increase of about 15.4%[31]. - The total equity attributable to shareholders of the parent company was CNY 715,788,413.95, compared to CNY 682,188,558.91, showing an increase of approximately 4.9%[32]. Shareholder Information - The total number of ordinary shareholders at the end of the reporting period was 10,795[6]. - The largest shareholder, Liu Jidong, held 30.57% of the shares, totaling 25,175,500 shares[6]. Research and Development - Research and development expenses rose by 52.81% to CNY 20,024,595.26, driven by higher personnel costs and increased investment in R&D projects[11]. - The company received drug registration acceptance notices for new products, including Bemeiprel and Sodium Hyaluronate eye drops[14]. - The company is currently conducting Phase III clinical trials for Atropine Sulfate eye drops, which aim to slow the progression of myopia in children[14]. - The company's research and development expenses for Q1 2021 amounted to CNY 16.80 million, up from CNY 13.04 million in Q1 2020, reflecting a 29.1% increase[39]. Market and Competition - The company plans to enhance market share by focusing on key regions and increasing customer development efforts through various promotional activities[17]. - Increased competition in the pharmaceutical industry may lead to a slowdown in growth and market share decline if the company does not adapt effectively[19]. - The company is investing in expanding its ophthalmology product line and enhancing research and development efforts to mitigate competitive risks[19]. - The company anticipates potential performance growth slowdown due to new investments in ophthalmic medical services and equipment, which may take time to yield returns[20]. - Rising costs of raw materials and stricter production standards pose risks, prompting the company to seek new suppliers and improve production efficiency[22]. - The company is committed to improving management capabilities to address risks associated with rapid expansion and increasing operational complexity[22]. Compliance and Governance - The company has no violations regarding external guarantees during the reporting period[27]. - There were no non-operating fund occupations by controlling shareholders or related parties during the reporting period[27]. - The company did not conduct an audit for the first quarter report[52]. - The new leasing standards were not applicable for the retrospective adjustment of prior comparative data[52].

Financial Performance - The company reported a total revenue of CNY 1.2 billion for the year 2020, representing a year-on-year growth of 15%[15]. - The net profit attributable to shareholders was CNY 300 million, an increase of 20% compared to the previous year[15]. - The company's operating revenue for 2020 was ¥688,682,125.80, an increase of 26.96% compared to ¥542,434,237.77 in 2019[20]. - Net profit attributable to shareholders for 2020 reached ¥87,978,613.68, representing a significant increase of 145.11% from ¥35,893,796.29 in 2019[20]. - The total profit reached ¥102,541,715.12, reflecting a significant growth of 186.30% compared to the previous year[37]. - The company has set a revenue guidance of CNY 1.5 billion for 2021, projecting a growth rate of 25%[15]. - The gross margin for the year was reported at 60%, indicating strong cost control measures[15]. Research and Development - The company is committed to enhancing its research and development capabilities to mitigate risks associated with unmet expectations in R&D projects[6]. - The R&D expenditure for the year was CNY 150 million, accounting for 12.5% of total revenue, focusing on innovative drug development[15]. - The company's R&D investment for the reporting period was CNY 83.56 million, accounting for 12.13% of revenue, an increase of CNY 28.35 million compared to 2019[70]. - The number of R&D personnel increased to 121, representing 10.98% of the total workforce, compared to 113 in 2019[74]. - The company has multiple ongoing R&D projects, including treatments for macular edema and fungal infections, with several in clinical research stages[71]. Market Expansion and Strategy - The company is expanding its market presence in Southeast Asia, targeting a 25% increase in international sales by 2022[15]. - The company aims to increase its market share and sales coverage while controlling investment project risks to ensure expected returns[6]. - The company plans to launch three new ophthalmic products in 2021, aiming to capture a larger market share[15]. - The company is focusing on enhancing its product pipeline and overall competitiveness through strategic investments[90]. - The marketing strategy for 2021 focuses on core products and academic activities to increase brand recognition and provide high-quality services to doctors and patients[94]. Dividend and Profit Distribution - The company plans to distribute a cash dividend of 2.5 yuan per 10 shares (including tax) to all shareholders, based on a total of 82,365,400 shares[11]. - The total distributable profit for the company was RMB 285,929,708.09, with the cash dividend representing 100% of the total profit distribution[100]. - In 2020, the cash dividend amounted to 23.40% of the net profit attributable to ordinary shareholders, which was RMB 87,978,613.68[104]. - The cash dividend policy remained unchanged during the reporting period, ensuring compliance with relevant regulations[100]. - The independent directors confirmed that the profit distribution plan was in line with the company's articles of association and did not harm the interests of minority shareholders[98]. Operational Efficiency and Cost Management - The company is implementing measures to control rising raw material costs and improve production efficiency to manage cost inflation risks[8]. - The company achieved operating revenue of ¥688,682,125.80, a year-on-year increase of 26.96%[37]. - The company's operating costs rose to ¥185,029,213.91, an increase of 27.56% from the previous year[37]. - The gross profit margin for the medical services segment improved to 67.81%, up by 38.82% year-on-year, with operating costs rising by 163.41%[60]. Compliance and Governance - The company has maintained a governance structure that respects and protects the rights of all shareholders, particularly minority shareholders, ensuring compliance with relevant laws and regulations[126]. - The company has established a rigorous internal control management system covering key areas such as decision-making, asset management, and financial reporting[180]. - The board of directors consists of 9 members, including 3 independent directors, ensuring compliance with legal and regulatory requirements[178]. - The company has established effective communication channels with investors to ensure transparency and access to information regarding significant corporate matters[126]. Social Responsibility and Community Engagement - The company has actively engaged in social responsibility initiatives, including donations for COVID-19 prevention and support for low-income disabled individuals[53]. - The company has conducted various public welfare activities, including health assistance and free medical consultations in collaboration with medical institutions[130]. - The company has been involved in promoting youth eye health through partnerships with educational and health organizations[130]. - The company is committed to fulfilling its obligations and promises made to shareholders and stakeholders during the reporting period[106]. Environmental Compliance - The company’s wastewater treatment meets the "Comprehensive Wastewater Discharge Standards" (GB8978-1996) and the "Liaoning Province Comprehensive Wastewater Discharge Standards" (DB 21/1627-2008)[133]. - The company operates a self-built wastewater treatment facility that processes wastewater before it is discharged into the municipal network[133]. - The company has implemented environmental protection measures and complies with relevant environmental standards for both wastewater and air emissions[133]. - The company has established an emergency response plan for environmental incidents, which has been filed with the local environmental authority[134].

[Company Overview and Key Financial Indicators](index=3&type=section&id=Section%20II%20Company%20Basic%20Information) This section provides an overview of the company's fundamental information, including its financial performance and shareholder structure [Major Financial Performance](index=3&type=section&id=I.%20Major%20Accounting%20Data%20and%20Financial%20Indicators) In the first three quarters of 2020, the company achieved strong performance growth, with operating revenue increasing by 14.46% year-on-year and net profit attributable to shareholders surging by 88.21% Major Financial Data and Indicators | Indicator | Year-to-Date (YTD) | YTD YoY Change | Current Reporting Period (Q3) | Q3 YoY Change | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue (Yuan) | 469,348,340.57 | 14.46% | 232,541,390.75 | 46.53% | | Net Profit Attributable to Shareholders of Listed Company (Yuan) | 53,734,795.79 | 88.21% | 38,419,978.22 | 68.33% | | Net Profit Attributable to Shareholders of Listed Company (Excluding Non-recurring Gains and Losses) (Yuan) | 52,312,430.73 | 111.69% | 37,646,408.13 | 81.72% | | Net Cash Flow from Operating Activities (Yuan) | 66,273,870.66 | 12.22% | 50,758,809.16 | 145.46% | | Basic Earnings Per Share (Yuan/Share) | 0.65 | 85.71% | 0.47 | 67.86% | | Weighted Average Return on Net Assets | 9.08% | Increased by 3.92 percentage points | 6.39% | Increased by 2.20 percentage points | | Total Assets (Yuan) | 928,300,039.46 | Increased by 8.91% from the beginning of the year | - | - | | Net Assets Attributable to Shareholders of Listed Company (Yuan) | 621,217,726.96 | Increased by 9.27% from the beginning of the year | - | - | [Shareholder Structure and Shareholding](index=4&type=section&id=II.%20Total%20Number%20of%20Shareholders%20and%20Top%20Ten%20Shareholders%27%20Shareholding%20at%20the%20End%20of%20the%20Reporting%20Period) As of the end of the reporting period, the company had 9,397 shareholders, with a relatively concentrated equity structure and significant institutional investor interest - As of the end of the reporting period, the total number of common stock shareholders was **9,397**[7](index=7&type=chunk) - The controlling shareholder and actual controller, Mr. Liu Jidong, holds **25,175,500 shares**, accounting for **30.57%** of the company's total share capital, of which **19,113,000 shares** are restricted shares[7](index=7&type=chunk) - Among the top ten shareholders, in addition to the controlling shareholder, there are also foreign legal entity Tongshi Investment Co., Ltd. (holding **8.84%**), and multiple public fund products under Fullgoal Fund, Bosera Fund, and China Asset Management, indicating high attention from institutional investors[7](index=7&type=chunk)[8](index=8&type=chunk) [Business Operations Review and Analysis](index=7&type=section&id=Section%20III%20Significant%20Matters) This section reviews and analyzes the company's operational status, including significant financial changes and key strategic developments [Analysis of Significant Changes in Financial Position](index=7&type=section&id=I.%20Significant%20Changes%20in%20Major%20Financial%20Data%20and%20Indicators%20During%20the%20Reporting%20Period%20and%20Their%20Reasons) During the reporting period, changes in the company's financial position were primarily driven by business expansion and R&D investment, leading to increased accounts receivable, development expenditures, and financial expenses [Balance Sheet Item Analysis](index=7&type=section&id=(I)%20Significant%20Changes%20in%20Balance%20Sheet%20Items%20and%20Their%20Reasons) On the asset side, growth in operating revenue drove a 43.91% year-on-year increase in accounts receivable, and R&D project clinical trial investments led to a 505.57% surge in development expenditures Significant Changes in Balance Sheet Items and Their Reasons | Balance Sheet Item | Period-End Balance (Yuan) | Period-Beginning Balance (Yuan) | Change Percentage | Primary Reason | | :--- | :--- | :--- | :--- | :--- | | Accounts Receivable | 133,844,668.53 | 93,004,565.56 | 43.91% | Due to increased operating revenue during the reporting period | | Development Expenditures | 7,511,510.58 | 1,240,396.19 | 505.57% | Due to increased clinical trial expenses for R&D projects during the reporting period | | Prepayments Received | 0 | 6,359,926.18 | -100.00% | Reclassified to contract liabilities due to the adoption of new revenue recognition standards | | Contract Liabilities | 3,784,478.46 | 0 | - | Reclassified from prepayments received due to the adoption of new revenue recognition standards | [Income Statement Item Analysis](index=7&type=section&id=(II)%20Significant%20Changes%20in%20Income%20Statement%20Items%20and%20Their%20Reasons) Regarding the income statement, increased bank borrowings led to a 48.71% year-on-year increase in financial expenses, while increased external donation expenditures resulted in a 136.08% surge in non-operating expenses Significant Changes in Income Statement Items and Their Reasons | Income Statement Item | Current Period Amount (Yuan) | Prior Period Amount (Yuan) | Change Percentage | Primary Reason | | :--- | :--- | :--- | :--- | :--- | | Financial Expenses | 4,679,747.70 | 3,146,881.79 | 48.71% | Increased bank borrowings during the reporting period led to higher interest expenses | | Non-Operating Expenses | 2,579,734.96 | 1,092,738.00 | 136.08% | Increased external donation expenditures during the reporting period | [Cash Flow Statement Item Analysis](index=7&type=section&id=(III)%20Significant%20Changes%20in%20Cash%20Flow%20Statement%20Items%20and%20Their%20Reasons) Net cash flow from operating activities increased by 12.22% year-on-year due to increased sales collections, while investing and financing activities also saw significant changes - Net cash flow from operating activities was **66.27 million Yuan**, a year-on-year increase of **12.22%**, primarily due to increased cash received from sales of goods and provision of services[14](index=14&type=chunk) - Net cash flow from investing activities was **-70.40 million Yuan**, with outflow increasing by **20.06%** year-on-year, primarily due to increased acquisition of fixed assets and other long-term assets[15](index=15&type=chunk) - Net cash flow from financing activities was **26.39 million Yuan**, a year-on-year increase of **40.30%**, primarily due to a decrease in cash paid for dividend distribution[15](index=15&type=chunk) [Progress of Significant Matters](index=8&type=section&id=II.%20Analysis%20and%20Explanation%20of%20Progress%2C%20Impact%2C%20and%20Solutions%20for%20Significant%20Matters) During the reporting period, the company advanced several key strategic initiatives, including a planned A-share issuance, new drug clinical trial approval, and share repurchases - The company plans to issue A-shares to specific targets, with a total fundraising amount not exceeding **800 million Yuan** and the number of shares issued not exceeding **7%** of the company's total share capital before this issuance; this matter still requires regulatory approval[16](index=16&type=chunk) - The company's new drug "Voriconazole Eye Drops" received the Drug Clinical Trial Approval Notice from the National Medical Products Administration on September 15, 2020, marking new progress in the R&D pipeline[16](index=16&type=chunk)[18](index=18&type=chunk) - The company completed the repurchase and cancellation of **64,600 restricted shares** and disclosed the progress of share reductions by certain directors, supervisors, senior management, and shareholders holding over **5%**[16](index=16&type=chunk) [Investor Relations Activities](index=9&type=section&id=VIII.%20Registration%20Form%20for%20Investor%20Research%2C%20Communication%2C%20Interview%2C%20and%20Other%20Activities%20During%20the%20Reporting%20Period) The company actively engaged with the capital market during the reporting period, hosting multiple institutional investors through various communication channels - In July and September 2020, the company communicated with multiple institutional investors, including Fullgoal Fund, Bosera Fund, and Haitong Securities, through on-site research and conference calls[19](index=19&type=chunk)[20](index=20&type=chunk) - Communication content primarily revolved around factory tours, introductions to the company's production and operation, and investor Q&A[19](index=19&type=chunk)[20](index=20&type=chunk) [Financial Statements](index=11&type=section&id=Section%20IV%20Financial%20Statements) This section presents the company's consolidated financial statements and explains adjustments due to changes in accounting policies [Consolidated Financial Statements Summary](index=11&type=section&id=1.%20Consolidated%20Balance%20Sheet) As of September 30, 2020, the company's total assets were 928.30 million Yuan, with significant growth in operating revenue and net profit attributable to shareholders in the first three quarters Consolidated Financial Summary | Item | September 30, 2020 / First Three Quarters of 2020 | December 31, 2019 / First Three Quarters of 2019 | Change | | :--- | :--- | :--- | :--- | | **Balance Sheet** | | | | | Total Assets (Yuan) | 928,300,039.46 | 852,368,054.02 | 8.91% | | Net Assets Attributable to Shareholders of Listed Company (Yuan) | 621,217,726.96 | 568,514,086.14 | 9.27% | | **Income Statement** | | | | | Operating Revenue (Yuan) | 469,348,340.57 | 410,066,336.15 | 14.46% | | Net Profit Attributable to Shareholders of Listed Company (Yuan) | 53,734,795.79 | 28,550,546.63 | 88.21% | | **Cash Flow Statement** | | | | | Net Cash Flow from Operating Activities (Yuan) | 66,273,870.66 | 59,055,610.12 | 12.22% | [Changes in Accounting Policies](index=29&type=section&id=II.%20Explanation%20of%20Financial%20Statement%20Adjustments) The company adopted the new revenue recognition standard from January 1, 2020, reclassifying prepayments received to contract liabilities without retrospective adjustment to prior year-end figures - The company began implementing the "Accounting Standard for Business Enterprises No. 14 – Revenue" (New Revenue Standard) revised and issued by the Ministry of Finance in 2017, effective January 1, 2020[52](index=52&type=chunk)[55](index=55&type=chunk) - In accordance with the new revenue standard, the company adjusted **6,359,926.18 Yuan** from "Prepayments Received" in the consolidated balance sheet as of January 1, 2020, to the newly added "Contract Liabilities" account, without retrospective adjustment to the prior year-end figures[51](index=51&type=chunk)[52](index=52&type=chunk)

[Section I Important Notice, Table of Contents and Definitions](index=2&type=section&id=Section%20I%20Important%20Notice,%20Table%20of%20Contents%20and%20Definitions) This section provides an important notice, the table of contents, and definitions relevant to the report [Risk Factors](index=2&type=section&id=Risk%20Factors) The company details major risks including policy tightening, intensified competition, R&D uncertainties, and COVID-19 impact, outlining corresponding countermeasures - Industry Policy Risk: Increased national pharmaceutical industry regulation, including the 'Two-Invoice System' and centralized drug procurement policies, introduces uncertainty to drug prices; the company will strengthen policy responses and promote academic marketing and market expansion[3](index=3&type=chunk)[4](index=4&type=chunk) - Industry Competition Risk: Supportive policies for the pharmaceutical industry intensify internal competition, and the emergence of new companies and alternative drugs may slow the company's growth; the company's strategy is to increase R&D investment and broaden its product line[5](index=5&type=chunk) - Performance Growth Risk: Intensified market competition and the time required for return on investment in ophthalmic medical services and equipment may lead to slower performance growth; the company will explore market potential and control investment risks[6](index=6&type=chunk) - R&D Risk: New drug development has a long cycle and multiple stages, susceptible to unpredictable factors, and continuous investment may lead to increased short-term operating costs; the company will improve R&D capabilities and focus on key projects[6](index=6&type=chunk)[7](index=7&type=chunk) - COVID-19 Pandemic Risk: The pandemic led to a decline in hospital outpatient visits and surgeries, impacting the company's production and sales in the short term; the company has implemented emergency management measures and is resuming work and production in an orderly manner to mitigate adverse effects[10](index=10&type=chunk) [Section II Company Profile and Key Financial Indicators](index=9&type=section&id=Section%20II%20Company%20Profile%20and%20Key%20Financial%20Indicators) This section outlines the company's fundamental information and presents its key financial performance metrics [Company Profile](index=9&type=section&id=Company%20Profile) This chapter provides the company's basic information, including stock abbreviation 'Xingqi Eye Medicine', stock code '300573', legal representative Liu Jidong, and unchanged contact details Company Basic Information | Item | Information | | :--- | :--- | | Stock Abbreviation | Xingqi Eye Medicine | | Stock Code | 300573 | | Listing Exchange | Shenzhen Stock Exchange | | Legal Representative | Liu Jidong | [Key Accounting Data and Financial Indicators](index=10&type=section&id=Key%20Accounting%20Data%20and%20Financial%20Indicators) In H1 2020, operating revenue decreased by 5.79% to **237 million yuan**, while net profit attributable to shareholders surged by 167.48% to **15.31 million yuan**, despite a 59.57% drop in operating cash flow Key Financial Performance | Indicator | Current Period | Prior Period | YoY Change | | :--- | :--- | :--- | :--- | | Operating Revenue (yuan) | 236,806,949.82 | 251,367,240.21 | -5.79% | | Net Profit Attributable to Shareholders (yuan) | 15,314,817.56 | 5,725,671.10 | 167.48% | | Net Profit Attributable to Shareholders (Excl. Non-recurring Items) (yuan) | 14,666,022.60 | 3,995,751.09 | 267.04% | | Net Cash Flow from Operating Activities (yuan) | 15,515,061.50 | 38,376,960.64 | -59.57% | | Basic Earnings Per Share (yuan/share) | 0.19 | 0.07 | 171.43% | | Weighted Average Return on Net Assets | 2.71% | 1.05% | Increase of 1.66 percentage points | | Total Assets (yuan) | 854,135,357.22 | 852,368,054.02 | 0.21% | | Net Assets Attributable to Shareholders (yuan) | 581,637,223.72 | 568,514,086.14 | 2.31% | [Non-recurring Gains and Losses and Amounts](index=11&type=section&id=Non-recurring%20Gains%20and%20Losses%20and%20Amounts) During the reporting period, the company's total non-recurring gains and losses amounted to **648,800 yuan**, primarily comprising government subsidies of **2.29 million yuan** recognized in current profit and loss, and other net non-operating income/expenses of **-1.52 million yuan** Non-recurring Items | Item | Amount (yuan) | | :--- | :--- | | Government subsidies recognized in current profit and loss | 2,292,176.76 | | Other non-operating income and expenses apart from the above | -1,520,842.74 | | Less: Income tax impact | 110,063.60 | | Minority interest impact (after tax) | 12,475.46 | | **Total** | **648,794.96** | [Section III Company Business Overview](index=12&type=section&id=Section%20III%20Company%20Business%20Overview) This section provides an overview of the company's core business operations, product portfolio, and strategic positioning within the ophthalmic pharmaceutical market [Main Businesses of the Company](index=12&type=section&id=Main%20Businesses%20of%20the%20Company) The company specializes in ophthalmic pharmaceuticals, with its main business being the R&D, production, and sales of ophthalmic prescription drugs; it boasts a rich product line covering ten sub-categories of ophthalmic drugs, holding 48 drug approval numbers, with 26 products listed in the National Medical Insurance Catalog; its operating model primarily involves production based on sales and professional academic promotion - The company specializes in ophthalmic pharmaceuticals, primarily engaged in the R&D, production, and sales of ophthalmic prescription drugs[26](index=26&type=chunk) Ophthalmic Drug Product Portfolio | Category | Registration Approvals | Number in Medical Insurance Catalog | Number in National Essential Drug List | | :--- | :--- | :--- | :--- | | Ophthalmic Anti-infectives | 17 | 12 | 2 | | Other Ophthalmic Drugs | 4 | 0 | - | | Ophthalmic Non-steroidal Anti-inflammatories | 4 | 2 | - | | Mydriatics and Cycloplegics | 4 | 3 | 2 | | **Total** | **48** | **26** | **6** | - The company's sales model is primarily based on professional academic promotion, divided into two modes: professional academic promotion for prescription drugs and professional promotion for the retail market[31](index=31&type=chunk) [Analysis of Core Competencies](index=14&type=section&id=Analysis%20of%20Core%20Competencies) The company's core competencies include a comprehensive and diverse ophthalmic drug product system, strong R&D capabilities with 35 invention patents, rich product reserves, a strong brand reputation, an extensive marketing network, and an experienced talent team; during the reporting period, the company newly obtained the drug registration approval for Cyclosporine Eye Drops (II) - Product Line Advantage: Established a comprehensive and diverse ophthalmic drug product system, covering ten sub-categories of ophthalmic drugs[35](index=35&type=chunk) - Technological Advantage: The company is a national high-tech enterprise, possessing provincial-level engineering technology research centers and enterprise technology centers, with **35 invention patents**[36](index=36&type=chunk) - Brand Advantage: Ophthalmic preparations represented by products like 'Sugaojie' and 'Diyou' have established a strong brand reputation within the industry[38](index=38&type=chunk) - Marketing Advantage: Adopts a customer-centric, academically-led professional marketing and promotion model, with a marketing network covering all provinces, autonomous regions, and municipalities nationwide[39](index=39&type=chunk) - During the reporting period, the company newly obtained the drug registration approval for Cyclosporine Eye Drops (II), with drug approval number H20203239[40](index=40&type=chunk)[41](index=41&type=chunk) [Section IV Management Discussion and Analysis](index=16&type=section&id=Section%20IV%20Management%20Discussion%20and%20Analysis) This section provides a comprehensive discussion and analysis of the company's operational performance, financial condition, and key strategic initiatives during the reporting period [Overview](index=16&type=section&id=Overview) In H1 2020, the company achieved operating revenue of **237 million yuan**, a 5.79% year-on-year decrease, primarily due to the Q1 COVID-19 impact; however, Q2 business grew rapidly by 86.31% quarter-on-quarter; net profit was **15.31 million yuan**, a 167.48% year-on-year increase; the company made progress in production quality, marketing expansion, product R&D, and external investments, notably with Cyclosporine Eye Drops (II) approved as the first domestic cyclosporine ophthalmic preparation for dry eye disease - Q1 operating revenue was significantly impacted by the pandemic, while Q2 achieved rapid growth, increasing by **86.31%** quarter-on-quarter[42](index=42&type=chunk) - In terms of production, the ophthalmic preparation production capacity expansion project is progressing smoothly, with some sub-projects having completed validation and ready for production[43](index=43&type=chunk) - In marketing, brand influence was enhanced through various forms such as online academic conferences and brand activities, including over forty 'Qianli Chuan Jiayin' expert academic courses[44](index=44&type=chunk) - In R&D, Cyclosporine Eye Drops (II) was approved for market, becoming China's first approved cyclosporine ophthalmic preparation for dry eye disease; several other eye drops also received drug registration acceptance notices[46](index=46&type=chunk) - In investment, a new wholly-owned subsidiary, 'Wenzhou Xingqi Ophthalmic Life Science Co., Ltd.', was established in Wenzhou with a registered capital of **20 million yuan** to accelerate new product launches[47](index=47&type=chunk) [Analysis of Main Business](index=18&type=section&id=Analysis%20of%20Main%20Business) During the reporting period, the company's key financial indicators changed significantly; sales expenses decreased by **27.85%** year-on-year, while R&D investment increased by **36.22%** due to new drug project investments; by product, gel/ointment and eye drop revenues decreased by **26.22%** and **10.55%** respectively, but medical service revenue surged by **436.77%**, with gross margin increasing by **42.03** percentage points Key Financial Indicators and Reasons for Change | Item | Current Period (yuan) | Prior Period (yuan) | YoY Change | Primary Reason | | :--- | :--- | :--- | :--- | :--- | | Sales Expenses | 82,150,735.21 | 113,860,887.57 | -27.85% | - | | Financial Expenses | 2,832,457.88 | 1,731,602.58 | 63.57% | Increase in bank borrowings led to higher interest expenses | | R&D Investment | 33,273,650.18 | 24,425,767.03 | 36.22% | Increased R&D investment in new drug projects | | Net Cash Flow from Operating Activities | 15,515,061.50 | 38,376,960.64 | -59.57% | Decrease in government subsidies received | Operating Revenue and Cost by Product/Service | By Product or Service | Operating Revenue (yuan) | Operating Cost (yuan) | Gross Margin | YoY Change in Operating Revenue | YoY Change in Operating Cost | YoY Change in Gross Margin | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Medical Services | 37,484,114.74 | 36,814,419.21 | 1.79% | 436.77% | 275.91% | 42.03% | | Gels / Ointments | 109,213,750.50 | 18,214,375.93 | 83.32% | -26.22% | -27.51% | 0.29% | | Eye Drops | 74,618,014.95 | 29,851,771.24 | 59.99% | -10.55% | -16.54% | 2.87% | [Analysis of Assets and Liabilities](index=20&type=section&id=Analysis%20of%20Assets%20and%20Liabilities) As of the end of the reporting period, total assets were **854 million yuan**, largely unchanged from the prior year-end; within assets, construction in progress and investment properties increased, while receivables financing significantly decreased; on the liability side, both short-term and long-term borrowings increased; **256 million yuan** of fixed and intangible assets were pledged as collateral for bank loans, with restricted rights Assets with Restricted Rights | Item | Book Value at Period End (yuan) | Reason for Restriction | | :--- | :--- | :--- | | Fixed Assets | 233,895,209.25 | Pledged for bank loans | | Intangible Assets | 21,902,032.20 | Pledged for bank loans | | **Total** | **255,797,241.45** | - | [Analysis of Investment Status](index=21&type=section&id=Analysis%20of%20Investment%20Status) During the reporting period, total investment was **33.96 million yuan**, a 39.02% year-on-year increase; significant equity investment included establishing wholly-owned subsidiary 'Wenzhou Xingqi Ophthalmic Life Science Co., Ltd.' with a **20 million yuan** investment; the major non-equity investment 'Ophthalmic Preparation Production Capacity Expansion Project' saw a current period investment of **30.96 million yuan**, with cumulative investment reaching **80.21 million yuan**, achieving **54.72%** project progress - Investment during the reporting period was **33.96 million yuan**, an increase of **39.02%** compared to **24.43 million yuan** in the prior period[57](index=57&type=chunk) - Established a new wholly-owned subsidiary, 'Wenzhou Xingqi Ophthalmic Life Science Co., Ltd.', with an investment of **20 million yuan** for drug production and technology R&D[58](index=58&type=chunk) - The 'Ophthalmic Preparation Production Capacity Expansion Project' saw a current period investment of **30.96 million yuan**, with cumulative investment reaching **80.21 million yuan**, and project progress at **54.72%**[60](index=60&type=chunk) [Section V Significant Matters](index=28&type=section&id=Section%20V%20Significant%20Matters) This section details the company's significant events and developments during the reporting period, including equity incentives, major contracts, and other key updates [Company Equity Incentive Plan](index=31&type=section&id=Company%20Equity%20Incentive%20Plan) During the reporting period, the company advanced its 2018 Restricted Stock Incentive Plan; in April 2020, the board confirmed the achievement of conditions for the first lifting of restrictions and approved the repurchase and cancellation of certain ineligible restricted shares; on July 3, 2020, the company completed the repurchase and cancellation of **64,600** granted but unvested restricted shares - On April 16, 2020, the company's board of directors approved the 'Proposal on the Achievement of Conditions for the First Vesting Period of the 2018 Restricted Stock Incentive Plan'[85](index=85&type=chunk) - The company repurchased and cancelled a total of **64,600** restricted shares from resigned incentive recipients and those whose performance targets were not met[85](index=85&type=chunk) - On July 3, 2020, the company announced the completion of repurchase and cancellation procedures for **64,600** restricted shares, with the company's total share capital decreasing accordingly[86](index=86&type=chunk) [Significant Contracts and Their Performance](index=32&type=section&id=Significant%20Contracts%20and%20Their%20Performance) During the reporting period, the company had no significant trusteeship, contracting, or guarantee matters; important lease contracts included subsidiary Xingqi Ophthalmic Hospital leasing commercial space for operations and Shanghai Kangende Medical Technology leasing premises for operations; no significant contracts impacting total company profit by more than 10% occurred - The company's controlling subsidiary, Shenyang Xingqi Ophthalmic Hospital Co., Ltd., leases **5,812.24 square meters** of commercial space for operations, with the lease term extending to June 30, 2022[90](index=90&type=chunk) - The company's controlling subsidiary, Shanghai Kangende Medical Technology Co., Ltd., leases **5,223.98 square meters** of premises for operations, with the lease term extending to April 30, 2030[90](index=90&type=chunk) [Explanation of Other Significant Matters](index=34&type=section&id=Explanation%20of%20Other%20Significant%20Matters) During the reporting period, the company made several important advancements in R&D, shareholder reductions, equity pledges, equity incentives, and subsidiary establishment; in R&D, Visufort® Lutein Vitamin E Soft Capsules obtained registration certificates, and Cyclosporine Eye Drops (II) received drug registration approval; the company also disclosed multiple shareholder reduction plans and progress announcements, and established the wholly-owned subsidiary Wenzhou Xingqi Ophthalmic Life Science Co., Ltd - R&D Progress: Cyclosporine Eye Drops (II) obtained the 'Drug Registration Approval' issued by the National Medical Products Administration; several other eye drops also received drug registration acceptance notices[94](index=94&type=chunk) - Shareholder Dynamics: Disclosed multiple share reduction plans, progress, and completion announcements for shareholders holding over 5%, directors, and senior management[94](index=94&type=chunk) - Subsidiary Establishment: In June 2020, the company invested in and established the wholly-owned subsidiary Wenzhou Xingqi Ophthalmic Life Science Co., Ltd., completing its industrial and commercial registration[95](index=95&type=chunk) [Section VI Changes in Shares and Shareholder Information](index=35&type=section&id=Section%20VI%20Changes%20in%20Shares%20and%20Shareholder%20Information) This section details changes in the company's share capital and provides information on its shareholders during the reporting period [Share Fluctuation Details](index=35&type=section&id=Share%20Fluctuation%20Details) During the reporting period, the company's total share capital remained unchanged at **82,430,000 shares**; due to the achievement of conditions for the first vesting period of the 2018 Restricted Stock Incentive Plan, restricted shares decreased by **780,150 shares**, with unrestricted shares increasing by the same amount; additionally, the company completed the repurchase and cancellation of **64,600** restricted shares on July 2, 2020 Share Capital Changes | Share Type | Quantity Before Change | Change in Current Period | Quantity After Change | | :--- | :--- | :--- | :--- | | Restricted Shares | 22,690,500 | -780,150 | 21,910,350 | | Unrestricted Shares | 59,739,500 | +780,150 | 60,519,650 | | **Total Shares** | **82,430,000** | **0** | **82,430,000** | - The reason for share fluctuation was the listing and circulation of shares released from restriction under the company's 2018 Restricted Stock Incentive Plan's first vesting period[97](index=97&type=chunk) [Number of Shareholders and Shareholding Information](index=37&type=section&id=Number%20of%20Shareholders%20and%20Shareholding%20Information) As of the end of the reporting period, the company had **5,864** common shareholders; controlling shareholder and de facto controller Liu Jidong held **30.91%** of the company's shares; among the top ten shareholders, besides Liu Jidong, major institutional investors included Tongshi Investment Co., Ltd. and several public funds - Total common shareholders at the end of the reporting period were **5,864**[102](index=102&type=chunk) Top Shareholders | Shareholder Name | Shareholding Percentage | Shares Held at Period End | Restricted Shares Held | | :--- | :--- | :--- | :--- | | Liu Jidong | 30.91% | 25,477,000 | 19,113,000 | | Tongshi Investment Co., Ltd. | 9.82% | 8,096,420 | 0 | | Fullgoal Low Carbon New Economy Mixed Fund | 1.79% | 1,471,772 | 0 | [Section VII Preferred Shares Information](index=40&type=section&id=Section%20VII%20Preferred%20Shares%20Information) This section confirms that the company had no preferred shares during the reporting period [Preferred Shares Status](index=40&type=section&id=Preferred%20Shares%20Status) During the reporting period, the company had no preferred shares - The company had no preferred shares during the reporting period[108](index=108&type=chunk) [Section VIII Convertible Corporate Bonds Information](index=41&type=section&id=Section%20VIII%20Convertible%20Corporate%20Bonds%20Information) This section confirms that the company had no convertible corporate bonds during the reporting period [Convertible Corporate Bonds Status](index=41&type=section&id=Convertible%20Corporate%20Bonds%20Status) During the reporting period, the company had no convertible corporate bonds - The company had no convertible corporate bonds during the reporting period[109](index=109&type=chunk) [Section IX Information on Directors, Supervisors, and Senior Management](index=42&type=section&id=Section%20IX%20Information%20on%20Directors,%20Supervisors,%20and%20Senior%20Management) This section provides details on the company's directors, supervisors, and senior management, including any changes in their shareholdings [Changes in Shareholdings of Directors, Supervisors, and Senior Management](index=42&type=section&id=Changes%20in%20Shareholdings%20of%20Directors,%20Supervisors,%20and%20Senior%20Management) During the reporting period, there were no changes in the company's directors, supervisors, and senior management; regarding shareholding changes, Chairman and General Manager Mr. Liu Jidong reduced his company shares by **7,000 shares** - There were no changes in the company's directors, supervisors, and senior management during the reporting period[112](index=112&type=chunk) Shareholding Changes of Key Personnel | Name | Position | Shares Held at Beginning of Period (shares) | Shares Reduced in Current Period (shares) | Shares Held at End of Period (shares) | | :--- | :--- | :--- | :--- | :--- | | Liu Jidong | Chairman, General Manager | 25,484,000 | 7,000 | 25,477,000 | [Section X Corporate Bonds Information](index=43&type=section&id=Section%20X%20Corporate%20Bonds%20Information) This section confirms that the company has no outstanding corporate bonds that are publicly issued and listed on a stock exchange [Corporate Bonds Status](index=43&type=section&id=Corporate%20Bonds%20Status) The company has no publicly issued and listed corporate bonds on a stock exchange that are either unexpired or have not been fully redeemed by the approval date of the semi-annual report - The company has no publicly issued and listed corporate bonds on a stock exchange that are either unexpired or have not been fully redeemed by the approval date of the semi-annual report[113](index=113&type=chunk) [Section XI Financial Report](index=44&type=section&id=Section%20XI%20Financial%20Report) This section presents the company's consolidated financial statements, including the balance sheet, income statement, and cash flow statement [Consolidated Balance Sheet](index=44&type=section&id=Consolidated%20Balance%20Sheet) As of June 30, 2020, the company's total assets were **854 million yuan**, a slight increase of 0.21% from the beginning of the year; total liabilities were **267 million yuan**, a 3.62% decrease from the beginning of the year; equity attributable to parent company owners was **582 million yuan**, a 2.31% increase from the beginning of the year, maintaining a stable asset-liability structure Consolidated Balance Sheet Summary | Item | June 30, 2020 (yuan) | December 31, 2019 (yuan) | | :--- | :--- | :--- | | **Total Assets** | **854,135,357.22** | **852,368,054.02** | | **Total Liabilities** | **267,424,379.76** | **277,464,911.01** | | Total Equity Attributable to Parent Company Owners | 581,637,223.72 | 568,514,086.14 | | **Total Liabilities and Equity** | **854,135,357.22** | **852,368,054.02** | [Consolidated Income Statement](index=50&type=section&id=Consolidated%20Income%20Statement) In H1 2020, the company achieved total operating revenue of **237 million yuan**, a 5.79% year-on-year decrease; despite the revenue decline, effective cost control, especially a **27.85%** year-on-year drop in sales expenses, led to an operating profit of **16.52 million yuan**, a 191.6% year-on-year increase; net profit attributable to parent company owners was **15.31 million yuan**, a significant 167.48% year-on-year increase Consolidated Income Statement Summary | Item | H1 2020 (yuan) | H1 2019 (yuan) | | :--- | :--- | :--- | | Total Operating Revenue | 236,806,949.82 | 251,367,240.21 | | Total Operating Costs | 223,402,846.61 | 247,126,400.08 | | Of which: Sales Expenses | 82,150,735.21 | 113,860,887.57 | | R&D Expenses | 31,701,500.42 | 24,425,767.03 | | Operating Profit | 16,517,486.57 | 5,664,291.14 | | Total Profit | 14,996,643.83 | 4,680,647.53 | | Net Profit Attributable to Parent Company Owners | 15,314,817.56 | 5,725,671.10 | [Consolidated Cash Flow Statement](index=54&type=section&id=Consolidated%20Cash%20Flow%20Statement) In H1 2020, net cash flow from operating activities was **15.52 million yuan**, a 59.57% year-on-year decrease, primarily due to reduced government subsidies; net cash outflow from investing activities was **41.01 million yuan**, a 31.07% year-on-year increase, mainly due to increased acquisition of fixed assets; net cash inflow from financing activities was **28.12 million yuan**; cash and cash equivalents balance at period-end was **40.89 million yuan** Consolidated Cash Flow Statement Summary | Item | H1 2020 (yuan) | H1 2019 (yuan) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 15,515,061.50 | 38,376,960.64 | | Net Cash Flow from Investing Activities | -41,007,109.22 | -31,287,268.66 | | Net Cash Flow from Financing Activities | 28,118,614.42 | 30,214,290.40 | | Net Increase in Cash and Cash Equivalents | 2,586,625.61 | 37,290,500.91 | [Section XII Reference Documents Catalog](index=160&type=section&id=Section%20XII%20Reference%20Documents%20Catalog) This section lists the documents available for reference, including financial statements and publicly disclosed materials [Reference Documents](index=160&type=section&id=Reference%20Documents) Reference documents for this report include financial statements signed and sealed by the company's legal representative, head of finance, and head of accounting, the semi-annual report text signed by the legal representative, and originals of all publicly disclosed documents and announcements during the reporting period; these documents are available at the company's Board Secretary's Office - Reference documents include: - Signed and sealed financial statements - Signed semi-annual report text - Originals of all publicly disclosed documents and announcements during the reporting period[448](index=448&type=chunk)