Financial Performance - The company's net profit attributable to shareholders was 6.4 million yuan, a year-on-year decrease of 88.15%, with a net profit of -1.96 million yuan after deducting non-recurring gains and losses[6]. - Revenue increased by 21.88% from 2.79 billion yuan in 2020 to 3.4 billion yuan in 2021[7]. - The net profit attributable to shareholders decreased significantly by 88.15% to ¥6,400,029.75 from ¥54,017,717.66 in the previous year[26]. - The company's revenue for 2021 reached ¥3,400,580,726.17, representing a 21.88% increase compared to ¥2,790,133,940.28 in 2020[26]. - The net cash flow from operating activities turned negative at -¥154,378,944.17, a decline of 322.71% compared to ¥69,319,600.48 in 2020[26]. - The basic earnings per share dropped by 90.67% to ¥0.07 from ¥0.75 in 2020[26]. - The weighted average return on equity decreased to 0.85% from 10.75% in the previous year[26]. - The gross profit margin declined, leading to a decrease in gross profit by CNY 12 million, attributed to changes in product structure and increased promotional expenses[70]. Revenue Breakdown - Total revenue for the year was approximately CNY 3.4 billion, with a quarterly breakdown of CNY 830.92 million in Q1, CNY 762.46 million in Q2, CNY 812.85 million in Q3, and CNY 994.35 million in Q4[29]. - The revenue from the pharmaceutical e-commerce business was CNY 1,495,045,186.35, accounting for 43.96% of total revenue, with a growth of 23.32% compared to the previous year[77]. - The traditional pharmaceutical business generated CNY 1,874,925,479.29, which is 55.14% of total revenue, reflecting a year-on-year increase of 22.06%[77]. - The company achieved terminal pure sales of CNY 2.11 billion in 2021, a year-on-year increase of 29.07%[69]. - The e-commerce business revenue increased from 1.212 billion yuan in 2020 to 1.495 billion yuan in 2021, representing a growth rate of 23.32%[57]. User Engagement and Market Expansion - The number of active users on the company's e-commerce platform reached 13,700, a growth rate of 24.5%[11]. - The average weekly active users of the e-commerce platform reached 13,700, a growth rate of 24.50% compared to the end of 2020[53]. - The company has established records with over 67,000 pharmaceutical terminals across 31 provinces, covering over 80% of pharmaceutical chain enterprises in Sichuan province[40]. - The company aims to enhance its digital platform, targeting a 45% increase in online sales by the end of 2022[100]. - User data indicates a 25% increase in active customers, reaching 500,000 by the end of 2021[159]. Research and Development - R&D expenses rose by approximately 11 million yuan due to the establishment of a technology center[6]. - The company has invested in technology development, establishing a technical center with over 100 personnel focused on smart healthcare solutions[52]. - Research and development expenses increased to CNY 11,377,795.52, driven by the expansion of pharmaceutical supply chain development projects[85]. - New product development initiatives are underway, with a budget allocation of 50 million for research and technology advancements[101]. - The company plans to continue investing in R&D to develop proprietary products and strengthen partnerships with upstream pharmaceutical companies, leveraging the MAH policy to enhance its product portfolio[125]. Strategic Initiatives - The company is actively exploring new business segments in drug production, e-commerce, and new retail to build a comprehensive pharmaceutical service ecosystem[10]. - The company has established a comprehensive F2B2C pharmaceutical service ecosystem, integrating various segments including B2B e-commerce and smart logistics[38]. - The company plans to expand its market presence through strategic acquisitions, including a focus on medical devices and healthcare services[100]. - The company aims to become a leader in the digital health ecosystem by building a one-stop service system from production to end-users, enhancing the efficiency of drug purchasing and health services[121]. - The company is focusing on enhancing its supply chain capabilities to capture more market share in the expanding outpatient market[120]. Governance and Compliance - The company has implemented a robust corporate governance structure in compliance with relevant laws and regulations, ensuring the protection of minority shareholders' rights[144]. - The company has established a fair and effective performance evaluation and incentive mechanism for senior management, combining base salary with annual performance assessment[145]. - The company emphasizes compliance with information disclosure obligations, ensuring timely, truthful, and accurate communication with investors[195]. - The company has strengthened its internal control system and auditing supervision to enhance compliance and risk management[187]. - The company has not faced any administrative penalties related to environmental issues during the reporting period[194]. Future Outlook - Future guidance suggests a projected revenue growth of 20% for 2022, driven by new product launches and market expansion[100]. - The company plans to optimize its existing warehousing and distribution systems to reduce unit costs while enhancing customer engagement and increasing sales volume through various channels such as e-commerce and offline retail[123]. - The company aims to achieve a gross margin of 40% in 2022, up from 38% in 2021[159]. - The company is adapting to regulatory changes and aiming for operational model innovation to improve its position in the pharmaceutical industry[119]. - The company acknowledges the risks associated with regulatory changes in the pharmaceutical industry, which could impact operational pressures and competitive dynamics[129].

Financial Performance - The company's revenue for Q1 2022 was ¥910,012,727.88, representing a 9.52% increase compared to ¥830,916,487.56 in the same period last year[3] - Net profit attributable to shareholders reached ¥9,136,693.85, a significant increase of 746.52% from ¥1,079,321.55 in the previous year[3] - The net profit after deducting non-recurring gains and losses was ¥6,798,768.20, up 346.31% from a loss of ¥2,760,263.93 in the same period last year[3] - Basic and diluted earnings per share were both ¥0.10, reflecting a 900.00% increase from ¥0.01 in the previous year[3] - Total operating revenue for Q1 2022 reached CNY 910,012,727.88, an increase of 9.6% compared to CNY 830,916,487.56 in Q1 2021[19] - Net profit for Q1 2022 was CNY 7,414,416.55, significantly higher than CNY 1,293,861.48 in Q1 2021, marking a growth of 473.5%[20] - Earnings per share for Q1 2022 were CNY 0.10, compared to CNY 0.01 in Q1 2021, indicating a tenfold increase[21] Assets and Liabilities - The total assets at the end of the reporting period were ¥1,322,687,904.54, an increase of 11.42% from ¥1,187,068,605.90 at the end of the previous year[3] - The total current assets increased to CNY 970,341,153.26 from CNY 831,684,671.94, representing a growth of approximately 16.7%[15] - Total liabilities increased to CNY 512,089,643.24 in Q1 2022 from CNY 399,131,979.12 in Q1 2021, reflecting a growth of 28.3%[17] - The total non-current assets decreased slightly to CNY 261,626,110.12 from CNY 261,953,000.00, a marginal decline of about 0.1%[15] Cash Flow - The net cash flow from operating activities improved to -¥57,440,183.26, a 45.90% improvement from -¥106,177,249.12 in the same period last year[3] - The company's cash flow from operating activities for Q1 2022 was CNY 628,484,597.81, compared to CNY 547,910,269.81 in Q1 2021, showing an increase of 14.7%[23] - Total cash inflow from operating activities amounted to 643,727,865.40 CNY, compared to 555,287,111.76 CNY in the same period last year, reflecting a year-over-year increase of approximately 15.9%[24] - Cash outflow from operating activities totaled 701,168,048.66 CNY, up from 661,464,360.88 CNY, indicating a rise of about 6.5%[24] - The net cash flow from investing activities was 6,417,422.29 CNY, a significant recovery from -9,189,364.05 CNY in the previous year[24] - The ending cash and cash equivalents balance was 89,292,730.22 CNY, down from 214,465,761.82 CNY, reflecting a decrease of about 58.4%[25] Shareholder Information - The total number of ordinary shareholders at the end of the reporting period was 15,413[8] - The largest shareholder, Li Yanfei, holds 36.97% of the shares, totaling 35,370,000 shares[9] Future Outlook - The company plans to release new products and technologies in the upcoming quarters, focusing on market expansion strategies[12] - The company is also exploring potential mergers and acquisitions to enhance its market position and product offerings[12] - Future performance guidance remains optimistic, with expectations of continued growth in user data and market share[12] Research and Development - The company received government subsidies amounting to ¥2,629,363.94, related to R&D and other operational support[5] - Research and development expenses for Q1 2022 were CNY 4,976,547.82, indicating ongoing investment in innovation[19]

Financial Performance - The company achieved a net profit attributable to shareholders of 6.4 million yuan, a year-on-year decrease of 88.15%, with a net profit of -1.96 million yuan after deducting non-recurring gains and losses[6]. - Revenue increased by 21.88% from 2.79 billion yuan in 2020 to 3.40 billion yuan in 2021, despite a decline in gross margin and gross profit[7]. - The net profit attributable to shareholders decreased by 88.15% to ¥6.40 million from ¥54.02 million in the previous year[26]. - The net cash flow from operating activities was negative at ¥154.38 million, a decline of 322.71% compared to ¥69.32 million in 2020[26]. - Basic and diluted earnings per share fell by 90.67% to ¥0.07 from ¥0.75 in the previous year[26]. - The company's revenue for 2021 was approximately ¥3.40 billion, representing a 21.88% increase compared to ¥2.79 billion in 2020[26]. - The revenue after deducting unrelated income was approximately ¥3.38 billion, up from ¥2.77 billion in 2020[27]. - The company's total revenue for Q4 2021 was approximately ¥994.35 million, showing a significant increase compared to Q1 2021's revenue of ¥830.92 million[29]. - The net profit attributable to shareholders for Q4 2021 was a loss of approximately ¥4.58 million, contrasting with a profit of ¥1.08 million in Q1 2021[29]. - The net cash flow from operating activities turned positive in Q4 2021, reaching approximately ¥18.84 million, after negative cash flows in the first three quarters[29]. Market Development and Strategy - The company plans to explore new business segments in drug production, e-commerce, and new retail, although these segments have not yet generated revenue[7]. - The pharmaceutical distribution market is experiencing a shift from hospital to outpatient markets, driven by regulatory reforms and increasing health awareness[9]. - The company aims to build a comprehensive pharmaceutical service ecosystem in the outpatient market, leveraging its industry position and brand reputation[10]. - The company is actively integrating with the "Internet+" initiative, enhancing its competitive edge in the rapidly growing pharmaceutical e-commerce market[37]. - The company is focusing on technology-driven innovations in health management, smart warehousing, and AI algorithms to enhance its service offerings[58]. - The company aims to become a leader in the digital health ecosystem by building a one-stop service system from production to end-users[38]. - The company is exploring new retail models and e-commerce platforms to enhance its market presence and customer loyalty[124]. - The company is committed to building a comprehensive health ecosystem by integrating supply chain and technological advantages[127]. Research and Development - Research and development expenses rose by approximately 11 million yuan due to the establishment of a technology center, reflecting the company's commitment to "smart pharmaceutical industry" development strategy[6]. - The company has invested in technology development, forming a technical team of over 100 people and establishing a smart decision-making engine for the pharmaceutical industry[52]. - The company's R&D investment amounted to ¥11,377,795.52 in 2021, representing 0.33% of its operating revenue[85]. - The number of R&D personnel increased to 108 in 2021, representing 10.33% of the total workforce, a significant change from 0% in 2020[85]. E-commerce and User Engagement - The number of active users on the company's e-commerce platform reached 13,700, a growth rate of 24.5%, with over 67,000 established pharmaceutical terminal enterprise files[11]. - The company's e-commerce platform, Hezhong Yiyuan, achieved sales of 1.495 billion yuan in 2021, representing a year-on-year growth of 23.32% from 1.212 billion yuan in 2020[57]. - The average weekly active users on the platform increased by 24.5% year-on-year, reaching 13,700 users by the end of 2021[57]. - The e-commerce business revenue increased from 1.212 billion CNY in 2020 to 1.495 billion CNY in 2021, representing a growth rate of 23.32%[53]. Operational Efficiency and Logistics - The company has built a modern logistics and warehousing system, improving operational efficiency and reducing costs through a self-owned logistics network and smart warehouse management[62]. - The company has established a distribution system with over 900 subordinate distributors and has created profiles for over 67,000 pharmaceutical terminals[44]. - The company has built a logistics system to enhance service capabilities, establishing a wholly-owned subsidiary for independent logistics operations[51]. - The company aims to strengthen its supply chain advantages and optimize its warehousing and distribution efficiency to reduce unit costs while enhancing customer engagement[124]. Governance and Compliance - The company maintains a governance structure that aligns with the requirements of the Company Law and Securities Law, ensuring the protection of minority shareholders' interests[141]. - The company is committed to timely and accurate information disclosure, ensuring equal access for all shareholders[140]. - The company emphasizes strict compliance with e-commerce laws and consumer protection, ensuring data security and ethical business practices[56]. - The company has established a comprehensive quality control system in compliance with GSP regulations to manage drug quality throughout the supply chain[130]. Employee Management and Training - The company emphasizes a differentiated compensation incentive policy based on market principles to enhance employee motivation and performance[177]. - The company has implemented a comprehensive training program for employees, including various training types such as technical and management training[179]. - The total remuneration for the board of directors, supervisors, and senior management during the reporting period amounted to 4.38 million yuan[164]. - The company has a total of 12 directors, supervisors, and senior management personnel[164]. Subsidiaries and Investments - The subsidiary Sichuan Hezhong Yiyigou Health Home Pharmacy reported an operating income of RMB 148.69 million but incurred a net loss of RMB 52.86 million[116]. - The subsidiary Chengdu Hesheng Yike Technology Co., Ltd. generated an operating income of RMB 135.59 million with a net profit of RMB 21.77 million[116]. - The company has completed the integration of its subsidiary, Sichuan Jingcheng Mingyi, focusing on governance and financial systems[186]. - The company reported a profit of 3,981,938.06 CNY from the transfer of Henan Yaoyigou Hezhong Pharmaceutical Co., Ltd. during the reporting period[119]. Future Outlook - The company plans to expand its market presence through strategic acquisitions and partnerships, aiming for a 50% increase in market share by 2023[102]. - New product development initiatives are underway, with a focus on innovative healthcare solutions expected to launch in Q2 2022[102]. - The company anticipates intensified market competition and changing market demands, particularly in the outpatient pharmaceutical circulation sector[128].

[Financial Summary and Key Indicators](index=1&type=section&id=%E4%B8%80%E3%80%81%E4%B8%BB%E8%A6%81%E8%B4%A2%E5%8A%A1%E6%95%B0%E6%8D%AE) [Key Accounting Data and Financial Indicators](index=1&type=section&id=%E4%B8%80%E3%80%81%28%E4%B8%80%29%E4%B8%BB%E8%A6%81%E4%BC%9A%E8%AE%A1%E6%95%B0%E6%8D%AE%E5%92%8C%E8%B4%A2%E5%8A%A1%E6%8C%87%E6%A0%87) In Q1-Q3 2021, revenue grew 18.89% YoY, but net profit attributable to shareholders sharply declined 66.12%, while total assets increased 33.20% from year-end Key Financial Indicators for Q3 2021 and Year-to-Date | Indicator | Current Period (Q3) | Year-to-Date (YTD) | YoY Change (YTD) | | :--- | :--- | :--- | :--- | | Operating Revenue (Yuan) | 812,851,149.23 | 2,406,228,814.29 | 18.89% | | Net Profit Attributable to Shareholders of Listed Company (Yuan) | 2,071,615.79 | 10,982,833.71 | -66.12% | | Net Profit Attributable to Shareholders of Listed Company After Deducting Non-Recurring Gains and Losses (Yuan) | 1,955,553.81 | -2,243,731.42 | -107.43% | | Net Cash Flow from Operating Activities (Yuan) | - | -173,221,674.20 | -385.91% | | Basic Earnings Per Share (Yuan/share) | 0.02 | 0.12 | -73.33% | | Total Assets (Yuan) | 1,118,030,540.72 | 1,118,030,540.72 | 33.20% (较上年度末) | | Total Equity Attributable to Shareholders of Listed Company (Yuan) | 759,347,034.42 | 759,347,034.42 | 46.59% (较上年度末) | [Non-Recurring Gains and Losses](index=2&type=section&id=%E4%B8%80%E3%80%81%28%E4%BA%8C%29%E9%9D%9E%E7%BB%8F%E5%B8%B8%E6%80%A7%E6%8D%9F%E7%9B%8A%E9%A1%B9%E7%9B%AE%E5%92%8C%E9%87%91%E9%A2%9D) Year-to-date non-recurring gains and losses totaled 13.23 million Yuan, primarily from non-current asset disposal and government grants, significantly impacting current profit positively Non-Recurring Gains and Losses Year-to-Date | Item | Amount Year-to-Date (Yuan) | | :--- | :--- | | Gains and Losses from Disposal of Non-Current Assets | 10,558,078.58 | | Government Grants Recognized in Current Profit or Loss | 7,777,987.71 | | Other Non-Operating Income and Expenses | -575,391.37 | | Less: Income Tax Impact | 1,620,821.76 | | Less: Impact on Minority Interests (After Tax) | 2,913,288.03 | | **Total** | **13,226,565.13** | - Non-recurring gains and losses were crucial for achieving positive net profit, as net profit after deducting non-recurring items was **-2.24 million Yuan**, indicating core business loss pressure[3](index=3&type=chunk)[6](index=6&type=chunk) [Analysis of Major Financial Data Changes](index=2&type=section&id=%E4%B8%80%E3%80%81%28%E4%B8%89%29%E4%B8%BB%E8%A6%81%E4%BC%9A%E8%AE%A1%E6%95%B0%E6%8D%AE%E5%92%8C%E8%B4%A2%E5%8A%A1%E6%8C%87%E6%A0%87%E5%8F%91%E7%94%9F%E5%8F%98%E5%8A%A8%E7%9A%84%E6%83%85%E5%86%B5%E5%8F%8A%E5%8E%9F%E5%9B%A0) Significant financial changes include increased receivables and prepayments from business expansion, a 46.59% rise in equity from IPO funds, a sharp decline in net profit due to higher personnel costs and new business losses, and substantial operating cash outflow [Balance Sheet Item Variation Analysis](index=2&type=section&id=1%E3%80%81%E8%B5%84%E4%BA%A7%E8%B4%9F%E5%80%BA%E8%A1%A8%E9%A1%B9%E7%9B%AE%E9%87%8D%E5%A4%A7%E5%8F%98%E5%8A%A8%E5%8E%9F%E5%9B%A0%E8%AF%B4%E6%98%8E) Assets saw significant increases in accounts receivable and prepayments due to business expansion, while equity investments decreased; liabilities grew with increased payables and contract liabilities, and shareholder equity rose by 46.59% from IPO funds - Accounts receivable increased by **865.82%** from the beginning of the year, primarily due to expanded credit sales not yet settled[8](index=8&type=chunk) - Other receivables increased by **1314.57%** from the beginning of the year, mainly due to added equity transfer payments and loans[8](index=8&type=chunk) - Accounts payable and contract liabilities grew by **94.43%** and **98.17%** respectively, driven by increased sales, procurement, and advance receipts[9](index=9&type=chunk) - Total equity attributable to shareholders of the listed company increased by **46.59%** from the beginning of the year, primarily due to proceeds from new share issuance[9](index=9&type=chunk) [Income Statement Item Variation Analysis](index=3&type=section&id=2%E3%80%81%20%E5%B9%B4%E5%88%9D%E8%87%B3%E6%8A%A5%E5%91%8A%E6%9C%9F%E6%9C%AB%E5%88%A9%E6%B6%A6%E8%A1%A8%E9%A1%B9%E7%9B%AE%E9%87%8D%E5%A4%A7%E5%8F%98%E5%8A%A8%E5%8E%9F%E5%9B%A0%E8%AF%B4%E6%98%8E) Year-to-date net profit attributable to the parent company declined by 66.12% due to increased personnel costs and initial losses from a new subsidiary, while investment income surged by 6559.68% from equity disposal and financial expenses decreased by 72.15% - Net profit attributable to the parent company decreased by **66.12%** year-on-year, primarily due to increased employee compensation and initial losses from the 'Hezong Traditional Chinese Medicine Decoction Pieces' subsidiary[10](index=10&type=chunk) - Administrative expenses increased by **47.56%** year-on-year, mainly due to higher employee compensation from increased headcount and IPO-related costs[10](index=10&type=chunk) - Investment income increased by **6559.68%** year-on-year, primarily from the disposal of equity in Henan Yaoyigou Hezong Pharmaceutical Co., Ltd. and Sichuan Zikushan Pharmaceutical Co., Ltd[10](index=10&type=chunk) [Cash Flow Statement Item Variation Analysis](index=3&type=section&id=3%E3%80%81%E7%8E%B0%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8%E9%A1%B9%E7%9B%AE%E9%87%8D%E5%A4%A7%E5%8F%98%E5%8A%A8%E5%8E%9F%E5%9B%A0%E8%AF%B4%E6%98%8E) Year-to-date net cash flow from operating activities was -173.22 million Yuan, a 385.91% year-on-year decrease due to increased receivables and prepayments from expanded sales, while financing cash flow significantly increased to 224 million Yuan from IPO proceeds - Net cash flow from operating activities decreased by **385.91%** year-on-year, primarily due to increased accounts receivable from expanded sales and higher prepayments for increased procurement[11](index=11&type=chunk) - Net cash outflow from investing activities increased by **96.19%**, mainly due to increased acquisition of fixed assets and equity investments during the reporting period[11](index=11&type=chunk) - Net cash flow from financing activities significantly increased year-on-year, primarily due to proceeds from the IPO[11](index=11&type=chunk) [Shareholder Information](index=3&type=section&id=%E4%BA%8C%E3%80%81%E8%82%A1%E4%B8%9C%E4%BF%A1%E6%81%AF) [Shareholding Structure](index=3&type=section&id=%E4%BA%8C%E3%80%81%28%E4%B8%80%29%E6%99%AE%E9%80%9A%E8%82%A1%E8%82%A1%E4%B8%9C%E6%80%BB%E6%95%B0%E5%92%8C%E8%A1%A8%E5%86%B3%E6%9D%83%E6%81%A2%E5%A4%8D%E7%9A%84%E4%BC%98%E5%85%88%E8%82%A1%E8%82%A1%E4%B8%9C%E6%95%B0%E9%87%8F%E5%8F%8A%E5%89%8D%E5%8D%81%E5%90%8D%E8%82%A1%E4%B8%9C%E6%8C%81%E8%82%A1%E6%83%85%E5%86%B5%E8%A1%A8) As of the reporting period end, the company had 16,661 common shareholders, with controlling shareholder Li Yanfei holding 36.97% and acting in concert with other key shareholders, indicating high concentration among the top ten, many of whom hold restricted shares - Total common shareholders at the end of the reporting period were **16,661** households[13](index=13&type=chunk) Top 10 Shareholders' Shareholding | Shareholder Name | Shareholding Percentage | Number of Shares Held | Number of Restricted Shares Held | | :--- | :--- | :--- | :--- | | Li Yanfei | 36.97% | 35,370,000 | 35,370,000 | | Chengdu Heshen Investment Management Center (Limited Partnership) | 7.11% | 6,800,000 | 6,800,000 | | Tian Wenshu | 6.27% | 6,000,000 | 6,000,000 | | Chengdu Boyuan Xinhang Venture Capital Fund Partnership (Limited Partnership) | 3.70% | 3,537,386 | 3,537,386 | | Zhou Yuewu | 3.45% | 3,300,000 | 3,300,000 | | Sichuan Haite Aviation Venture Capital Fund Partnership (Limited Partnership) | 2.93% | 2,800,000 | 2,800,000 | | Jiaxing Hairong Luhao Equity Investment Partnership (Limited Partnership) | 2.79% | 2,670,263 | 2,670,263 | | Li Jin | 2.51% | 2,400,000 | 2,400,000 | | Shenzhen Dingfeng Mingdao Huicheng Investment Partnership (Limited Partnership) | 2.09% | 2,000,000 | 2,000,000 | | Chengdu Jizhuan Zhishi Equity Investment Fund Management Co., Ltd. - Chengdu Jizhuan Zhishi Venture Capital Partnership (Limited Partnership) | 1.83% | 1,750,011 | 1,750,011 | - The company's controlling shareholder and de facto controller, Li Yanfei, acts in concert with Zhou Yuewu, Li Jin, Chengdu Heshen Investment Management Center (Limited Partnership), and Chengdu Heqi Investment Management Center (Limited Partnership)[14](index=14&type=chunk) [Changes in Restricted Shares](index=5&type=section&id=%E4%BA%8C%E3%80%81%28%E4%B8%89%29%E9%99%90%E5%94%AE%E8%82%A1%E4%BB%BD%E5%8F%98%E5%8A%A8%E6%83%85%E5%86%B5) During the period, 1,200,281 post-IPO offline restricted shares were unlocked on July 27, 2021, reducing total restricted shares from 72,950,292 to 71,750,011, with most pre-IPO restricted shares set to unlock in January 2022 or January 2024 - During this period, **1,200,281** 'post-IPO offline restricted shares' were unlocked, with no new restricted shares added[17](index=17&type=chunk) - Total restricted shares at period-end were **71,750,011**, primarily pre-IPO restricted shares[17](index=17&type=chunk) - Restricted shares held by controlling shareholder Li Yanfei and her concerted parties (e.g., Zhou Yuewu, Li Jin) will be unlocked on **January 27, 2024**[16](index=16&type=chunk) [Other Significant Matters](index=6&type=section&id=%E4%B8%89%E3%80%81%E5%85%B6%E4%BB%96%E9%87%8D%E8%A6%81%E4%BA%8B%E9%A1%B9) On September 17, 2021, the company approved establishing Hainan Xinran Health Technology Co., Ltd., a controlling subsidiary with a 51% stake (5.1 million Yuan investment) in a 10 million Yuan registered capital venture, likely to expand into new business areas or regional markets - On **September 17, 2021**, the company's board approved the establishment of a controlling subsidiary, 'Hainan Xinran Health Technology Co., Ltd.'[18](index=18&type=chunk) - The new company has a registered capital of **10 million Yuan**, with Yaoyigou subscribing **5.1 million Yuan** for a **51%** stake[18](index=18&type=chunk) [Quarterly Financial Statements](index=6&type=section&id=%E5%9B%9B%E3%80%81%E5%AD%A3%E5%BA%A6%E8%B4%A2%E5%8A%A1%E6%8A%A5%E8%A1%A8) [Consolidated Balance Sheet](index=6&type=section&id=1%E3%80%81%E5%90%88%E5%B9%B6%E8%B5%84%E4%BA%A7%E8%B4%9F%E5%80%BA%E8%A1%A8) As of September 30, 2021, total assets reached 1.118 billion Yuan, up 33.20% from year-end, total liabilities were 339 million Yuan, up 7.77%, and equity attributable to the parent company significantly increased by 46.59% to 759 million Yuan, primarily due to IPO proceeds Consolidated Balance Sheet Key Items (September 30, 2021) | Item | September 30, 2021 (Yuan) | December 31, 2020 (Yuan) | Change Rate | | :--- | :--- | :--- | :--- | | Total Assets | 1,118,030,540.72 | 839,378,687.05 | 33.20% | | Total Liabilities | 338,538,937.83 | 314,146,878.12 | 7.77% | | Total Equity Attributable to Parent Company Shareholders | 759,347,034.42 | 518,024,241.68 | 46.59% | | Total Equity | 779,491,602.89 | 525,231,808.93 | 48.41% | [Consolidated Income Statement](index=9&type=section&id=2%E3%80%81%E5%90%88%E5%B9%B6%E5%B9%B4%E5%88%9D%E5%88%B0%E6%8A%A5%E5%91%8A%E6%9C%9F%E6%9C%AB%E5%88%A9%E6%B6%A6%E8%A1%A8) In Q1-Q3 2021, revenue reached 2.406 billion Yuan, up 18.89% YoY, but increased operating, sales, and administrative costs led to a 54.84% decline in operating profit and a 66.12% drop in net profit attributable to the parent company to 10.98 million Yuan Consolidated Income Statement Key Items (Year-to-Date) | Item | Current Period Amount (Yuan) | Prior Period Amount (Yuan) | Change Rate | | :--- | :--- | :--- | :--- | | Total Operating Revenue | 2,406,228,814.29 | 2,023,890,397.57 | 18.89% | | Total Operating Costs | 2,394,943,029.09 | 1,975,007,610.35 | 21.26% | | Operating Profit | 15,522,396.67 | 34,374,589.72 | -54.84% | | Total Profit | 14,947,005.30 | 36,126,498.52 | -58.63% | | Net Profit Attributable to Parent Company Shareholders | 10,982,833.71 | 32,418,281.47 | -66.12% | [Consolidated Cash Flow Statement](index=11&type=section&id=3%E3%80%81%E5%90%88%E5%B9%B6%E5%B9%B4%E5%88%9D%E5%88%B0%E6%8A%A5%E5%91%8A%E6%9C%AB%E7%8E%B0%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) In Q1-Q3 2021, net cash flow from operating activities was -173.22 million Yuan, indicating weak cash collection and significant working capital use, while investing activities had a 34.10 million Yuan net outflow, and financing activities saw a 224 million Yuan net inflow from IPO proceeds, with cash and equivalents at 110 million Yuan at period-end Consolidated Cash Flow Statement Key Items (Year-to-Date) | Item | Current Period Amount (Yuan) | Prior Period Amount (Yuan) | Change Rate | | :--- | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | -173,221,674.20 | 60,585,029.84 | -385.91% | | Net Cash Flow from Investing Activities | -34,098,623.56 | -17,380,741.29 | -96.19% | | Net Cash Flow from Financing Activities | 223,989,522.76 | -13,441,249.37 | 1766.43% | | Net Increase in Cash and Cash Equivalents | 16,669,225.00 | 29,763,039.18 | -44.00% | [Financial Statement Adjustments and Audit Status](index=13&type=section&id=%28%E4%B8%89%29%E5%AE%A1%E8%AE%A1%E6%8A%A5%E5%91%8A) The company adopted new lease standards in 2021 but made no adjustments to prior period financial statements due to no initial lease assets, and this quarterly report remains unaudited - The company adopted new lease standards from **2021**, but did not adjust the beginning-of-year financial statements as there were no lease assets at the start of the period[30](index=30&type=chunk) - The company's **Q3 2021** report is unaudited[30](index=30&type=chunk)

Financial Performance - The company's operating revenue for the first half of 2021 was ¥1,593,377,665.06, representing a 19.39% increase compared to ¥1,334,591,923.76 in the same period last year[22]. - The net profit attributable to shareholders of the listed company decreased by 60.39% to ¥8,911,217.92 from ¥22,497,358.36 in the previous year[22]. - The net cash flow from operating activities was negative at -¥146,890,925.21, a decline of 223.88% compared to ¥118,576,464.15 in the same period last year[22]. - Basic earnings per share dropped by 67.74% to ¥0.1 from ¥0.31 in the previous year[22]. - The company's revenue for the first half of 2021 increased by 19.39% year-on-year, while the gross margin decreased by 2.86%[42]. - The company faced a decline in net profit due to reduced demand for cold and antibiotic medications amid ongoing pandemic impacts and strict sales controls on pharmacies[42]. - The company reported a net profit after deducting non-recurring gains and losses of -¥4,199,285.23, a decrease of 118.78% compared to ¥22,360,714.57 in the previous year[22]. - The net profit for the first half of 2021 was approximately CNY 12.11 million, a decrease of 43.3% from CNY 21.34 million in the first half of 2020[182]. - The total profit for the first half of 2021 was approximately CNY 13.89 million, a decrease of 45.2% from CNY 25.32 million in the first half of 2020[182]. Assets and Liabilities - Total assets increased by 34.24% to ¥1,126,781,227.85 from ¥839,378,687.05 at the end of the previous year[22]. - Net assets attributable to shareholders rose by 46.19% to ¥757,275,418.63 from ¥518,024,241.68 at the end of the previous year[22]. - The company's cash and cash equivalents decreased by 31.86% to ¥56,149,762.25, primarily due to reduced operating cash flow[64]. - Accounts receivable increased significantly, accounting for 21.31% of total assets, reflecting a seasonal collection pattern[70]. - The company's total assets as of June 30, 2021, amounted to CNY 1,133,949,242.99, compared to CNY 845,798,560.30 at the end of 2020, marking an increase of 34.1%[173]. - The total liabilities increased to CNY 340,947,286.72 from CNY 294,601,950.54, reflecting a rise of 15.7%[174]. Operational Highlights - The company achieved a sales revenue of 1.593 billion yuan in the reporting period, with over 80,000 community medical terminals and grassroots medical institutions covered[30]. - The company operates more than 15,000 pharmaceutical products, including Western medicine, traditional Chinese medicine, and medical devices, ensuring a comprehensive supply for outpatient medical terminals[31]. - The company's terminal pure sales business grew by 13.81% compared to the first half of 2020, indicating a stable growth trend in revenue[35]. - The company has established a self-built logistics distribution system, enhancing its service capabilities and responsiveness to procurement demands in the outpatient market[40]. - The company has developed a smart warehouse management system to improve storage efficiency and operational effectiveness, supporting timely and efficient service delivery[41]. - The company has formed a distribution system with over 800 subordinate distributors, enhancing its market reach and operational efficiency[30]. E-commerce and Technology - The e-commerce platform "Hezhong Medicine Network - Yiyigou" had 86,000 registered users, with over 49,000 certified users, and an average weekly active user count of 13,000, reflecting an 18.18% growth from the end of 2020[46]. - E-commerce revenue grew from 572 million yuan in the first half of 2020 to 637 million yuan in the first half of 2021, marking an increase of 11.29%[46]. - The company's online sales through its self-operated platform accounted for 39.97% of total revenue in the first half of 2021[47]. - The company signed technology service contracts worth 5.4 million for e-commerce platform technology output in the first half of 2021[53]. - The company has established a technology center with 84 full-time developers as of June 30, 2021[52]. Market and Competitive Landscape - The pharmaceutical distribution industry is experiencing rapid growth, with significant opportunities arising from policy reforms and a shift towards outpatient markets[43]. - The company is positioned as a regional leader in the outpatient pharmaceutical distribution market, leveraging its established brand and partnerships[46]. - The competitive landscape is intensifying as traditional pharmaceutical companies and e-commerce platforms increasingly converge, posing risks to the company's market position[49]. - The company aims to enhance its market coverage and integration in the outpatient pharmaceutical market, leveraging internet and big data technologies to adjust product offerings based on market demand[101]. - The company faces increased market competition and changing consumer demand, particularly in the sales of cold and fever medications, due to ongoing pandemic impacts[100]. Financial Management and Investments - The company received government subsidies amounting to approximately 7.69 million yuan, contributing positively to its financial performance[26]. - The total amount of raised funds is RMB 249.47 million, with a net amount after deducting issuance costs of RMB 249.47 million[85]. - The total amount of raised funds invested during the reporting period is RMB 205.27 million, with a cumulative investment of RMB 205.27 million[83]. - The company has not changed the purpose of the raised funds, with a change ratio of 0.00%[83]. - The company has not engaged in any derivative investments during the reporting period[92]. Corporate Governance and Compliance - The company emphasizes customer rights protection and adheres to national laws and regulations regarding consumer rights[50]. - The company has maintained a high level of transparency in information disclosure, ensuring timely and accurate communication with investors[116]. - The company has not reported any overdue or unrecovered amounts from entrusted financial management[92]. - The company has not experienced any administrative penalties due to environmental issues during the reporting period[114]. - The company has not engaged in any related party transactions during the reporting period[125]. Future Outlook - The company plans to continue expanding its market presence and investing in new product development, although specific figures or timelines were not provided in the report[176]. - The company is focusing on enhancing its capital reserves to support future growth initiatives[198].

Financial Performance - The company's revenue for Q1 2021 was CNY 830,916,487.56, representing a 17.99% increase compared to CNY 704,233,474.23 in the same period last year[7]. - The net profit attributable to shareholders decreased by 89.70% to CNY 1,079,321.55 from CNY 10,478,657.35 year-on-year[7]. - Basic and diluted earnings per share dropped by 93.33% to CNY 0.01 from CNY 0.15 in the same period last year[7]. - The net profit attributable to shareholders for Q1 2021 was ¥1,079,300, a decrease of 93.33% year-on-year[20]. - The total profit for the first quarter of 2021 was CNY 2.03 million, significantly lower than CNY 12.86 million in the previous year[45]. - The operating profit for the first quarter of 2021 was CNY 2.13 million, down from CNY 12.90 million in the same period last year[44]. Cash Flow - The net cash flow from operating activities was negative at CNY -106,177,249.12, a decline of 310.63% compared to CNY 50,410,138.83 in the previous year[7]. - The company reported a cash inflow from operating activities of approximately CNY 555.29 million, slightly up from CNY 551.96 million in the previous period[51]. - The net cash flow from operating activities was -106,177,249.12 CNY, compared to 50,410,138.83 CNY in the previous period, indicating a significant decline in operational performance[52]. - The company's cash inflow from operating activities totaled 556,412,488.00 CNY, an increase from 525,672,234.42 CNY in the previous year[55]. - The net increase in cash and cash equivalents for the period was 119,832,972.67 CNY, compared to 39,266,358.75 CNY in the previous period, representing a significant improvement[53]. Assets and Liabilities - Total assets increased by 42.78% to CNY 1,198,456,011.29 from CNY 839,378,687.05 at the end of the previous year[7]. - The total liabilities increased to CNY 408,164,074.54 from CNY 294,601,950.54 in the previous period[40]. - Owner's equity totaled CNY 805,563,414.65, up from CNY 551,196,609.76 year-over-year[40]. - The company's total assets as of March 31, 2021, were CNY 1,213,727,489.19, compared to CNY 845,798,560.30 at the end of 2020[39]. Shareholder Information - The total number of ordinary shareholders at the end of the reporting period was 29,080[10]. - The largest shareholder, Li Yanfei, holds 36.97% of the shares, amounting to 35,370,000 shares[10]. - The company did not engage in any repurchase transactions among the top 10 shareholders during the reporting period[11]. Investments and Projects - Cumulative investment in committed projects reached 19,748.25 million yuan, with an investment progress of 44.4%[26]. - The company has invested 7,540.09 million yuan in working capital, achieving 98.09% of the planned investment[25]. - The logistics distribution system project received 1,113.02 million yuan, representing 27.83% of the total investment[25]. - The e-commerce platform optimization project has seen an investment of 1,095.14 million yuan, achieving 36.50% of the planned investment[25]. - The e-commerce logistics center project has fully utilized its planned investment of 10,000 million yuan[25]. Operating Costs and Expenses - Total operating costs amounted to CNY 821,521,838.71, up from CNY 679,031,721.02 year-over-year[43]. - The company's operating costs for the first quarter of 2021 were CNY 771.89 million, up from CNY 626.66 million in the previous year[47]. - The company incurred one-time expenses of over ¥5 million related to its successful listing on the Shenzhen Stock Exchange in January 2021[20]. - Cash outflow for purchasing goods and services was 616,948,235.42 CNY, compared to 449,339,114.42 CNY in the same period last year, reflecting a 37.3% increase[55]. - The cash outflow for employee payments was 29,419,393.86 CNY, up from 23,236,497.55 CNY, indicating a 26.5% increase in labor costs[52]. Other Income and Gains - The company reported non-recurring gains and losses totaling CNY 3,839,585.48 for the period[8]. - The company reported other income of CNY 4.53 million in the first quarter of 2021, compared to CNY 0.10 million in the previous year[47].

Financial Performance - The company reported a total revenue of RMB 1.2 billion for the year 2020, representing a year-on-year increase of 15% compared to 2019[13]. - The net profit attributable to shareholders was RMB 150 million, which is a 10% increase from the previous year[13]. - The company achieved operating revenue of CNY 2.79 billion in 2020, representing a 21.87% increase compared to CNY 2.29 billion in 2019[19]. - Net profit attributable to shareholders decreased by 16.46% to CNY 54.02 million in 2020 from CNY 64.66 million in 2019[19]. - The basic earnings per share decreased by 16.67% to CNY 0.75 in 2020 from CNY 0.90 in 2019[19]. - The company's net profit attributable to shareholders was 54.0177 million yuan in 2020, a decrease of 16.46% compared to the previous year[66]. - The gross profit margin declined by 2% due to changes in product sales structure and increased promotional expenses, with sales discounts rising by 9 million yuan year-on-year[67]. Dividend Distribution - The company plans to distribute a cash dividend of RMB 2 per 10 shares, totaling approximately RMB 19.13 million[5]. - The cash dividend distribution for 2020 is set at RMB 19,133,336.40, which is 35.42% of the net profit attributable to shareholders[130]. - The company did not distribute any stock dividends or increase capital reserves during the reporting period[127]. User Growth and Market Expansion - User data showed an increase in active users by 25%, reaching 1.5 million by the end of 2020[13]. - The company aims to expand its market presence by opening 50 new retail locations in 2021, targeting a 20% growth in market share[13]. - The e-commerce platform registered 73,000 users in 2020, with an annual active user growth rate of 35.58%[49]. - The number of registered users on the e-commerce platform reached 73,000, with an average weekly active user count of 11,000, reflecting growth rates of 15.77% and 35.58% respectively[63]. Investment and Development - Investment in new product development increased by 30%, focusing on innovative healthcare solutions[13]. - The company is exploring potential mergers and acquisitions to enhance its supply chain efficiency and product offerings[13]. - The company will increase collaboration with upstream pharmaceutical enterprises and develop its own branded products, leveraging MAH policy advantages to strengthen R&D investments[109]. Operational Efficiency - The company has implemented advanced ERP systems to improve operational efficiency and reduce costs by 15%[11]. - The company has established a self-built logistics system to enhance service capabilities and respond quickly to procurement demands from outpatient terminals[39]. - The company has implemented an intelligent warehouse management system to improve operational efficiency and reduce costs[40]. - The company has established long-term stable partnerships with reputable suppliers, which helps lower overall procurement costs[33]. Market Presence and Distribution - The company covered over 70,000 community medical terminals and grassroots medical institutions, with a market presence in over 80% of pharmaceutical chain enterprises in Sichuan Province[30]. - The company has established a distribution system with over 800 subordinate distributors, enhancing its market reach[30]. - The company has formed a distribution system with over 800 subordinate distributors, enhancing its market presence[45]. - The company has established a comprehensive pharmaceutical product system with over 18,000 types of products, effectively meeting the procurement needs of outpatient medical terminals[40]. E-commerce and Sales Growth - E-commerce revenue increased from 976 million in 2019 to 1.212 billion in 2020, reflecting a growth rate of 24.18%[49]. - The company achieved precise marketing revenue of 565 million in 2020, a 45.48% increase from 2019[52]. - The terminal pure sales business revenue rose from 1.307 billion yuan in 2019 to 1.636 billion yuan in 2020, achieving a growth rate of 25.17%[64]. Social Responsibility and Community Engagement - The company actively responded to the COVID-19 pandemic, ensuring the supply of medical products and donating a total of 132,000 masks, 8.6 million pairs of gloves, and 400 liters of alcohol for epidemic prevention[157]. - The company signed numerous agricultural product procurement orders to support poverty alleviation efforts in various impoverished counties, contributing to national poverty alleviation goals[158]. Risk Management and Compliance - The management highlighted the importance of risk management strategies in navigating market uncertainties and ensuring sustainable growth[5]. - The company has established a comprehensive quality control system in compliance with GSP regulations to mitigate drug quality risks[119]. - Regulatory policies such as "two-invoice system" and "volume-based procurement" have created new business opportunities but also increased regulatory pressure on the company[118]. Corporate Governance and Shareholding - The company has a total of 48,470,000 shares held by directors and supervisors, with no changes in shareholding during the reporting period[181]. - The board consists of 9 directors, including 3 independent directors, and the supervisory board has 3 supervisors, including 1 employee representative[182]. - The largest shareholder, Li Yanfei, holds 49.30% of the shares, totaling 35,370,000 shares[169]. - The actual controller, Li Yanfei, has been involved in the pharmaceutical distribution industry since 1995 and founded the company in 2007[173]. Employee Management and Compensation - The total remuneration for the board of directors, supervisors, and senior management during the reporting period amounted to CNY 3.541 million[196]. - The highest individual remuneration was received by the general manager, Ms. Zhan Deyan, totaling CNY 665,000[196]. - The company implements a differentiated compensation incentive policy based on market principles to enhance employee motivation[199]. - The total number of employees in the company is 759, with 440 in the parent company and 319 in major subsidiaries[198].