| 香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性或完整性亦不發表任何聲明，並明確表示，概不對因 | | | --- | --- | | 公告全部或任何部份內容而產生或因倚賴該等內容而引致的任何損失承擔任何責任。 | | | 股票發行人現金股息公告 | | | 發行人名稱 | 中國神威藥業集團有限公司 | | 股份代號 | 02877 | | 多櫃檯股份代號及貨幣 | 不適用 | | 相關股份代號及名稱 | 不適用 | | 公告標題 | 二零二五年財政年度第二次中期股息 | | 公告日期 | 2025年8月27日 | | 公告狀態 | 新公告 | | 股息信息 | | | 股息類型 | 其他 | | 二零二五年財政年度第二次中期股息 | | | 股息性質 | 普通股息 | | 財政年末 | 2025年12月31日 | | 宣派股息的報告期末 | 2025年12月31日 | | 宣派股息 | 每 股 0.11 RMB | | 股東批准日期 | 不適用 | | 香港過戶登記處相關信息 | | | 派息金額及公司預設派發貨幣 | 每 股 0.12 HKD | | 匯率 | 1 R ...

[Company Overview and Financial Summary](index=1&type=section&id=Company%20Overview%20and%20Financial%20Summary) [Financial Highlights](index=1&type=section&id=1.1%20Financial%20Highlights) In the first half of 2025, the Group faced industry challenges with declining turnover and gross profit margin, yet net profit only slightly decreased due to stringent cost control and increased investment income, maintaining stable operating cash flow H1 2025 Financial Highlights | Metric | H1 2025 (RMB thousands) | Y-o-Y Change | | :--- | :--- | :--- | | Turnover | 1,652,698 | -20.8% | | Gross Profit Margin | 72.2% | -3.1 percentage points | | Profit for the Period | 614,663 | -1.9% | | Earnings Per Share | 81 cents | -2.4% | | Net Cash from Operating Activities | 566,319 | +0.4% | | Second Interim Dividend | 11 cents per share | - | [Performance Overview and Market Environment](index=2&type=section&id=1.2%20Performance%20Overview%20and%20Market%20Environment) In H1 2025, the Group experienced negative operational growth with sales down 20.8% year-on-year and gross margin falling from 75.3% to 72.2%, primarily due to shrinking TCM demand, consumption downgrade, centralized procurement price cuts, rising production costs, and medical insurance cost controls; however, net profit only slightly decreased by 1.9% through cost efficiency and increased investment income - Overall sales decreased by **20.8%** to **RMB 1,652,698,000**, primarily due to macro factors such as shrinking demand in the Traditional Chinese Medicine (TCM) industry, consumption downgrade, centralized procurement price reductions, rising production costs, and medical insurance cost controls[4](index=4&type=chunk) - Gross profit margin decreased from **75.3%** in the same period last year to **72.2%**, mainly due to increased raw material procurement costs and the impact of centralized procurement on drug prices[4](index=4&type=chunk) - Through cost control and efficiency improvements, sales and distribution costs decreased by **20.7%**, administrative expenses by **12.9%**, and coupled with increased investment income, net profit only slightly decreased by **1.9%**, with net profit margin improving from **30.0%** to **37.2%**[5](index=5&type=chunk) - Net cash from operating activities was **RMB 566,319,000**, a slight increase of **0.4%** year-on-year, generating approximately **RMB 465,705,000** in free cash flow during the first half[5](index=5&type=chunk) [Dividend Declaration](index=3&type=section&id=1.3%20Dividend%20Declaration) The Board declared a second interim dividend of RMB 11 cents per share for 2025, bringing the total dividends paid to shareholders for 2025 to RMB 47 cents per share, including the first interim dividend - Declared a second interim dividend of **RMB 11 cents per share** for 2025[6](index=6&type=chunk) - Together with the first interim dividend of **RMB 36 cents per share** for 2025, total dividends paid to shareholders for 2025 amounted to **RMB 47 cents per share**[6](index=6&type=chunk) [Operating Performance Analysis](index=3&type=section&id=Operating%20Performance%20Analysis) [Sales by Dosage Form](index=3&type=section&id=2.1%20Sales%20by%20Dosage%20Form) In H1 2025, the Group experienced a general decline in sales across all dosage forms, with total sales decreasing by 20.8% year-on-year, while oral products remained a key development strategy, accounting for 65.8% of total sales H1 2025 Sales by Dosage Form | Dosage Form | H1 2025 Sales (RMB thousands) | Y-o-Y Change | 2025 Sales Share | | :--- | :--- | :--- | :--- | | Injections | 565,628 | -27.4% | 34.2% | | Soft Capsules | 217,383 | -24.7% | 13.2% | | Granules | 272,695 | -21.0% | 16.5% | | TCM Formula Granules | 487,717 | -12.1% | 29.5% | | Others | 109,275 | -8.1% | 6.6% | | Total Oral Products | 1,087,070 | -16.9% | 65.8% | | Total Sales | 1,652,698 | -20.8% | 100.0% | - Oral products accounted for **65.8%** of total sales, while injection products accounted for **34.2%**, with the Group continuing to prioritize the expansion of oral preparations as a key development strategy[7](index=7&type=chunk) [Injections](index=3&type=section&id=2.1.1%20Injections) Total sales of injection products decreased by 27.4% year-on-year, primarily due to significant reductions in sales of Qingkailing Injection and Shenmai Injection - Total sales of injection products decreased by **27.4%**, with Qingkailing Injection and Shenmai Injection sales decreasing by **50.1%** and **21.0%** respectively[8](index=8&type=chunk) [Soft Capsules](index=4&type=section&id=2.1.2%20Soft%20Capsules) Total sales of soft capsule products decreased by 24.7% year-on-year, mainly due to reduced sales of Wufu Xinnaoqing Soft Capsules, Huoxiang Zhengqi Soft Capsules, and Qingkailing Soft Capsules, though exclusive products Jiangzhi Tongluo Soft Capsules and Dandeng Tongnao Soft Capsules achieved growth - Total sales of soft capsule products decreased by **24.7%**, with Wufu Xinnaoqing Soft Capsules, Huoxiang Zhengqi Soft Capsules, and Qingkailing Soft Capsules sales decreasing by **67.4%**, **16.0%**, and **24.6%** respectively[9](index=9&type=chunk) - Exclusive products Jiangzhi Tongluo Soft Capsules and Dandeng Tongnao Soft Capsules recorded sales growth of **16.5%** and **15.2%** respectively[9](index=9&type=chunk) [Granules](index=4&type=section&id=2.1.3%20Granules) Total sales of granule products decreased by 21.0% year-on-year, primarily due to significant reductions in sales of respiratory medications Phenamin Caffeine Granules and Xiao'er Qingfei Huatan Granules, though the exclusive product Shujin Tongluo Granules achieved growth - Total sales of granule products decreased by **21.0%**, with Phenamin Caffeine Granules and Xiao'er Qingfei Huatan Granules sales decreasing by **40.1%** and **57.8%** respectively[9](index=9&type=chunk) - Exclusive product Shujin Tongluo Granules recorded sales growth of **43.8%**[9](index=9&type=chunk) [TCM Formula Granules](index=4&type=section&id=2.1.4%20TCM%20Formula%20Granules) Sales of TCM formula granules decreased by 12.1% year-on-year, primarily due to increased overdue accounts receivable leading to delayed shipments, and intensified market competition - Sales of TCM formula granules decreased by **12.1%**, mainly due to increased overdue accounts receivable and the Group's temporary suspension of shipments to institutions not meeting risk management requirements[9](index=9&type=chunk) [Other Dosage Forms](index=3&type=section&id=2.1.5%20Other%20Dosage%20Forms) Sales of other dosage forms, including pills and tablets, decreased by 8.1% year-on-year - Sales of other dosage forms decreased by **8.1%** year-on-year[7](index=7&type=chunk) [Sales by Drug Category](index=4&type=section&id=2.2%20Sales%20by%20Drug%20Category) The Group experienced significant declines in sales of essential medicines and prescription drugs, with an even larger drop in OTC drugs, reflecting weak market demand and policy impacts [Essential Medicines](index=4&type=section&id=2.2.1%20Essential%20Medicines) Overall sales of the Group's regularly produced drugs listed in the National Essential Medicines Catalogue decreased by 30.7% to RMB 582,080,000, accounting for 35.2% of total sales, mainly due to reduced sales of related varieties; national policies promoting widespread use of essential medicines are expected to drive future growth - Eighteen of the Group's regularly produced drugs are listed in the National Essential Medicines Catalogue, but overall sales decreased by **30.7%** to **RMB 582,080,000**, accounting for **35.2%** of the Group's total sales[10](index=10&type=chunk) - The National Health Commission emphasized improving the national drug system, implementing grassroots drug linkage services, and consolidating the essential medicines system, which is expected to drive sustained growth in essential medicines[11](index=11&type=chunk) [Prescription and Over-the-Counter Drugs](index=5&type=section&id=2.2.2%20Prescription%20and%20Over-the-Counter%20Drugs) Prescription drug sales decreased by 20.4% year-on-year, accounting for 89.3% of total sales; OTC drug sales decreased by 24.0%, accounting for 10.7% H1 2025 Sales by Drug Category and Efficacy | Drug Category | H1 2025 Sales (RMB thousands) | Sales Share | Sales Change | | :--- | :--- | :--- | :--- | | TCM Formula Granules | 487,717 | 29.5% | -12.1% | | Respiratory Prescription Drugs | 264,410 | 16.0% | -47.6% | | Cardiovascular and Cerebrovascular Injection Prescription Drugs | 294,462 | 17.8% | -14.9% | | Exclusive Oral Prescription Drugs | 266,627 | 16.1% | 3.6% | | Other Prescription Drugs | 162,726 | 9.9% | -15.2% | | **Total Prescription Drugs** | **1,475,942** | **89.3%** | **-20.4%** | | **OTC Drugs** | **176,756** | **10.7%** | **-24.0%** | | **Total Sales** | **1,652,698** | **100%** | **-20.8%** | [Key Product Line Details](index=6&type=section&id=2.3%20Key%20Product%20Line%20Details) The Group's key product lines face diverse challenges, with declining sales in TCM formula granules and respiratory drugs, cardiovascular and cerebrovascular injections affected by centralized procurement, but exclusive oral prescription drugs maintaining growth, while OTC drugs decreased due to high base and consumer confidence [TCM Formula Granules Business](index=6&type=section&id=2.3.1%20TCM%20Formula%20Granules%20Business) Sales of TCM formula granules decreased by 12.1% to RMB 487,717,000, accounting for 29.5% of total sales, primarily due to increased overdue accounts receivable leading to delayed shipments and price wars from new suppliers; the Group is reorganizing its team, increasing national market personnel, and prioritizing hospital market development in 10 other provinces - Sales of TCM formula granules decreased by **12.1%** to **RMB 487,717,000**, accounting for **29.5%** of total sales, ranking among the top five listed companies for TCM formula granules nationwide[13](index=13&type=chunk) - The sales decline was mainly due to increased overdue accounts receivable leading to temporary suspension of shipments to some hospitals and primary healthcare institutions, as well as price wars from new suppliers[13](index=13&type=chunk) - The Group is reorganizing its formula granule business unit team, increasing national market personnel, and prioritizing the development of hospital markets in 10 provinces outside Hebei and Yunnan[14](index=14&type=chunk) [Respiratory Prescription Drugs](index=6&type=section&id=2.3.2%20Respiratory%20Prescription%20Drugs) Sales of respiratory prescription drugs significantly decreased by 47.6% to RMB 264,410,000, accounting for 16.0% of total sales, primarily due to a high base of social inventory post-pandemic, slowing macroeconomy, and inventory adjustments in terminal channels; the self-developed 'JC Capsule' has completed Phase III clinical trials and is expected to obtain a production license in the second half of the year - Sales of respiratory prescription drugs significantly decreased by **47.6%** to **RMB 264,410,000**, with Qingkailing Injection and Phenamin Caffeine Granules sales decreasing by **50.1%** and **40.1%** respectively[15](index=15&type=chunk) - The sales decline was mainly due to a high base post-pandemic, weak market demand caused by a slowing macroeconomy, and inventory adjustments by medical institutions and retail pharmacies[16](index=16&type=chunk) - The self-developed **'JC Capsule'** for upper respiratory tract infections has completed Phase III clinical trials and is expected to obtain a production license in the second half of 2025[16](index=16&type=chunk) [Cardiovascular and Cerebrovascular Injection Prescription Drugs](index=7&type=section&id=2.3.3%20Cardiovascular%20and%20Cerebrovascular%20Injection%20Prescription%20Drugs) Sales of cardiovascular and cerebrovascular injection prescription drugs recorded a negative growth of 14.9% to RMB 294,462,000, accounting for 17.8% of total sales, primarily due to the national centralized procurement's 'dual control' policy, leading to a significant decline in hospital procurement demand - Sales of cardiovascular and cerebrovascular injection prescription drugs recorded a negative growth of **14.9%** to **RMB 294,462,000**[17](index=17&type=chunk) - The primary sales channel is hospitals, and sales significantly declined due to the implementation of 'dual control' policies on drug prices and procurement volumes across various regions following national centralized procurement[17](index=17&type=chunk) [Exclusive Oral Prescription Drugs](index=7&type=section&id=2.3.4%20Exclusive%20Oral%20Prescription%20Drugs) Sales of exclusive oral prescription drugs grew by 3.6% year-on-year, accounting for 16.1% of total sales, with Jiangzhi Tongluo Soft Capsules, Dandeng Tongnao Soft Capsules, and Shujin Tongluo Granules all achieving significant growth; Qihuang Tongmi Soft Capsules and Dandeng Tongnao Soft Capsules received recommendations in expert consensus and medication guidelines, enhancing clinical recognition; the Group will continue to increase evidence-based medicine research and academic promotion - Sales of exclusive oral prescription drugs increased by **3.6%**, accounting for **16.1%** of total sales[18](index=18&type=chunk)[19](index=19&type=chunk) - Jiangzhi Tongluo Soft Capsules, Dandeng Tongnao Soft Capsules, and Shujin Tongluo Granules grew by **16.5%**, **15.2%**, and **43.8%** respectively[18](index=18&type=chunk) - Qihuang Tongmi Soft Capsules were recommended in the 'Expert Consensus on Integrated Traditional Chinese and Western Medicine Diagnosis and Treatment of Functional Constipation (2025)', and Dandeng Tongnao Soft Capsules were included in the 'Guidelines for Rational Drug Use in Cerebrovascular Diseases', enhancing their clinical standing[19](index=19&type=chunk)[20](index=20&type=chunk) [Over-the-Counter Drugs](index=9&type=section&id=2.3.5%20Over-the-Counter%20Drugs) Overall OTC drug sales decreased by 24.0% year-on-year, with Huoxiang Zhengqi Soft Capsules, Qingkailing Soft Capsules, and Xiao'er Qingfei Huatan Granules all experiencing sales declines, primarily due to high base reserves by the public and pharmacies post-pandemic, and slowing economic growth affecting consumer confidence - Overall OTC drug sales decreased by **24.0%** year-on-year, with Huoxiang Zhengqi Soft Capsules and Qingkailing Soft Capsules declining by **16.0%** and **24.6%** respectively[22](index=22&type=chunk) - Xiao'er Qingfei Huatan Granules sales decreased by **57.8%**[22](index=22&type=chunk) - The sales reduction was mainly due to high base reserves post-pandemic and slowing economic growth affecting consumer confidence[22](index=22&type=chunk) [Research and Development & Innovation](index=9&type=section&id=Research%20and%20Development%20%26%20Innovation) [New Drug Clinical Trial Progress](index=9&type=section&id=3.1%20New%20Drug%20Clinical%20Trial%20Progress) The Group continues to increase R&D investment, focusing on modern TCM new drug development for chronic diseases; the exclusive innovative drug 'Q-B-Q-F Concentrated Pills' is still in Phase III clinical trials, while 'Sailuotong Capsules' and 'JC Capsules' have completed Phase III clinical trials, with the goal of completing production license applications by year-end - The exclusive innovative drug **'Q-B-Q-F Concentrated Pills'** is still in Phase III clinical trials[23](index=23&type=chunk) - **'Sailuotong Capsules'** and **'JC Capsules'** have completed Phase III clinical trials, with the goal of completing the submission of production license applications by the end of 2025[23](index=23&type=chunk) - R&D expenses accounted for **3.0%** of total sales revenue during the period, and the Group will continue to develop innovative TCM drugs focusing on advantageous areas such as cardiovascular and cerebrovascular diseases, pediatric diseases, orthopedic diseases, gynecological diseases, and geriatric diseases[24](index=24&type=chunk) [Technological Innovation and Awards](index=10&type=section&id=3.2%20Technological%20Innovation%20and%20Awards) The Group's 'Research and Application Project of Hawthorn Leaves and Formula Granules, Hebei Characteristic Traditional Chinese Medicine' won the Third Prize of Hebei Provincial Science and Technology Progress Award; this project achieved significant results in hawthorn leaf quality evaluation, material basis research for formula granules, and quality standard formulation, promoting the standardized development of the TCM industry - The **'Research and Application Project of Hawthorn Leaves and Formula Granules, Hebei Characteristic Traditional Chinese Medicine'** won the **Third Prize of Hebei Provincial Science and Technology Progress Award**[25](index=25&type=chunk) - The project achieved significant results in constructing a quality evaluation system for hawthorn leaves, researching the material basis of formula granules, formulating quality standards, and industrial upgrading, filling a gap in this field[25](index=25&type=chunk) - A total of **49 papers** were published, **1 provincial standard** and **1 local standard** were formulated, and **2 authorized utility model patents** were obtained[25](index=25&type=chunk) [Development of Ancient Classic Prescriptions](index=11&type=section&id=3.3%20Development%20of%20Ancient%20Classic%20Prescriptions) The Group actively promotes the inheritance and innovation of Traditional Chinese Medicine, having developed and researched over 100 ancient classic prescriptions for new drug transformation; the self-developed 'Shaoyao Gancao Tang Granules' received NMPA approval for market launch, becoming the first approved classic prescription in 2025; Phase II clinical trials for 'Yigong San Granules', a Class 1.1 new TCM drug for chronic anemia, are progressing smoothly - Over **100 ancient classic prescriptions** have been developed and researched for new drug transformation, and the registration applications for multiple Class 1.1 and Class 3.1 new TCM drugs are being accelerated[26](index=26&type=chunk) - The self-developed **'Shaoyao Gancao Tang Granules'** received approval from the National Medical Products Administration (NMPA) for market launch, becoming the **first approved classic prescription in 2025** and the Group's second approved classic prescription[26](index=26&type=chunk) - Preparations for Phase II clinical trials of **'Yigong San Granules'**, a Class 1.1 new TCM drug for chronic anemia, are progressing smoothly, with its clinical value particularly prominent for those unresponsive to EPO treatment[26](index=26&type=chunk) [Industry Policies and Market Dynamics](index=11&type=section&id=Industry%20Policies%20and%20Market%20Dynamics) [National Support Policies for TCM](index=11&type=section&id=4.1%20National%20Support%20Policies%20for%20TCM) In H1 2025, the state continued to introduce multiple policies supporting the high-quality development of the TCM industry, including deepening the '14th Five-Year Plan' for TCM development, promoting standard system construction, enhancing TCM quality and technological innovation, incorporating innovative drugs and high-value TCM drugs into medical insurance, and promoting TCM services to grassroots levels, providing opportunities for TCM enterprises to expand their markets - The National Conference of Directors of Traditional Chinese Medicine Bureaus outlined key tasks for 2025, including deepening the **'14th Five-Year Plan' for TCM development**, promoting standard system construction, and enhancing TCM quality and technological innovation[28](index=28&type=chunk) - The National Healthcare Security Administration announced the inclusion of innovative drugs and high-value TCM drugs in medical insurance policy adjustments and management, supporting TCM innovation[29](index=29&type=chunk) - The National Health Commission promoted the optimization of community and grassroots TCM service systems, enhancing basic public health service capabilities in TCM, thereby driving TCM enterprises to expand their markets at the grassroots level[29](index=29&type=chunk) [National Centralized Procurement Bidding for Proprietary Chinese Medicines](index=12&type=section&id=4.2%20National%20Centralized%20Procurement%20Bidding%20for%20Proprietary%20Chinese%20Medicines) Eight of the Group's key products, including Qingkailing Injection and Shuxuening Injection, successfully won bids in the national centralized procurement for proprietary Chinese medicines; this successful bid aligns with DRGs/DIP payment requirements, enhancing the Group's product demand, market coverage, and sales potential in the terminal market - Eight of the Group's key products, including **Qingkailing Injection**, **Shuxuening Injection**, **Shenmai Injection**, **Shuanghuanglian Injection**, **Dengzhanhuasu Injection**, **Yinzhihuang Injection**, **Qingkailing Soft Capsules**, and **Xuesaitong Dripping Pills**, successfully won bids in the national centralized procurement for proprietary Chinese medicines[30](index=30&type=chunk) - The winning products cover therapeutic areas such as cardiovascular and cerebrovascular diseases, respiratory diseases, and digestive system diseases, all of which are commonly used medical insurance and essential drug varieties in clinical practice[30](index=30&type=chunk) - This centralized procurement bid win aligns with DRGs/DIP payment requirements, which will further enhance the Group's product demand, market coverage, and greater market sales potential in the terminal market[31](index=31&type=chunk) [Financial Analysis](index=13&type=section&id=Financial%20Analysis) [Turnover](index=13&type=section&id=5.1%20Turnover) In H1 2025, the Group's turnover decreased by 20.8% year-on-year to RMB 1,652,698,000, with major dosage forms such as injections, soft capsules, granules, and TCM formula granules all experiencing declining turnover H1 2025 Turnover by Dosage Form | Dosage Form | H1 2025 Turnover (RMB thousands) | Y-o-Y Change | Share of Total Turnover | | :--- | :--- | :--- | :--- | | Injections | 565,628 | -27.4% | 34.2% | | Soft Capsules | 217,383 | -24.7% | 13.2% | | Granules | 272,695 | -21.0% | 16.5% | | TCM Formula Granules | 487,717 | -12.1% | 29.5% | | Other Dosage Forms | 109,275 | -8.1% | 6.6% | | Total Turnover | 1,652,698 | -20.8% | 100.0% | - Turnover from prescription drugs and OTC drugs was **RMB 1,475,942,000** and **RMB 176,756,000** respectively, accounting for **89.3%** and **10.7%** of total turnover[32](index=32&type=chunk) [Cost of Sales](index=13&type=section&id=5.2%20Cost%20of%20Sales) In H1 2025, the cost of sales was RMB 459,092,000, representing 27.8% of turnover, with direct materials accounting for 66.8% of total production costs - Cost of sales was **RMB 459,092,000**, accounting for **27.8%** of turnover[33](index=33&type=chunk) - Direct materials, direct labor, and other production costs accounted for **66.8%**, **14.3%**, and **18.9%** of total production costs respectively[33](index=33&type=chunk) [Operating Gross Profit Margin](index=13&type=section&id=5.3%20Operating%20Gross%20Profit%20Margin) In H1 2025, the overall gross profit margin was 72.2%, a decrease from 75.3% in the same period last year, with average gross profit margins for all major product dosage forms declining to varying degrees H1 2025 Average Gross Profit Margin by Dosage Form | Dosage Form | H1 2025 Gross Profit Margin | H1 2024 Gross Profit Margin | | :--- | :--- | :--- | | Injections | 71.6% | 76.0% | | Soft Capsules | 76.0% | 77.8% | | Granules | 77.5% | 78.6% | | TCM Formula Granules | 69.7% | 72.9% | | **Overall Gross Profit Margin** | **72.2%** | **75.3%** | [Other Income](index=14&type=section&id=5.4%20Other%20Income) Other income primarily included enterprise development funds of RMB 156,300,000, a slight decrease from the same period last year - Other income primarily consisted of enterprise development funds of **RMB 156,300,000** (H1 2024: RMB 162,297,000)[35](index=35&type=chunk) [Investment Income](index=14&type=section&id=5.5%20Investment%20Income) Investment income significantly increased, primarily from interest income on bank deposits and structured deposits, and income from financial product investments - Investment income primarily included interest income from bank deposits and structured deposits of **RMB 119,821,000** (H1 2024: RMB 116,556,000) and income from financial product investments of **RMB 98,469,000** (H1 2024: RMB 4,617,000)[36](index=36&type=chunk) [Other Gains and Losses](index=14&type=section&id=5.6%20Other%20Gains%20and%20Losses) The Group recorded a net exchange gain of RMB 32,843,000, primarily due to changes in the exchange rates of AUD and HKD against RMB - Recorded a net exchange gain of **RMB 32,843,000** (H1 2024: RMB 19,118,000), primarily due to changes in the exchange rates of AUD and HKD against RMB[37](index=37&type=chunk) [Impairment of Financial Assets](index=14&type=section&id=5.7%20Impairment%20of%20Financial%20Assets) The Group made an impairment reversal of RMB 2,706,000 for trade receivables and recognized an impairment of RMB 871,000 for trade receivables secured by bank notes - Made an impairment reversal of **RMB 2,706,000** for trade receivables (H1 2024: impairment of RMB 4,788,000)[38](index=38&type=chunk) - Recognized an impairment of **RMB 871,000** for trade receivables secured by bank notes (H1 2024: impairment reversal of RMB 502,000)[38](index=38&type=chunk) [Selling and Distribution Costs](index=14&type=section&id=5.8%20Selling%20and%20Distribution%20Costs) Selling and distribution costs decreased by 20.7% year-on-year, accounting for 39.2% of turnover, primarily due to the Group's enhanced cost control, reducing market development, marketing management, and promotional expenses, as well as sales personnel numbers and salaries - Selling and distribution costs decreased by **20.7%** year-on-year, accounting for **39.2%** of turnover[39](index=39&type=chunk) - Mainly due to enhanced cost control, reducing market development expenses, marketing management expenses, market promotion expenses, and the number and salaries of sales personnel[39](index=39&type=chunk) [Administrative Expenses](index=15&type=section&id=5.9%20Administrative%20Expenses) Administrative expenses decreased by approximately 12.9% year-on-year, accounting for about 7.7% of turnover - Administrative expenses decreased by approximately **12.9%** year-on-year, accounting for about **7.7%** of turnover (H1 2024: 7.0%)[40](index=40&type=chunk) [Research and Development Costs](index=15&type=section&id=5.10%20Research%20and%20Development%20Costs) Research and development costs accounted for approximately 3.0% of turnover, an increase from 2.1% in the same period last year - Research and development costs accounted for approximately **3.0%** of turnover (H1 2024: 2.1%)[41](index=41&type=chunk) [Taxation](index=15&type=section&id=5.11%20Taxation) Total taxation for the period was RMB 160,015,000, with the effective tax rate decreasing from 27.3% in the same period last year to 20.7%, primarily due to reduced withholding tax on dividends distributed by domestic subsidiaries - Total taxation for the period was **RMB 160,015,000**, with the effective tax rate decreasing from **27.3%** in the same period last year to **20.7%**[42](index=42&type=chunk) - Mainly due to a decrease in withholding tax on dividends distributed by domestic subsidiaries during the period compared to the same period last year[42](index=42&type=chunk) [Profit for the Period](index=15&type=section&id=5.12%20Profit%20for%20the%20Period) Net profit for H1 2025 was RMB 614,663,000, a 1.9% decrease from the same period last year, primarily due to increased raw material procurement costs and the impact of centralized procurement on drug prices, leading to reduced turnover and gross profit - Net profit was **RMB 614,663,000**, a decrease of **1.9%** compared to the same period last year[43](index=43&type=chunk) - The decrease in profit was mainly due to increased raw material procurement costs and the impact of centralized procurement on drug prices, leading to reduced turnover and gross profit[43](index=43&type=chunk) [Liquidity and Financial Resources](index=15&type=section&id=5.13%20Liquidity%20and%20Financial%20Resources) As of June 30, 2025, the Group's bank balances and cash amounted to RMB 6,860,819,000, indicating a robust financial position with sufficient resources for future development - As of June 30, 2025, bank balances and cash amounted to **RMB 6,860,819,000** (December 31, 2024: RMB 6,140,153,000)[44](index=44&type=chunk) - The fair value of financial assets at fair value through profit or loss was **RMB 100,419,000**[44](index=44&type=chunk) - The Directors believe the Group's financial position is robust, with sufficient financial resources to meet future development needs[44](index=44&type=chunk) [Capital Expenditure and Property, Plant and Equipment](index=16&type=section&id=5.14%20Capital%20Expenditure%20and%20Property%2C%20Plant%20and%20Equipment) In H1 2025, the Group's capital expenditure included additions to construction in progress of approximately RMB 59,126,000 and acquisition of other property, plant and equipment of approximately RMB 19,063,000; depreciation of property, plant and equipment was RMB 69,511,000 - Additions to construction in progress of **RMB 59,126,000** and acquisition of other property, plant and equipment of **RMB 19,063,000** in H1 2025[45](index=45&type=chunk) - Depreciation of property, plant and equipment was **RMB 69,511,000** (H1 2024: RMB 75,634,000)[45](index=45&type=chunk) [Condensed Consolidated Financial Statements](index=17&type=section&id=Condensed%20Consolidated%20Financial%20Statements) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=17&type=section&id=6.1%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This statement presents the Group's unaudited consolidated profit or loss and other comprehensive income for the six months ended June 30, 2025, showing key financial indicators such as turnover, gross profit, profit for the period, and earnings per share, along with comparisons to the prior year Summary of Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Metric | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 1,652,698 | 2,086,695 | | Cost of Sales | (459,092) | (514,511) | | Gross Profit | 1,193,606 | 1,572,184 | | Other Income | 162,059 | 168,985 | | Investment Income | 218,290 | 121,173 | | Other Gains and Losses | 29,418 | 14,206 | | Reversal (Provision) for Impairment Loss on Financial Assets, Net | 1,835 | (4,286) | | Selling and Distribution Costs | (647,836) | (817,369) | | Administrative Expenses | (126,452) | (145,212) | | Research and Development Costs | (50,378) | (44,746) | | Finance Costs | (5,864) | (2,852) | | Profit Before Tax | 774,678 | 862,083 | | Taxation | (160,015) | (235,604) | | Profit and Total Comprehensive Income for the Period | 614,663 | 626,479 | | Basic Earnings Per Share | RMB 81 cents | RMB 83 cents | [Condensed Consolidated Statement of Financial Position](index=18&type=section&id=6.2%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This statement presents the Group's unaudited consolidated financial position as of June 30, 2025, including key components such as non-current assets, current assets, current liabilities, non-current liabilities, and shareholders' equity Summary of Condensed Consolidated Statement of Financial Position | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | **Non-current Assets** | **1,434,737** | **1,443,007** | | Property, Plant and Equipment | 1,225,148 | 1,219,402 | | **Current Assets** | **8,952,919** | **8,598,523** | | Inventories | 722,369 | 813,190 | | Trade Receivables | 915,803 | 908,115 | | Bank Balances and Cash | 6,860,819 | 6,140,153 | | **Current Liabilities** | **2,428,081** | **2,449,996** | | Trade Payables | 373,676 | 367,046 | | **Net Current Assets** | **6,524,838** | **6,148,527** | | **Non-current Liabilities** | **149,952** | **124,630** | | **Net Assets** | **7,809,623** | **7,466,904** | | **Total Equity** | **7,809,623** | **7,466,904** | [Notes to the Condensed Consolidated Financial Statements](index=20&type=section&id=6.3%20Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes to the condensed consolidated financial statements, explaining the basis of preparation, significant accounting policies, composition and reasons for changes in financial data, and important information such as related party transactions and capital commitments [General Information and Significant Accounting Policies](index=20&type=section&id=6.3.1%20General%20Information%20and%20Significant%20Accounting%20Policies) The condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 and the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, presented in RMB, and adopt the same accounting policies and methods of computation as the annual consolidated financial statements for 2024 - The condensed consolidated financial statements are prepared in accordance with **International Accounting Standard 34** and the **Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited**[51](index=51&type=chunk) - Presented in the Company's functional currency, **RMB**, and adopt the same accounting policies and methods of computation as the annual consolidated financial statements for 2024[52](index=52&type=chunk)[53](index=53&type=chunk) - The application of amendments to International Financial Reporting Standards had no significant impact on the financial position and performance for the current and prior periods[54](index=54&type=chunk) [Turnover and Segment Information](index=20&type=section&id=6.3.2%20Turnover%20and%20Segment%20Information) The Group operates a single segment business of research, development, manufacturing, and trading of Traditional Chinese Medicine products, primarily selling to external customers in China (including Hong Kong); the notes provide an analysis of turnover by major products - The Group operates a single segment business of research, development, manufacturing, and trading of Traditional Chinese Medicine products[55](index=55&type=chunk) Analysis of Turnover from Major Products | Product | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Injections | 565,628 | 779,238 | | Soft Capsules | 217,383 | 288,759 | | Granules | 272,695 | 345,074 | | TCM Formula Granules | 487,717 | 554,726 | | Others | 109,275 | 118,898 | | **Total** | **1,652,698** | **2,086,695** | [Taxation](index=21&type=section&id=6.3.3%20Taxation) Taxation includes PRC corporate income tax, under-provision for prior years, withholding tax on distributed profits of PRC subsidiaries, and deferred tax; certain subsidiaries enjoy a 15% preferential tax rate or tax exemption; a 5% withholding tax rate applies to dividends distributed by PRC subsidiaries to overseas investors Composition of Taxation | Tax Category | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | PRC Corporate Income Tax | 97,329 | 144,053 | | Under-provision in Prior Years | 5,763 | 7,979 | | Withholding Tax on Distributed Profits of PRC Subsidiaries | 70,287 | 81,752 | | Deferred Tax | (13,364) | 1,820 | | **Total Taxation** | **160,015** | **235,604** | - Certain subsidiaries operating in Western China and recognized as high-tech enterprises enjoy a **15% preferential PRC corporate income tax rate**, while a subsidiary engaged in agricultural product business enjoys tax exemption[58](index=58&type=chunk) - Direct holding companies of PRC subsidiaries enjoy a **5% withholding tax rate**[58](index=58&type=chunk) [Profit for the Period](index=22&type=section&id=6.3.4%20Profit%20for%20the%20Period) Profit for the period is stated after deducting amortization of intangible assets, depreciation of property, plant and equipment, and including enterprise development funds, net exchange gains, and gains from disposal of property, plant and equipment Items Deducted (Included) in Profit for the Period | Item | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Amortization of Intangible Assets | 4,424 | 5,044 | | Depreciation of Property, Plant and Equipment | 69,511 | 75,634 | | Enterprise Development Funds (included in other income) | (156,300) | (162,297) | | Net Exchange Gains (included in other gains and losses) | (32,843) | (19,118) | | Gain (Loss) on Disposal of Property, Plant and Equipment | (7,619) | 255 | [Dividends](index=23&type=section&id=6.3.5%20Dividends) The Company's Directors have declared a second interim dividend of RMB 11 cents per share for 2025, totaling RMB 83,094,000, to be paid on September 26, 2025 - The Directors have declared a second interim dividend of **RMB 11 cents per share** for 2025, totaling **RMB 83,094,000**[61](index=61&type=chunk) - The dividend will be paid on **September 26, 2025**, to shareholders whose names appear on the Company's register of members on **September 12, 2025**[61](index=61&type=chunk) [Earnings Per Share](index=23&type=section&id=6.3.6%20Earnings%20Per%20Share) Basic and diluted earnings per share attributable to owners of the Company are calculated based on profit for the period and the weighted average number of ordinary shares outstanding Earnings Per Share Calculation Data | Metric | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Profit attributable to owners of the Company | 614,663 | 626,479 | | Weighted average number of ordinary shares outstanding | 755,400,000 | 755,400,000 | | Basic and diluted earnings per share | RMB 81 cents | RMB 83 cents | [Property, Plant and Equipment](index=24&type=section&id=6.3.7%20Property%2C%20Plant%20and%20Equipment) In H1 2025, the Group added RMB 59,126,000 in construction in progress and acquired other property, plant and equipment totaling RMB 19,063,000; a gain of RMB 7,619,000 was recognized from the disposal of certain property, plant and equipment - Additions to construction in progress of **RMB 59,126,000** (H1 2024: RMB 40,518,000)[65](index=65&type=chunk) - Acquisition of other property, plant and equipment of **RMB 19,063,000** (H1 2024: RMB 22,088,000)[65](index=65&type=chunk) - Gain on disposal of property, plant and equipment of **RMB 7,619,000** (H1 2024: loss of RMB 255,000)[65](index=65&type=chunk) [Trade Receivables / Trade Receivables Secured by Bank Notes](index=24&type=section&id=6.3.8%20Trade%20Receivables%20%2F%20Trade%20Receivables%20Secured%20by%20Bank%20Notes) As of June 30, 2025, net trade receivables amounted to RMB 915,803,000, and net trade receivables secured by bank notes amounted to RMB 276,312,000; the Group generally grants credit terms ranging from six months to one year Trade Receivables and Trade Receivables Secured by Bank Notes | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade Receivables | 950,242 | 945,260 | | Less: Provision for Expected Credit Losses | (34,439) | (37,145) | | **Net Trade Receivables** | **915,803** | **908,115** | | Trade Receivables Secured by Bank Notes | 278,883 | 295,462 | | Less: Provision for Expected Credit Losses | (2,571) | (1,700) | | **Net Trade Receivables Secured by Bank Notes** | **276,312** | **293,762** | | **Total** | **1,192,115** | **1,201,877** | - The Group generally grants credit terms ranging from **six months to one year** to its trade customers[67](index=67&type=chunk) [Reversal (Provision) for Impairment Loss on Financial Assets under Expected Credit Loss Model, Net](index=25&type=section&id=6.3.9%20Reversal%20(Provision)%20for%20Impairment%20Loss%20on%20Financial%20Assets%20under%20Expected%20Credit%20Loss%20Model%2C%20Net) In H1 2025, an impairment loss reversal of RMB 2,706,000 was recognized for trade receivables, and an impairment loss of RMB 871,000 was recognized for trade receivables secured by bank notes, resulting in a net reversal of RMB 1,835,000 Reversal (Provision) for Impairment Loss on Financial Assets, Net | Item | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Impairment loss recognized (reversed) on trade receivables | (2,706) | 4,788 | | Impairment loss recognized (reversed) on trade receivables secured by bank notes | 871 | (502) | | **Total** | **(1,835)** | **4,286** | [Trade Payables / Trade Payables Secured by Bank Notes](index=26&type=section&id=6.3.10%20Trade%20Payables%20%2F%20Trade%20Payables%20Secured%20by%20Bank%20Notes) As of June 30, 2025, total trade payables amounted to RMB 377,676,000, of which RMB 4,000,000 were trade payables secured by bank notes; the average credit period ranged from two to six months Trade Payables and Trade Payables Secured by Bank Notes | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade Payables | 373,676 | 367,046 | | Trade Payables Secured by Bank Notes | 4,000 | 35,918 | | **Total** | **377,676** | **402,964** | - The average credit period obtained for trade purchases ranged from **two to six months**[70](index=70&type=chunk) [Share-based Payment Transactions](index=27&type=section&id=6.3.11%20Share-based%20Payment%20Transactions) The Company's share option scheme expired on May 28, 2025, with no outstanding share options; the share award scheme, adopted in 2018 to incentivize employees, had 71,600,000 shares held by the trustee at the end of the reporting period, with no shares granted or traded during the period - The Company's share option scheme expired on **May 28, 2025**, with no outstanding share options[71](index=71&type=chunk) - The share award scheme was adopted in **2018** to recognize employee contributions and attract talent[72](index=72&type=chunk) - As of the end of the reporting period, **71,600,000 shares** were held by the trustee, and no shares were sold or purchased by the trustee during the period[72](index=72&type=chunk) [Related Party Disclosures](index=28&type=section&id=6.3.12%20Related%20Party%20Disclosures) The Group has transactions with related parties, including Shenwei Pharmaceutical Technology Co Ltd, Shenwei (Sanhe) Real Estate Development Co Ltd, and Shijiazhuang Luancheng Shenwei Training School, involving interest expenses on lease liabilities and service fees Summary of Related Party Transactions and Balances | Related Party Name | Nature of Transaction | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | :--- | | Shenwei Pharmaceutical Technology Co Ltd | Interest expense on lease liabilities | 287 | 412 | | Shenwei Pharmaceutical Technology Co Ltd | Service fees | 5,916 | 5,916 | | Shenwei (Sanhe) Real Estate Development Co Ltd | Interest expense on lease liabilities | 47 | 68 | | Shenwei (Sanhe) Real Estate Development Co Ltd | Service fees | 1,353 | 1,353 | | Shijiazhuang Luancheng Shenwei Training School | Service fees | 621 | 360 | | Related Party Name | Nature of Balance | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | :--- | | Shenwei Pharmaceutical Technology Co Ltd | Lease liabilities | 10,517 | 13,871 | | Shenwei (Sanhe) Real Estate Development Co Ltd | Lease liabilities | 1,733 | 2,285 | - Shenwei Pharmaceutical Technology, Shenwei Sanhe, and Shenwei Training School are all ultimately controlled by the Company's controlling shareholder[73](index=73&type=chunk) [Capital Commitments](index=29&type=section&id=6.3.13%20Capital%20Commitments) As of June 30, 2025, the Group's contracted capital expenditure for the acquisition of property, plant and equipment, but not yet provided for in the condensed consolidated financial statements, amounted to RMB 225,175,000 - As of June 30, 2025, contracted capital expenditure for the acquisition of property, plant and equipment, but not yet provided for in the condensed consolidated financial statements, amounted to **RMB 225,175,000** (December 31, 2024: RMB 217,818,000)[74](index=74&type=chunk) [Corporate Governance and Other Information](index=30&type=section&id=Corporate%20Governance%20and%20Other%20Information) [Closure of Register of Members](index=30&type=section&id=7.1%20Closure%20of%20Register%20of%20Members) The Company will suspend registration of members from September 11 to September 12, 2025, to determine eligibility for the second interim dividend for 2025 - The Company will suspend registration of members from **September 11, 2025, to September 12, 2025** (both dates inclusive)[75](index=75&type=chunk) - All transfer documents must be lodged with the Company's Hong Kong Share Registrar by **4:30 p.m. on September 10, 2025**, to be eligible for the second interim dividend for 2025[75](index=75&type=chunk) [Purchase, Sale or Redemption of Securities](index=30&type=section&id=7.2%20Purchase%2C%20Sale%20or%20Redemption%20of%20Securities) Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's securities during the six months ended June 30, 2025 - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's securities during the six months ended **June 30, 2025**[76](index=76&type=chunk) [Compliance with Corporate Governance Code](index=30&type=section&id=7.3%20Compliance%20with%20Corporate%20Governance%20Code) The Company complied with the Corporate Governance Code in Appendix C1 of the Listing Rules during the reporting period, except for the deviation where the Chairman and CEO roles are held by the same person; the Board believes this arrangement facilitates business strategy execution and maximizes operational efficiency, subject to periodic review, and all Directors confirmed compliance with the Model Code - The Company complied with the Corporate Governance Code in Appendix C1 of the Listing Rules during the reporting period, except for the deviation from Code Provision C.2.1 regarding the separation of roles for Chairman and Chief Executive Officer[77](index=77&type=chunk) - Mr Li Zhenjiang holds both the Chairman and Chief Executive Officer positions, and the Board believes this arrangement facilitates the execution of the Group's business strategies and maximizes operational efficiency[77](index=77&type=chunk) - All Directors of the Company confirmed their compliance with the Model Code for Securities Transactions by Directors during the six months ended **June 30, 2025**[78](index=78&type=chunk) [Audit Committee](index=31&type=section&id=7.4%20Audit%20Committee) The Company's Audit Committee, together with management and external auditors, reviewed the accounting principles and policies adopted by the Group and the unaudited consolidated results for the six months ended June 30, 2025 - The Company's Audit Committee reviewed the accounting principles and policies adopted by the Group and the unaudited consolidated results for the six months ended **June 30, 2025**[79](index=79&type=chunk) [Board of Directors](index=31&type=section&id=7.5%20Board%20of%20Directors) This announcement is issued by Mr Li Zhenjiang, Chairman, on behalf of the Board; as of the announcement date, the Board members include executive directors, non-executive directors, and independent non-executive directors - Chairman **Mr Li Zhenjiang** issued this announcement on behalf of the Board[81](index=81&type=chunk) - The Board members include Executive Directors **Mr Li Zhenjiang**, **Ms Xin Yunxia**, and **Mr Li Huimin**; Non-executive Director **Mr Zhou Wencheng**; and Independent Non-executive Directors **Mr Liao Shunhui**, **Mr Yao Yian**, and **Ms Wang Guihua**[81](index=81&type=chunk)

Group 1 - The company, Shenwei Pharmaceutical (02877.HK), will hold a board meeting on August 27, 2025 [1] - The agenda includes reviewing and approving the interim results for the six months ending June 30, 2025, and discussing the proposal for an interim dividend distribution, if any [1]

董事會會議通知 董事會會議通知 中國神威藥業集團有限公司（「本公司」）董事會（「董事會」）謹此宣佈，董事會將於 二零二五年八月二十七日星期三舉行董事會會議，藉以（其中包括）批准發佈本公司 截至二零二五年六月三十日止六個月之中期業績及考慮宣派股息。 承董事會命 中國神威藥業集團有限公司 中國神威藥業集團有限公司 主席 李振江 香港，二零二五年八月十八日 於本公告日期，執行董事包括李振江先生、信蘊霞女士及李惠民先生；非執行董事為 周文成先生；而獨立非執行董事包括廖舜輝先生、姚逸安先生及王桂華女士。 香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性或完整性 亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部分內容而產生或因倚賴該等內容而引致 的任何損失承擔任何責任。 CHINA SHINEWAY PHARMACEUTICAL GROUP LIMITED 中國神威藥業集團有限公司 ( 在開曼群島註冊成立之有限責任公司 ) ( 股份代號： 2877) ...

股份發行人及根據《上市規則》第十九B章上市的香港預託證券發行人的證券變動月報表 截至月份: 2025年7月31日 狀態: 新提交 致：香港交易及結算所有限公司 公司名稱: 中國神威藥業集團有限公司 呈交日期: 2025年8月1日 本月底法定/註冊股本總額： HKD 500,000,000 FF301 第 1 頁 共 10 頁 v 1.1.1 FF301 II. 已發行股份及/或庫存股份變動 | 1. 股份分類 | 普通股 | 股份類別 | 不適用 | | 於香港聯交所上市 (註1) | 是 | | | --- | --- | --- | --- | --- | --- | --- | --- | | 證券代號 (如上市) | 02877 | 說明 | | | | | | | | | 已發行股份（不包括庫存股份）數目 | | 庫存股份數目 | | 已發行股份總數 | | | 上月底結存 | | | 827,000,000 | | 0 | | 827,000,000 | | 增加 / 減少 (-) | | | | | | | | | 本月底結存 | | | 827,000,000 | | 0 | | 827,00 ...

Financial Performance - In 2024, the company achieved a sales revenue of RMB 3.78 billion, a decrease of 16.4% year-on-year[12] - Net profit for 2024 was RMB 840.05 million, down 13.4% compared to the previous year[12] - The company's total assets increased to RMB 10.04 billion in 2024, while total liabilities rose to RMB 2.57 billion[6] - The gross profit margin for 2024 was impacted by ongoing healthcare cost control policies and increased market competition[13] - In 2024, the overall sales revenue decreased by approximately 16.4% to RMB 3,778,043,000, while net profit fell by 13.4% to RMB 840,052,000[19] - The company recorded a gross margin of 75.0%, with a slight decrease of 0.1 percentage points compared to the previous year, and a net profit margin increased from 21.5% to 22.2%[19] - The company generated free cash flow of approximately RMB 823,023,000, equivalent to RMB 1.00 per share, after capital expenditures of about RMB 140,112,000[20] - The company’s second interim dividend for the fiscal year 2024 was reduced by 13.0% to RMB 0.47 per share, with a payout ratio of 42.3%[20] - The company reported a profit attributable to shareholders of RMB 840,052,000 in 2024, a decrease of approximately 13.4% compared to 2023[63] - Other income increased to RMB 174,094,000 in 2024 from RMB 143,257,000 in 2023, primarily from development funds for R&D and investments[56] - Investment income rose to RMB 176,718,000 in 2024, up from RMB 95,207,000 in 2023, reflecting higher interest income from bank deposits and structured deposits[57] Product Performance - The company is actively adjusting its product structure to focus on high-efficiency, low-cost, and quality pharmaceuticals[14] - Injection products saw a significant decline of 29.0% in sales, with Qingkailing injection experiencing a 40.8% drop to RMB 504,029,000[22] - Oral products, which represent 66.4% of total sales, recorded an overall decline of 8.1%, primarily due to high base effects from the previous year[23] - The sales of soft capsules decreased by 14.9%, attributed to a drop in demand for respiratory medications, with Qingkailing soft capsules down 20.4% to RMB 69,788,000[23] - Granule products experienced a slight decline of 2.9%, with pediatric cough granules down 31.4% to RMB 66,874,000, while exclusive oral granules showed growth[24] - The overall sales of basic drugs listed in the national essential drug list fell by 22.7% to RMB 1,348,062,000, with significant declines in Qingkailing injection and soft capsules[25] - The sales of traditional Chinese medicine formula granules dropped by 9.3% to RMB 1,090,116,000, accounting for 28.9% of total sales[29] - Exclusive oral prescription drugs saw a growth of 22.2%, with sales rising to RMB 543,922,000[28] - The company’s annual sales of respiratory prescription drugs for influenza reached RMB 745,758,000, a decrease of 32.3%, accounting for 19.7% of total sales[33] - The sales of cardiovascular injection prescription drugs declined by 23.8% to RMB 627,280,000, making up 16.6% of total sales[35] Strategic Initiatives - The company participated in national centralized procurement for traditional Chinese medicine, aiming to lower costs and enhance competitiveness[14] - The company is strengthening collaborations with medical institutions and distributors to expand sales channels and market share[14] - The company is committed to enhancing internal management and optimizing production processes to maintain stable profitability despite market challenges[13] - The company plans to enhance management and operational efficiency in response to the industry's transformation challenges in 2025[16] - The company is constructing a smart manufacturing demonstration factory, expected to generate an additional annual output value of RMB 7 billion upon completion[16] - The company anticipates continued growth in sales of drugs listed in the national essential drug list due to government initiatives[27] - The company aims to enhance the sales of exclusive oral products through increased terminal investment and academic promotion[38] Research and Development - The group invested 2.7% of total sales revenue in R&D during the year, focusing on modern Chinese medicine for chronic diseases[42] - The group is conducting clinical trials for innovative drugs, with two exclusive drugs, "Sailuotong Capsules" and "JC Capsules," having completed Phase III trials and expected to submit production license applications by the end of the year[40] - The classic formula "Yigong San Granules" has entered Phase II clinical trials, targeting chronic disease anemia, with no clear treatment options currently available in the market[45] - The group has submitted six applications for the registration of 3.1 category traditional Chinese medicine new drugs, the highest number in the country for this category[44] - The company completed the III phase clinical trial for the JC capsule, expected to obtain production approval by 2026[34] - The company has been awarded 35 patents, including PCT patents, and has established research centers in Hebei and Yunnan[30] Corporate Governance - The company is committed to corporate governance standards that emphasize transparency, accountability, and fairness[170] - The board consists of three executive directors, three independent non-executive directors, and one non-executive director as of December 31, 2024[175] - The company has adopted a higher standard code for securities trading by directors than that specified in the listing rules, ensuring compliance by all directors for the year ending December 31, 2024[172] - The board has established mechanisms to ensure independent viewpoints and will review these mechanisms annually[177] - The company has implemented a responsibility insurance for its directors and senior management to cover liabilities arising from corporate activities[176] - The company has established a remuneration committee, which has met twice during the year to evaluate the performance of executive directors and discuss contract renewals[192] - The company has adopted a whistleblowing policy to provide guidance and reporting channels for employees and third parties to report suspected misconduct[188] - The company confirms that the roles of the chairman and CEO are distinct, with the current chairman also serving as president, a structure deemed beneficial for executing business strategies[184] Market Conditions - The overall industry is experiencing a decline in revenue and profit levels, but there are new development opportunities due to government support for traditional Chinese medicine[13] - The company is closely monitoring regulatory changes in China’s healthcare reform, which could affect its operations and compliance requirements[96] - The company has identified major risks and uncertainties that could impact its performance, including regulatory changes in the healthcare and pharmaceutical sectors in China[94] Related Party Transactions - The company entered into a technical service contract with a related party, with a total contract value of RMB 14,000,000, extended for an additional year until November 4, 2025[139] - The annual rent for a land lease agreement with a related party is RMB 1,600,000, covering an area of approximately 49,276 square meters for three years[140] - The annual rent for another land lease agreement with a related party is RMB 1,200,000, covering an area of approximately 20,986 square meters for three years[141] - The total transaction amount for a general service contract with a related party is RMB 11,832,000, with an annual cap of RMB 12,500,000[146] - The independent non-executive directors have reviewed the related party transactions and confirmed that they comply with the pricing policies and internal control procedures[154] Shareholder Information - As of December 31, 2024, the major shareholder, Fuhui Investment Limited, holds 546,802,990 shares, representing approximately 66.12% of the company's total shares[115] - The company will suspend the registration of share transfers from May 6, 2025, to May 7, 2025, to determine shareholders' rights to the first interim dividend for the year ending December 31, 2025[167] - The company will also suspend the registration of share transfers from May 22, 2025, to May 29, 2025, for the annual general meeting, requiring all transfer documents to be submitted by May 21, 2025, at 4:30 PM[167]

Financial Performance - The company reported a revenue of RMB 3,778,043,000 for the fiscal year ending December 31, 2024, representing a decrease of 16.4% year-on-year[3]. - The annual profit was RMB 840,052,000, a decline of 13.4% compared to the previous year[3]. - In 2024, the overall sales revenue decreased by approximately 16.4% to RMB 3,778,043,000, while net profit fell by 13.4% to RMB 840,052,000[11]. - The gross profit margin was 75.0%, slightly down from 75.1% in the previous year[3]. - The gross profit for the same period was RMB 2,831,749, down 16.6% from RMB 3,394,119 in 2023[61]. - Basic earnings per share decreased to RMB 1.11 from RMB 1.28, reflecting a drop of 13.3%[61]. - The profit attributable to the company's owners for 2024 was RMB 840,052,000, a decrease of approximately 13.4% compared to 2023[55]. - The effective tax rate for the group increased to 26.7% in 2024 from 21.8% in 2023, primarily due to increased withholding tax from profit distributions[54]. Dividend Information - The company declared a first interim dividend of RMB 0.36 per share, with a total dividend payout of RMB 0.47 per share for the fiscal year, resulting in a payout ratio of 42.3%[4]. - The board declared an interim dividend of RMB 0.36 per share, representing a 13.0% decrease compared to the previous year[12]. - The company declared a first interim dividend of RMB 0.43 per share for 2024, totaling RMB 324,822,000, compared to RMB 0.36 per share for 2025, totaling RMB 271,944,000[82]. Sales Performance - The total sales of essential medicines listed in the national essential drug catalog decreased by 22.7% to RMB 1,348,062,000, accounting for 35.7% of total sales[18]. - Injection products experienced a significant sales decline of 29.0%, with the sales of Qingkailing injection dropping by 40.8% to RMB 504,029,000[14]. - Oral products accounted for 66.4% of total sales, but overall sales decreased by 8.1% compared to the previous year[15]. - The sales of soft capsule products fell by 14.9%, primarily due to high base effects from the previous year[16]. - The sales of granule products decreased by 2.9%, with significant declines in pediatric cough granules and cold relief granules[17]. - The sales of traditional Chinese medicine granules fell by 9.3% to RMB 1,090,116,000, accounting for 28.9% of the group's total sales in 2024[22]. - The sales of cardiovascular injection prescription drugs decreased by 23.8% to RMB 627,280,000, accounting for 16.6% of total sales, with only the sales of Shenmai injection increasing by 10.6% to RMB 207,751,000[28]. - The sales of respiratory prescription drugs for the group amounted to RMB 745,758,000, a decrease of 32.3%, accounting for 19.7% of total sales[26]. Research and Development - The company is actively adjusting its product structure and increasing R&D for high-efficiency, low-cost, and quality drugs in response to healthcare cost control policies[6]. - The group invested 2.7% of total sales revenue in R&D, focusing on modern traditional Chinese medicine for chronic diseases[35]. - The company reported a decrease in research and development costs to RMB 100,522 from RMB 110,462, a reduction of 9.0%[61]. - The group is advancing clinical trials for innovative drugs, with two products, "Sai-Luo-Tong capsules" and "JC capsules," completing phase III trials and expected to submit for production approval by the end of the year[33]. - The group aims to develop innovative traditional Chinese medicines targeting cardiovascular diseases, pediatric diseases, and gynecological diseases, leveraging its strengths in these areas[35]. Market Strategy and Expansion - The company aims to enhance management and operational efficiency while adapting to market changes and seizing opportunities from national procurement policies for traditional Chinese medicine[9]. - The company plans to continue focusing on innovation, quality, and collaboration to drive the transformation and high-quality development of the traditional Chinese medicine industry[10]. - The group plans to expand its market development efforts, increasing the number of provinces targeted from 4 to 10 by 2025[24]. - The company's market expansion efforts are supported by favorable national policies aimed at promoting traditional Chinese medicine innovation and development[41]. - The group has developed into one of the largest producers of traditional Chinese medicine granules in the country, ranking among the top five publicly listed companies in this sector[23]. Financial Position - As of December 31, 2024, the group's cash and structured deposits amounted to approximately RMB 6,140,153,000, an increase from RMB 5,888,776,000 in 2023[56]. - Trade receivables rose to RMB 908,115, a significant increase of 19.8% from RMB 758,205 in 2023[62]. - Non-current assets totaled RMB 1,443,007, slightly up from RMB 1,419,263 in 2023[62]. - The company reported trade payables of RMB 367,046,000 in 2024, a decrease from RMB 484,791,000 in 2023[85]. - The aging analysis of trade receivables showed that RMB 853,487,000 was within six months, down from RMB 1,041,352,000 in 2023[84]. Compliance and Governance - The company maintained compliance with the corporate governance code, with a clear division of responsibilities between the chairman and the president[92]. - The audit committee reviewed the audited financial performance for the year ended December 31, 2024[94]. - Deloitte has verified the figures in the preliminary announcement against the audited consolidated financial statements approved by the board on March 28, 2025, but did not provide any assurance or verification conclusion on the preliminary announcement[95].

Financial Performance - The company's revenue for the six months ended June 30, 2024, was RMB 2,086,695,000, a decrease of 13.0% compared to the same period last year[5]. - Net profit for the period rose by 27.5% to RMB 626,479,000, with earnings per share increasing by 27.7% to RMB 0.83[5]. - Total sales for the first six months of 2024 decreased by 13.0% to RMB 2,398,680,000 compared to the same period in 2023[12]. - The net profit for the first six months of 2024 was RMB 626,479,000, an increase of 27.5% compared to the previous year, driven by growth in other income and investment income, as well as a reduction in sales and distribution costs[32]. - The company reported a profit before tax of RMB 862,083, which is a 28.5% increase from RMB 671,288 in the previous year[58]. - Basic and diluted earnings per share increased to RMB 0.83, compared to RMB 0.65 for the same period last year[58]. Revenue Breakdown - The proportion of prescription drugs and OTC products in revenue was approximately 88.9% and 11.1%, respectively[6]. - Oral products accounted for 62.7% of total sales, while injection products represented 37.3%[12]. - Sales of injection products fell by 18.6% to RMB 957,253,000, primarily due to high comparison bases from the previous year and centralized procurement impacts[10]. - Sales of traditional Chinese medicine granules dropped by 11.8% to RMB 554,726,000, accounting for 26.6% of total sales[13]. - Prescription drug sales fell by 9.9% to RMB 2,056,849,000, while OTC drug sales saw a significant decline of 32.0%[12]. Cost Management - The company focused on cost control, reducing sales and distribution costs by approximately 20.3% compared to the previous year[7]. - The company's sales and distribution costs decreased by 20.3% year-on-year, accounting for 39.2% of total revenue, attributed to improved cost control measures[29]. - Administrative expenses increased by approximately 4.9% year-on-year, representing 7.0% of total revenue, mainly due to higher salaries and social insurance costs[30]. Cash Flow and Liquidity - Net cash generated from operating activities was RMB 564,116,000, an increase of 75.5% year-on-year[7]. - The group’s cash and cash equivalents amounted to approximately RMB 6,234,974,000 as of June 30, 2024, up from RMB 5,908,776,000 at the end of 2023[34]. - The company reported a net increase in cash and cash equivalents of RMB 341,966 thousand, compared to RMB 330,668 thousand in the prior year[68]. Investment and R&D - The company invested 2.1% of total sales revenue in R&D, focusing on modern Chinese medicine for chronic diseases, particularly in areas where Western medicine lacks solutions[19]. - The company is developing over 100 new drugs based on ancient classic formulas, with the clinical trial for Yigong San Granules already underway[20]. - Total investment income for the six months ended June 30, 2024, was RMB 121,173,000, significantly up from RMB 56,609,000 in the same period of 2023, representing an increase of 114.3%[74]. Dividends - The board declared an interim dividend of RMB 0.11 per share for 2024, totaling RMB 0.54 per share for the twelve months ending December 31, 2024[7]. - The company declared a second interim dividend of RMB 0.11 per share, totaling RMB 83,094,000, to be paid on September 27, 2024[80]. Market Strategy - The company plans to enhance market expansion in provinces like Beijing, Tianjin, Anhui, and Shandong for traditional Chinese medicine granules[13]. - National policies are increasingly supportive of traditional Chinese medicine, promoting innovation and development within the industry[21]. Shareholder Information - Major shareholder 富威 holds 546,802,990 shares, representing approximately 66.12% of the company[44]. - The company has no unexercised options under the 2015 share option plan, which is set to expire on May 28, 2025[48]. Employee and Management - The number of employees decreased to 3,232 as of June 30, 2024, down from 3,436 as of December 31, 2023[40]. - The company reported a total remuneration of RMB 7,664,000 for key management personnel for the six months ended June 30, 2024, compared to RMB 6,468,000 in the same period of 2023, reflecting an increase of approximately 18.5%[97].

Financial Performance - The group's revenue for the six months ended June 30, 2024, was RMB 2,086,695,000, a decrease of 13.0% compared to the same period last year[2] - Net profit increased by 27.5% to RMB 626,479,000, with a net profit margin rising from 20.5% to 30.0%[3] - Earnings per share rose by 27.7% to RMB 0.83[2] - Cash generated from operating activities was RMB 564,116,000, an increase of 75.5%[3] - The total sales for the first half of 2024 decreased by 13.0% to RMB 2,086,695,000, compared to RMB 2,398,680,000 in the same period of 2023[10] - The group's net profit for the first six months of 2024 was RMB 626,479,000, an increase of 27.5% compared to the same period last year, primarily due to growth in other income and investment income, as well as a decrease in sales and distribution costs[32] Sales Performance - Sales of injection products decreased by 18.6% to RMB 779,238,000, accounting for 37.3% of total sales[5] - Oral products accounted for 62.7% of total sales, with a total sales amount of RMB 1,307,457,000, down 9.3%[5] - The overall sales of essential medicines decreased by 9.5% to RMB 840,358,000, representing 40.3% of total sales[8] - Prescription drugs and OTC drugs accounted for approximately 88.9% and 11.1% of total sales, respectively, with prescription drugs down 9.9% and OTC drugs down 32.0%[9] - The sales of traditional Chinese medicine granules fell by 11.8% to RMB 554,726,000, accounting for 26.6% of total sales[11] - The sales of respiratory prescription drugs decreased by 1.7% to RMB 504,343,000, representing 24.2% of total sales[13] - The sales of cardiovascular injection prescription drugs dropped significantly by 30.6% to RMB 345,926,000, making up 16.6% of total sales[15] - Exclusive oral prescription drugs saw a growth of 12.0%, with sales reaching RMB 257,390,000, accounting for 12.3% of total sales[10] - OTC drug sales decreased by 32.0% to RMB 232,526,000, which is 11.1% of total sales[10] - The sales of the "Cleansing Spirit Injection" decreased by 8.6% to RMB 366,322,000, which is 17.6% of total sales[13] Research and Development - The group invested 2.1% of total sales revenue in R&D during the period, focusing on modern traditional Chinese medicine[19] - The group is developing over 100 new drugs based on ancient classic formulas, aiming for regulatory approval[20] - The group is in the process of clinical trials for several innovative drugs, with the goal of submitting production license applications by the end of the year[19] Cash Flow and Investments - The group generated free cash flow of approximately RMB 489,618,000, equivalent to RMB 0.59 per share[3] - Other income increased significantly to RMB 162,297,000 from RMB 8,812,000 in the previous year, primarily from government grants[25] - Investment income rose to RMB 116,556,000, up from RMB 52,486,000 in the same period last year[26] - The group recorded a net foreign exchange gain of RMB 19,118,000, compared to RMB 7,054,000 in the previous year[27] - The group purchased property, plant, and equipment worth RMB 40,518,000 in the first half of 2024, including land leases and machinery[34] Dividends and Shareholder Information - The group declared an interim dividend of RMB 0.11 per share for 2024, totaling RMB 0.54 per share for the twelve months ending December 31, 2024[3] - The group declared an interim dividend of RMB 0.43 per share, totaling RMB 324,822,000, compared to RMB 0.31 per share totaling RMB 234,174,000 in the previous year[52] - The company will suspend the handling of shareholder registration from September 12 to September 13, 2024, to qualify for the second interim dividend for the fiscal year 2024[69] Assets and Liabilities - The group's total assets as of June 30, 2024, were RMB 8,465,054,000, compared to RMB 8,154,730,000 as of December 31, 2023[38] - The net assets of the group increased to RMB 7,336,425,000 as of June 30, 2024, from RMB 7,034,768,000 as of December 31, 2023[41] - Trade receivables, net of expected credit loss provisions, totaled RMB 840,813,000 as of June 30, 2024, an increase from RMB 758,205,000 as of December 31, 2023[55] - The group reported a decrease in trade payables to RMB 460,685,000 as of June 30, 2024, from RMB 484,791,000 as of December 31, 2023[59] - The expected credit loss provision for trade receivables was RMB 34,427,000 as of June 30, 2024, compared to RMB 29,639,000 as of December 31, 2023[55] Corporate Governance - The company has complied with the corporate governance code as per the listing rules, with a deviation noted regarding the roles of the chairman and CEO[70] - The chairman and president, Mr. Li Zhenjiang, holds both positions, with responsibilities clearly defined and approved by the board[70] - The company has adopted the standard code of conduct for securities transactions, ensuring compliance by all directors during the six months ending June 30, 2024[71] - The audit committee has reviewed the accounting principles and policies used by the group for the unaudited consolidated results for the six months ending June 30, 2024[72] Taxation - The effective tax rate increased from 26.8% in the same period of 2023 to 27.3% in the first half of 2024, primarily due to withholding tax from dividends distributed by domestic subsidiaries[31] - The company’s effective tax rate for subsidiaries in China was 25%, with some subsidiaries benefiting from a reduced rate of 15%[49] Miscellaneous - The group added construction projects amounting to RMB 40,518,000 in the six months ended June 30, 2024, compared to RMB 10,523,000 in the same period of 2023[54] - The group signed multiple lease agreements with a term of three years, recognizing right-of-use assets and lease liabilities of RMB 23,797,000 each[54] - The group did not grant any stock options under the share option plan during the reporting period[61] - No securities were purchased, sold, or redeemed by the company or its subsidiaries during the six months ending June 30, 2024[70] - The interim report for 2024 will be sent to shareholders and published on the Hong Kong Stock Exchange and the company's website at an appropriate time[72] - The company expresses gratitude to shareholders and employees for their support and efforts[72]

Financial Performance - Full-year sales revenue reached a record high of RMB 4.516 billion, a 14.3% increase compared to the previous year[8] - Net profit for the year was RMB 969.5 million, a 34.1% growth year-on-year[8] - The company achieved a record high sales revenue of RMB 4,516,538,000 in 2023, a 14.3% increase year-on-year, with net profit rising 34.1% to RMB 969,510,000[12] - Gross profit margin improved by 0.7 percentage points to 75.1%, and net profit margin increased from 18.3% to 21.5% in 2023[12] - Earnings per share grew by 33.3% to RMB 1.28, and the dividend payout ratio reached 42.2%[12] - Revenue for 2023 reached RMB 4,516,538 thousand, a 14.3% increase from RMB 3,950,636 thousand in 2022[164] - Gross profit for 2023 was RMB 3,394,119 thousand, up 15.5% from RMB 2,938,314 thousand in 2022[164] - Net profit for 2023 was RMB 969,510 thousand, a 34.1% increase from RMB 722,773 thousand in 2022[164] - Basic earnings per share for 2023 were RMB 128 cents, up from RMB 96 cents in 2022[164] - Profit before tax rose by 35.2% from RMB 917,025 thousand in 2022 to RMB 1,240,253 thousand in 2023[172] Dividend and Shareholder Returns - The company declared a total dividend of RMB 0.54 per share for the 2023 fiscal year, with a dividend payout ratio of 42.2%[8] - The company declared an interim dividend of RMB 0.43 per share for the fiscal year ending December 31, 2024, totaling RMB 324,822,000, payable on May 17, 2024[66] - The company's distributable reserves to shareholders as of December 31, 2023, were RMB 1,534,881,000, compared to RMB 1,023,848,000 in 2022[69] - Dividends paid increased by 31.3% from RMB 241,728 thousand in 2022 to RMB 317,268 thousand in 2023[170] Product Sales and Market Performance - Respiratory system drugs and exclusive oral products showed continuous sales growth, with traditional Chinese medicine formula granules also achieving record sales[8] - Injection products sales increased by 25.5%, driven by a 75.1% growth in Qingkailing Injection sales to RMB 850,751,000[14] - Oral products accounted for 60.5% of total sales, with an 8.0% year-on-year growth despite a slowdown in the second half of 2023[15] - Soft capsule product sales decreased by 3.6% year-on-year, with Wufu Xinnaoqing Soft Capsule sales dropping 24.5% to RMB 135,154,000[16] - Granule product sales increased by 10.1%, driven by exclusive oral products such as Huamoyan Granules, Qihuangtongmi Granules, and Shujintongluo Granules[16] - Sales of drugs listed in the National Essential Drugs Directory increased by 32.8% to RMB 1,743,820,000, accounting for 38.6% of the company's total sales[17] - Prescription drug sales rose by 14.6%, while OTC drug sales increased by 12.6% in 2023[18] - Respiratory system prescription drugs sales surged by 62.4% to RMB 1,102,257,000, accounting for 24.4% of total sales, with Qingkailing Injection sales up 75.1% to RMB 850,751,000[19][20] - Traditional Chinese medicine formula granules sales grew by 8.9% to RMB 1,201,664,000, representing 26.6% of total sales[21] - Cardiovascular Chinese medicine injection prescription drugs experienced a slight decline of 2.0% to RMB 822,845,000, with some products like Huangqi Injection and Xiangdan Injection showing significant growth[22] - Exclusive oral prescription products sales increased by 7.0% to RMB 445,150,000 in 2023, with specific products like Huamoyan Granules, Qihuang Tongmi Soft Capsules, Jiangzhi Tongluo Soft Capsules, and Shujin Tongluo Granules growing by 5.2%, 7.7%, 16.1%, and 40.8% respectively[24] - OTC drug sales grew by 12.6% to RMB 583,217,000 in 2023, with Huoxiang Zhengqi Soft Capsules increasing by 23.3% to RMB 187,249,000, while children's respiratory infection treatment granules saw a 1.0% decline[25] Research and Development - The company's 3.1-class new traditional Chinese medicine "Yiguanjian Granules" was approved for market launch[8] - Two innovative drugs, "Sailuotong Capsule" and "JC Capsule," are nearing completion of Phase III clinical trials[8] - The company's self-developed 1.1-class innovative drug "Yigongsan Granules" was approved for clinical trials, targeting chronic disease anemia treatment[8] - Three innovative drugs, including "Sailuotong Capsule," "Q-B-Q-F Concentrated Pill," and "JC Capsule," are in Phase III clinical trials, targeting vascular dementia, pediatric mycoplasma pneumonia, and upper respiratory infections respectively[28][29] - The company received approval from the National Medical Products Administration to conduct clinical trials for "Yigong San Granules," a new traditional Chinese medicine for chronic disease anemia[30] - The company launched "Yiguan Jian Granules," a 3.1 class traditional Chinese medicine, in December 2023, marking the first approval for this ancient classic formula[31] - Research and development costs decreased to RMB 110,462 thousand in 2023 from RMB 117,454 thousand in 2022[164] Financial Position and Assets - Total assets increased to RMB 9.574 billion in 2023, up from RMB 8.232 billion in 2022[5] - Total liabilities rose to RMB 2.539 billion in 2023, compared to RMB 1.849 billion in the previous year[5] - Shareholders' equity grew to RMB 7.035 billion in 2023, a significant increase from RMB 6.383 billion in 2022[5] - Total assets as of December 31, 2023, were RMB 7,140,275 thousand, compared to RMB 6,566,268 thousand in 2022[165] - Cash and bank balances increased to RMB 5,888,776 thousand in 2023 from RMB 5,026,265 thousand in 2022[165] - Inventory rose to RMB 897,709 thousand in 2023 from RMB 657,659 thousand in 2022[165] - Trade receivables increased to RMB 758,205 thousand in 2023 from RMB 673,380 thousand in 2022[165] - Bank borrowings stood at RMB 300,000 thousand in 2023, compared to none in 2022[165] - Non-current liabilities decreased from RMB 183,742 thousand in 2022 to RMB 105,507 thousand in 2023, primarily due to reductions in lease liabilities and deferred income[166] - Net assets increased by 10.2% from RMB 6,382,526 thousand in 2022 to RMB 7,034,768 thousand in 2023[166] Cash Flow and Investments - Free cash flow for 2023 was RMB 788,310,000, equivalent to RMB 0.95 per share[12] - The company's bank balance and cash totaled RMB 5,888,776,000, with bank debt of RMB 300,000,000 as of December 31, 2023[12] - Operating cash flow before working capital changes increased by 32.9% from RMB 976,388 thousand in 2022 to RMB 1,297,464 thousand in 2023[172] - Net cash from operating activities decreased by 16% from RMB 1,109,676 thousand in 2022 to RMB 932,635 thousand in 2023[172] - Cash and cash equivalents grew by 17.2% from RMB 5,026,265 thousand in 2022 to RMB 5,888,776 thousand in 2023[173] - The company raised new borrowings of RMB 300,000 thousand in 2023, compared to none in 2022[173] - Investment in financial products increased by 66.7% from RMB 300,000 thousand in 2022 to RMB 500,000 thousand in 2023[173] Corporate Governance and Board Structure - The Board of Directors consists of three executive directors, three independent non-executive directors, and one non-executive director as of December 31, 2023[110] - The Board has established mechanisms to ensure independence, with three out of seven directors being independent non-executive directors[111] - The Board of Directors held six meetings and one annual general meeting during the year, with all executive directors attending all meetings[113] - The company's internal audit department regularly reviews the effectiveness of the internal control system and reports key findings to the Board and Audit Committee[114] - The Chairman and CEO roles are combined, with Li Zhenjiang serving as both, which the Board believes is beneficial for executing the company's business strategy[116] - All directors participated in continuous professional development, including training courses and reading updated regulatory materials[117][118] - The company updated its whistleblowing policy in November 2022 to provide guidance and channels for reporting suspected misconduct[120] - The company adopted an Anti-Fraud and Anti-Corruption Policy on November 30, 2022, outlining guidelines and minimum standards of conduct to prevent fraud and corruption[121] - The Remuneration Committee held three meetings in 2023 to evaluate executive directors' performance and discuss contract renewals[123] - The Remuneration Committee's attendance rate for 2023 was 100% for all members except for Ms. Wang Guihua, who attended 1 out of 1 meeting as the newly appointed chair[124] - The company's remuneration policy for directors emphasizes performance-based compensation, including fixed salary, allowances, performance bonuses, and stock options[127] - The Nomination Committee reviewed the board's structure, size, and composition to ensure a balance of expertise, skills, and experience suitable for the company's business needs[130] - The company achieved its board diversity policy targets, including having at least three independent non-executive directors and one with professional qualifications in accounting or financial management[130] - The board currently consists of 5 male and 2 female directors, reflecting diversity in gender, educational background, professional expertise, and industry experience[130] - The company's diversity policy aims to enhance board performance by considering factors such as gender, age, cultural and educational background, race, professional experience, skills, knowledge, and tenure[132] - The company has 2 female directors and aims to maintain at least this level, with plans to gradually increase female representation when suitable candidates are found[134] - As of December 31, 2023, the company has 3,436 employees (including senior management), with a gender ratio of 48.05% male and 51.95% female, achieving a near 1:1 gender balance[134] - One-third of the board members (including executive and independent non-executive directors) must retire annually, with retiring directors eligible for re-election[135] - The audit committee held 4 meetings in 2023, with all members achieving 100% attendance except for one member who attended 3 out of 3 meetings[137] - The Corporate Social Responsibility and Sustainability Committee held 2 meetings in 2023 to formulate and review the group's sustainability policies[138] - The Corporate Social Responsibility and Sustainability Committee members achieved 100% attendance in 2023, except for one member who had no meetings to attend[139] - The board reviewed and adopted several corporate governance policies in 2023, including anti-fraud, anti-corruption, shareholder communication, and revised whistleblowing policies[136][140] - The company's risk management and internal control system is effective and sufficient, with no significant deficiencies identified[142] - The total remuneration for senior management is distributed across 5 individuals, with 1 earning between 0 – 1,000,000 and 4 earning between 1,000,001 – 2,000,000[143] - The external auditor, Deloitte Touche Tohmatsu, was paid HKD 2,250,000 for statutory audit services and HKD 648,000 for other services, including interim financial statement reviews and tax advisory services[144] - The company maintains regular communication with shareholders and investors through meetings, conference calls, and site visits, and publishes detailed company information in annual reports, interim reports, and announcements[146] - The company has adopted a shareholder communication policy to ensure shareholders and potential investors have convenient, equal, and timely access to company information[147] - Shareholders holding at least one-tenth of the company's paid-up share capital with voting rights can request the board to convene an extraordinary general meeting[149] - The company's goodwill related to the manufacturing and trading of pharmaceutical products was valued at RMB 165,956,000 as of December 31, 2023, with no impairment recognized during the year[158] - The company's audit committee held four formal meetings during the year, reviewing internal controls, risk management systems, and financial statements[154] - The company's financial statements for 2023 were prepared in accordance with International Financial Reporting Standards (IFRS) and Hong Kong Company Ordinance disclosure requirements[155] - The company's audit committee recommended the reappointment of Deloitte Touche Tohmatsu as the external auditor for the 2023 fiscal year[154] - The company's cash-generating units' recoverable amount was determined using the discounted cash flow method, involving significant judgments and assumptions[158] - The company's management conducted sensitivity analysis on growth rates and discount rates to assess the impact on the recoverable amount of cash-generating units[158] - The company's audit committee reviewed the independence and scope of the external auditor's work, as well as management's responses to audit recommendations[154] - The company's financial statements were audited in accordance with Hong Kong Standards on Auditing, ensuring compliance with professional ethical responsibilities[156] - The company's board of directors is responsible for assessing the group's ability to continue as a going concern and ensuring the financial statements are free from material misstatement[160] - The company's audit committee evaluated the appropriateness of the valuation method used for goodwill impairment testing, including the discount rate applied[158] Sustainability and Social Responsibility - The company and its subsidiaries contributed 858 hours and RMB 820,000 to charitable activities in 2023[105] - The company emphasizes innovation, social responsibility, and sustainable development as part of its core values and business strategy[108] - The Corporate Social Responsibility and Sustainability Committee held 2 meetings in 2023 to formulate and review the group's sustainability policies[138] - The Corporate Social Responsibility and Sustainability Committee members achieved 100% attendance in 2023, except for one member who had no meetings to attend[139] Risk Management and Compliance - The company faces risks related to product liability claims due to the lack of mandatory product liability insurance in China, which could harm its reputation and operations[63] - The company is closely monitoring China's ongoing healthcare reform, as regulatory changes could negatively impact its business and reputation[64] - The company participates in government-led bidding processes, and failure to win bids in certain provinces could adversely affect market share, revenue, and profitability[65] - The company's risk management and internal control system is effective and sufficient, with no significant deficiencies identified[142] - The company updated its whistleblowing policy in November 2022 to provide guidance and channels for reporting suspected misconduct[120] - The company adopted an Anti-Fraud and Anti-Corruption Policy on November 30, 2022, outlining guidelines and minimum standards of conduct to prevent fraud and corruption[121] Connected Transactions and Contracts - Shenwei Pharmaceutical signed a technical service contract with Shenwei Pharmaceutical Technology for RMB 14,000,000 from November 5, 2019, to November 4, 2024[88] - Shenwei Pharmaceutical Group leased 49,276 square meters of land from Shenwei Pharmaceutical Technology for an annual rent of RMB 1,600,000 from January 1, 2021, to December 31, 2023, with the contract renewed until December 31, 2026[89][90] - Hebei Shenwei leased 20,986 square meters of land from Shenwei (Sanhe) Real Estate Development for an annual rent of RMB 1,200,000 from January 1, 2021, to December 31, 2023, with the contract renewed until December 31, 2026[91] - Shenwei Pharmaceutical Group signed a hotel service contract with Shenwei Pharmaceutical Technology for an annual rent of RMB 1,368,000 from January 1, 2023, to December 31, 2023, with the contract renewed until December 31, 2026[92] - Shenwei Pharmaceutical leased equipment from Shenwei Pharmaceutical Technology for an annual rent of RMB 2,100,000 from January 1, 2021, to December 31, 2023, with the contract renewed at an annual rent of RMB 3,012,000 until December 31, 2026[93] - Shenwei Pharmaceutical leased vehicles from Shenwei Pharmaceutical Technology for an annual rent of RMB 1,284,000 from January 1, 2021, to December 31, 2023, with the contract renewed at an annual rent of RMB 1,304,000 until December 31, 2026[94] - Shenwei Pharmaceutical signed a general service contract with Shenwei Pharmaceutical Technology for property management and catering services, with a transaction amount of RMB 11,050,000 and an annual cap of RMB 12,500,000 for the year ending December 31, 2023, and the contract renewed with an annual cap of RMB 12,500,000 until December 31, 2026[95] - The general service contract between Hebei Shenwei and Shenwei (Sanhe) Real Estate Development Co., Ltd. has been renewed for three years from January 1, 2024, to December 31, 2026, with a proposed annual cap of RMB 3,500,000[96] -