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] -

Financial Performance - The group's operating revenue for the year ended December 31, 2023, was RMB 4,516,538,000, an increase of 14.3% compared to the previous year[2] - The annual profit reached RMB 969,510,000, representing a growth of 34.1% year-on-year[2] - The earnings per share were RMB 1.28, with a proposed interim dividend of RMB 0.43 per share for 2024[2] - The company achieved a net cash per share of RMB 6.76, equivalent to HKD 7.43[2] - The group reported record sales and profits, with sales exceeding RMB 4.5 billion, driven by growth in respiratory medications and proprietary oral products[3] - The company achieved a record sales revenue of RMB 4,516,538,000 in 2023, representing a 14.3% increase compared to the previous year[6] - Net profit for 2023 reached RMB 969,510,000, marking a growth of 34.1% year-over-year[6] - Gross margin improved by 0.7 percentage points to 75.1%, while net profit margin increased from 18.3% to 21.5%[6] - The company generated free cash flow of approximately RMB 788,310,000, equivalent to RMB 0.95 per share[6] - The profit attributable to the owners of the company for 2023 was RMB 969,510,000, an increase of approximately 34.1% compared to 2022, driven by increased sales revenue and improved operational performance[34] Revenue Breakdown - The sales of injection products increased by 25.5%, driven by a significant rise in the sales of Qingkailing injection, which grew by 75.1% to RMB 850,751,000[8] - Oral product sales accounted for 60.5% of total sales, with an overall growth of 8.0% despite a slowdown in the second half of the year[9] - Sales of essential medicines included in the national essential drug list rose by 32.8% to RMB 1,743,820,000, representing 38.6% of total sales[11] - Prescription drugs and OTC drugs accounted for approximately 87.1% and 12.9% of total sales, respectively, with prescription drugs growing by 14.6%[12] - The sales of influenza treatment respiratory prescription drugs reached RMB 1,102,257,000, an increase of 62.4%, accounting for 24.4% of the total sales[14] - The sales of Qingkailing injection reached RMB 850,751,000, up 75.1%, representing 18.8% of the total sales[14] - The sales of traditional Chinese medicine formula granules increased by 8.9% to RMB 1,201,664,000, accounting for 26.6% of total sales[16] - The sales of exclusive oral prescription products grew by 7.0% to RMB 445,150,000, with significant increases in several specific products[18] - OTC drug sales increased by 12.6% to RMB 583,217,000, with Huoxiang Zhengqi soft capsules growing by 23.3% to RMB 187,249,000[19] Research and Development - The company is advancing multiple research and clinical projects, including the approval of the traditional Chinese medicine "Yiguan Jian Granules" for market[3] - The company plans to continue strengthening R&D investment, focusing on modern Chinese medicine for chronic disease treatment[20] - The group has nearly 100 R&D projects converting ancient classic prescriptions into new traditional Chinese medicines[23] - The company’s research and development costs for 2023 were RMB 110,462,000, slightly down from RMB 117,454,000 in 2022[40] Market Strategy and Opportunities - The group is focusing on digital transformation and smart manufacturing, aiming to establish itself as a leader in the modern Chinese medicine industry[5] - The Chinese government's support for traditional Chinese medicine is expected to enhance market opportunities, with plans to build 130 key hospitals and 64 medical centers by 2025[4] - The company plans to continue expanding its competitive advantages in the formula granule sector and implement a multi-product, multi-channel marketing strategy to drive growth[4] - The company aims to accelerate market development in key provinces and enhance sales in grassroots medical institutions[16] Financial Position and Assets - As of December 31, 2023, the company had cash and bank balances of RMB 5,888,776,000, with net cash per share of HKD 7.43[6] - The total assets less current liabilities amounted to RMB 7,140,275,000 as of December 31, 2023, compared to RMB 6,566,268,000 in 2022[41] - The company’s net assets increased to RMB 7,034,768,000 in 2023 from RMB 6,382,526,000 in 2022[42] - The net book value of property, plant, and equipment as of December 31, 2023, was approximately RMB 1,205,287,000, a decrease of about 1.0% from the previous year[36] Dividends and Shareholder Returns - The company declared an interim dividend of RMB 0.43 per share, with a total dividend related to the fiscal year 2023 amounting to RMB 0.54 per share, resulting in a payout ratio of 42.2%[6] - The company did not recommend any final dividend for the year ended December 31, 2023, but declared an interim dividend of RMB 0.43 per share for the year ending December 31, 2024, totaling RMB 324,822,000[38] - The company declared an interim dividend of RMB 0.31 per share for 2023, totaling RMB 324,822,000, compared to RMB 234,174,000 for the previous year, marking a rise of 38.7%[58] Compliance and Governance - The audit committee has reviewed the audited financial performance for the year ending December 31, 2023, confirming compliance with relevant standards[70] - The company has adopted a higher standard for securities trading by directors than those stipulated in the listing rules, ensuring compliance throughout the year[69] - The company will hold its annual general meeting on May 31, 2024, as per the requirements of the Hong Kong Stock Exchange[65] - The company will publish its annual report, including the board report and audited consolidated financial statements, on its website and the Hong Kong Stock Exchange website[71]

Financial Performance - The company's revenue for the six months ended June 30, 2023, reached RMB 2,398,680,000, representing a 32.1% increase compared to the same period last year[5]. - Net profit for the period was RMB 491,465,000, reflecting a 48.4% increase year-on-year[5]. - Earnings per share rose to RMB 0.65, an increase of 47.7% compared to the same period last year[5]. - Gross profit margin improved to 75.2%, up from 73.0% in the previous year[5]. - The group achieved a revenue increase of 32.1% in the first six months of 2023, with total revenue reaching RMB 2,398,680,000[17]. - Injection products generated revenue of RMB 957,253,000, up 37.3%, accounting for 39.9% of total revenue[17]. - The net profit for the first six months of 2023 was RMB 491,465,000, an increase of 48.4% compared to the same period last year[23]. Sales and Product Performance - Prescription drugs accounted for approximately 85.7% of total sales, while over-the-counter (OTC) drugs made up 14.3%[6]. - Oral product sales grew by 28.9% year-on-year, with significant contributions from soft capsules (19.0% increase), granules (28.5% increase), and traditional Chinese medicine granules (34.0% increase)[10]. - Sales of essential medicines listed in the national essential drug list increased by 57.0% to RMB 928,912,000, accounting for 38.7% of total sales, with 77.0% being prescription drugs[9]. - Prescription drug sales rose by 27.2% to RMB 2,056,849,000, while OTC drug sales surged by 72.6% to RMB 341,831,000[10]. - The company ranks among the top five in the national market for traditional Chinese medicine granules, with sales accounting for 26.2% of total sales and a 34.0% increase[11]. - The company’s injection products recorded a growth of 37.3%, driven by respiratory and cardiovascular prescription drugs[10]. Research and Development - The company is focusing on enhancing research and development, particularly in digital and intelligent supply chain projects[7]. - The group plans to enhance evidence-based medical research for exclusive oral prescription products and increase marketing efforts to boost sales[13]. - The company has continued to focus on the research and development of traditional Chinese medicine products, which is its primary operational segment[46]. Dividends and Shareholder Information - The board declared an interim dividend of RMB 0.11 per share for the fiscal year 2023[7]. - The company declared an interim dividend of RMB 0.31 per share for 2023, totaling RMB 234,174,000, compared to RMB 0.21 per share totaling RMB 158,634,000 for 2022, representing a 47.5% increase in dividend payout[53]. - As of June 30, 2023, the major shareholder, 富威, holds 546,802,990 shares, representing 66.12% of the company's equity[30]. Financial Position and Assets - Total assets as of June 30, 2023, amounted to RMB 7,441,052,000, an increase from RMB 6,782,399,000 as of December 31, 2022[40]. - Cash and bank balances amounted to approximately RMB 5,364,576,000 as of June 30, 2023, compared to RMB 4,831,946,000 on December 31, 2022[23]. - Inventory increased by 21.5% compared to December 31, 2022, with raw materials, work-in-progress, and finished goods accounting for 26.2%, 39.7%, and 34.1% of inventory, respectively[23]. Costs and Expenses - The sales cost for the first half of 2023 was RMB 594,723,000, representing 24.8% of total revenue[18]. - Sales and distribution costs increased by 24.3%, accounting for 42.7% of the group's revenue, compared to 45.4% in the same period last year[22]. - Administrative expenses rose by approximately 8.1%, representing 5.8% of the group's revenue, up from 7.0% in the same period last year[22]. - Research and development costs accounted for 2.0% of the group's revenue, compared to 1.6% in the same period last year[22]. Taxation and Compliance - The effective tax rate increased from 19.5% to 26.8%, primarily due to withholding tax from dividends distributed by domestic subsidiaries[22]. - The company recognized income tax expenses of RMB 179,823,000 for the first half of 2023, up from RMB 80,285,000 in the same period of 2022, reflecting a significant increase of 124.4%[51]. - The company’s subsidiaries in western China benefited from a reduced corporate income tax rate of 15% due to local tax incentives, compared to the standard rate of 25%[50]. Employee and Corporate Governance - The number of employees decreased to 3,533 as of June 30, 2023, from 4,131 as of December 31, 2022, reflecting a reduction of approximately 14.5%[24]. - The company has complied with the corporate governance code during the six months ending June 30, 2023, with all directors confirming adherence to the securities trading regulations[33]. - There have been no changes in director information that require disclosure under the listing rules for the six months ending June 30, 2023[34].

Financial Performance - The group recorded a revenue of RMB 2,398,680,000 for the six months ended June 30, 2023, representing a 32.1% increase compared to the same period last year[2]. - Net profit for the period was RMB 491,465,000, reflecting a 48.4% increase year-on-year[2]. - Earnings per share rose to RMB 0.65, an increase of 47.7% compared to the same period last year[2]. - The gross profit margin improved to 75.2%, up from 73.0% in the previous year[2]. - The group achieved a revenue increase of 32.1% in the first six months of 2023, with injection products generating RMB 957,253,000, up 37.3%[18]. - The net profit attributable to the company's owners for the six months ended June 30, 2023, was RMB 491,465,000, representing a 48.4% increase from RMB 331,123,000 in the same period of 2022[46]. - Revenue for the first half of 2023 reached RMB 2,398,680,000, up from RMB 1,815,194,000 in the same period of 2022, reflecting a significant growth in sales[33]. Sales Performance - Sales of essential medicines included in the national essential drug list increased by 57.0% to RMB 928,912,000, accounting for 38.7% of total sales[5]. - Prescription drug sales grew by 27.2%, with a total sales amount of RMB 2,056,849,000, representing 85.7% of total sales[7]. - Oral product sales increased by 28.9%, driven by exclusive oral products such as specific capsules and granules[4]. - The sales of traditional Chinese medicine formula granules increased significantly by 34.0%, accounting for 26.2% of the total sales of the company[9]. - The sales revenue of respiratory prescription drugs surged by 82.0%, reaching RMB 512,898,000, which represents 21.4% of the company's overall sales[10]. - The sales of the Qingkailing injection reached RMB 400,632,000, up 92.8%, contributing 16.7% to the total sales[10]. - The overall sales of the company's injectable products rose by 37.3%, with significant growth in cardiovascular injectable drugs, which increased by 13.3% to RMB 498,150,000[11]. - The sales of the company's OTC products grew by 72.6%, with the Huoxiang Zhengqi soft capsule and Qingkailing soft capsule increasing by 110.8% and 54.6%, respectively[13]. Cost and Expenses - The overall sales and distribution costs increased by only 24.3%, while administrative expenses rose by 8.1%, contributing to an increase in net profit margin from 18.2% to 20.5%[3]. - The sales cost for the first six months of 2023 was RMB 594,723,000, representing 24.8% of the total revenue[19]. - The sales and distribution costs increased by 24.3% year-on-year, accounting for 42.7% of total revenue, down from 45.4% in the previous year[25]. - Administrative expenses rose by approximately 8.1% year-on-year, representing 5.8% of total revenue, compared to 7.0% in the same period last year[26]. - Research and development costs accounted for 2.0% of total revenue in the first half of 2023, up from 1.6% in the same period of 2022[27]. Dividends and Equity - The group declared an interim dividend of RMB 0.11 per share for the fiscal year 2023[2]. - The company declared an interim dividend of RMB 0.31 per share for 2023, compared to RMB 0.21 per share for 2022, reflecting a 47.6% increase[46]. - The company’s total equity as of June 30, 2023, was RMB 6,639,817,000, an increase of 4.0% from RMB 6,382,526,000 at the end of 2022[36]. Government Support and Grants - The group received government subsidies amounting to RMB 8,812,000, an increase from RMB 7,634,000 in the previous year[21]. - The company received government grants totaling RMB 8,812,000 during the period, compared to RMB 7,634,000 in the previous year[44]. Research and Development - The group is currently conducting clinical trials for three exclusive innovative drugs, including "Sailuotong Capsules" in Phase III trials[15]. - The group submitted new drug applications for two ancient classic formulas, "Shaoyao Gancao Decoction Granules" and "Yiguan Decoction Granules" during the reporting period[16]. - The group plans to accelerate the registration applications for multiple classic formulas by the end of 2023[16]. Market Development - The company has completed the listing of traditional Chinese medicine formula granules in 13 provinces and municipalities, with plans to accelerate market development in key regions[9]. - The company aims to enhance its exclusive oral prescription products through evidence-based medical research and increased academic promotion[12]. - The company has successfully bid for multiple traditional Chinese medicine injections in national and provincial centralized procurement, indicating a recovery in demand[12]. - The company is positioned to benefit from the aging population, which is expected to increase the demand for cardiovascular injectable drugs[12]. Financial Position - As of June 30, 2023, the company had cash and bank balances of approximately RMB 5,364,576,000, an increase from RMB 5,046,495,000 at the end of 2022[29]. - The impairment losses on financial assets increased to RMB 6,236,000 in the first half of 2023, compared to a reversal of RMB 1,443,000 in the same period of 2022[33]. - Trade receivables, net of expected credit loss provisions, increased to RMB 759,323,000 as of June 30, 2023, compared to RMB 673,380,000 as of December 31, 2022[51]. - Trade payables amounted to RMB 387,013,000 as of June 30, 2023, up from RMB 308,745,000 as of December 31, 2022[55]. - The total amount of notes received was RMB 451,773,000 as of June 30, 2023, compared to RMB 301,682,000 as of December 31, 2022[53]. Corporate Governance - The company has adhered to the corporate governance code as per the Hong Kong Stock Exchange rules, with a noted deviation regarding the separation of roles between the Chairman and the CEO, which is currently held by the same individual[67]. - The audit committee has reviewed the accounting principles and policies adopted by the group for the six months ended June 30, 2023[69]. - The interim report for the six months ended June 30, 2023, will be distributed to shareholders and published on the Hong Kong Stock Exchange website and the company's website[69].

Financial Performance - The company's total sales revenue for 2022 reached RMB 3.956 billion, representing a 22.6% increase compared to the previous year[6]. - The gross profit for 2022 was RMB 2.938 billion, with a gross margin improvement reflected in the overall financial performance[6]. - The net profit attributable to shareholders increased by 29.7% year-on-year to RMB 722.773 million[6]. - The company's total sales for 2022 reached RMB 3,950,636,000, representing a 22.6% increase compared to the previous year, with net profit rising by 29.8% to RMB 722,773,000[12]. - The gross profit margin for the year was 74.4%, slightly down from 74.8% in the previous year, while the net profit margin improved from 17.3% to 18.3%[12]. - The overall gross profit margin for the group was 74.4% in 2022, slightly down from 74.8% in 2021[27]. - The net profit attributable to the company's owners for 2022 was RMB 722,773,000, a 29.8% increase compared to the previous year[35]. - The company's total comprehensive income for 2022 was RMB 722,773,000, compared to RMB 556,674,000 in 2021, marking an increase of approximately 30%[156]. - Basic earnings per share rose to RMB 0.96, up from RMB 0.74, marking a 30% increase year-over-year[153]. - The company's profit before tax for 2022 was RMB 917,025,000, an increase from RMB 720,103,000 in 2021, representing a growth of approximately 27.4%[158]. Sales and Market Expansion - Sales of traditional Chinese medicine formula granules exceeded RMB 1.1 billion, marking a 59.3% increase and positioning the company among the top five publicly listed firms in this sector[9]. - The company has expanded its market presence, with traditional Chinese medicine formula granules now available in 2 municipalities and 13 provinces by the end of 2022[9]. - The company plans to focus on deepening its market in Hebei, expanding in Yunnan, and developing in four additional provinces in 2023[9]. - The sales of injection products, soft capsules, and granules saw significant increases of 6.3%, 24.5%, and 18.1% respectively during the year[9]. - Sales of traditional Chinese medicine formula granules surged by 59.3%, contributing to 27.9% of total sales, with overall oral product sales accounting for 64.0% of total revenue[14]. - The sales of injection products grew by 6.3% to RMB 1,423,254,000, accounting for 36.0% of total sales, despite a slowdown in growth in the second half of the year[16]. - Sales in grassroots markets surged by 196.0% compared to the previous year, with sales in Hebei province increasing by 49.0% and in Yunnan province by 84.0%[17]. - The exclusive product "Synovitis Granules" achieved a sales growth of 34.1%, reaching RMB 231,012,000 in 2022[19]. - "Qi Huang Tong Mi Soft Capsules" recorded a sales growth of 45.8%, totaling RMB 68,359,000 in 2022[20]. - "Cholesterol-Lowering Soft Capsules" saw an impressive sales growth of 82.8%, reaching RMB 35,904,000 in 2022[20]. - "Dan Deng Tong Nao Soft Capsules" achieved a sales growth of 71.9%, totaling RMB 31,088,000 in 2022[20]. Research and Development - The company is actively enhancing evidence-based medical research and academic promotion to support its product offerings[9]. - The company has a strong research team of 48 personnel at the Shenwei Drug Research Institute, focusing on innovative drug development, with three proprietary drugs currently in Phase III clinical trials[22]. - The global dementia patient population is expected to double every 20 years, reaching 67.7 million by 2030, with vascular dementia accounting for 32% of cases, highlighting the potential market for the company's innovative drug, Seluotong capsules[22]. - The Q-B-Q-F concentrated pill is entering Phase III clinical trials, targeting mycoplasma pneumonia, which accounts for 30% of pneumonia cases and is prevalent in children[23]. - The company aims to complete the registration of its first batch of classic Chinese medicine formulas by the end of 2023, in line with national policies supporting traditional Chinese medicine[24]. - The company is committed to investing in the research and development of new drugs to diversify its product portfolio[56]. Financial Position and Cash Flow - The company generated a net cash flow from operating activities of RMB 1,109,676,000, with no bank debt reported, resulting in a free cash flow of approximately RMB 980,213,000, equivalent to RMB 1.19 per share[12]. - As of December 31, 2022, the group's cash and structured deposits totaled approximately RMB 5,046,495,000, up from RMB 4,205,722,000 in 2021[36]. - The company's cash and cash equivalents reached RMB 5,026,265 thousand, compared to RMB 4,205,722 thousand in the previous year, showing a growth of 19.5%[154]. - The total liabilities increased to RMB 1,665,593 thousand from RMB 1,098,371 thousand, representing a 51.7% rise[155]. - The net assets of the company were RMB 6,382,526 thousand, up from RMB 5,901,481 thousand, indicating a growth of 8.1%[155]. - Operating cash flow generated from operations for 2022 was RMB 1,266,330,000, compared to RMB 847,723,000 in 2021, indicating a significant increase of about 49.3%[158]. - The net cash increase for cash and cash equivalents at the end of 2022 was RMB 814,218,000, up from RMB 269,226,000 in 2021, reflecting a growth of approximately 202.5%[159]. Corporate Governance and Compliance - The company adheres to corporate governance standards and has implemented new policies, including shareholder communication and anti-fraud measures, in compliance with updated regulations[99]. - The board consists of four executive directors, three independent non-executive directors, and one non-executive director as of December 31, 2022[102]. - The company has established mechanisms to ensure the independence of the board, with three out of eight directors being independent non-executive directors, meeting regulatory requirements[103]. - The board held five meetings and one annual general meeting in 2022, with all executive directors attending all meetings[105]. - The company has established four committees: Audit Committee, Remuneration Committee, Nomination Committee, and Corporate Social Responsibility and Sustainability Committee[104]. - The company has adopted a nomination policy for selecting board members, considering diversity in gender, age, and professional experience[126]. - The company has established a Corporate Governance Committee, which is responsible for reviewing governance policies and compliance with legal requirements[131]. Shareholder Information and Dividends - The board declared a first interim dividend of RMB 0.31 per share, with a total dividend related to the 2022 fiscal year amounting to RMB 0.42 per share, representing a payout ratio of 43.8%[12]. - The company declared an interim dividend of RMB 0.31 per share, totaling RMB 234,174,000, based on 827,000,000 issued shares minus 71,600,000 shares held under the share incentive plan[57]. - As of December 31, 2022, the reserves available for distribution to shareholders amounted to RMB 1,023,848,000, an increase from RMB 874,930,000 in 2021[60]. - The company has a significant shareholder, Fu Wei, holding 546,802,990 shares, which represents approximately 66.12% of the total shares[67]. Related Party Transactions - The company entered into a technical service contract with a related party for a total consideration of RMB 14,000,000, effective from November 5, 2019, to November 4, 2024[80]. - The annual rent payable under a land lease contract with a related party is RMB 1,600,000, covering approximately 49,276 square meters of land for a period of three years[81]. - The company has confirmed compliance with the disclosure requirements under the Listing Rules for all related party transactions[89]. Environmental and Social Responsibility - The company has implemented environmental policies to ensure sustainable operations without compromising environmental integrity[52]. - The company made charitable donations totaling RMB 7,220,600 and contributed 78 hours to public welfare activities during the year[96]. - The board emphasizes values such as quality, social responsibility, innovation, respect for life, and sustainable development to guide business activities[100]. Risk Management and Internal Controls - The group has established a risk management and internal control system to ensure effective governance and compliance with laws and regulations[132]. - The internal audit department has assessed the effectiveness and adequacy of the risk management and internal control system, with no significant deficiencies found[133]. - The company has established internal controls to prevent material misstatements in the financial statements due to fraud or error[149].

Financial Performance - The group's revenue for the year ended December 31, 2022, was RMB 3,950,636,000, an increase of 22.6% compared to the previous year[2]. - The annual profit was RMB 722,773,000, representing a growth of 29.8% year-on-year[2]. - The company's total sales for 2022 reached RMB 3,950,636,000, an increase of 22.6% compared to the previous year, with net profit rising by 29.8% to RMB 722,773,000[5]. - The gross profit margin was 74.4%, slightly down from 74.8% in the previous year[2]. - The net profit margin improved from 17.3% to 18.3%[5]. - The group achieved a total revenue increase of 22.6% in 2022, with injection products generating approximately RMB 1,423,254,000, a 6.3% increase, accounting for 36.0% of total revenue[20]. - The sales cost for the group in 2022 was approximately RMB 1,012,322,000, representing 25.6% of total revenue[21]. - The pre-tax profit for 2022 was RMB 917,025,000, an increase of 27.4% compared to RMB 720,103,000 in 2021[55]. - The total tax expense for 2022 was RMB 194,252,000, up from RMB 163,429,000 in 2021, reflecting an 18.8% increase[55]. - The basic and diluted earnings per share for 2022 were RMB 0.96, compared to RMB 0.74 in 2021, representing a 29.7% increase[59]. Product Sales and Growth - Sales of traditional Chinese medicine formula granules exceeded RMB 1.1 billion, up 59.3% from the previous year, ranking among the top five listed companies in the industry[3]. - Oral products continued to be the main growth driver, with overall sales increasing by 34.1% to RMB 2,527,382,000, representing 64.0% of total sales[6]. - The sales of the respiratory system drug Qingkailing soft capsule increased by 79.8% to RMB 81,770,000, with a significant growth of 154.4% in the second half of the year[8]. - The sales of traditional Chinese medicine formula granules surged by 59.3% to approximately RMB 1,102,958,000, representing 27.9% of total revenue[20]. - The sales of the company's unique product, Synovitis Granules, grew by 34.1% in 2022, reaching RMB 231,012,000, making it the only approved innovative traditional Chinese medicine for treating synovitis[13]. - The sales of Qi Huang Tong Mi Soft Capsules increased by 45.8% in 2022, totaling RMB 68,359,000, and it is recognized as a new generation of modern traditional Chinese medicine for treating functional constipation[13]. - The company’s proprietary product, Jiang Zhi Tong Liao Soft Capsules, saw an impressive sales growth of 82.8% in 2022, amounting to RMB 35,904,000, and is included in the national medical insurance catalog[13]. - Dan Deng Tong Nao Soft Capsules recorded a sales increase of 71.9% in 2022, reaching RMB 31,088,000, and is effective for treating ischemic stroke and transient ischemic attacks[14]. - The sales revenue from grassroots markets for traditional Chinese medicine formula granules surged by 196.0% compared to the previous year[10]. Market Expansion and Strategy - The company plans to deepen its market presence in Hebei, expand in Yunnan, and develop in four other provinces in 2023[3]. - The company is committed to increasing its digital marketing transformation and expanding its coverage in retail pharmacies and target hospitals[4]. - The company aims to enhance its core competitiveness through projects focused on modern traditional Chinese medicine production and technology standards[4]. - The company has completed the listing registration for national standard varieties in 29 provinces and is focusing on expanding sales in key provinces[11]. - The company aims to establish a national network for traditional Chinese medicine formula granules, leveraging the opportunities presented by the opening of the national market[12]. - The expansion of sales channels is projected to grow from over 2,000 pilot hospitals to one million medical institutions capable of providing traditional Chinese medicine services[12]. - The market for traditional Chinese medicine formula granules is expected to exceed RMB 100 billion by 2025, with a growth rate nearly several times the current market size[12]. - The company has become one of the top five listed companies in the traditional Chinese medicine formula granules industry by sales revenue[12]. Research and Development - The company is in the III phase of clinical research for innovative traditional Chinese medicine, with plans to accelerate trials following the control of the pandemic[4]. - The group is currently conducting Phase III clinical trials for three innovative drugs, including "Sailuotong Capsules," targeting vascular dementia, which is a significant health concern with an expected global increase in dementia cases[16]. - The "Q-B-Q-F Concentrated Pill" is entering Phase III clinical trials, aimed at treating mycoplasma pneumonia in children, addressing a significant clinical need due to rising antibiotic resistance[17]. - The group plans to complete the registration of the first batch of classic Chinese medicine formulas by the end of 2023, in line with national policies promoting traditional medicine[17]. - The group has 48 researchers and is collaborating with prestigious institutions like Tsinghua University and Peking University for drug development[16]. - The group is actively advancing the development and registration of classic Chinese medicine formulas, reflecting the government's support for traditional medicine[19]. Financial Position and Assets - The company recorded a net cash per share of HKD 6.87 and a net asset value per share of HKD 8.72 as of December 31, 2022[5]. - The group had cash and cash equivalents of approximately RMB 5,046,495,000 as of December 31, 2022, compared to RMB 4,205,722,000 in 2021[31]. - Current assets increased significantly from RMB 5,699,112 thousand in 2021 to RMB 6,782,399 thousand in 2022, representing an increase of about 19.0%[37]. - Total liabilities rose from RMB 1,098,371 thousand in 2021 to RMB 1,665,593 thousand in 2022, an increase of approximately 51.7%[37]. - Net assets increased from RMB 5,901,481 thousand in 2021 to RMB 6,382,526 thousand in 2022, representing a growth of about 8.1%[38]. - The company reported a significant increase in trade payables, which rose from RMB 228,620 thousand in 2021 to RMB 308,540 thousand in 2022[37]. - The impairment loss on financial assets for 2022 was RMB 10,432,000, up from RMB 5,424,000 in 2021[26]. Dividends and Shareholder Returns - The company declared a first interim dividend of RMB 0.31 per share[2]. - The company declared an interim dividend of RMB 0.31 per share for 2023, with a total dividend related to the 2022 fiscal year amounting to RMB 0.42 per share, resulting in a payout ratio of 43.8%[5]. - The company declared a first interim dividend of RMB 0.31 per share for 2023, totaling RMB 234,174,000, compared to RMB 0.21 per share totaling RMB 158,634,000 in 2022[58]. Governance and Compliance - The company plans to hold its annual general meeting on May 30, 2023, to discuss future strategies and performance[65]. - The company did not repurchase, sell, or redeem any of its listed securities during the year ended December 31, 2022[67]. - The company has adopted a higher standard of conduct for securities trading than that outlined in the listing rules, and all directors confirmed compliance for the year ended December 31, 2022[69]. - The audit committee reviewed the audited financial performance of the group for the year ended December 31, 2022[70]. - The financial statements for the year ended December 31, 2022, were approved by the board on March 30, 2023, and are consistent with the figures provided by the auditors[70]. - The annual report will include the board report, audited consolidated financial statements, and corporate governance report, to be published on the company's website and the stock exchange's website[71]. - The chairman and president roles are held by the same individual, with responsibilities clearly defined and documented, which the board believes is beneficial for executing the group's business strategy[68].

Financial Performance - The company achieved a revenue of RMB 3.2235 billion in 2021, representing a 21.4% increase compared to the previous year[13]. - Net profit reached RMB 556.674 million, marking an 88.7% growth year-over-year[15]. - In 2021, the company recorded a sales increase of 21.4% year-on-year, with net profit reaching RMB 557 million, an increase of 88.7% compared to the previous year[30]. - The gross profit margin for the company in 2021 was 74.8%, slightly down from 74.9% in the previous year[30]. - The net profit margin improved from 11.1% last year to 17.3%, with earnings per share increasing by 89.7% to RMB 0.74[30]. - The overall gross profit margin for the group was 74.8%, slightly down from 74.9% in the previous year[53]. - The group achieved a total revenue of RMB 5,000,000,000 in 2021, representing a 21.4% increase compared to the previous year[51]. - The revenue from injection products was approximately RMB 1,339,241,000, an increase of about 21.5%, accounting for 41.5% of total revenue[51]. - Other income included government subsidies of RMB 79,023,000, up from RMB 74,988,000 in the previous year[54]. Sales and Market Development - The company completed online sales of RMB 190.5 million through the internet, nearly 1.3 times higher than the previous year[23]. - The company has strengthened its market coverage and investment in key products, focusing on market, brand, and product innovations[23]. - The sales of the company's proprietary oral products grew by 21.3% in 2021, accounting for 58.5% of total sales[33]. - The sales of traditional Chinese medicine granules increased by 24.5% year-on-year, contributing RMB 692,565 thousand to total sales[32]. - The company’s injection products saw a sales increase of 21.5%, marking five consecutive quarters of growth since 2013[32]. - The sales revenue of the coronary heart disease injection product reached RMB 295 million, a significant increase of 71.2% compared to the previous year[32]. - The exclusive oral products of the company recorded a sales revenue of RMB 379,372,000, representing a 96.5% increase compared to the previous year, accounting for 11.8% of total sales[41]. - The company aims to become one of the main suppliers of formula granules in China by 2024, accelerating the filing process in target provinces and expanding its sales team[39]. Research and Development - The company is advancing the clinical progress of "Sailuotong Capsule" Phase III trials and accelerating the development of other innovative traditional Chinese medicines[23]. - The company is conducting a multi-center, randomized, double-blind clinical trial for "Xiaojiean Capsule," which is a unique national medical insurance product[24]. - The group is currently conducting Phase III clinical trials for three exclusive innovative drugs, including "Sailuotong Capsule" targeting vascular dementia and Alzheimer's disease[47][48][49]. - The company has established key innovation platforms in Yunnan Province, including a "Key Laboratory" and "Engineering Research Center" for traditional Chinese medicine[26]. - The company plans to increase the production capacity of traditional Chinese medicine granules to an annual output value of RMB 4 billion by the end of the year[26]. Digital Transformation and Operational Efficiency - The company is actively pursuing digital transformation to enhance its operational efficiency and market competitiveness[23]. - The company plans to expand its internet hospital operations following the approval of its practice registration[23]. - The company’s internet hospital has passed the registration approval, enhancing its online healthcare services and addressing the issue of access to medical resources[42]. Financial Management and Policies - The company adopted a new dividend policy, declaring an interim dividend of RMB 0.21 per share for the year ending December 31, 2022[30]. - The mid-term dividend is set at RMB 0.39 per share, totaling RMB 294,606,000, distributed to shareholders on September 28, 2021[89]. - The company has adopted a new dividend policy, which will consider financial performance, reasonable returns for investors, future development needs, and general market conditions[90]. - As of December 31, 2021, the reserves available for distribution to shareholders amounted to RMB 874,930,000, down from RMB 1,125,273,000 in 2020[93]. Corporate Governance - The board consists of four executive directors, three independent non-executive directors, and one non-executive director as of December 31, 2021[149]. - The board held four meetings during the year to review the group's financial performance and significant issues[150]. - The company is committed to high-quality corporate governance practices to safeguard shareholder interests[147]. - The board will continuously review its structure and consider appropriate adjustments when necessary[154]. - The company emphasizes diversity in its board composition, with two out of eight members being female[165]. - The nomination committee will regularly discuss measurable goals for gender diversity and recommend their adoption to the board[165]. Risk Management - The board of directors is responsible for ensuring the establishment and maintenance of effective risk management and internal control systems[177]. - The internal audit department assessed the effectiveness of the risk management and internal control systems, with no significant deficiencies identified[179]. - The company faces risks related to product liability due to the lack of mandatory insurance for drug production and distribution in China[85]. - The company is closely monitoring regulatory changes in China's healthcare and pharmaceutical sectors, which may impact operations[87]. Employee Relations and Compensation - The group offers competitive compensation and benefits to employees, including medical benefits, social insurance, and stock incentive plans[84]. - The management team regularly reviews employee compensation to ensure alignment with market standards[84]. - The company has a strong focus on employee retention and building good employee relations through its management policies and work environment[84]. - The remuneration policy for employees is determined based on performance, qualifications, and capabilities[161]. Environmental and Social Responsibility - The company has a commitment to creating a successful business without compromising the environment, aiming for sustainable operations[83]. - The group has implemented various environmental laws and regulations, including the Environmental Protection Law and the Water Pollution Prevention Law of the People's Republic of China[83]. - The company has established a framework for corporate social responsibility, focusing on environmental, social, and governance matters[172].