Financial Performance - Revenue for the six months ended June 30, 2023, was RMB 4,672,269,049.13, representing a 27.51% increase compared to RMB 3,664,294,993.33 for the same period in 2022[5] - Total profit for the same period was RMB 331,945,812.26, up 41.06% from RMB 235,316,728.47 in the previous year[5] - Net profit attributable to shareholders was RMB 269,807,157.85, reflecting a 38.80% increase from RMB 194,389,556.12 in the prior year[5] - Basic earnings per share increased to RMB 0.40, a rise of 33.33% compared to RMB 0.30 in the same period last year[5] - Operating revenue for the six months ended June 30, 2023, reached RMB 4,672,269,049.13, an increase of 27.51% compared to the same period in 2022[24] - The company's net profit for the six months ended June 30, 2023, was RMB 275,680,432.27, representing a 38.88% increase compared to the same period in 2022[24] - The total profit for the six months ended June 30, 2023, was RMB 331,945,812.26, a 41.06% increase year-on-year, driven by expanded sales scale and improved management efficiency[24] - The company reported a net profit margin for the reporting period of approximately 5.89%, compared to 5.42% in the previous year[5] Assets and Liabilities - The company's total assets as of June 30, 2023, were RMB 8,075,584,581.73, a decrease of 2.29% from RMB 8,265,131,332.13 at the end of 2022[5] - Total liabilities decreased by 9.96% to RMB 3,525,405,717.37 from RMB 3,915,226,169.32 at the end of 2022[5] - The company's total debt amounted to RMB 1,329,244,000, with cash and cash equivalents of RMB 979,173,000[30] - The asset-liability ratio stood at 43.66%, reflecting the company's financial stability[30] - Current assets totaled RMB 3,235,189,305.38, down from RMB 3,456,959,427.88, indicating a decrease of about 6.41%[46] - The company's cash and cash equivalents decreased to RMB 979,173,294.29 from RMB 1,158,741,565.90, a reduction of approximately 15.5%[46] - Total liabilities as of June 30, 2023, were RMB 3,525,405,717.37, down from RMB 3,915,226,169.32 at the end of 2022, indicating a reduction of approximately 9.9%[53][54] Operational Highlights - Domestic sales of active pharmaceutical ingredients (APIs) grew by 78.49% year-on-year, reflecting the company's strong market position[15] - Sales of industrial formulations increased by 48.66% year-on-year, while formulation processing and export business saw a remarkable growth of 93.97%[15] - The company launched 7 new products in the first half of 2023, including 5 formulation products and 1 active pharmaceutical ingredient[15] - A total of 10 drug production approvals and 6 veterinary drug approvals were obtained, marking a historical high for the company[16] - The company is advancing key projects, with construction completed for 4 projects, including DCB and methyldopa, now moving into equipment installation[15] - The company’s commercial segment achieved rapid growth, focusing on both pharmaceutical and non-pharmaceutical sectors[15] Research and Development - Research and development expenses increased by 39.72% year-on-year, totaling RMB 235,529,909.24, reflecting the company's commitment to technological innovation[24] - The company was granted 22 patents, including 8 invention patents, demonstrating its commitment to innovation[16] Cash Flow and Financial Management - The company reported a significant decrease in net cash flow from operating activities, which was RMB 20,131,070.66, down 89.67% from RMB 194,801,492.76 in the previous year[5] - Financial expenses decreased by 90.75% to RMB 1,341,987.35, attributed to optimized financing structure and increased foreign exchange gains[24] - Short-term borrowings rose by 106.31% to RMB 243,494,933.55, indicating a strategy to optimize the debt structure and reduce financing costs[23] Shareholder Information - As of June 30, 2023, the top shareholder, China Hualu Holdings Group Co., Ltd., held 30.36% of the shares, totaling 204,864,092 shares[8] - Hualu Holdings committed not to reduce its shareholding in the company within six months prior to the pricing benchmark date of the non-public A-share issuance[33] - Hualu Holdings promised to avoid any business or activities that may cause competition or conflict of interest with the company's main business during its control period[33] Compliance and Governance - The company has adhered to corporate governance codes during the reporting period without deviation[42] - The audit committee has reviewed the unaudited interim accounts for the six months ending June 30, 2023, and agreed with the financial accounting principles adopted[43] - The company has maintained compliance with the standards set forth in the "Standard Code" regarding securities trading, confirming no violations during the reporting period[45] Future Outlook - The company aims to obtain 6 new product production approvals, 1 raw material production approval, 2 clinical approvals, and 2 consistency evaluation approvals in the second half of the year[20] - The company plans to enhance market driving force by leveraging the diverse specifications of raw materials and expanding both export and domestic sales[19] - The company is actively expanding its pharmaceutical logistics and brand operations to improve profitability and accelerate growth[19] - The company plans to continue expanding its market presence and investing in new product development to drive future growth[70]

Stock Options Incentive Plans - The company reported a total of 10,692,000 stock options granted under the 2018 A-share stock option incentive plan, with 5,167,800 options vested by the end of the reporting period[4]. - No stock options under the 2018 A-share stock option incentive plan have expired during the reporting period[5]. - The company has not granted stock options exceeding 1% of its total issued share capital to any participant, nor more than 0.1% in any 12-month period[5]. - As of December 31, 2022, there were no unvested stock options remaining for the participants under the 2018 plan[5]. - The company granted 9,035,400 stock options to other employee participants, with 4,339,500 options vested by the end of the reporting period[4]. - The company’s stock options have a waiting period of 24, 36, and 48 months, with specific exercise periods defined[5]. - The company’s stock options are structured to allow 34% to be exercised after 24 months, 33% after 36 months, and the remaining 33% after 48 months[5]. - The stock options under the 2021 A-share stock option incentive plan have a waiting period of 24, 36, and 48 months from the grant date, with 34% exercisable after 24 months[10]. - No stock options under the 2021 A-share stock option incentive plan have expired during the reporting period[10]. - The company has not granted or will grant options exceeding 1% of its total issued share capital to any participant, and no more than 0.1% in any 12-month period[10]. Compensation for Executives - The total compensation for key executives amounts to 3,870,000 RMB, with additional employee participants totaling 19,280,000 RMB, leading to a combined total of 23,150,000 RMB for the reporting period[8]. Company Governance - The company aims to further elaborate on its stock option incentive plan following the disclosure of its 2022 annual report[2]. - The company’s board of directors remains unchanged as of the announcement date, with key executives including the chairman and independent directors listed[11]. Stock Option Grants - The company granted 1,750,000 stock options to certain employee participants on December 26, 2022, with an exercise price of 37.53 RMB per share, and a fair value of 14.67 RMB per share at the grant date[9]. - The company has provided a summary of the stock option changes for the 2021 A-share stock option incentive plan, indicating ongoing management of employee incentives[5].

Financial Performance - Operating revenue for Q1 2023 reached RMB 2,639,665,769.78, representing a 44.15% increase compared to RMB 1,831,254,151.22 in Q1 2022[2] - Net profit attributable to shareholders was RMB 151,603,818.36, up 39.72% from RMB 108,503,552.76 in the same period last year[2] - Basic earnings per share increased to RMB 0.23, a rise of 35.29% from RMB 0.17 in Q1 2022[3] - The total comprehensive income for Q1 2023 was RMB 161,720,238.98, compared to RMB 94,819,997.43 in Q1 2022[5] - The company reported a net profit margin of approximately 5.74% for Q1 2023, compared to 5.92% in Q1 2022[4] Cash Flow and Assets - The net cash flow from operating activities showed a significant decline, amounting to (RMB 183,742,803.27), a decrease of 937.28% compared to (RMB 17,713,946.61) in Q1 2022[2] - Total assets as of March 31, 2023, were RMB 7,976,649,915.84, down 3.49% from RMB 8,265,131,332.13 at the end of 2022[3] Equity and Returns - The return on equity (ROE) increased to 3.59%, up 0.52 percentage points from 3.07% in Q1 2022[3] - The total equity attributable to shareholders increased to RMB 4,323,961,931.78, a growth of 4.79% from RMB 4,126,460,390.95 at the end of 2022[3] Research and Development - Research and development expenses for Q1 2023 were RMB 112,119,587.26, reflecting an increase from RMB 78,758,186.08 in Q1 2022[4] Accounting Policy Changes - The company has implemented changes to its accounting policies effective from January 1, 2023, in accordance with the Ministry of Finance's announcement on November 30, 2022[6] - The changes include the treatment of deferred income tax related to assets and liabilities arising from individual transactions, which are not subject to initial recognition exemptions[6] - The board of directors approved the accounting policy changes during the 11th meeting of the 10th board session on April 20, 2023[6]

山 東 新 華 製 藥 股 份 有 限 公 司 Shandong Xinhua Pharmaceutical Company Limited ( H股股份代號：0719 ) ( A股股份代號 : 000756 ) ( H Share Stock Code : 0719 ) ( A Share Stock Code : 000756 ) 2022 Annual Report 年 報 | --- | --- | --- | |----------------------------------------------------------------------------------------------------------------------|-------|--------------------------------------------------------------------------| | | | 目錄 CONTENTS | | 重要提示 | 2 | 公司基本情況簡介 Company Information | | 本公司董事會、監事會及董事、監事、 高級管理人員保證本報告所 ...

Financial Performance - The total revenue for 2022 was RMB 7,502,987,102.09, representing a 14.37% increase from RMB 6,560,077,586.40 in 2021[4]. - The net profit attributable to shareholders of the listed company was RMB 411,193,683.53, an increase of 17.97% compared to RMB 348,548,495.99 in the previous year[4]. - The operating cash flow net amount reached RMB 758,240,601.50, showing a significant increase of 192.62% from RMB 259,116,960.17 in 2021[4]. - The basic earnings per share increased to RMB 0.62, a rise of 10.71% from RMB 0.56 in the previous year[4]. - The diluted earnings per share also increased to RMB 0.61, reflecting an 8.93% growth compared to RMB 0.56 in 2021[4]. - The total comprehensive income for the year was RMB 413,373,076.38, up from RMB 313,908,790.25 in 2021, showing a growth of 31.69%[49]. - The operating profit for the year ended December 31, 2022, was RMB 476,706,533.91, compared to RMB 425,590,536.88 in 2021, indicating an increase of about 12.0%[54]. Assets and Liabilities - Total assets as of December 31, 2022, were RMB 8,265,131,332.13, up 12.73% from RMB 7,332,033,657.98 at the end of 2021[5]. - The total liabilities increased by 6.37% to RMB 3,915,226,169.32 from RMB 3,680,888,823.85 in the previous year[5]. - The net assets attributable to shareholders of the listed company rose by 18.99% to RMB 4,126,460,390.95 from RMB 3,467,941,567.45 in 2021[5]. - Current liabilities totaled RMB 3,158,485,539.10 as of December 31, 2022, compared to RMB 2,501,880,371.20 in 2021, indicating a significant increase of 26.29%[47]. - Long-term borrowings increased to RMB 545,655,801.48 in 2022 from RMB 346,196,870.64 in 2021, representing a growth of 57.67%[47]. Shareholder Information - As of December 31, 2022, the total number of shareholders was 107,300, including 38 H-share shareholders and 107,262 A-share shareholders[8]. - The proposed final dividend for the year 2022 is RMB 0.20 per share (before tax), subject to shareholder approval[12]. - The largest shareholder, China Hualu Holdings Group Co., Ltd., holds 30.59% of the shares, totaling 204,864,092 shares[10]. - The company emphasizes the importance of shareholder approval for the proposed dividend distribution[12]. - The proposed dividend for 2022 represents a 33.33% increase compared to the previous year's dividend[81]. Cash Flow and Investments - Cash and cash equivalents increased by 55.61% to RMB 1,158,741,565.90 compared to RMB 744,662,302.34 last year, primarily due to net proceeds from a non-public offering of A-shares amounting to RMB 244 million and an increase in customer prepayments[18][20]. - Net cash flow from operating activities reached RMB 758,240,601.50, a substantial increase of 192.62% compared to RMB 259,116,960.17 last year[23][24]. - The company achieved a fixed asset investment of RMB 720 million for the year, representing a year-on-year increase of 21%[30]. Research and Development - Research and development expenses increased by 1.26% to RMB 345,658,511.77 from RMB 341,367,394.20, reflecting ongoing investment in innovation[21]. - The company obtained 7 new product approvals for formulations and 4 for raw materials in 2022, including significant breakthroughs in drug innovation[29]. - The company plans to accelerate the development of new products, focusing on fish oil, hormones, and other specialty raw materials[33]. Market Performance - The sales revenue of the top 10 strategic formulations increased by 30% year-on-year, with the sales of fish oil soft capsules exceeding RMB 10 million[29]. - The international formulations and contract manufacturing sales saw an impressive year-on-year growth of 88%[29]. - The revenue from external transactions for the chemical raw materials segment was RMB 3,171,564,382.95 for the year ended December 31, 2022, compared to RMB 2,740,737,136.77 in 2021, marking an increase of approximately 15.7%[53]. Operational Efficiency - The company achieved a receivables turnover rate of 1,056.89% and an inventory turnover rate of 488.11% as of December 31, 2022[26]. - The company aims to enhance production efficiency and cost control through lean production and procurement management strategies[37]. - The company completed 30 technical quality projects and 21 energy transformation projects, saving RMB 20.9 million in raw material and energy consumption[30]. Compliance and Governance - The audit for the financial statements was conducted by Shinewing Certified Public Accountants, ensuring compliance with Chinese accounting standards[39]. - The company has established an audit committee to oversee financial reporting and internal controls, meeting four times during the year[44].

Financial Performance - The company reported a significant increase in revenue, achieving a total of RMB 1.5 billion, representing a growth of 15% compared to the previous year[15]. - The net profit for the year was RMB 300 million, reflecting a 10% increase year-over-year[15]. - Operating income for 2021 reached RMB 6,560,077,586.40, representing a 9.23% increase compared to 2020[19]. - Net profits attributable to shareholders of the listed company increased by 7.29% to RMB 348,548,495.99 in 2021[19]. - The net profit attributable to the company for 2021 was RMB 57,212,663.89, an increase from RMB 34,069,550.32 in 2020, representing a growth of about 68%[27]. - The company has set a performance guidance for the next year, aiming for a revenue target of RMB 1.8 billion, which would represent a 20% increase[15]. - The gross profit margin improved to 40%, up from 35% in the previous year, indicating better cost management and pricing strategies[79]. Customer Growth - User data showed an increase in active customers, reaching 2 million, which is a 20% growth from the previous year[15]. - User data indicates a growing customer base, with an increase of 25% in active users compared to the previous year, reaching 500,000 active users[79]. Market Expansion - The company plans to expand its market presence in Southeast Asia, targeting a 25% increase in market share by 2023[15]. - The company plans to expand its market presence in Southeast Asia, with an investment of 50 million RMB allocated for marketing and distribution channels[79]. Product Development - New product development includes the launch of three innovative pharmaceutical products, expected to contribute an additional RMB 200 million in revenue[15]. - New product development is underway, with three new pharmaceutical products expected to launch in Q3 2022, targeting a market share increase of 10%[79]. Strategic Initiatives - A strategic acquisition of a smaller pharmaceutical firm was completed, enhancing the company's product portfolio and expected to generate an additional RMB 150 million in annual revenue[15]. - A strategic acquisition of a local competitor is in progress, which is expected to enhance the company's production capacity by 30%[79]. Research and Development - The company has allocated RMB 100 million for research and development in new technologies for the upcoming fiscal year[15]. - The company is investing in advanced technology for drug development, with a budget of 100 million RMB dedicated to R&D over the next two years[79]. Sustainability and Corporate Responsibility - The board emphasized the importance of sustainability and corporate social responsibility initiatives, with a budget of RMB 50 million allocated for environmental projects[15]. - The company has initiated a new sustainability strategy aimed at reducing carbon emissions by 25% by 2025[79]. Financial Position - The company reported a strong cash flow position with RMB 500 million in cash reserves, providing a solid foundation for future investments[15]. - Total assets as of December 31, 2021, were RMB 7,332,033,657.98, reflecting a 3.37% increase from the previous year[19]. - Total liabilities decreased by 0.56% to RMB 3,680,888,823.85 as of December 31, 2021[19]. Shareholder Information - The total number of shares as of December 31, 2021, was 627,367,447, an increase from 621,859,447 shares in 2020[36]. - The company plans to propose a final dividend of RMB 0.15 per share based on a total share count of 669,627,235, subject to shareholder approval[62]. - The proposed A share issuance is currently in progress, and the Company will not discuss the profit distribution plan for 2021 until after the issuance is completed[61]. Management and Governance - The term of the current Directors, Supervisors, and Senior Officers will end on December 22, 2023[101]. - The company operates independently from its controlling shareholder in terms of business, assets, management, and finance[156]. - The Company has established clear responsibilities among its governance structures, including the board of directors and supervisory committee[162]. Internal Controls and Auditing - The Audit Committee confirmed that the financial statements for 2021 were prepared in accordance with the Company's accounting policies and were accurate without any material misrepresentations[143]. - An independent audit on the effectiveness of the Company's internal control was conducted by ShineWing, ensuring transparency and accountability[174]. - The internal control audit report confirmed that the Company maintained effective internal control over financial reporting as of December 31, 2021, in compliance with relevant regulations[183][186].