Market Position and Growth - Sihuan Pharmaceutical has become the largest manufacturer in China's prescription drug market by market share since 2007[4]. - The company has a strong nationwide distribution network, enhancing its market reach and product availability[4]. - Sihuan Pharmaceutical's success is attributed to its differentiated marketing strategies and extensive distribution capabilities[4]. - The company is focused on expanding its market presence through innovative products and strategic partnerships[4]. - Future outlook includes continued investment in R&D to address significant clinical needs and expand product offerings[4]. - The company aims to leverage its strong R&D capabilities to drive growth and enhance shareholder value[4]. - The Group's revenue and profitability are significantly dependent on winning drug tenders at desirable prices across various provinces in China[73]. Research and Development - The company has a well-established R&D platform supported by approximately 600 R&D experts, focusing on therapeutic areas with considerable unmet clinical demand[4]. - Current products and R&D pipeline encompass the top five medical therapeutic areas: cardio-cerebral vascular, central nervous system, metabolism, oncology, and anti-infectives[4]. - The company began its innovative drug R&D in 2008, indicating a long-term commitment to developing new therapies[4]. - Expenditure for R&D and related activities increased by 45.7% year-on-year to approximately RMB 777.0 million, representing 26.9% of the total revenue of the Group[30]. - The Group's R&D team expansion contributed to the increase in R&D expenditure, reflecting a commitment to innovation and development[30]. - The Group has 113 research projects, including 20 newly established projects, and has obtained over 300 patents for innovative drug inventions[111]. - The Group plans to enhance its drug R&D resources and establish a sustainable drug pipeline through mergers and acquisitions and international collaborations[117]. Financial Performance - The Group recorded a revenue of approximately RMB 2,887.0 million for the year, representing a year-on-year decrease of 1.0%[66]. - Gross profit margin decreased to 79.5% for the year, down from 81.5% in 2018[30]. - Adjusted profit attributable to owners of the Company decreased year-on-year by 24.8% to approximately RMB 1,218.2 million[66]. - The Group recorded a loss before tax of approximately RMB 2,466.9 million, compared to a profit of RMB 2,012.2 million in the previous year[127]. - The loss for the year amounted to approximately RMB 2,757.3 million, compared to a profit of RMB 1,679.4 million in the previous year[127]. - Loss attributable to owners of the Company amounted to approximately RMB 2,753.3 million, primarily due to impairment losses and increased R&D activities[30]. Product Development and Launches - The company launched the exclusive first-to-market generic drug Kelinao in 2003 and received a 20-year patent protection for its synthesis process in China in 2004[10]. - The company launched several new products including Oudimei, Yuanzhijiu, and Yeduojia in 2011[15]. - The company has received production approval for Rivastigmine hydrogen tartrate capsules, the first product in China to pass consistency evaluation for treating mild to moderate Alzheimer's dementia, indicating a significant market potential due to the increasing number of dementia patients[40]. - The company has launched oxcarbazepine tablets and will soon launch levetiracetam tablets, midazolam oromucosal solution, and eslicarbazepine tablets, providing more treatment options for epilepsy patients[40]. - The company is focusing on oncology drug development, with over 10 projects for generic oncology drugs and ongoing clinical trials for CDK4/6 products, aligning with national health policies[83][85]. Strategic Partnerships and Collaborations - Established a cooperation agreement with NeuroVive Pharmaceutical AB to develop and sell innovative patent drugs in China[16]. - Established a joint venture with Austria-based CROMA-Pharma GmbH to expand into the aesthetic medicine market in China[22]. - The Group established its Global Business Development Department in both China and the U.S., focusing on major therapeutic areas[25]. - The Group is enhancing talent acquisition and technology introduction through joint ventures and cooperation to accelerate product development and market launch[111]. Regulatory and Compliance - Compliance with PRC environmental and safety regulations is critical, as violations could lead to substantial fines and operational disruptions[76]. - The Group confirmed compliance with the Model Code for Securities Transactions throughout the reporting period[194]. - The Group has established a compliance risk management organizational structure to ensure compliance with relevant laws and regulations since the restructuring of the surveillance department into the compliance department in 2015[200]. - The Group's compliance training includes signing annual compliance undertakings with employees to promote adherence to discipline and anti-corruption rules[200]. Corporate Governance - The roles of Chairman and Chief Executive Officer are segregated, with Dr. Che Fengsheng as Chairman and Dr. Guo Weicheng as CEO[163]. - The Company has appointed one non-executive Director and three independent non-executive Directors, with one-third of the Board being independent[169]. - The Company encourages Directors to participate in continuous professional development to ensure their contributions remain informed and relevant[174]. - The Audit Committee is chaired by Mr. Patrick Sun, who has professional qualifications in accountancy[176]. - The Company has established an Audit Committee to assist the Board in overseeing financial reporting and internal control systems[176]. Market Challenges and Adaptation - The new policies in China's pharmaceutical industry, including centralized drug procurement, have significantly reduced profit margins, prompting the company to adapt its strategies[35]. - The Group's focus on optimizing API investments aims to enhance future product competitiveness and profitability[64]. - The Group is committed to social responsibility and aims to navigate the challenges posed by industry reforms through transformation and innovation[36]. - The Group is actively developing antiviral products for major infectious diseases, including a COVID-19 treatment in collaboration with military medical research institutions[87].

Market Position and Growth - Sihuan Pharmaceutical has become the largest cardio-cerebral vascular drug manufacturer in China's prescription drug market by market share since 2007[3]. - The Group achieved a market share of 8.3% in China's cardiovascular prescription drug market in 2018, maintaining its position as the largest manufacturer in this sector[52]. - The Group ranked 11th among pharmaceutical companies in China's hospital market with a market share of 1.4%[53]. - Revenue from CCV products increased by 22.7% year-on-year to approximately RMB1,450.3 million, accounting for 87.2% of the Group's total revenue[83]. - Revenue from non-CCV products increased by 120.6% year-on-year to approximately RMB212.0 million, accounting for 12.8% of the Group's total revenue[83]. Research and Development - The Group has approximately 600 R&D experts and focuses on therapeutic areas with considerable unmet clinical demand[4]. - The Group is reallocating more resources to R&D projects to drive short- to mid-term growth and enhance long-term development capabilities[16]. - R&D expenditure increased by 25.5% to approximately RMB297.0 million, representing 17.9% of total revenue[31]. - The Group's innovative drugs platform has submitted over 700 domestic patent applications and has been granted approximately 300 domestic patents and over 80 overseas patents[45]. - The Group's R&D efforts are focused on both innovative and generic drugs, with a commitment to optimizing product offerings and expediting drug launches[36]. Financial Performance - The Group recorded a revenue of approximately RMB1,662.3 million, representing a year-on-year increase of 30.0%[27]. - Loss attributable to owners of the Company was approximately RMB2,019.9 million, primarily due to impairment loss on goodwill[28]. - Adjusted profit attributable to owners of the Company increased year-on-year by 7.6% to approximately RMB824.0 million, excluding goodwill impairment[28]. - Gross profit was approximately RMB1,368.0 million, with a year-on-year increase of 33.4% and a gross profit margin increase from 80.2% to 82.3%[29]. - Loss for the period totaled approximately RMB1,964.1 million, compared to a profit of RMB786.2 million in the same period last year[124]. Product Development and Approvals - The Group's first self-developed anti-diabetic drug Janagliflozin commenced phase III clinical trials in China, progressing well[21]. - The Group established a joint venture with Strides Pharma Global Pte Limited for supplying and distributing 4 drugs in China[32]. - The Group's innovative drug XZP–5809 received approval for clinical trials from phase I to III in China[24]. - The production approval application for Eslicarbazepine Acetate, an epilepsy treatment drug, has been accepted by NMPA and is included in the Priority Review Process, making the Group the first and only domestic enterprise to submit this application in China[38]. - The Group has achieved drug registration approval for the compound amino acid injection (20AA) (500 ml), which is the only fourth-generation high branched-chain amino acid injection containing 20 types of amino acids, aimed at treating hepatic encephalopathy[37]. Clinical Studies and Evidence - A large-scale clinical study for Cinepazide Maleate Injection involved 1,301 patients and demonstrated its effectiveness in improving prognosis and reducing disability rates in stroke patients[56]. - The safety of Cinepazide Maleate was confirmed through a clinical study involving 19,847 patients conducted at the People's Liberation Army General Hospital[56]. - The Group is conducting a multi-center RCT clinical study to verify the efficacy of Cerebroside-kinin Injection in patients with hypertensive cerebral hemorrhage[56]. - The results of a national multi-center RCT study on Cerebroside-kinin for ischemic stroke patients confirmed its effectiveness in improving neurological functions and prognosis[56]. - The Group's systematic review of Cerebroside-kinin for ischemic stroke and cerebral hemorrhage has led to published meta-analysis results in key medical journals, enhancing the evidence-based level of the product[56]. Strategic Initiatives and Market Adaptation - The Group is expected to launch several generic drugs in the coming years, enriching its product portfolio and generating new revenue streams[36]. - The Group's efforts in adapting to national policy changes include promoting clinical pathways and rational drug use, with multiple products recommended in the 2018 national guidelines[60]. - The introduction of the Monitoring Drug List in July 2019 is expected to impact prescription and procurement patterns in the pharmaceutical industry[90]. - The company aims to strengthen its supply of raw materials to reduce costs and enhance the competitiveness of its generic products[91]. - The company plans to enhance drug R&D resources and optimize product structure through mergers and acquisitions and international collaborations[89]. Financial Position and Investments - Cash and cash equivalents reached approximately RMB4,936.5 million, up from RMB3,314.8 million as of December 31, 2018[131]. - Total investments conducted during the period amounted to approximately RMB554.9 million, primarily in short-term financial planning products[132]. - The Group maintained net cash of approximately RMB4,917.5 million, up from RMB3,219.8 million as of December 31, 2018, indicating a strong financial position[136]. - The Group's capital expenditure for the period amounted to RMB 179.2 million, with RMB 133.4 million spent on property, plant, and equipment, RMB 28.4 million on land use rights, and RMB 17.4 million on intangible assets[174]. - The Group's investment in R&D capital expenditure was RMB 41.6 million, including RMB 26.9 million on property, plant, and equipment, and RMB 14.7 million on intangible assets[179]. Shareholding and Corporate Governance - Dr. Guo Weicheng holds 5,928,928,699 shares, representing 62.64% of the total shareholding[190]. - Dr. Zhang Jionglong has an interest in 5,474,346,813 shares, also accounting for 62.64% of the total shareholding[190]. - The company maintains a register of substantial shareholders as required under Section 336 of the SFO[199]. - The substantial shareholders with 5% or more interests include various entities, but specific percentages are not disclosed in the provided content[199]. - As of June 30, 2019, no directors or chief executives had any interests or short positions in the shares of the company[196].

Company Overview - Sihuan Pharmaceutical has maintained its position as the largest manufacturer of cardio-cerebral vascular (CCV) prescription drugs in China since 2007[4]. - The Group ranks as the eleventh largest pharmaceutical company in China's hospital prescription drug market based on hospital purchase amounts[4]. - In 2018, Sihuan Pharmaceutical celebrated its eighteenth year of operation, continuing to expand its R&D pipeline across five major medical therapeutic areas: CCV system, central nervous system, metabolism, oncology, and diabetes[4]. - Major products include Oudimei, Yuanzhijiu, Kelinao, Wei'ao, Yeduojia, and Mainokang, which are widely used for treating various CCV diseases[3]. - The company has developed a differentiated marketing and sales model since its inception in 2001, contributing to its growth and market leadership[13]. - Sihuan Pharmaceutical was listed on the main board of the Singapore Exchange on March 23, 2007, marking a significant milestone in its corporate development[13]. Research and Development - The Group's R&D capabilities have been recognized, with several products receiving patent protections in China, including a 20-year patent for the synthesis process of Kelinao[13]. - Sihuan Pharmaceutical's commitment to innovation is evident in its ongoing development of new products and technologies to address unmet medical needs in the market[4]. - Acquired 60% interest in Shandong Xuanzhu Pharma Co., Ltd. to enhance R&D capabilities for innovative drugs[14]. - The Group obtained clinical trial approval for the innovative anti-diabetic drug Janagliflozin from the CFDA[16]. - The Group's innovative patent drug Imiglitin Dihydrochloride received approval for Phase II/III clinical trials from the CFDA[17]. - The Group's U.S. R&D Centre focuses on developing innovative small and large molecule drugs, particularly in immunotherapy[17]. - The Group's partnership with Covance supports the global development of its drug candidate pipeline[16]. - The Group's innovative antihypertensive drug Tylerdipine Hydrochloride received clinical trial approval[16]. - The Group's first diabetes patented innovative drug commenced Phase III clinical trials in China, with three other innovative drugs entering Phase II and three entering Phase I clinical trials[26]. - The Group's self-developed oncology drug Pirotinib received full clinical trial approval from the CFDA for Phases I, II, and III[16]. Financial Performance - The Group's revenue increased by 6.2% from RMB2,745.8 million to RMB2,917.4 million in 2018[20]. - Profit attributable to owners of the Company rose by 11.8% to RMB1,620.0 million in 2018[21]. - Basic earnings per share increased by approximately 11.8% over 2017 to approximately RMB17.1 cents in 2018[21]. - Gross profit margin improved to 81.5% in 2018, up from 72.4% in 2017[22]. - Net profit margin increased to 57.6% in 2018, compared to 53.9% in 2017[22]. - Total assets reached RMB15,443.5 million in 2018, an increase from RMB13,591.9 million in 2017[22]. - Cash and cash equivalents rose significantly to RMB3,314.8 million in 2018 from RMB831.9 million in 2017[22]. Market Expansion and Strategy - The Group established a Global Business Development Department to expand its international presence in major therapeutic areas[18]. - Sihuan Pharmaceutical aims to optimize its product resources through mergers and acquisitions to accelerate its internationalization process[30]. - The company is focusing on targeted marketing management to expand hospital coverage for its growth stage products[29]. - The Group believes that its investment in R&D over the past years is yielding positive results, positioning it well for future growth in the Chinese pharmaceutical market[31]. - The Group's strong market presence and product portfolio position it well for future growth and expansion in the pharmaceutical industry[4]. Environmental, Social, and Governance (ESG) - Sihuan Pharmaceutical engaged a third-party consultancy to identify and sort out risk factors to strengthen its ESG system and avoid related risks during the reporting year[35]. - The Board of Directors established an ESG management system based on the group's risk management framework, overseeing sustainable development strategies and monitoring performance[36]. - The Risk Management Committee is responsible for coordinating and monitoring risk management and establishing ESG development strategies for the Group[36]. - The Group's ESG report is published annually, covering efforts and achievements in sustainable development and social responsibility[34]. - The company emphasizes compliance with environmental regulations, including waste gas and wastewater management, and greenhouse gas emissions[44]. - The company is committed to energy saving and emission reduction, as well as ecosystem protection[41]. - The company focuses on employee rights protection, occupational health, and career development[41]. - The company has established communication channels with stakeholders, including customer service centers and feedback surveys[41]. Product Development and Approvals - The Group obtained production approval for exclusive first-to-market generic drug Roxatidine Acetate Hydrochloride for Injection[15]. - The Group's innovative drug platform has submitted over 600 domestic patent applications and has been granted 176 domestic patents and 69 overseas patents[170]. - The Group's Metformin Hydrochloride Tablet has passed the bioequivalence test, becoming the first manufacturer in China to achieve this through a supplementary application[173]. - The Group has scheduled several new products to be launched in the coming years, focusing on oral solid dosage forms for bioequivalence testing to enhance profitability[173]. - The Group's first diabetes innovative patented new drug Janagliflozin commenced Phase III clinical trials in China[162]. Employee Welfare and Community Engagement - The Group provides various employee benefits, including paid annual leave, marriage leave, maternity leave, and housing subsidies for high-end talent[124]. - Sihuan Pharmaceutical has a zero-tolerance policy towards child labor and forced labor, ensuring all employees are at least 18 years old[124]. - The Group actively contributes to community development through charitable events and initiatives[123]. - The Group prioritizes fair employment practices, ensuring no discrimination based on gender, age, ethnicity, religion, disability, or marital status[124]. - 183 employees participated in a charity campaign called "Run for Love," funding milk for children from poverty-stricken families for one academic year[138]. Compliance and Risk Management - The Group has established a comprehensive training system that includes orientation, induction, and on-the-job training to enhance employee skills and knowledge[132]. - The Group has implemented a whistle-blowing system to address complaints and ensure confidentiality[123]. - Employees in high-risk departments are required to sign a Compliance Undertaking Letter to enhance compliance requirements[123]. - The Group has established policies on community engagement to understand the needs of the communities where it operates[158]. Sustainability and Environmental Impact - Total exhaust gas emissions decreased from 28,843.4 (10,000 standard cubic meters) in 2017 to 26,814.7 in 2018, representing a reduction of approximately 7.1%[97]. - The Group reduced 42.5 tons of non-hazardous waste through recycling during the year[103]. - The Group has prioritized environmentally-friendly products with lower toxicity during the procurement of hazardous chemicals[84]. - The Group has conducted regular assessments of occupational hazards with no indicators exceeding safety standards[88]. - The Group has implemented the Hazardous Chemical Safety Management Protocol to manage hazardous chemicals effectively during procurement, transportation, storage, usage, and disposal[84].