步长制药(603858) - 2022 Q2 - 季度财报

Definitions This section provides definitions of key terms used in the report Company Profile and Key Financial Indicators This section provides an overview of the company's basic information and key financial performance metrics for the reporting period Company Information This chapter provides the company's basic business registration details, including its Chinese and English names, legal representative, registered address, and contact information - The company's full name is Shandong Buchang Pharmaceuticals Co., Ltd., with stock code 603858, and its legal representative is Zhao Tao[11][15] Key Accounting Data and Financial Indicators During the reporting period, the company's operating revenue decreased by 3.90% year-on-year, and net profit attributable to shareholders decreased by 13.50%, while net cash flow from operating activities significantly increased by 148.56%, indicating strong cash recovery capability Key Financial Performance Indicators | Indicator | Current Period (Jan-Jun) | Prior Period | YoY Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 7.098 billion yuan | 7.386 billion yuan | -3.90% | | Net Profit Attributable to Shareholders | 818 million yuan | 946 million yuan | -13.50% | | Net Profit Attributable to Shareholders After Non-Recurring Items | 644 million yuan | 813 million yuan | -20.85% | | Net Cash Flow from Operating Activities | 1.425 billion yuan | 573 million yuan | 148.56% | | Basic Earnings Per Share (yuan/share) | 0.7399 | 0.8554 | -13.50% | | Weighted Average Return on Net Assets (%) | 5.52% | 6.67% | Decrease of 1.15 percentage points | Non-Recurring Gains and Losses Items and Amounts During the reporting period, the company's total non-recurring gains and losses amounted to 175 million yuan, primarily from government grants recognized in current profit or loss, totaling 229 million yuan Non-Recurring Gains and Losses | Non-Recurring Gain/Loss Item | Amount (yuan) | | :--- | :--- | | Gains/Losses from Disposal of Non-Current Assets | -563,556.84 | | Government Grants Recognized in Current Profit or Loss | 228,951,904.01 | | Net Other Non-Operating Income and Expenses | -5,202,565.98 | | Income Tax Impact | -45,621,731.46 | | Impact on Minority Interests (After Tax) | -2,974,308.22 | | Total | 174,589,741.51 | Management Discussion and Analysis This section provides management's discussion and analysis of the company's operations, financial condition, and industry trends Explanation of Industry and Main Business During the Reporting Period The company primarily engages in the R&D, production, and sales of traditional Chinese medicine, focusing on cardiovascular and cerebrovascular diseases while expanding into biopharmaceuticals and vaccines. Core products include Naoxintong Capsule and Wenxin Granule. During the reporting period, China's pharmaceutical manufacturing industry showed restorative growth, with biological drug manufacturing growing fastest, and the traditional Chinese medicine sector maintaining steady growth supported by policies. The cardiovascular and cerebrovascular and gynecological medication markets are the company's main strongholds, with market sizes continuously expanding - The company's core business is traditional Chinese medicine (TCM), based on the 'Brain-Heart Co-treatment Theory', focusing on cardiovascular and cerebrovascular diseases and gynecological medications. Six core products (Naoxintong Capsule, Wenxin Granule, Danhong Injection, Guhong Injection, Compound Brain Peptide Ganglioside Injection, Compound Qupeptide Injection) generated a combined revenue of 3.973 billion yuan in the first half of 2022[22] Pharmaceutical Manufacturing Sub-Industry Revenue in 2021 | Pharmaceutical Manufacturing Sub-Industry | 2021 Operating Revenue (billion yuan) | YoY Growth (%) | | :--- | :--- | :--- | | Biological Drug Manufacturing | 59.181 billion yuan | 113.8% | | Traditional Chinese Medicine Production | 48.622 billion yuan | 11.9% | | Chemical Pharmaceutical Preparation Manufacturing | 84.087 billion yuan | 8.1% | | Total | 324.318 billion yuan | 19.1% | - Cardiovascular and cerebrovascular disease medications represent the largest category in the TCM market, accounting for 33.29% of market share in 2021. The gynecological medication market size is also expanding with increased female self-care awareness[31][32][33] Analysis of Core Competencies During the Reporting Period The company's core competitiveness is multifaceted: product advantages include four well-known exclusive varieties like Naoxintong Capsule, leading in cardiovascular and cerebrovascular traditional Chinese medicine market share; patent advantages include 403 valid patents; scale advantages position it fourth among China's top 100 traditional Chinese medicine enterprises; additionally, significant advantages in brand, marketing, R&D, management, and team form a comprehensive competitive barrier - The company's four core products (Naoxintong Capsule, Wenxin Granule, Danhong Injection, Guhong Injection) achieved combined sales revenue of 3.43 billion yuan in the first half of 2022. Among these, Naoxintong, Wenxin, and Danhong, all exclusive varieties, ranked among the top 20 in the cardiovascular and cerebrovascular TCM market share in 2021[37][38] - As of the end of the reporting period, the company held 403 valid patents, with most leading products being exclusive varieties. Additionally, the company has 221 products under research and development, covering traditional Chinese medicine, chemical drugs, and biological drugs[41] - The company's R&D strategy covers three major areas: traditional Chinese medicine, chemical drugs, and biological drugs. In biological drugs, 16 products are under development, with some having entered Phase II or Phase III clinical trials, covering oncology and osteoporosis[46] - The company's core marketing advantage lies in specialized academic promotion guided by the 'Brain-Heart Co-treatment Theory', converting academic strengths into market advantages through academic exchanges and evidence-based medicine research[45] Discussion and Analysis of Operations In the first half of 2022, the company achieved operating revenue of 7.098 billion yuan, a 3.90% year-on-year decrease, and net profit attributable to shareholders of 818 million yuan, a 13.50% year-on-year decrease. The company continued its strategy of 'focusing on major industries and cultivating major varieties', maintaining stable core product revenue, actively developing various types of drugs, and improving its comprehensive health industry chain layout, with 20 new patent applications and 28 granted patents during the reporting period Key Financial Indicators (Jan-Jun 2022) | Financial Indicator | Jan-Jun 2022 | YoY Change | | :--- | :--- | :--- | | Operating Revenue | 7.098 billion yuan | -3.90% | | Net Profit Attributable to Shareholders | 818 million yuan | -13.50% | - The company's six core products (Naoxintong Capsule, Wenxin Granule, Danhong Injection, Guhong Injection, Compound Brain Peptide Ganglioside Injection, Compound Qupeptide Injection) generated a combined revenue of 3.973 billion yuan in the first half of the year, demonstrating a prominent market position[51] - The company is advancing R&D in traditional Chinese medicine, chemical drugs, biological drugs, and vaccines. In biological drugs, 16 products are under development, with some in Phase II-III clinical trials; in vaccines, 4 products are already available, and 5 are under development[53] Main Business Analysis During the reporting period, the company's operating cost increased by 18.53% year-on-year, while R&D expenses significantly decreased by 41.79%, primarily due to reduced expensed R&D expenditures. Net cash flow from operating activities increased by 148.56% year-on-year, mainly benefiting from reduced procurement and selling expenses Key Income Statement Items | Account | Current Period (billion yuan) | Prior Period (billion yuan) | Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 7.098 billion yuan | 7.386 billion yuan | -3.90 | | Operating Cost | 2.303 billion yuan | 1.943 billion yuan | 18.53 | | Selling Expenses | 3.331 billion yuan | 3.722 billion yuan | -10.51 | | R&D Expenses | 99.6 million yuan | 171 million yuan | -41.79 | | Net Cash Flow from Operating Activities | 1.425 billion yuan | 573 million yuan | 148.56 | Analysis of Assets and Liabilities As of the end of the reporting period, the company's total assets were 24.072 billion yuan, a slight increase of 0.36% from the beginning of the period. The asset structure changed, with cash and cash equivalents significantly increasing by 48.71% due to increased operating cash flow, and financial assets held for trading growing by 63.15%; on the liability side, short-term borrowings significantly decreased by 46.37%, while non-current liabilities due within one year notably increased by 134.31% Key Balance Sheet Items and Changes | Item Name | Period-End Balance (billion yuan) | Change from Prior Year-End (%) | Primary Reason | | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 1.811 billion yuan | 48.71% | Increase in net cash flow from operating activities | | Financial Assets Held for Trading | 813 million yuan | 63.15% | Increase in wealth management product balance | | Other Receivables | 420 million yuan | 109.17% | Increase in government grants receivable | | Short-term Borrowings | 695 million yuan | -46.37% | Decrease in bank short-term borrowings | | Non-current Liabilities Due Within One Year | 755 million yuan | 134.31% | Increase in long-term borrowings due within one year | Analysis of Investment Status During the reporting period, the company actively engaged in external equity investments, establishing several new subsidiaries including Buchang Health Industry (Xi'an) Co., Ltd. and Changsha Zhongce Biotechnology, and participating in the subscription of investment fund shares such as Suzhou Yuanhe Puhua to optimize its industrial layout - The company invested in establishing several subsidiaries, including Buchang Health Industry (Xi'an), Changsha Zhongce Biotechnology, and Buchang (Beijing) Property Management Co., Ltd[57][58] - The company, as a limited partner, plans to subscribe for 50 million yuan in Suzhou Yuanhe Puhua partnership shares and 100 million yuan in Hainan Sanya Yuhai partnership shares[59][60] Analysis of Major Holding and Invested Companies During the reporting period, three major wholly-owned subsidiaries—Shaanxi Buchang Pharmaceutical, Tonghua Guhong Pharmaceutical, and Shandong Danhong Pharmaceutical—all achieved profitability, with Shaanxi Buchang Pharmaceutical reporting the highest net profit of 266 million yuan Analysis of Major Holding and Invested Companies | Company Name | Net Assets (million yuan) | Net Profit (million yuan) | Main Business Revenue (million yuan) | | :--- | :--- | :--- | :--- | | Shaanxi Buchang Pharmaceutical | 971.3558 million yuan | 265.8133 million yuan | 1.3600819 billion yuan | | Tonghua Guhong Pharmaceutical | 321.0703 million yuan | 187.8676 million yuan | 290.5811 million yuan | | Shandong Danhong Pharmaceutical | 128.6331 million yuan | 129.32 million yuan | 786.0119 million yuan | Potential Risks The company faces multiple risks, including competition from international pharmaceutical giants, the long-term nature of traditional Chinese medicine modernization, management challenges from company expansion, risks associated with high product concentration, drug price reduction policy risks, and significant goodwill impairment risk arising from acquisitions (goodwill amounting to 4.997 billion yuan) - Product concentration risk: Five exclusive varieties, including Naoxintong Capsule and Wenxin Granule, contribute significantly to the company's performance, and any major change in their production or sales could substantially impact results[63] - Policy risk: With the promotion of medical insurance cost control and centralized volume-based procurement policies, the company faces the risk of losing drug tenders or significant price reductions[64] - Goodwill impairment risk: High goodwill of 4.997 billion yuan resulted from the acquisitions of Jilin Tiancheng Pharmaceutical and Tonghua Guhong Pharmaceutical; if future operations do not meet expectations, there is a risk of significant impairment, which would directly affect the company's current profit[68] Corporate Governance This section outlines the company's corporate governance structure and practices, including shareholder meetings and management changes Overview of Shareholders' Meeting During the reporting period, the company held its 2021 Annual General Meeting of Shareholders on June 28, 2022 - The company held its 2021 Annual General Meeting of Shareholders on June 28, 2022[69] Changes in Company Directors, Supervisors, and Senior Management During the reporting period, the company's senior management team underwent changes, with Vice President Liu Luxiang and Director and Vice President Li Weijun resigning due to personal reasons. Concurrently, Wang Baocai was elected as a non-independent director of the Fourth Board of Directors - Vice President Liu Luxiang and Director and Vice President Li Weijun resigned[70][71] - Wang Baocai was elected as a non-independent director of the company's Fourth Board of Directors[71] Environmental and Social Responsibility This section details the company's environmental protection measures and social responsibility initiatives Environmental Information The company and its major subsidiaries, as key pollutant-discharging entities, disclosed detailed information on emissions, construction and operation of pollution control facilities, environmental impact assessment permits, and emergency plans. All subsidiaries have established environmental management systems, with wastewater and exhaust gas treated to meet discharge standards, and regular self-monitoring conducted; no administrative penalties for environmental issues were received during the reporting period - The company and its major subsidiaries, including Shandong Kang'ai Pharmaceutical, Baoding Tianhao Pharmaceutical, and Liaoning Aoda Pharmaceutical, are all listed as key pollutant-discharging entities[73] - All subsidiaries have constructed wastewater treatment plants and exhaust gas treatment facilities, with pollutant discharge concentrations and total amounts complying with national and local standards, and no exceedances were reported during the period[74][76][78] - All subsidiaries strictly implement the 'Three Simultaneities' environmental protection system for construction projects, have developed and filed emergency response plans for environmental incidents, and regularly organize training and drills[83][86] Significant Matters This section covers significant events and matters affecting the company, including commitments, related party transactions, and major contracts Fulfillment of Commitments During the reporting period, the company's controlling shareholder, actual controller, and other related parties strictly fulfilled long-term effective commitments made during the initial public offering, such as avoiding horizontal competition, with no breaches observed - The company's controlling shareholder Buchang (Hong Kong), actual controller Zhao Tao, and other shareholders holding over 5% equity, including Shoucheng International (Hong Kong), have all issued long-term valid 'Commitments to Avoid Horizontal Competition' and strictly fulfilled them during the reporting period[96][97] Significant Related Party Transactions The company disclosed its estimated routine related party transactions for 2022, primarily involving the purchase of goods and acceptance of services from related parties. During the reporting period, significant purchases were made from Shaanxi Yusheng Printing Co., Ltd., totaling 38.5265 million yuan. Additionally, the company plans to jointly invest with related parties to establish a controlling subsidiary, Aobu Lightning Technology Co., Ltd Major Related Party Transactions | Related Party | Related Party Transaction Content | 2022 Estimated (million yuan) | Current Period Amount (million yuan) | | :--- | :--- | :--- | :--- | | Shaanxi Yusheng Printing Co., Ltd. | Purchase of Goods, Acceptance of Services, etc. | 360 million yuan | 38.5265 million yuan | | Guizhou Mingshuai Liquor Sales Co., Ltd. | Purchase of Goods, Acceptance of Services, etc. | 120 million yuan | 7.7094 million yuan | | Jilin Sichang Pharmaceutical Co., Ltd. | Purchase of Goods, Acceptance of Services, etc. | 100 million yuan | 0 | | Shaanxi International Business Institute | Joint Application for Science and Technology Projects | 200 million yuan | 0 | - The company plans to invest 1.56 million yuan with related parties to jointly establish a controlling subsidiary, Aobu Lightning Technology Co., Ltd., with a 78% equity stake[109] Significant Contracts and Their Performance During the reporting period, the company had no external guarantees. Guarantees for subsidiaries were performed normally, with a total outstanding guarantee balance of 1.143 billion yuan at period-end, representing 7.70% of the company's net assets. Of this, debt guarantees provided to guaranteed parties with a debt-to-asset ratio exceeding 70% amounted to 1.014 billion yuan Guarantee Information | Guarantee Situation | Amount (million yuan) | | :--- | :--- | | Total Guarantees Provided to Subsidiaries During the Period | 415 million yuan | | Total Guarantees Provided to Subsidiaries at Period-End | 1.1429629 billion yuan | | Proportion of Total Guarantees to Company's Net Assets (%) | 7.70% | | Debt Guarantees Provided to Guaranteed Parties with Debt-to-Asset Ratio Exceeding 70% | 1.0137779 billion yuan | Changes in Share Capital and Shareholder Information This section provides information on changes in the company's share capital and details of its shareholders Changes in Share Capital During the reporting period, there were no changes in the company's total share capital or share structure - During the reporting period, there were no changes in the company's total share capital or share structure[113] Shareholder Information As of the end of the reporting period, the company had 82,919 common shareholders. The top two shareholders are Buchang (Hong Kong) Holdings Limited and Shoucheng International (Hong Kong) Limited, holding 43.01% and 7.25% respectively, both ultimately controlled by Zhao Tao Top Shareholders | Shareholder Name | Shares Held at Period-End | Proportion (%) | | :--- | :--- | :--- | | Buchang (Hong Kong) Holdings Limited | 490,957,202 | 43.01 | | Shoucheng International (Hong Kong) Limited | 82,742,400 | 7.25 | | Shandong Buchang Pharmaceuticals Co., Ltd. Repurchase Special Account | 35,537,965 | 3.11 | | Hong Kong Securities Clearing Company Limited | 25,877,300 | 2.27 | | Liu Shaoluan | 24,520,000 | 2.15 | - The actual controller of controlling shareholder Buchang (Hong Kong) and second largest shareholder Shoucheng International (Hong Kong) is Zhao Tao[116] Preferred Shares Related Information This section addresses any matters related to the company's preferred shares Preferred Shares Related Information During the reporting period, there were no preferred shares related matters for the company - Not applicable[119] Bonds Related Information This section addresses any matters related to the company's bonds and debt financing instruments Bonds Related Information During the reporting period, the company had no corporate bonds, company bonds, non-financial enterprise debt financing instruments, or convertible corporate bonds related matters - Not applicable[119] Financial Statements This section presents the company's financial statements, including accounting policies, notes to financial items, and related party transactions Company Overview This section details the company's historical evolution, from its establishment as a domestic limited liability company in 2001, through multiple equity transfers, capital increases, and changes in enterprise type, culminating in its listing on the Shanghai Stock Exchange in 2016. The company operates in the pharmaceutical manufacturing industry, with its main business encompassing the production of various drug formulations such as tablets, capsules, and granules - The company was listed on the Shanghai Stock Exchange on November 18, 2016, with stock code 603858[150] - As of the end of the reporting period, the company's consolidated financial statements covered a total of 59 subsidiaries and sub-subsidiaries, with 1 new addition during the period[151] Basis of Financial Statement Preparation The company's financial statements are prepared on a going concern basis, in accordance with the 'Accounting Standards for Business Enterprises' and related regulations issued by the Ministry of Finance, accurately and completely reflecting the company's financial position and operating results - The financial statements are prepared on a going concern basis, and in accordance with the 'Accounting Standards for Business Enterprises'[152][153] Significant Accounting Policies and Estimates This chapter elaborates on the company's significant accounting policies and estimates, covering business combinations, consolidated financial statement preparation, financial instruments, inventories, long-term equity investments, fixed assets, intangible assets, revenue recognition, and government grants, providing a foundation for understanding the financial statements. During the reporting period, the company changed the depreciation period for buildings and structures, which are fixed assets, as an accounting estimate change - Revenue recognition policy: The company recognizes revenue when customers obtain control of the related goods or services, typically considering product pickup as the completion of performance obligations[202] - R&D expenditure capitalization policy: Expenditures incurred after obtaining the National Medical Products Administration's 'Clinical Trial Approval' until obtaining the new drug certificate, and meeting capitalization conditions, are recognized as intangible assets[191] - Change in accounting estimates: To more fairly reflect asset conditions, the company changed the depreciation period for buildings and structures, applying the prospective method, effective January 1, 2022. This change is expected to reduce depreciation expense by approximately 5.23 million yuan and increase total profit by approximately 5.23 million yuan in 2022[214] Taxation The company's main taxes include VAT and corporate income tax. The parent company's corporate income tax rate is 25%, but several subsidiaries enjoy preferential tax rates of 15% or lower due to their high-tech enterprise qualifications, Western Development policy eligibility, or status as small and micro enterprises - Multiple subsidiaries enjoy tax incentives: Shandong Danhong Pharmaceutical, Liaoning Aoda Pharmaceutical, Tonghua Guhong Pharmaceutical, Jilin Tiancheng Pharmaceutical, and Baoding Tianhao Pharmaceutical are high-tech enterprises, subject to a reduced corporate income tax rate of 15%[219][220] - Shaanxi Buchang Pharmaceutical and Qionglai Tianyin Pharmaceutical enjoy Western Development tax incentives, subject to a reduced corporate income tax rate of 15%[220] - Additionally, several other subsidiaries qualify as small and micro enterprises, enjoying corresponding income tax preferential policies[221] Notes to Consolidated Financial Statements This chapter provides detailed notes on key items in the consolidated financial statements. Cash and cash equivalents at period-end totaled 1.811 billion yuan, including 44.74 million yuan in restricted funds. Inventories had a book value of 3.092 billion yuan at period-end, a decrease from the beginning of the period. Goodwill had an original book value of 5.147 billion yuan, with no changes. During the reporting period, the company received total government grants of 229 million yuan Consolidated Balance Sheet Key Items | Balance Sheet Item | Period-End Balance (billion yuan) | Beginning Balance (billion yuan) | | :--- | :--- | :--- | | Cash and Cash Equivalents | 1.811 billion yuan | 1.218 billion yuan | | Accounts Receivable | 1.429 billion yuan | 1.531 billion yuan | | Inventories | 3.092 billion yuan | 3.834 billion yuan | | Construction in Progress | 3.082 billion yuan | 2.821 billion yuan | | Goodwill | 5.133 billion yuan | 5.133 billion yuan | | Short-term Borrowings | 695 million yuan | 1.295 billion yuan | | Accounts Payable | 2.004 billion yuan | 2.433 billion yuan | - As of the end of the period, the total book value of assets with restricted ownership or use rights was 1.014 billion yuan, primarily including cash and cash equivalents for bill deposits, accounts receivable financing pledged for loans, fixed assets, intangible assets, construction in progress, and long-term equity investments[352] - During the reporting period, the total government grants recognized in current profit or loss amounted to 229 million yuan, mainly enterprise support funds from Mehekou City Finance Bureau and other sources[326][328][329] Related Parties and Related Party Transactions The company's controlling shareholder is Buchang (Hong Kong) Holdings Limited, with Zhao Tao as the ultimate controlling party. During the reporting period, the company engaged in transactions such as purchasing and selling goods and accepting services with multiple related parties, with the largest procurement amount from Shaanxi Yusheng Printing Co., Ltd. Additionally, the company provided financing guarantees for several subsidiaries and borrowed 60 million yuan from related party Jilin Sichang Pharmaceutical Co., Ltd - Current period related party procurement transactions amounted to 47.9055 million yuan, primarily for purchasing packaging materials from Shaanxi Yusheng Printing Co., Ltd., totaling 38.5265 million yuan[389] - The company provided loan guarantees for several subsidiaries, including Tonghua Guhong Pharmaceutical and Sichuan Luzhou Buchang Biopharmaceutical[391] - Subsidiary Tonghua Tianshi Pharmaceutical borrowed 60 million yuan from related party Jilin Sichang Pharmaceutical Co., Ltd[395]