兴齐眼药(300573) - 2020 Q2 - 季度财报

Section I Important Notice, Table of Contents and Definitions This section provides an important notice, the table of contents, and definitions relevant to the report Risk Factors The company details major risks including policy tightening, intensified competition, R&D uncertainties, and COVID-19 impact, outlining corresponding countermeasures - Industry Policy Risk: Increased national pharmaceutical industry regulation, including the 'Two-Invoice System' and centralized drug procurement policies, introduces uncertainty to drug prices; the company will strengthen policy responses and promote academic marketing and market expansion[3][4] - Industry Competition Risk: Supportive policies for the pharmaceutical industry intensify internal competition, and the emergence of new companies and alternative drugs may slow the company's growth; the company's strategy is to increase R&D investment and broaden its product line[5] - Performance Growth Risk: Intensified market competition and the time required for return on investment in ophthalmic medical services and equipment may lead to slower performance growth; the company will explore market potential and control investment risks[6] - R&D Risk: New drug development has a long cycle and multiple stages, susceptible to unpredictable factors, and continuous investment may lead to increased short-term operating costs; the company will improve R&D capabilities and focus on key projects[6][7] - COVID-19 Pandemic Risk: The pandemic led to a decline in hospital outpatient visits and surgeries, impacting the company's production and sales in the short term; the company has implemented emergency management measures and is resuming work and production in an orderly manner to mitigate adverse effects[10] Section II Company Profile and Key Financial Indicators This section outlines the company's fundamental information and presents its key financial performance metrics Company Profile This chapter provides the company's basic information, including stock abbreviation 'Xingqi Eye Medicine', stock code '300573', legal representative Liu Jidong, and unchanged contact details Company Basic Information | Item | Information | | :--- | :--- | | Stock Abbreviation | Xingqi Eye Medicine | | Stock Code | 300573 | | Listing Exchange | Shenzhen Stock Exchange | | Legal Representative | Liu Jidong | Key Accounting Data and Financial Indicators In H1 2020, operating revenue decreased by 5.79% to 237 million yuan, while net profit attributable to shareholders surged by 167.48% to 15.31 million yuan, despite a 59.57% drop in operating cash flow Key Financial Performance | Indicator | Current Period | Prior Period | YoY Change | | :--- | :--- | :--- | :--- | | Operating Revenue (yuan) | 236,806,949.82 | 251,367,240.21 | -5.79% | | Net Profit Attributable to Shareholders (yuan) | 15,314,817.56 | 5,725,671.10 | 167.48% | | Net Profit Attributable to Shareholders (Excl. Non-recurring Items) (yuan) | 14,666,022.60 | 3,995,751.09 | 267.04% | | Net Cash Flow from Operating Activities (yuan) | 15,515,061.50 | 38,376,960.64 | -59.57% | | Basic Earnings Per Share (yuan/share) | 0.19 | 0.07 | 171.43% | | Weighted Average Return on Net Assets | 2.71% | 1.05% | Increase of 1.66 percentage points | | Total Assets (yuan) | 854,135,357.22 | 852,368,054.02 | 0.21% | | Net Assets Attributable to Shareholders (yuan) | 581,637,223.72 | 568,514,086.14 | 2.31% | Non-recurring Gains and Losses and Amounts During the reporting period, the company's total non-recurring gains and losses amounted to 648,800 yuan, primarily comprising government subsidies of 2.29 million yuan recognized in current profit and loss, and other net non-operating income/expenses of -1.52 million yuan Non-recurring Items | Item | Amount (yuan) | | :--- | :--- | | Government subsidies recognized in current profit and loss | 2,292,176.76 | | Other non-operating income and expenses apart from the above | -1,520,842.74 | | Less: Income tax impact | 110,063.60 | | Minority interest impact (after tax) | 12,475.46 | | Total | 648,794.96 | Section III Company Business Overview This section provides an overview of the company's core business operations, product portfolio, and strategic positioning within the ophthalmic pharmaceutical market Main Businesses of the Company The company specializes in ophthalmic pharmaceuticals, with its main business being the R&D, production, and sales of ophthalmic prescription drugs; it boasts a rich product line covering ten sub-categories of ophthalmic drugs, holding 48 drug approval numbers, with 26 products listed in the National Medical Insurance Catalog; its operating model primarily involves production based on sales and professional academic promotion - The company specializes in ophthalmic pharmaceuticals, primarily engaged in the R&D, production, and sales of ophthalmic prescription drugs[26] Ophthalmic Drug Product Portfolio | Category | Registration Approvals | Number in Medical Insurance Catalog | Number in National Essential Drug List | | :--- | :--- | :--- | :--- | | Ophthalmic Anti-infectives | 17 | 12 | 2 | | Other Ophthalmic Drugs | 4 | 0 | - | | Ophthalmic Non-steroidal Anti-inflammatories | 4 | 2 | - | | Mydriatics and Cycloplegics | 4 | 3 | 2 | | Total | 48 | 26 | 6 | - The company's sales model is primarily based on professional academic promotion, divided into two modes: professional academic promotion for prescription drugs and professional promotion for the retail market[31] Analysis of Core Competencies The company's core competencies include a comprehensive and diverse ophthalmic drug product system, strong R&D capabilities with 35 invention patents, rich product reserves, a strong brand reputation, an extensive marketing network, and an experienced talent team; during the reporting period, the company newly obtained the drug registration approval for Cyclosporine Eye Drops (II) - Product Line Advantage: Established a comprehensive and diverse ophthalmic drug product system, covering ten sub-categories of ophthalmic drugs[35] - Technological Advantage: The company is a national high-tech enterprise, possessing provincial-level engineering technology research centers and enterprise technology centers, with 35 invention patents[36] - Brand Advantage: Ophthalmic preparations represented by products like 'Sugaojie' and 'Diyou' have established a strong brand reputation within the industry[38] - Marketing Advantage: Adopts a customer-centric, academically-led professional marketing and promotion model, with a marketing network covering all provinces, autonomous regions, and municipalities nationwide[39] - During the reporting period, the company newly obtained the drug registration approval for Cyclosporine Eye Drops (II), with drug approval number H20203239[40][41] Section IV Management Discussion and Analysis This section provides a comprehensive discussion and analysis of the company's operational performance, financial condition, and key strategic initiatives during the reporting period Overview In H1 2020, the company achieved operating revenue of 237 million yuan, a 5.79% year-on-year decrease, primarily due to the Q1 COVID-19 impact; however, Q2 business grew rapidly by 86.31% quarter-on-quarter; net profit was 15.31 million yuan, a 167.48% year-on-year increase; the company made progress in production quality, marketing expansion, product R&D, and external investments, notably with Cyclosporine Eye Drops (II) approved as the first domestic cyclosporine ophthalmic preparation for dry eye disease - Q1 operating revenue was significantly impacted by the pandemic, while Q2 achieved rapid growth, increasing by 86.31% quarter-on-quarter[42] - In terms of production, the ophthalmic preparation production capacity expansion project is progressing smoothly, with some sub-projects having completed validation and ready for production[43] - In marketing, brand influence was enhanced through various forms such as online academic conferences and brand activities, including over forty 'Qianli Chuan Jiayin' expert academic courses[44] - In R&D, Cyclosporine Eye Drops (II) was approved for market, becoming China's first approved cyclosporine ophthalmic preparation for dry eye disease; several other eye drops also received drug registration acceptance notices[46] - In investment, a new wholly-owned subsidiary, 'Wenzhou Xingqi Ophthalmic Life Science Co., Ltd.', was established in Wenzhou with a registered capital of 20 million yuan to accelerate new product launches[47] Analysis of Main Business During the reporting period, the company's key financial indicators changed significantly; sales expenses decreased by 27.85% year-on-year, while R&D investment increased by 36.22% due to new drug project investments; by product, gel/ointment and eye drop revenues decreased by 26.22% and 10.55% respectively, but medical service revenue surged by 436.77%, with gross margin increasing by 42.03 percentage points Key Financial Indicators and Reasons for Change | Item | Current Period (yuan) | Prior Period (yuan) | YoY Change | Primary Reason | | :--- | :--- | :--- | :--- | :--- | | Sales Expenses | 82,150,735.21 | 113,860,887.57 | -27.85% | - | | Financial Expenses | 2,832,457.88 | 1,731,602.58 | 63.57% | Increase in bank borrowings led to higher interest expenses | | R&D Investment | 33,273,650.18 | 24,425,767.03 | 36.22% | Increased R&D investment in new drug projects | | Net Cash Flow from Operating Activities | 15,515,061.50 | 38,376,960.64 | -59.57% | Decrease in government subsidies received | Operating Revenue and Cost by Product/Service | By Product or Service | Operating Revenue (yuan) | Operating Cost (yuan) | Gross Margin | YoY Change in Operating Revenue | YoY Change in Operating Cost | YoY Change in Gross Margin | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Medical Services | 37,484,114.74 | 36,814,419.21 | 1.79% | 436.77% | 275.91% | 42.03% | | Gels / Ointments | 109,213,750.50 | 18,214,375.93 | 83.32% | -26.22% | -27.51% | 0.29% | | Eye Drops | 74,618,014.95 | 29,851,771.24 | 59.99% | -10.55% | -16.54% | 2.87% | Analysis of Assets and Liabilities As of the end of the reporting period, total assets were 854 million yuan, largely unchanged from the prior year-end; within assets, construction in progress and investment properties increased, while receivables financing significantly decreased; on the liability side, both short-term and long-term borrowings increased; 256 million yuan of fixed and intangible assets were pledged as collateral for bank loans, with restricted rights Assets with Restricted Rights | Item | Book Value at Period End (yuan) | Reason for Restriction | | :--- | :--- | :--- | | Fixed Assets | 233,895,209.25 | Pledged for bank loans | | Intangible Assets | 21,902,032.20 | Pledged for bank loans | | Total | 255,797,241.45 | - | Analysis of Investment Status During the reporting period, total investment was 33.96 million yuan, a 39.02% year-on-year increase; significant equity investment included establishing wholly-owned subsidiary 'Wenzhou Xingqi Ophthalmic Life Science Co., Ltd.' with a 20 million yuan investment; the major non-equity investment 'Ophthalmic Preparation Production Capacity Expansion Project' saw a current period investment of 30.96 million yuan, with cumulative investment reaching 80.21 million yuan, achieving 54.72% project progress - Investment during the reporting period was 33.96 million yuan, an increase of 39.02% compared to 24.43 million yuan in the prior period[57] - Established a new wholly-owned subsidiary, 'Wenzhou Xingqi Ophthalmic Life Science Co., Ltd.', with an investment of 20 million yuan for drug production and technology R&D[58] - The 'Ophthalmic Preparation Production Capacity Expansion Project' saw a current period investment of 30.96 million yuan, with cumulative investment reaching 80.21 million yuan, and project progress at 54.72%[60] Section V Significant Matters This section details the company's significant events and developments during the reporting period, including equity incentives, major contracts, and other key updates Company Equity Incentive Plan During the reporting period, the company advanced its 2018 Restricted Stock Incentive Plan; in April 2020, the board confirmed the achievement of conditions for the first lifting of restrictions and approved the repurchase and cancellation of certain ineligible restricted shares; on July 3, 2020, the company completed the repurchase and cancellation of 64,600 granted but unvested restricted shares - On April 16, 2020, the company's board of directors approved the 'Proposal on the Achievement of Conditions for the First Vesting Period of the 2018 Restricted Stock Incentive Plan'[85] - The company repurchased and cancelled a total of 64,600 restricted shares from resigned incentive recipients and those whose performance targets were not met[85] - On July 3, 2020, the company announced the completion of repurchase and cancellation procedures for 64,600 restricted shares, with the company's total share capital decreasing accordingly[86] Significant Contracts and Their Performance During the reporting period, the company had no significant trusteeship, contracting, or guarantee matters; important lease contracts included subsidiary Xingqi Ophthalmic Hospital leasing commercial space for operations and Shanghai Kangende Medical Technology leasing premises for operations; no significant contracts impacting total company profit by more than 10% occurred - The company's controlling subsidiary, Shenyang Xingqi Ophthalmic Hospital Co., Ltd., leases 5,812.24 square meters of commercial space for operations, with the lease term extending to June 30, 2022[90] - The company's controlling subsidiary, Shanghai Kangende Medical Technology Co., Ltd., leases 5,223.98 square meters of premises for operations, with the lease term extending to April 30, 2030[90] Explanation of Other Significant Matters During the reporting period, the company made several important advancements in R&D, shareholder reductions, equity pledges, equity incentives, and subsidiary establishment; in R&D, Visufort® Lutein Vitamin E Soft Capsules obtained registration certificates, and Cyclosporine Eye Drops (II) received drug registration approval; the company also disclosed multiple shareholder reduction plans and progress announcements, and established the wholly-owned subsidiary Wenzhou Xingqi Ophthalmic Life Science Co., Ltd - R&D Progress: Cyclosporine Eye Drops (II) obtained the 'Drug Registration Approval' issued by the National Medical Products Administration; several other eye drops also received drug registration acceptance notices[94] - Shareholder Dynamics: Disclosed multiple share reduction plans, progress, and completion announcements for shareholders holding over 5%, directors, and senior management[94] - Subsidiary Establishment: In June 2020, the company invested in and established the wholly-owned subsidiary Wenzhou Xingqi Ophthalmic Life Science Co., Ltd., completing its industrial and commercial registration[95] Section VI Changes in Shares and Shareholder Information This section details changes in the company's share capital and provides information on its shareholders during the reporting period Share Fluctuation Details During the reporting period, the company's total share capital remained unchanged at 82,430,000 shares; due to the achievement of conditions for the first vesting period of the 2018 Restricted Stock Incentive Plan, restricted shares decreased by 780,150 shares, with unrestricted shares increasing by the same amount; additionally, the company completed the repurchase and cancellation of 64,600 restricted shares on July 2, 2020 Share Capital Changes | Share Type | Quantity Before Change | Change in Current Period | Quantity After Change | | :--- | :--- | :--- | :--- | | Restricted Shares | 22,690,500 | -780,150 | 21,910,350 | | Unrestricted Shares | 59,739,500 | +780,150 | 60,519,650 | | Total Shares | 82,430,000 | 0 | 82,430,000 | - The reason for share fluctuation was the listing and circulation of shares released from restriction under the company's 2018 Restricted Stock Incentive Plan's first vesting period[97] Number of Shareholders and Shareholding Information As of the end of the reporting period, the company had 5,864 common shareholders; controlling shareholder and de facto controller Liu Jidong held 30.91% of the company's shares; among the top ten shareholders, besides Liu Jidong, major institutional investors included Tongshi Investment Co., Ltd. and several public funds - Total common shareholders at the end of the reporting period were 5,864[102] Top Shareholders | Shareholder Name | Shareholding Percentage | Shares Held at Period End | Restricted Shares Held | | :--- | :--- | :--- | :--- | | Liu Jidong | 30.91% | 25,477,000 | 19,113,000 | | Tongshi Investment Co., Ltd. | 9.82% | 8,096,420 | 0 | | Fullgoal Low Carbon New Economy Mixed Fund | 1.79% | 1,471,772 | 0 | Section VII Preferred Shares Information This section confirms that the company had no preferred shares during the reporting period Preferred Shares Status During the reporting period, the company had no preferred shares - The company had no preferred shares during the reporting period[108] Section VIII Convertible Corporate Bonds Information This section confirms that the company had no convertible corporate bonds during the reporting period Convertible Corporate Bonds Status During the reporting period, the company had no convertible corporate bonds - The company had no convertible corporate bonds during the reporting period[109] Section IX Information on Directors, Supervisors, and Senior Management This section provides details on the company's directors, supervisors, and senior management, including any changes in their shareholdings Changes in Shareholdings of Directors, Supervisors, and Senior Management During the reporting period, there were no changes in the company's directors, supervisors, and senior management; regarding shareholding changes, Chairman and General Manager Mr. Liu Jidong reduced his company shares by 7,000 shares - There were no changes in the company's directors, supervisors, and senior management during the reporting period[112] Shareholding Changes of Key Personnel | Name | Position | Shares Held at Beginning of Period (shares) | Shares Reduced in Current Period (shares) | Shares Held at End of Period (shares) | | :--- | :--- | :--- | :--- | :--- | | Liu Jidong | Chairman, General Manager | 25,484,000 | 7,000 | 25,477,000 | Section X Corporate Bonds Information This section confirms that the company has no outstanding corporate bonds that are publicly issued and listed on a stock exchange Corporate Bonds Status The company has no publicly issued and listed corporate bonds on a stock exchange that are either unexpired or have not been fully redeemed by the approval date of the semi-annual report - The company has no publicly issued and listed corporate bonds on a stock exchange that are either unexpired or have not been fully redeemed by the approval date of the semi-annual report[113] Section XI Financial Report This section presents the company's consolidated financial statements, including the balance sheet, income statement, and cash flow statement Consolidated Balance Sheet As of June 30, 2020, the company's total assets were 854 million yuan, a slight increase of 0.21% from the beginning of the year; total liabilities were 267 million yuan, a 3.62% decrease from the beginning of the year; equity attributable to parent company owners was 582 million yuan, a 2.31% increase from the beginning of the year, maintaining a stable asset-liability structure Consolidated Balance Sheet Summary | Item | June 30, 2020 (yuan) | December 31, 2019 (yuan) | | :--- | :--- | :--- | | Total Assets | 854,135,357.22 | 852,368,054.02 | | Total Liabilities | 267,424,379.76 | 277,464,911.01 | | Total Equity Attributable to Parent Company Owners | 581,637,223.72 | 568,514,086.14 | | Total Liabilities and Equity | 854,135,357.22 | 852,368,054.02 | Consolidated Income Statement In H1 2020, the company achieved total operating revenue of 237 million yuan, a 5.79% year-on-year decrease; despite the revenue decline, effective cost control, especially a 27.85% year-on-year drop in sales expenses, led to an operating profit of 16.52 million yuan, a 191.6% year-on-year increase; net profit attributable to parent company owners was 15.31 million yuan, a significant 167.48% year-on-year increase Consolidated Income Statement Summary | Item | H1 2020 (yuan) | H1 2019 (yuan) | | :--- | :--- | :--- | | Total Operating Revenue | 236,806,949.82 | 251,367,240.21 | | Total Operating Costs | 223,402,846.61 | 247,126,400.08 | | Of which: Sales Expenses | 82,150,735.21 | 113,860,887.57 | | R&D Expenses | 31,701,500.42 | 24,425,767.03 | | Operating Profit | 16,517,486.57 | 5,664,291.14 | | Total Profit | 14,996,643.83 | 4,680,647.53 | | Net Profit Attributable to Parent Company Owners | 15,314,817.56 | 5,725,671.10 | Consolidated Cash Flow Statement In H1 2020, net cash flow from operating activities was 15.52 million yuan, a 59.57% year-on-year decrease, primarily due to reduced government subsidies; net cash outflow from investing activities was 41.01 million yuan, a 31.07% year-on-year increase, mainly due to increased acquisition of fixed assets; net cash inflow from financing activities was 28.12 million yuan; cash and cash equivalents balance at period-end was 40.89 million yuan Consolidated Cash Flow Statement Summary | Item | H1 2020 (yuan) | H1 2019 (yuan) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 15,515,061.50 | 38,376,960.64 | | Net Cash Flow from Investing Activities | -41,007,109.22 | -31,287,268.66 | | Net Cash Flow from Financing Activities | 28,118,614.42 | 30,214,290.40 | | Net Increase in Cash and Cash Equivalents | 2,586,625.61 | 37,290,500.91 | Section XII Reference Documents Catalog This section lists the documents available for reference, including financial statements and publicly disclosed materials Reference Documents Reference documents for this report include financial statements signed and sealed by the company's legal representative, head of finance, and head of accounting, the semi-annual report text signed by the legal representative, and originals of all publicly disclosed documents and announcements during the reporting period; these documents are available at the company's Board Secretary's Office - Reference documents include: - Signed and sealed financial statements - Signed semi-annual report text - Originals of all publicly disclosed documents and announcements during the reporting period[448]