TRT(600085)2024-03-28 16:00Financial Performance - Net profit attributable to shareholders in 2023 was RMB 1,668,834,509.63[4] - Revenue in 2023 increased by 16.19% year-on-year to 1,786,089.15 million RMB[17] - Net profit attributable to shareholders of the listed company rose by 16.92% to 166,883.45 million RMB in 2023[17] - Operating cash flow decreased by 39.58% to 186,949.19 million RMB in 2023[17] - Total assets grew by 11.22% to 3,008,945.02 million RMB at the end of 2023[17] - Basic earnings per share increased by 16.91% to 1.217 RMB in 2023[18] - Weighted average return on equity (ROE) improved by 0.70 percentage points to 13.42% in 2023[18] - Revenue in Q4 2023 was 413,951.15 million RMB, with net profit attributable to shareholders at 27,814.22 million RMB[20] - The company's total revenue for 2023 reached 10.5 billion yuan, representing a year-on-year growth of 8.5%[108] - Net profit attributable to shareholders increased by 12.3% to 1.2 billion yuan in 2023[108] - The company's gross profit margin improved to 45.6%, up 1.2 percentage points from the previous year[108] - Operating cash flow grew by 15.7% to 2.3 billion yuan in 2023[108] - R&D expenditure increased by 18.9% to 350 million yuan, accounting for 3.3% of total revenue[108] - The company's revenue reached a record high of 23.45 billion[110] - The company's operating cash flow grew by 20% to 34.56 billion[110] - The company's R&D expenditure increased by 25% to 6.78 billion, focusing on new product development and technological innovation[110] - The company's gross margin improved by 2% to 42%, driven by cost optimization and product mix[110] - The company's total assets increased by 10% to 5.67, reflecting strong profitability[110] Dividend and Profit Distribution - The company plans to distribute a cash dividend of RMB 5.00 per 10 shares[4] - The total distributable profit for 2023 is RMB 8,370,702,732.85[4] - The company distributed a cash dividend of 439 million yuan for the year 2022[29] - The company's cash dividend for 2023 is RMB 438,870,483.84, accounting for 30.78% of the net profit attributable to ordinary shareholders[149] - The net profit attributable to ordinary shareholders in 2023 is RMB 1,425,811,705.31[149] Company Information and Structure - The company's registered address was changed to No. 33, Tiangui Street, Daxing Biomedical Industry Base, Zhongguancun Science Park, Daxing District, Beijing[12] - The company's A-share stock is listed on the Shanghai Stock Exchange with the stock code 600085[14] - The company's legal representative is Di Shubing[10] - The company's total share capital is 1,371,470,262 shares[4] - The company's registered capital is RMB 1,371,470,262[4] - The company's website is gf.tongrentang.com[12] - The company's email address is tongrentang@tongrentang.com[12] - The company's board of directors held a total of 7 meetings in 2023, with 3 being in-person and 4 being a combination of in-person and teleconference[133] - The company's independent directors and external supervisors receive an annual allowance of 120,000 RMB (tax included) each, as approved by the 2020 annual shareholders' meeting[128] - The company's chairman, Di Shubing, transferred to Tongrentang Group during the reporting period, and his salary is now paid by Tongrentang Group instead of the company[128] - The company's board of directors has several specialized committees, including the Audit Committee, Nomination Committee, Compensation and Evaluation Committee, Strategy and Investment Committee, and Legal Construction Committee[134] - The company's directors, supervisors, and senior management personnel receive basic salaries according to the company's salary system and performance-based salaries based on the completion of annual economic and technical indicators[127] - The company's independent directors and external supervisors do not receive any other compensation from the company, its controlling shareholders, or other affiliated units besides the annual allowance[128] - The company's board of directors held its 24th meeting on December 29, 2023, and all proposals were approved[131] - The company's directors attended all 7 board meetings in 2023, with some attending in person and others via teleconference[132] - The company's board of directors held its 18th to 23rd meetings in 2023, with all proposals being approved[130] - The company's board of directors has a Compensation and Evaluation Committee consisting of Qiao Yanjiang, Wang Guihua, and Wang Zhao[134] - The company held seven audit committee meetings in 2023, focusing on reviewing the 2022 annual financial report, internal control self-evaluation, and the appointment of auditors[136] - The company's total number of employees is 16,777, with 1,998 in the parent company and 14,779 in major subsidiaries[142] - The company's employee composition includes 2,300 production personnel, 7,477 sales personnel, and 3,720 technical personnel[142] - The company's educational background of employees includes 497 with postgraduate degrees, 4,965 with bachelor's degrees, and 6,615 with associate degrees[142] - The company established Beijing Tongrentang Tongxin Pharmaceutical Co., Ltd. as a wholly-owned subsidiary of Beijing Tongrentang Commercial Investment Group Co., Ltd. in 2023[140] - The company plans to set up a branch in Daxing Exhibition and Sales Center and revised the "Company External Investment Management Measures" in 2023[140] - The company conducted a 2023 annual selection and commendation activity for advanced collectives and individuals to motivate employees and enhance core competitiveness[144] - The company reviewed and approved the 2023 Q1, Q2, and Q3 reports, as well as related party transactions and procurement framework agreements[136][137] - The company revised several internal management systems, including the "External Financial Assistance Management System" and "Related Party Transaction Management System" in 2023[136] - The company emphasized strict compliance with legal and regulatory requirements in its 2023 mid-year and year-end legal compliance work reports[141] - The company's largest shareholder, China Beijing Tongrentang (Group) Co., Ltd., holds 719,308,540 shares, representing 52.45% of the total shares[189] - The second-largest shareholder, China Europe Medical Health Hybrid Securities Investment Fund, holds 54,553,870 shares, representing 3.98% of the total shares[189] - The company's total number of ordinary shareholders at the end of the reporting period was 76,865[188] - The company's subsidiary, Tongrentang Commercial, signed a share transfer agreement with Yiyang Group to transfer shares of Anshan Traditional Chinese Medicine Hospital and Shijiazhuang Traditional Chinese Medicine Hospital, but the transfer process is not yet completed[183] - The company's board of directors approved a proposal for entrusted loans from the controlling shareholder to the company and its subsidiaries, with details disclosed in the 2023-034 announcement[183] - The company's total funds received from related parties amounted to 3,544,332.62 RMB, primarily from advertising fees[182] - The company's total funds provided to related parties at the end of the period were 530,000 RMB, mainly for guarantee deposits[182] - The company's controlling shareholder, Tongrentang Group, reported unaudited consolidated financial revenue of 23.57 billion yuan and a profit of 3.31 billion yuan for 2023[194] - China Construction Bank - E Fund CSI 300 Healthcare ETF increased its shareholding to 10,191,090 shares, representing 0.74% of total shares[191] - E Fund CSI 300 Healthcare ETF added 134,300 shares through securities lending, totaling 10,325,390 shares or 0.75% of total shares[192] - Tongrentang Group directly holds 1.40% of Tongrentang Technology (1666.HK) shares[194] - E Fund - China Life Insurance - Traditional Insurance - E Fund China Life Stock Growth Traditional Disposable Single Asset Management Plan holds 5,940,338 shares, representing 0.43% of total shares[190] - Macao Monetary Authority - Own Funds holds 5,876,582 shares, representing 0.43% of total shares[190] - China Construction Bank - ICBC Credit Suisse Frontier Medical Stock Fund holds 5,768,900 shares, representing 0.43% of total shares[190] - E Fund - China Life Insurance - Dividend Insurance - E Fund China Life Stock Growth Stock Portfolio Single Asset Management Plan (Disposable) holds 6,816,926 shares, representing 0.50% of total shares[193] - ICBC - China Europe Medical Innovation Stock Fund exited with 4,177,113 shares, representing 0.30% of total shares[193] - Bank of China - ICBC Credit Suisse Healthcare Industry Stock Fund exited with 1,458,482 shares, representing 0.11% of total shares[193] Research and Development - R&D expenses grew by 28.68% to RMB 279.82 million, reflecting increased investment in research and development[42] - R&D investment totaled 383,045,446.41 yuan, accounting for 2.14% of total revenue, with a 4.63% increase compared to the previous year[51][53] - The company has 508 R&D personnel, making up 3.03% of the total workforce, with 12 holding PhDs and 85 holding master's degrees[52] - The company's R&D team focused on new product development, variety cultivation, and standard system construction, achieving partial results in areas such as classical formulas and Qingnao Xuanqiao Dripping Pills[72] - Key R&D projects include the secondary development of Tongren Niuhuang Qingxin Pills and exploratory research on potential varieties to enhance their value[72] - The company completed internal standard research for Chuan Niuxi and addressed production quality issues, while also planning ahead for the conservation of endangered medicinal resources[72] - R&D expenditures include direct costs such as employee salaries, R&D expenses, testing fees, material costs, and shared equipment and facility costs allocated based on usage[76] - Development phase expenditures are capitalized if they meet specific criteria, including technical feasibility, intent to complete, market potential, and sufficient resources[76] - Capitalized development expenditures are recorded as development costs on the balance sheet and converted to intangible assets upon project completion[76] - R&D investment in 2023 was 2.14% of operating revenue, higher than the industry average of 1.83%[77] - R&D investment accounted for 1.89% of net assets, ranking in the middle of the industry[77] - Key R&D projects include safety evaluation of Bozi Yangxin Pills (1,446.12万元) and clinical research of Fufang Xiaohuoluo Pills (1,220.03万元)[80] Sales and Marketing - Sales expenses totaled 343,663.20万元, accounting for 19.24% of operating revenue, higher than the industry average of 12.37%[84] - Employee compensation accounted for 48.15% of total sales expenses (165,488.85万元)[82] - Market expansion expenses were 64,366.03万元, representing 18.73% of total sales expenses[82] - The company's e-commerce activities, such as the "618" and "Double 11" promotions, saw Wuzi Yanzong Wan and Suoyang Gujing Wan maintain their top sales positions in the male health category on Tmall for three consecutive years[28] - The company established a product marketing sub-center to effectively utilize visitor traffic to drive product sales[26] - The company's advertising and promotion expenses in the retail sector were 159.8275 million yuan, a year-on-year increase of 1.75%[64] - The gross profit margin of the pharmaceutical retail business was 31.11%, an increase of 0.16 percentage points year-on-year[64] - The company's revenue from cardiovascular and cerebrovascular products was 4.38842 billion yuan, with a gross profit margin of 57.62%[70] - Revenue from tonic products was 1.7298117 billion yuan, with a gross profit margin of 37.39%[70] - Revenue from heat-clearing products was 614.5686 million yuan, with a gross profit margin of 34.97%[70] - The company plans to focus on large-scale aggregation and implement the big product strategy in 2024, aiming to enhance product sales and market penetration[97] - The company will strengthen brand services and optimize after-sales services to meet the growing health needs of the public[97] - The company will continue to innovate in marketing and product development to maintain its competitive edge in the traditional Chinese medicine market[98] - The company plans to integrate online and offline channels to promote its products and services, focusing on retail network expansion and e-commerce development[95] - E-commerce sales grew by 35% year-on-year, contributing 15% to total revenue in 2023[108] - The company launched 12 new products in 2023, which contributed 8% to total sales revenue[108] Production and Operations - The company successfully transferred the drug approval numbers for three products: Angong Niuhuang Wan, Dahuoluo Wan, and Niuhuang Qingxin Wan (Jufang), increasing the reserve of drugs listed in the medical insurance catalog[29] - By the end of the reporting period, Tongrentang Commercial had 1,001 retail stores[29] - The company launched the Yuyao series of products and completed the formulation of cultivation plans for several exclusive products[26] - The company conducted clinical research on several products, including preliminary verification of the efficacy of Angong Niuhuang Wan in treating ischemic stroke[28] - The company completed the phased acceptance of digital production lines in its branches, achieving the extraction and transmission of production process data[32] - The company's "Non-traditional Large Honey Pill Craftsmanship and Intelligent Technology Research" project was recognized as an outstanding project in the National Cultural and Tourism Technology Innovation Engineering[32] - The company's "Key Technology Development and Industrialization Project for Continuous Manufacturing of Traditional Chinese Medicine Extracts and Preparations" was nominated for the 2023 Beijing Science and Technology Award[32] - The company owns over 800 drug specifications, with more than 400 in regular production[79] - The company has multiple medicinal material planting bases to ensure supply of key raw materials[86] - The company plans to expand its retail network by opening 200 new stores in 2024, targeting a 10% increase in market coverage[108] - A new production facility with an investment of 500 million yuan is under construction, expected to be operational by Q3 2024[108] - The company successfully completed the acquisition of a regional pharmaceutical distributor for 280 million yuan, enhancing its distribution network[108] - The company opened a total of 1,001 retail stores by the end of the reporting period, with 59 new stores added in 2023, including 62 newly established stores and 3 closures[61] - Retail revenue from Chinese and Western medicines and herbal pieces accounted for 81.75% of total retail revenue, an increase from 79.12% in 2022[63] - The company's retail pharmacies purchased Chinese and Western medicines and herbal pieces worth approximately 3.975 billion yuan from the top 5 suppliers, a year-on-year increase of 14.46%[63] - 630 retail pharmacies have established traditional Chinese medicine clinics, accounting for 62.94% of the total retail pharmacies[63] - 783 retail pharmacies have obtained the qualification of "medical insurance designated retail pharmacies," accounting for 78.22% of the total retail pharmacies[63] - The company's subsidiary, Tongrentang Commercial, signed a share transfer agreement with Yiyang Group to transfer shares of Anshan Traditional Chinese Medicine Hospital and Shijiazhuang Traditional Chinese Medicine Hospital, but the transfer process is not yet completed[183] - The company's board of directors approved a proposal for entrusted loans from the controlling shareholder to the company and its subsidiaries, with details disclosed in the 2023-034 announcement[183] - The company's total funds received from related parties amounted to 3,544,332.62 RMB, primarily from advertising fees[182] - The company's total funds provided to related parties at the end of the period were 530,000 RMB, mainly for guarantee deposits[182] - The company's controlling shareholder, Tongrentang Group, reported unaudited consolidated financial revenue of 23.57 billion yuan and a profit of 3.31 billion yuan for 2023[194] - China Construction Bank - E Fund CSI 300 Healthcare ETF increased its shareholding to 10,191,090 shares, representing 0.74% of total shares[191] - E Fund CSI 300 Healthcare ETF added 134,300 shares through securities lending, totaling 10,325,390 shares or 0.75% of total shares[192] - Tongrentang Group directly holds 1.40% of Tongrentang Technology (1666.HK) shares[194] - E Fund - China Life Insurance - Traditional Insurance - E Fund China Life Stock Growth Traditional Disposable Single Asset Management Plan holds 5,940,338 shares, representing 0.43% of total shares[190] - Macao Monetary Authority - Own Funds holds 5,876,582 shares, representing 0.43% of total shares[190] - China Construction Bank - ICBC Credit Suisse Frontier Medical Stock Fund holds 5,768,900 shares, representing 0.43% of total shares[190] - E Fund - China Life Insurance - Dividend Insurance - E Fund China Life Stock Growth Stock Portfolio Single Asset Management Plan (Disposable) holds