ZZPZH(600436)2024-04-19 11:54Financial Performance - Revenue for 2023 reached 10,058,497,338.92 yuan, a 15.69% increase compared to 2022 [17] - Net profit attributable to shareholders was 2,797,351,515.70 yuan, up 13.15% year-on-year [17] - Total assets increased by 16.96% to 17,080,413,435.81 yuan at the end of 2023 [17] - Basic earnings per share (EPS) rose by 13.17% to 4.64 yuan [18] - Weighted average return on equity (ROE) decreased by 0.86 percentage points to 22.64% [18] - Operating cash flow decreased by 67.89% to 2,206,631,519.26 yuan due to changes in cash flow classification for fixed deposits [18] - Revenue for Q1 2023 was 262,951.76 million RMB, Q2 was 241,575.81 million RMB, Q3 was 255,460.11 million RMB, and Q4 was 245,862.05 million RMB [20] - Net profit attributable to shareholders in Q1 2023 was 76,968.13 million RMB, Q2 was 77,115.58 million RMB, Q3 was 86,381.14 million RMB, and Q4 was 39,270.30 million RMB [20] - Net cash flow from operating activities in Q1 2023 was 63,442.40 million RMB, Q2 was 73,418.57 million RMB, Q3 was 101,092.54 million RMB, and Q4 was -17,290.36 million RMB [20] - Non-recurring gains and losses for 2023 totaled -56,481,951.15 RMB, compared to -3,699,079.34 RMB in 2022 and 25,513,113.39 RMB in 2021 [23] - Government subsidies in 2023 amounted to 12,430,716.63 RMB, compared to 13,965,561.85 RMB in 2022 and 11,141,407.57 RMB in 2021 [22] - Total revenue for 2023 reached 10.06 billion yuan, a year-on-year increase of 15.69% [46] - Net profit for 2023 was 2.85 billion yuan, up 13.01% year-on-year [46] - Sales expenses increased by 61.95% to 782.78 million yuan, mainly due to increased promotion and advertising costs [47][49] - Other income surged by 97.72% to 21.52 million yuan, driven by VAT deduction policies [49] - Investment income rose by 67.78% to 126.19 million yuan, primarily due to increased interest income from time deposits [49] - The company's total assets stood at 17.08 billion yuan as of December 31, 2023 [46] - Operating cash flow decreased by 67.89% to 2.21 billion yuan, mainly due to changes in the classification of time deposits [49] - Total revenue for 2023 reached 1,003,618.59 million yuan, with a year-on-year increase of 15.70% [52][54] - The pharmaceutical manufacturing sector contributed 480,165.72 million yuan in revenue, a decrease of 75.77% compared to the previous year [52][54] - The pharmaceutical distribution sector generated 420,482.22 million yuan in revenue, with a year-on-year increase of 3.60% [52][54] - The cosmetics industry reported revenue of 70,675.80 million yuan, with a year-on-year increase of 62.18% [52][54] - Gross profit margin for the pharmaceutical distribution sector increased by 1.63 percentage points to 46.86% [52][54] - Online sales revenue was 73,000.11 million yuan, with a gross profit margin increase of 3.13 percentage points to 19.97% [55] - Offline sales revenue reached 930,618.48 million yuan, with a gross profit margin increase of 0.32 percentage points to 48.92% [55] - Production volume of liver disease drugs increased by 4.24% to 401.72 million boxes, while sales volume increased by 34.02% to 453.45 million boxes [56] - Direct material costs for liver disease drugs increased by 39.86% to 89,021.43 million yuan, accounting for 94.02% of total costs [57] - The total cost for pharmaceutical manufacturing increased by 43.30% to 116,353.40 million yuan, with direct material costs accounting for 92.76% [58] - Top 5 customers contributed sales of 883.46 million yuan, accounting for 8.80% of total annual sales [60] - Top 5 suppliers accounted for 1.21 billion yuan in procurement, representing 19.88% of total annual procurement [61] - Sales expenses increased by 61.95% to 782.78 million yuan, mainly due to increased promotion and advertising expenses [65] - Management expenses rose by 10.87% to 367.05 million yuan, primarily due to increased employee compensation and depreciation [66] - R&D investment totaled 232.35 million yuan, accounting for 2.31% of operating revenue [67] - The company has 237 R&D personnel, representing 8.50% of total employees [68] - Operating cash flow decreased by 4.67 billion yuan to 2.21 billion yuan, mainly due to changes in the classification of fixed deposits [71] - Investment cash flow improved by 3.53 billion yuan to -2.77 billion yuan, reflecting changes in fixed deposit classification [72] - Financing cash flow decreased by 193.48 million yuan to -769.30 million yuan, mainly due to reduced borrowing [72] - Cash and cash equivalents decreased by 53.58% to 11,587.46 million yuan, accounting for 6.78% of total assets [73] - Accounts receivable increased by 22.48% to 9,117.49 million yuan, accounting for 5.34% of total assets [73] - Inventory increased by 28.57% to 33,786.61 million yuan, accounting for 19.78% of total assets [73] - Other current assets increased by 45.56% to 91,442.74 million yuan, accounting for 53.54% of total assets [73] - Long-term equity investments decreased by 20.81% to 1,935.54 million yuan, accounting for 1.13% of total assets [73] - Construction in progress increased by 158.62% to 1,571.90 million yuan, accounting for 0.92% of total assets [73] - Retained earnings increased by 21.82% to 99,957.72 million yuan, accounting for 58.52% of total assets [74] - Overseas assets amounted to 518.35 million yuan, accounting for 0.30% of total assets [77] - Restricted assets totaled 1,071.76 million yuan, including 815.56 million yuan in cash and 256.19 million yuan in intangible assets [78] - The company's financial assets measured at fair value had a total impact of 21,720,121.28 RMB on current profits [25] - The company's financial assets measured at fair value totaled 4.91 billion yuan at the end of the period, with a net impact on other comprehensive income of 1.61 million yuan and a net impact on current profit of 21.72 million yuan [103] - The company's equity investments in listed companies, including Huarun Double-Crane, Liaoning Chengda, Industrial Securities, and Industrial Bank, had a total initial investment cost of 2.82 billion yuan and a total fair value of 3.66 billion yuan at the end of the period [104] - The total book value of private equity investments at the end of the period was RMB 1.2003 billion, with a net decrease of RMB 472.291 million during the period [105] - Xiamen Pien Tze Huang Hongren Pharmaceutical Co., Ltd. (consolidated) reported revenue of RMB 3.444 billion and net profit of RMB 1.1015 million [106] - Fujian Tongchun Pharmaceutical Co., Ltd. reported revenue of RMB 4.304 billion and net profit of RMB 53.6449 million [107] - The company distributed a cash dividend of 754,146,512.50 yuan (tax included) for 2022, accounting for 30.50% of the net profit attributable to shareholders [154] - The proposed cash dividend for 2023 is 1,399,695,927.20 yuan (tax included), representing 50.04% of the net profit attributable to shareholders [154][157] - The company did not propose any stock dividends or capital reserve to share capital conversion for 2023 [154][157] - The company's cash dividend policy ensures a minimum cash dividend ratio of not less than 30% of the distributable profit for the year, with adjustments requiring approval by two-thirds of the shareholders present at the general meeting [153] Research and Development - The company conducted 11 clinical studies on the secondary development of its core product, Pien Tze Huang, and completed 3 clinical studies [27] - The company completed 10 research projects on the pharmacological and toxicological effects of Pien Tze Huang, including its mechanism of action on bile acid metabolism and liver protection [27] - The company published 25 new research papers during the reporting period [27] - The company published a research paper on inhibiting colorectal cancer by regulating gut microbiota and metabolites in the top gastroenterology journal Gastroenterology (IF 29.4), enhancing product competitiveness [28] - 3 chemical drug Class 1 new drugs, 3 traditional Chinese medicine (TCM) Class 1.1 new drugs, and 1 TCM Class 1.2 new drug entered clinical research stage [28] - Obtained Phase II clinical trial summary report for Wandan Tablets, confirming clinical efficacy for mild to moderate generalized anxiety disorder [28] - Completed Phase I clinical research report for PZH2108 tablets, showing good safety and tolerability in Chinese healthy subjects [28] - Completed preclinical research for 2 chemical innovative drugs [28] - Newly authorized 26 invention patents and 4 utility model patents, transferred 2 invention patents [28] - Obtained 5 computer software copyright registration certificates and 2 non-major crop variety certification certificates [28] - 4 products including Compound Pien Tze Huang Ointment passed national patent-intensive product filing [28] - Passed the 2023 national intellectual property demonstration enterprise assessment and Fujian provincial intellectual property advantage enterprise review [28] - The company is focusing on secondary development of its core product Pien Tze Huang, as well as the development of new traditional Chinese medicine, classical formulas, and chemical drugs [85] - Key R&D projects include PZH2113 for tumors, PZH1215 for diabetic nephropathy, and PZH2114 for liver diseases, with various stages ranging from pre-clinical research to Phase II clinical trials [86] - The company has submitted applications for drug re-registration for Qinghuo Tablets and Sangju Ganmao Tablets, which are used for clearing heat and detoxifying, and treating wind-heat colds respectively [87] - R&D investment in 2023 was RMB 23,235.43 million, accounting for 2.31% of operating revenue [90] - The company's R&D investment accounted for 1.67% of net assets, with a capitalisation ratio of 0.00% [90] - The average R&D investment of peer companies was RMB 35,155.55 million [90] - Key R&D projects include modern disease spectrum research with an investment of RMB 7,691.41 million, a 17.88% increase year-on-year [92] - The company's R&D policy distinguishes between research and development phases, with development phase expenditures capitalised under specific conditions [88] Product Sales and Marketing - Sales of Pien Tze Huang capsules increased significantly during the reporting period, with Pien Tze Huang lozenges ranking first in sales in the liver and gallbladder medication category on Tmall and JD platforms [32] - Three major products, Angong Niuhuang Wan, Pien Tze Huang lozenges, and Ganbao, each achieved sales exceeding 100 million yuan [32] - The sales of Queen Brand Pien Tze Huang Pearl Cream exceeded 100 million yuan, and sales of five proprietary "Blue Hat" health food products doubled [32] - The company conducted over 4,500 offline terminal promotion activities and approximately 1,500 public welfare-themed activities, benefiting tens of thousands of people [33] - The company upgraded all "Pien Tze Huang Experience Halls" to "Pien Tze Huang Traditional Medicine Halls" starting January 3, 2024, to enhance brand image [45] - The company's terminal stores now cover over 100,000 locations through partnerships with major pharmacy chains [45] - The company's brand value was 40.94 billion yuan, ranking second among "China Time-Honored Brands" [43] - The company's sales model includes strategic partnerships with major pharmacy chains and the establishment of "Pien Tze Huang Traditional Medicine Halls" both domestically and internationally [93] - Business promotion expenses increased by 298.82 million yuan, with the parent company contributing an increase of 265.27 million yuan, Fujian Pien Tze Huang Cosmetics Co., Ltd. adding 40.24 million yuan, and Fujian Pien Tze Huang Health Food Co., Ltd. increasing by 13.49 million yuan, while Fujian Pien Tze Huang E-commerce Co., Ltd. decreased by 9.69 million yuan [98] - Advertising expenses decreased by 15.64 million yuan, with the parent company reducing expenses by 13.59 million yuan [99] - Operating expenses through e-commerce platforms decreased by 6.74 million yuan [99] - The company's sales expenses in 2023 were 783 million yuan, with a sales expense ratio of 7.78%, significantly lower than the industry average of 23.99 billion yuan and 44.33% [99] - Promotion, business promotion, and advertising expenses accounted for 67.90% of total sales expenses [94] - The company's main sales channels include domestic pharmacy sales, hospital sales, and overseas distribution [93] Corporate Governance and Leadership - The company held 2 shareholder meetings in the reporting period, addressing issues such as board reports, profit distribution, and financial budgets [118] - The company's board of directors held 7 meetings and 10 specialized committee meetings, with independent directors actively fulfilling their duties and providing professional opinions [119] - The company's board of directors revised the "Board Strategic Committee Work Rules" to enhance ESG governance and sustainability performance [119] - The company held two shareholders' meetings during the reporting period, with all proposals passed [123] - The total pre-tax remuneration for directors, supervisors, and senior management during the reporting period was 6.0237 million yuan [125] - The chairman of the board, Lin Zhihui, received a pre-tax remuneration of 234,800 yuan [124] - The general manager, Huang Jinming, received a pre-tax remuneration of 563,500 yuan [124] - The total pre-tax remuneration for independent directors during the reporting period was 240,000 yuan [124] - The total pre-tax remuneration for supervisors during the reporting period was 1.8012 million yuan [124] - The total pre-tax remuneration for senior management during the reporting period was 2.0237 million yuan [125] - The company's financial report for 2022 and financial budget for 2023 were approved at the 2022 annual shareholders' meeting [123] - The company's profit distribution plan for 2022 was approved at the 2022 annual shareholders' meeting [123] - The company's proposal to appoint additional directors was approved at the 2023 first extraordinary shareholders' meeting [123] - Lin Zhihui was appointed as the company's Party Committee Secretary and Chairman in August 2023 [126] - Huang Jinming has been serving as the company's Deputy Party Committee Secretary, Director, and General Manager since July 2019 [126] - Lai Wenning has been serving as the company's Director since December 2022 [126] - Yang Haipeng has been serving as the company's Director and Chief Accountant since January 2022 [126] - Fan Zhipeng has been serving as the company's Independent Director since March 2018 [126] - Du Shouying, born in December 1960, holds a Ph.D. in Clinical Chinese Medicine from Beijing University of Chinese Medicine and serves as an independent director for Hunan Fangsheng Pharmaceutical Co., Ltd. and Chongqing Huasen Pharmaceutical Co., Ltd. [127] - Zhang Lei, born in October 1985, is a Certified Public Accountant and currently serves as the director of the Shenzhen branch of Tianzhi International Accounting Firm (Special General Partnership). [127] - Chen Lei, born in January 1981, holds a Ph.D. in Finance and is currently a professor and vice dean at the School of Finance and Economics, Jimei University, and also serves as an independent director for Ruida Fund Management Co., Ltd. [127] - Xu Shibin, born in May 1972, has extensive experience in government and corporate roles, currently serving as the Deputy Party Secretary and Chairman of the Supervisory Board of the company. [127] - Huang Yalong, born in December 1965, is a senior accountant with a long history in the company's financial department, currently serving as the Director of the Audit Department and a staff supervisor. [127] - Wei Tengyun, born in February 1972, is a licensed pharmacist and engineer, currently serving as the Director of the First Workshop and a staff supervisor at the company. [127] - Chen Yuhong has been serving as the company's supervisor and director of the Enterprise Management Department since June 2022 [128] - Huang Qiumin has been serving as the company's supervisor and director of the Securities Investment Department since June 2022, and also as the chairman of Zhangzhou Pien Tze Huang Investment Management Co., Ltd [128] - Hong Fei has been serving as the company's vice president since August 2022 [128] - Chen Honghui has been serving as the company's vice president and board secretary since August 2022 [128] - Zhang Zexiu has been serving as the company's vice president and chairman of Fujian Pien Tze Huang Health Food Co., Ltd since January 2024 [128] - Lai Wenning has been serving as a director and vice president of Zhangzhou Jiulongjiang Group Co., Ltd since April 2022 [129] - Fan Zhipeng serves as a partner at Beijing Danggui Yuanz