2023-09-26 08:44Financial Performance - For the six months ended June 30, 2023, the company's revenue was RMB 15.28 billion, a slight increase of 0.5% compared to RMB 15.19 billion in the same period of 2022[8]. - The net profit attributable to shareholders for the same period was RMB 1.26 billion, representing a decrease of 34.5% from RMB 1.92 billion year-on-year[11]. - Adjusted net profit under non-HKFRS for the six months was RMB 1.48 billion, up 1.2% from RMB 1.46 billion in the previous year[10]. - In Q2 2023, the company reported revenue of RMB 8.63 billion, a significant increase of 30.0% from RMB 6.64 billion in Q2 2022[9]. - The adjusted net profit for Q2 2023 was RMB 960 million, reflecting a growth of 20.7% compared to RMB 800 million in Q2 2022[9]. - The decline in net profit attributable to shareholders was primarily due to the underperformance of an associated company compared to the previous year[9]. - The financial results indicate a stable revenue stream with a focus on innovative drug development and market expansion strategies[8]. - The basic earnings per share based on the adjusted net profit attributable to the parent company rose by 1.8% to RMB 7.96[12]. - The profit attributable to equity holders of the parent company for the first half of 2023 was RMB 1,258,784,000, compared to RMB 1,921,037,000 in the same period of 2022, reflecting a decline of approximately 34.4%[81]. Innovative Drug Development - Innovative drug revenue reached RMB 3.86 billion, an increase of 10.9% year-on-year, accounting for 25.3% of total revenue[8]. - The company is transitioning from a generics-based model to a fully innovative approach, with the revenue contribution from innovative drugs increasing year by year[14]. - The company has a strong pipeline of products in oncology, liver disease, respiratory, and pain management, with several key drugs already in the market[16]. - The company launched two innovative products during the reporting period and received approval for two biosimilars, focusing on oncology, liver disease, respiratory, and surgical/pain treatment areas[21]. - The company expects to have 7 innovative drugs and 9 biosimilars or generics approved for market in the oncology field over the next three years (2023-2025)[23]. - The group has 127 products in development, including 60 oncology drugs, 10 liver disease drugs, 21 respiratory drugs, and 17 surgical/pain relief drugs, with 69 of these being Class I innovative products[37]. - The group anticipates that 1 innovative drug and 8 biosimilars or generic drugs in the respiratory system field will be approved for market launch in the next three years (2023-2025)[26]. - The group expects to launch 1 innovative drug and 10 biosimilars or generic drugs in the surgical/pain relief field in the next three years (2023-2025)[29]. Research and Development - The company continues to focus on core business performance, adjusting for non-cash items and contributions from associated companies[10]. - Total R&D expenditure for the six months ended June 30, 2023, was approximately RMB 2,604.95 million, accounting for about 17.1% of total group revenue[39]. - The company reported an increase in research and development costs to RMB 2,357,257 thousand from RMB 2,048,604 thousand, reflecting a growth of 15.06%[54]. - The company has established research centers recognized for their contributions to drug development, particularly in liver disease and oncology[17]. Market Position and Recognition - The company has been recognized as a top pharmaceutical company, ranking in the "Top 50 Global Pharmaceutical Companies" by Pharmaceutical Executive for five consecutive years[14]. - The company has been included in multiple indices, such as the MSCI Global Standard Index and the Hang Seng Index, reflecting its strong market position[20]. - The group was recognized as one of the 88 selected companies in the "Sustainable Development Yearbook (China Edition) 2023" by S&P Global, highlighting its commitment to ESG management[50]. Financial Position and Cash Flow - The group maintains a strong cash position with total cash reserves of approximately RMB 1,960.9 million, including RMB 1,157.7 million in cash and bank balances[30]. - The group reported a net cash position of approximately RMB 424,812 million as of June 30, 2023, down from RMB 443,625 million at the end of 2022[45]. - The total cash and cash equivalents at the end of the period were RMB 3,293,964 thousand, down from RMB 6,065,442 thousand at the end of the same period last year[59]. - The company’s cash flow from financing activities showed a net outflow of RMB 4,042,087 thousand, compared to RMB 1,460,527 thousand in the previous year, indicating a substantial increase in cash outflow[59]. Corporate Governance and Shareholder Information - The company has complied with the corporate governance code as per the listing rules, except for the absence of two independent non-executive directors at the annual general meeting[122]. - The audit committee consists of four independent non-executive directors, ensuring compliance with relevant listing rules[125]. - The company’s directors and key executives hold significant shares, with Xie Qirun holding approximately 12.13% of the total issued share capital[107]. - The company aims to attract and retain top talent through the 2023 stock option plan, which is effective for 10 years[116]. Regulatory and Market Environment - The new regulations from the National Healthcare Security Administration are expected to alleviate price reduction pressures for innovative drugs, benefiting their development[21]. - The average price drop for the 39 drugs selected in the eighth batch of national centralized procurement was 56%, indicating a shift towards normalized and institutionalized procurement management[21].