Financial Performance - The company reported revenue of RMB 2,424.4 million for the year ended June 30, 2019, a decrease of 38.8% from RMB 3,968.9 million for the previous eighteen months[14]. - Gross profit was RMB 326.8 million, resulting in a gross margin of 13.5%, down from 16.4% in the previous period[14]. - The operating loss narrowed to RMB 281.6 million from RMB 966.2 million, indicating an improvement in operational efficiency[14]. - Net loss for the year was RMB 267.1 million, compared to RMB 924.8 million in the previous period, reflecting a significant reduction in losses[14]. - The return on equity improved by 32.4 percentage points to -15.4% from -47.8%[14]. - The loss attributable to equity holders was RMB 265.6 million, down from RMB 917.0 million in the previous eighteen months, indicating a strategic transformation despite ongoing economic challenges in Northeast China[24]. - For the fiscal year ending June 30, 2019, the company recorded revenue of RMB 2,424.4 million, a decrease from RMB 3,968.9 million for the eighteen months ending June 30, 2018[56]. - The company reported a loss attributable to owners of RMB 265.6 million for the fiscal year, compared to a loss of RMB 917.0 million for the previous eighteen months[56]. - The overall gross profit margin decreased from 16.4% to 13.5%, primarily due to promotional measures taken to mitigate revenue decline[64]. Retail and Distribution Operations - The retail business recorded sales revenue of RMB 1,096.0 million, a decrease from RMB 1,896.8 million in the previous period[42]. - The distribution business generated sales revenue of RMB 1,328.4 million, down from RMB 2,072.1 million in the previous period[43]. - The total number of retail pharmacies operated by the company decreased to 850 from 917 in the previous year[60]. - The company had approximately 850 retail pharmacies and around 3,800 active distribution customers across Northeast China[8]. - The company closed 67 stores during the year, resulting in a total of 850 stores at the end of the year[42]. - The company has approximately 3,800 active customers in its national distribution network, down from 6,200 in the previous eighteen months[61]. Strategic Initiatives and Future Plans - The company is actively exploring the "Internet+" sector, including online pharmacies and cross-border e-commerce initiatives[9]. - The company plans to extend its upstream ecosystem into traditional Chinese medicine cultivation and plant capsule production[9]. - The company aims to establish a "Health Industry Fund" to support its strategic vision and enhance its ecosystem through financial and capital resources[9]. - The group aims to integrate "Internet + Health" with the physical economy, enhancing collaboration with industry platforms to develop international cooperation in the health sector[24]. - The company is focused on diversifying its product offerings and expanding sales channels to mitigate operational declines in retail distribution[24]. - The group aims to stabilize and optimize its existing retail chain and distribution system, focusing on strategic partnerships and logistics upgrades[87]. - The company plans to develop under-forest Chinese medicinal materials, leveraging government support for the industry[88]. - The group is exploring the "N+" strategy to create new business models and enhance its operational structure[90]. Market Context and Industry Trends - The global pharmaceutical market demand is projected to reach USD 122.49 billion in 2019, with an average compound growth rate of 4% to 5% from 2015 to 2019[27]. - China's pharmaceutical industry revenue reached RMB 2,398.6 billion in 2018, with a year-on-year growth of 12.6%[31]. - In the first half of 2019, China's GDP was RMB 45.09 trillion, growing by 6.3% year-on-year, which is the lowest growth rate since 1990[32]. - The pharmaceutical manufacturing industry's revenue and profit totaled RMB 1.22 trillion and RMB 160.82 billion respectively in the first half of 2019, reflecting year-on-year growth of 8.5% and 9.4%[32]. - The global pharmaceutical market is expected to see significant growth in emerging markets, particularly in Asia, Africa, and Australia, with growth rates between 6.9% and 9.9% from 2014 to 2019[27]. - The pharmaceutical industry is expected to face significant performance pressure due to policies like volume-based procurement, but overall growth is anticipated due to strategic reforms and market demand[36]. Employee and Corporate Governance - As of June 30, 2019, the group employed 5,628 staff, with 99.8% located in mainland China[118]. - The total number of employees decreased from 6,068 in 2018 to 5,628 in 2019, reflecting a reduction of approximately 7.2%[121]. - Employee turnover for the year was 440, compared to 223 in the previous 18 months, indicating an increase in turnover[121]. - The group provided 162 training sessions through the Jintian Business School, with a total of 8,916 participants in the current year[130]. - The group adheres to local labor laws, ensuring compliance with minimum wage and paid leave regulations[120]. - The group has not reported any employee fatalities or injuries related to work during the year[126]. - The group emphasizes employee well-being by offering flexible leave and organizing activities to relieve stress[125]. - The group ensures that all business conduct adheres to ethical standards, including health and safety regulations[123]. Environmental and Social Responsibility - The company aims to reduce greenhouse gas emissions by minimizing business travel and promoting alternative communication methods such as video conferencing[106]. - The company collaborates with five pharmaceutical manufacturers to ensure compliance with environmental regulations and promote energy-saving practices[106]. - The company emphasizes green office practices, including encouraging paperless operations and setting air conditioning to 25 degrees Celsius[115]. - The company has implemented a logistics warehouse construction project to enhance operational efficiency and reduce environmental impact[116]. - The company has established policies to promote resource conservation, including energy and water-saving measures[114]. - The group is committed to corporate social responsibility and sustainable development, integrating business growth with community engagement[141]. - The group actively participates in community activities and promotes the "Love China" public welfare brand[145]. Stock Options and Shareholder Information - The company issued a total of 300,000,000 stock options to 50 eligible participants, representing approximately 9.87% of the total issued shares[55]. - The company has granted a total of 500,000 stock options under the stock option plan to each of Zheng Shuangqing, Jiang Suhui, and Zou Haiyan, allowing them to subscribe for 500,000 shares upon exercise[187]. - The stock option plan was approved on November 18, 2013, and modified on December 20, 2018, with a validity period until November 17, 2023, lasting ten years[186]. - The total number of stock options granted under the stock option plan cannot exceed 10% of the total issued shares as of the resolution date[189]. - The beneficial owner, Jin Dongtao, holds 562,014,953 shares, representing 15.66% of the total shareholding[183]. - The company aims to attract skilled and experienced personnel through the stock option plan to encourage their retention and contribution to future development[186]. - The maximum number of shares that may be issued upon the exercise of all outstanding stock options under the plan cannot exceed 30% of the issued shares as per listing rules[190]. - The total number of stock options granted under the stock option plan is 500,000,000, with 200,000,000 options unexercised at the beginning of the year and 300,000,000 options granted during the year[192].
大健康国际(02211) - 2019 - 年度财报