Company Overview - The company is a leading supplier of in vitro diagnostic reagents in China, focusing on R&D, production, sales, and distribution of diagnostic products [9]. - The company has established a marketing network covering over 600 distributors across more than 30 provinces and municipalities in China [9]. - The first major shareholder, Beijing Saipu Asset Management Co., Ltd., is a wholly-owned subsidiary of the Chinese Academy of Sciences, enhancing the company's credibility [9]. - The brand "Zhongsheng" has been recognized as a famous brand in Beijing and has received multiple quality awards in the diagnostic reagent market [9]. - The company has a strong management team, including several university professors and PhDs, contributing to its competitive edge in research and development [10]. - The company emphasizes a business philosophy of "people-oriented, innovation, quality first, pursuit of perfection, honest labor, and legal operation" to strengthen its overall competitiveness [10]. - The company is committed to providing high-quality and reliable disease testing reagent products to hospitals and healthcare institutions [9]. - The company has a diverse ownership structure, with significant stakes held by both state-owned and private enterprises, ensuring a robust financial backing [14]. Financial Performance - The company achieved a revenue of RMB 131 million in the first half of 2020, a decrease of 36% compared to the same period last year [22]. - The loss attributable to shareholders was RMB 12.31 million, a decrease of 2.7 times compared to a profit of RMB 7.21 million in the same period last year, primarily due to the negative impact of COVID-19 [22]. - For the six months ended June 30, 2020, the group's revenue was approximately RMB 131,383,000, a decrease of 35.4% compared to RMB 203,893,000 for the same period in 2019 [40]. - The gross profit for the same period was RMB 46,716,000, down 44.5% from RMB 84,193,000 in 2019 [40]. - The operating profit for the six months ended June 30, 2020, was a loss of RMB 9,875,000, compared to a profit of RMB 15,914,000 in the same period of 2019 [40]. - The net profit attributable to the company's shareholders for the six months ended June 30, 2020, was a loss of RMB 12,305,000, compared to a profit of RMB 7,213,000 in 2019 [41]. - The company reported a net loss of RMB 15,072,000 for the six months ended June 30, 2020, compared to a profit of RMB 11,560,000 in the same period of 2019 [43]. - The total employee cost for the six months ended June 30, 2020, was approximately RMB 39,310,000, a decrease of 43.7% compared to RMB 69,880,000 in 2019 [37]. - The company employed approximately 470 full-time employees as of June 30, 2020, down from about 542 employees as of December 31, 2019 [37]. - The total current liabilities amounted to RMB 370,000,000 as of June 30, 2020, slightly up from RMB 362,952,000 as of December 31, 2019, representing an increase of approximately 1.3% [46]. - The total equity as of June 30, 2020, was RMB 183,741,000, a decrease from RMB 199,225,000 as of December 31, 2019, representing a decline of approximately 7.8% [46]. - The net cash flow from operating activities for the six months ended June 30, 2020, was a negative RMB 9,290,000, compared to a positive RMB 26,149,000 for the same period in 2019, indicating a significant decline [49]. - The total non-current liabilities increased to RMB 85,574,000 as of June 30, 2020, compared to RMB 82,786,000 as of December 31, 2019, marking an increase of about 3.4% [46]. - The total non-current assets as of June 30, 2020, were RMB 207,721,000, a decrease from RMB 219,398,000 as of December 31, 2019 [44]. - The total current assets as of June 30, 2020, were RMB 431,594,000, slightly up from RMB 425,565,000 as of December 31, 2019 [44]. - The net cash and cash equivalents increased to RMB 49,970,000 as of June 30, 2020, from RMB 30,052,000 at the beginning of the period, showing an increase of about 66.5% [49]. Market and Product Development - The domestic in vitro diagnostic reagent market size was estimated to be over RMB 70 billion in 2019, with the biochemical product market share reaching approximately 35% [22]. - The company registered two new products during the reporting period and completed the continuation registration of 74 products, including a new COVID-19 antibody detection kit that received EU CE certification [21]. - The company plans to expand its biochemical product line and accelerate the development of immunological products, mass spectrometry products, flow cytometers, and molecular products [18]. - The company aims to enhance its competitiveness through new technologies and products in response to the intense price competition in the domestic biochemical diagnostic reagent market [27]. - The company anticipates that the in vitro diagnostic industry may continue to be affected by the unpredictable macroeconomic environment and the spread of the pandemic in the second half of 2020 [29]. Corporate Governance - The company has complied with all corporate governance code provisions during the reporting period, except for specific provisions A.1.8, A.2.1, and C.2.5 [95]. - The company has established an audit committee to review and supervise its financial reporting procedures and internal control systems [94]. - No directors or supervisors have been reported to have interests in any business that competes directly or indirectly with the company [89]. - The company believes that the current structure of having the Chairman and CEO roles combined does not undermine the balance of power and authority between the board and management [98]. - The company has decided not to establish an internal audit department due to its operational scale and structure, but has implemented measures to ensure compliance with financial reporting and internal control principles [99]. - The board has engaged external consultants to conduct internal reviews as part of its risk management and internal control strategy [99]. - The necessity of establishing an internal audit function will be reviewed periodically by the board, with potential formation of an internal audit team if needed [99]. Shareholder Information - As of June 30, 2020, Mr. Wu Le Bin holds 3,500,878 shares, representing 4.35% of the company's domestic shares and 2.42% of the total registered capital [83]. - Beijing Puxi Asset Management Co., Ltd. owns 31,308,576 shares, accounting for 38.93% of domestic shares and 21.64% of the total registered capital [86]. - Mr. Wang Shuai holds 24,506,143 shares, representing 30.47% of domestic shares and 16.93% of the total registered capital [86]. - The company has not purchased, sold, or redeemed any of its listed securities during the six months ending June 30, 2020 [90]. - The company has not granted any rights to directors or supervisors to purchase shares or debt securities during the six months ending June 30, 2020 [88]. - The total equity attributable to non-controlling interests was RMB 21,663,000 as of June 30, 2020, down from RMB 24,434,000 as of December 31, 2019, reflecting a decrease of approximately 11.5% [46]. Other Financial Metrics - Revenue from a single customer in the in vitro diagnostic reagent product category accounted for approximately RMB 26,223,000, which is over 10% of the total revenue [61]. - The net cash flow from investing activities was RMB 3,145,000 for the six months ended June 30, 2020, compared to a negative RMB 6,616,000 for the same period in 2019, indicating an improvement [49]. - Financial expenses for the three months ended June 30, 2020, increased significantly to RMB 2,892,000 from RMB 825,000 in the same period of 2019, marking a rise of approximately 250.5% [65]. - The total tax expense for the six months ended June 30, 2020, was RMB 88,000, down from RMB 4,358,000 in the same period of 2019, indicating a substantial decrease of approximately 98% [68]. - Basic earnings per share for the six months ended June 30, 2020, remained at RMB 0.00, consistent with the same period in 2019, as there were no diluted earnings reported [69]. - The company proposed not to declare an interim dividend for the six months ended June 30, 2020, consistent with the decision in 2019 [70]. - Trade receivables as of June 30, 2020, totaled RMB 175,382,000, a decrease from RMB 221,889,000 as of December 31, 2019, reflecting a decline of approximately 20.9% [72]. - Trade payables as of June 30, 2020, amounted to RMB 97,152,000, down from RMB 118,223,000 as of December 31, 2019, representing a decrease of approximately 17.8% [74]. - The company has guaranteed loans amounting to RMB 36,200,000 for an associate and a subsidiary as of June 30, 2020, slightly down from RMB 36,500,000 as of December 31, 2019 [76]. - Total remuneration for key management personnel for the six months ended June 30, 2020, was RMB 2,152,000, a slight decrease from RMB 2,163,000 in the same period of 2019 [80]. - The company has no significant capital commitments related to property, plant, and equipment as of June 30, 2020 [77].
中生北控生物科技(08247) - 2020 - 中期财报