SINO BIOPHARM(01177)2024-09-26 08:30Financial Performance - Revenue for the first half of 2024 reached RMB 15.87 billion, an increase of 11.1% compared to RMB 14.28 billion in the same period last year[7] - Net profit attributable to owners of the parent company surged by 139.7% to RMB 3.02 billion, up from RMB 1.26 billion in the previous year[7] - Adjusted non-HKFRS net profit attributable to owners of the parent company increased by 14.0% to RMB 1.54 billion[7] - Revenue for the period reached approximately RMB 158.744 billion, an increase of 11.1% year-over-year[46] - Net profit attributable to shareholders was approximately RMB 30.1716 billion, a significant increase of 139.7% year-over-year[46] - Adjusted non-HKFRS net profit attributable to shareholders was approximately RMB 15.3533 billion, up 14.0% year-over-year[46] - Revenue for the first half of 2024 reached RMB 15,874.4 million, a 11.1% increase compared to RMB 14,283.7 million in the same period of 2023[96] - Gross profit for the first half of 2024 was RMB 13,029.6 million, up 11.5% from RMB 11,683.9 million in the first half of 2023[96] - Net profit attributable to shareholders of the parent company for the first half of 2024 was RMB 3,017.2 million, a significant increase from RMB 1,258.8 million in the same period of 2023[96] - Basic earnings per share for the first half of 2024 were RMB 16.39 cents, compared to RMB 6.78 cents in the same period of 2023[96] - Total comprehensive income for the first half of 2024 was RMB 4,865.9 million, a 69.2% increase from RMB 2,875.9 million in the first half of 2023[99] - Profit for the period was RMB 3,017,162 thousand as of June 30, 2024, compared to RMB 1,258,784 thousand as of June 30, 2023[106] - Total comprehensive income for the period was RMB 3,275,666 thousand as of June 30, 2024, up from RMB 1,434,530 thousand as of June 30, 2023[106] - Net profit attributable to parent company owners increased by 139.7% to RMB 3,017.16 million in the first half of 2024 compared to the same period in 2023[60] - Adjusted non-HKFRS net profit attributable to parent company owners rose by 14.0% to RMB 1,535.33 million in the first half of 2024[60] - Basic earnings per share based on adjusted non-HKFRS net profit increased by 15.0% to RMB 8.34 cents in the first half of 2024[63] Revenue Breakdown - Revenue from innovative products grew by 14.8% to RMB 6.13 billion, accounting for 38.6% of total revenue[7] - Revenue from new products (launched within the last five years) rose by 39.6% to RMB 6.03 billion, representing 38.0% of total revenue[7] - The company's innovative products revenue reached RMB 6.13 billion in the first half of 2024, a year-on-year increase of 14.8%[27] - Revenue from products launched within the last 5 years reached RMB 6.03 billion in the first half of 2024, a year-on-year growth of 39.6%[27] - Oncology drug revenue was approximately RMB 53.6026 billion, accounting for 33.8% of total revenue and growing 19.5% year-over-year[52] - Surgical/analgesic drug revenue was approximately RMB 25.8284 billion, accounting for 16.3% of total revenue and growing 29.9% year-over-year[55] - Revenue from the Modern Chinese Medicine and Western Medicine segment reached RMB 15,649,885 thousand, contributing the majority of the total revenue of RMB 15,874,403 thousand[119] - Revenue from industrial product sales for the six months ended June 30, 2024, was RMB 15,631.808 million, an increase from RMB 14,073.156 million in the same period in 2023[129] R&D and Innovation - R&D expenses accounted for 16.2% of revenue, a slight decrease of 0.1 percentage points compared to the previous year[7] - The company launched 4 innovative products approved by the NMPA, including 3 national Class 1 innovative drugs[27] - The company obtained 11 generic drug approvals from the NMPA, with overall generic drug revenue achieving positive growth[27] - The company has 43 innovative oncology drug candidates in clinical and above development stages, including 3 in the NDA stage, 5 in Phase III, 17 in Phase II, and 18 in Phase I. Additionally, there are 18 biosimilar or generic oncology drug candidates in clinical and above development stages, with 7 in the NDA stage, 1 in pivotal clinical trials, 2 in Phase I, and 8 in BE trials. The company expects 4 innovative drugs and 8 biosimilars or generics to be approved in the oncology field from 2024 to 2026[33] - D-1553 (KRAS G12C inhibitor) submitted an NDA in December 2023 for second-line treatment of KRAS G12C-mutated locally advanced or metastatic non-small cell lung cancer. It is the first domestically developed KRAS G12C inhibitor in China and has been included in the breakthrough therapy program for two additional indications in June 2024[33] - TQB3616 (CDK2/4/6 inhibitor) submitted an NDA in July 2024 for HR+/HER2- advanced or metastatic breast cancer. It shows enhanced CDK2 and CDK4 inhibition compared to abemaciclib, potentially addressing resistance issues in current CDK4/6 inhibitors. The company is advancing Phase III trials for first-line and adjuvant treatment of breast cancer[33] - FS222 (CD137 agonist/PD-L1 inhibitor) demonstrated strong antitumor activity in Phase I trials, with an ORR of 47.4% and DCR of 68.4% in PD-1 antibody-pretreated metastatic/advanced melanoma patients. The company is accelerating its clinical development[34] - The company has 6 innovative liver disease drug candidates in clinical and above development stages, including 1 in Phase III and 5 in Phase II. Additionally, there are 3 biosimilar or generic liver disease drug candidates, with 2 in the NDA stage and 1 in BE trials. The company expects 2 biosimilars or generics to be approved in the liver disease field from 2024 to 2026[36] - The company has 8 innovative respiratory drugs in clinical development, including 1 in Phase III, 4 in Phase II, and 3 in Phase I, with 12 biosimilars or generics expected to be approved by 2026[41] - The company's total R&D expenditure in the first half of 2024 was approximately RMB 2,760.57 million, accounting for 17.4% of total revenue[73] - Research and development expenses for the six months ended June 30, 2024, were RMB 2,578.342 million, an increase from RMB 2,325.435 million in the same period in 2023[135] Product Approvals and Market Position - Fucove (Anlotinib Hydrochloride Capsules) has been approved for six indications, with two new indications for endometrial cancer and renal cell carcinoma submitted to CDE in February and July 2024[29] - Anlotinib combined with chemotherapy achieved positive results in a Phase III clinical trial for advanced soft tissue sarcoma, with a new indication application to be submitted soon[29] - Anlotinib has 10 new indications in Phase III clinical trials, including non-small cell lung cancer and hepatocellular carcinoma, with submissions expected in the coming years[29] - Anlotinib successfully renewed its inclusion in the national medical insurance reimbursement list in December 2023, with an additional indication for differentiated thyroid cancer added[29] - Yilisu (Efbemalenograstim alfa Injection), a third-generation long-acting G-CSF, was approved by NMPA in May 2023 and included in the national medical insurance list in December 2023, contributing significantly to revenue growth in H1 2024[29] - Andevi (Bemarituzumab Injection) was approved by NMPA in April 2024 for extensive-stage small cell lung cancer, with a new indication for endometrial cancer submitted to CDE in February 2024[31] - Bemarituzumab has 5 new indications in Phase III clinical trials, including non-small cell lung cancer, with submissions expected in the coming years[31] - Anbonni (Anlotinib Fumarate Capsules) was approved by NMPA in April 2024 for ROS1-positive non-small cell lung cancer, showing significant efficacy and safety in Phase II clinical trials[31] - Anluqing (Efonidipine Hydrochloride Capsules) was approved by NMPA in June 2024 for ALK-positive non-small cell lung cancer, demonstrating superior progression-free survival compared to crizotinib[31] - Anbeisi (Bevacizumab Injection), Delituo (Rituximab Injection), and Saituo (Trastuzumab Injection) were approved by NMPA in 2023 and contributed to rapid revenue growth in H1 2024[31] - The company expects to have 25 innovative products on the market by 2026, strengthening its position in oncology, hepatology, respiratory, and surgical/analgesia therapeutic areas[92] Industry and Market Trends - China's pharmaceutical manufacturing industry revenue reached RMB 1.2353 trillion in the first half of 2024, a year-on-year decrease of 0.9%[23] - China's pharmaceutical manufacturing industry profit reached RMB 180.6 billion in the first half of 2024, a year-on-year increase of 0.7%[23] Corporate Governance and Index Inclusion - The company has been selected as a constituent of the Hang Seng Index since September 10, 2018[19] - The company has been included in the Hang Seng China Enterprises Index since December 9, 2019[20] - The company has been selected as a constituent of the Hang Seng Stock Connect Biotech 50 Index since March 23, 2020[21] - The company has been ranked in the "Top 50 Global Pharmaceutical Companies" by Pharmaceutical Executive magazine for six consecutive years from 2019 to 2024[21] - The company was included in the FTSE4Good Index Series for the first time and recognized in the S&P Global Sustainability Yearbook (China Edition) 2024 for the second consecutive year[89] Financial Position and Assets - The company's cash and bank balances totaled approximately RMB 223.36 billion, including RMB 85.4947 billion in current assets and RMB 91.81 billion in non-current assets[46] - The company's cash and bank balances amounted to approximately RMB 85.49 billion as of June 30, 2024, compared to RMB 94.52 billion as of December 31, 2023[77] - Total assets were approximately RMB 667.04 billion as of June 30, 2024, with total liabilities of RMB 245.82 billion, resulting in a debt-to-asset ratio of 36.9%[81] - The company's available credit line totaled approximately RMB 38.7 billion as of June 30, 2024, with RMB 29.2 billion unused[78] - The company's net cash position was approximately RMB 80.54 billion as of June 30, 2024, compared to RMB 41.85 billion as of December 31, 2023[81] - The company's short-term loans decreased to approximately RMB 84.85 billion as of June 30, 2024, from RMB 111.36 billion as of December 31, 2023[78] - Total non-current assets increased to RMB 41,481,745 thousand as of June 30, 2024, compared to RMB 39,799,288 thousand as of December 31, 2023[101] - Total current assets rose to RMB 25,221,996 thousand as of June 30, 2024, from RMB 22,892,825 thousand as of December 31, 2023[101] - Net current assets improved to RMB 3,272,784 thousand as of June 30, 2024, up from RMB 1,198,756 thousand as of December 31, 2023[101] - Total assets minus current liabilities increased to RMB 44,754,529 thousand as of June 30, 2024, compared to RMB 40,998,044 thousand as of December 31, 2023[101] - Net assets grew to RMB 42,121,682 thousand as of June 30, 2024, from RMB 38,169,953 thousand as of December 31, 2023[104] - Cash and bank balances decreased to RMB 8,549,473 thousand as of June 30, 2024, from RMB 9,451,878 thousand as of December 31, 2023[101] - Interest-bearing bank borrowings under current liabilities decreased to RMB 8,484,591 thousand as of June 30, 2024, from RMB 11,135,940 thousand as of December 31, 2023[101] - Non-controlling interests increased to RMB 9,276,698 thousand as of June 30, 2024, from RMB 7,695,484 thousand as of December 31, 2023[104] Operational Efficiency and Expenses - Sales and administrative expenses as a percentage of revenue decreased by 0.5 percentage points to 43.1%[7] - Employee costs, including directors' remuneration, totaled approximately RMB 25.15 billion during the reporting period, up from RMB 23.05 billion in the previous year[84] - Employee benefit expenses, including wages and salaries, for the six months ended June 30, 2024, were RMB 2,514.697 million, an increase from RMB 2,304.570 million in the same period in 2023[135] - Depreciation and amortization expenses totaled RMB 510,231 thousand, with the Modern Chinese Medicine and Western Medicine segment accounting for RMB 472,187 thousand[119] - Financial costs for the six months ended June 30, 2024, were RMB 153.739 million, a significant decrease from RMB 293.425 million in the same period in 2023[132] Strategic Partnerships and Investments - In April 2024, the company established a strategic partnership with Boehringer Ingelheim to bring innovative anti-tumor therapies to the Chinese mainland market[92] - The company's investment in Sinovac Life Sciences, a joint venture, resulted in a loss of approximately RMB 86.50 million in the first half of 2024[64] - The company's financial assets, including wealth management products, amounted to approximately RMB 4,605.53 million as of June 30, 2024, representing 6.9% of total assets[67] - The company's equity investments and financial assets are aimed at diversifying its investment portfolio and achieving better returns[69] - The company completed the sale of its subsidiary Zhengda Qingdao in March 2024, recording a pre-tax gain of RMB 1,709,604 thousand and a post-tax gain of RMB 1,574,205 thousand[150] - The company received a cash consideration of RMB 1,455,780 thousand from the sale of Zhengda Qingdao, with an additional RMB 363,940 thousand receivable within one year[152] - The company's discontinued operations, including the sale of its commercial distribution subsidiaries and Zhengda Qingdao, resulted in a net cash inflow of RMB 1,409,679 thousand for the six months ended June 30, 2024[152] - Net cash outflow from operating activities for the discontinued operations was RMB 42,427 thousand in the first six months of 2024, compared to a net inflow of RMB 52,024 thousand in the same period of 2023[155] - Net profit attributable to parent company's ordinary shareholders from discontinued operations was RMB 1,606,350 thousand in the first six months of 2024, a significant increase from RMB 130,750 thousand in the same period of 2023[156] Dividends and Shareholder Returns - The company declared an interim dividend of 3 HK cents per share for the first half of 2024[7] - The company declared an interim dividend of 3 HK cents per share for the first six months of 2024, compared to 2 HK cents per share in the same period of 2023[158][159] ESG and Sustainability - Renewable energy usage increased by 16% year-over-year in the first half of 2024[88] - The company completed carbon audits for two pilot carbon-neutral units and identified 15 major categories of emission reduction opportunities[88] - The company plans to release a feasible carbon neutrality roadmap and improve ESG management across its supply chain in the second half of 2024[89] Cash Flow and Financing - Operating cash flow increased to RMB 3,078,490 thousand, up 15.3% compared to RMB 2,671,118 thousand in the same period last year[109] - Investment cash outflow decreased to RMB 2,040,917 thousand, a significant improvement from RMB 4,074,699 thousand in the previous year, driven by proceeds from the sale of subsidiaries amounting to RMB 1,409,679 thousand[109] - Financing cash outflow was RMB 4,099,463 thousand, slightly higher than the previous year's RMB 4,042,087 thousand, with new bank loans of RMB 6,712,386 thousand partially offset by repayments of RMB 9,396,105 thousand[109] - Cash and cash equivalents decreased by RMB 3,061,890 thousand, ending at RMB 4,469,473 thousand, compared to RMB 3,293,964 thousand at the end of the previous period[109][110] Tax and Regulatory Compliance - The company's tax expense from continuing operations for the six months ended June 30, 2024, was RMB 614,093 thousand, compared to RMB 497,992 thousand in the same period in 2023[138] - Tax expense from discontinued operations for the six months