赛升药业(300485) - 2016 Q4 - 年度财报

Part I Important Notes, Table of Contents, and Definitions This section provides crucial disclaimers, the report's structural overview, and definitions of key terms for clarity Important Notes The Board of Directors, Supervisory Board, and senior management guarantee the annual report's truthfulness, accuracy, and completeness, assuming legal responsibility - The company's Board of Directors, Supervisory Board, and senior management guarantee the truthfulness, accuracy, and completeness of the annual report, free from false statements, misleading representations, or major omissions, and assume legal responsibility[5] - Company representative Ma Biao, head of accounting Ma Li, and head of accounting department Li Jianhua declare that the financial report in the annual report is true, accurate, and complete[5] Risk Factors The company faces multiple risks including tightening industry policies, product price declines, quality issues, new drug R&D uncertainties, and core personnel loss - Increasing national regulation on the pharmaceutical industry, including policies on hierarchical diagnosis and treatment, new medical insurance catalogs, payment control, and drug tendering, raises policy risks for the company[7] - Key products like "Saibai" Fibrinolysin for Injection and "Saisheng" Polysaccharide Peptide for Injection are in the medical insurance catalog, but new tendering and payment changes may reduce prices and impact profitability[8] - New drug R&D is lengthy and complex, susceptible to unpredictable factors, posing risks of technical failure or registration inability, potentially increasing operating costs and affecting profitability and growth[12] - As a high-tech enterprise, the loss of core management and technical personnel could lead to core technology leakage, negatively impacting R&D[13] Table of Contents This section lists the detailed chapter structure of the annual report, covering business, financial, governance, shareholder, and significant matters Definitions This section defines common terms used in the report, including company names, controlling shareholders, subsidiaries, product names, regulatory bodies, and reporting periods Part II Company Profile and Key Financial Indicators This section provides the company's basic information and a summary of its key financial performance and indicators for the reporting period I. Company Information This section provides the company's basic registration details, including stock ticker, code, legal representative, and addresses - Company stock abbreviation: Saisheng Pharmaceutical, stock code: 300485[19] - The company's legal representative is Ma Biao, with both registered and office addresses at No. 8 Xingsheng Street, Beijing Economic-Technological Development Area, Beijing[19] II. Contact Persons and Information This section lists the contact details for the Board Secretary and Securities Affairs Representative, facilitating investor communication - The Board Secretary is Wang Xuefeng, and the Securities Affairs Representative is Ma Shengnan, both reachable at 010-67862500[20] III. Information Disclosure and Document Availability This section specifies the company's designated information disclosure media and the location for annual report availability, ensuring transparency - The company's designated information disclosure media include China Securities Journal, Shanghai Securities News, Securities Times, and Securities Daily[21] - The company's designated website is Juchao Information Network (http://www.cninfo.com.cn)[21](index=21&type=chunk) IV. Other Relevant Information This section discloses information about the company's appointed accounting firm and sponsor institution, including their names, addresses, and signing professionals - The company's appointed accounting firm is Grant Thornton (Special General Partnership), with signing accountants Tong Dengshu and Zhang Zaiqiang[23] - The company's appointed sponsor institution is China Great Wall Securities Co., Ltd., with sponsor representatives Chen Guangming and Gan Yankun, for a continuous supervision period from June 26, 2015, to December 31, 2018[23] V. Key Accounting Data and Financial Indicators In 2016, the company's operating revenue increased by 1.50% to CNY 616.24 million, net profit attributable to shareholders grew by 23.48% to CNY 258.41 million, and operating cash flow increased by 25.71% 2016 Key Accounting Data and Financial Indicators | Indicator | 2016 (CNY) | 2015 (CNY) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Operating Revenue | 616,238,487.47 | 607,138,310.74 | 1.50% | | Net Profit Attributable to Shareholders of Listed Company | 258,405,896.27 | 209,273,984.37 | 23.48% | | Net Profit Attributable to Shareholders of Listed Company (Excluding Non-Recurring Gains/Losses) | 239,368,778.69 | 208,686,902.58 | 14.70% | | Net Cash Flow from Operating Activities | 212,893,474.60 | 169,357,075.56 | 25.71% | | Basic Earnings Per Share (CNY/share) | 1.080 | 0.995 | 8.54% | | Diluted Earnings Per Share (CNY/share) | 1.080 | 0.995 | 8.54% | | Weighted Average Return on Net Assets | 13.04% | 16.75% | -3.71% | | Total Assets | 2,216,587,575.58 | 1,944,810,335.19 | 13.97% | | Net Assets Attributable to Shareholders of Listed Company | 2,096,569,039.06 | 1,881,363,142.79 | 11.44% | VI. Quarterly Key Financial Indicators This section presents the company's 2016 quarterly operating revenue, net profit, non-recurring net profit, and net cash flow from operating activities, showing quarterly operational fluctuations 2016 Quarterly Key Financial Indicators | Indicator | Q1 (CNY) | Q2 (CNY) | Q3 (CNY) | Q4 (CNY) | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 136,878,278.12 | 167,040,176.95 | 165,146,570.39 | 147,173,462.01 | | Net Profit Attributable to Shareholders of Listed Company | 58,854,650.80 | 72,955,689.06 | 69,641,873.98 | 56,953,682.43 | | Net Profit Attributable to Shareholders of Listed Company (Excluding Non-Recurring Gains/Losses) | 58,737,403.77 | 72,567,476.29 | 69,829,575.96 | 38,234,322.67 | | Net Cash Flow from Operating Activities | 46,124,217.00 | 90,142,081.84 | 47,687,626.57 | 28,939,549.19 | VII. Differences in Accounting Data under Domestic and International Accounting Standards The company reported no differences in net profit and net assets between international/overseas accounting standards and Chinese accounting standards during the reporting period - During the reporting period, there were no differences in net profit and net assets between financial reports disclosed under International Accounting Standards and Chinese Accounting Standards[26] - During the reporting period, there were no differences in net profit and net assets between financial reports disclosed under overseas accounting standards and Chinese Accounting Standards[27] VIII. Non-Recurring Gains and Losses and Amounts In 2016, total non-recurring gains and losses amounted to CNY 19.04 million, primarily from entrusted investment gains and government subsidies, positively impacting net profit 2016 Non-Recurring Gains and Losses and Amounts | Item | 2016 Amount (CNY) | 2015 Amount (CNY) | 2014 Amount (CNY) | | :--- | :--- | :--- | :--- | | Gains/Losses on Disposal of Non-Current Assets | 134,538.99 | 8,735.06 | -7,392.15 | | Government Subsidies Recognized in Current Profit/Loss | 1,437,518.42 | 667,908.28 | 1,973,915.49 | | Gains/Losses from Entrusted Investment or Asset Management | 21,202,760.92 | | | | Other Non-Operating Income and Expenses Apart from the Above | -333,747.19 | 21,714.70 | 205,865.66 | | Less: Income Tax Impact | 3,422,928.64 | 104,958.50 | 324,569.85 | | Impact on Minority Interests (After Tax) | -18,975.08 | 6,317.75 | 757.15 | | Total | 19,037,117.58 | 587,081.79 | 1,847,062.00 | Part III Business Overview This section outlines the company's core business activities, significant asset changes, and key competitive advantages during the reporting period I. Main Business Activities During the Reporting Period The company primarily engages in R&D, production, and sales of injectable biological and biochemical drugs, focusing on cardiovascular, immune (anti-tumor), and nervous system diseases - The company's main business is the R&D, production, and sales of injectable preparations, with leading products being biological and biochemical drugs, covering three major therapeutic areas: cardiovascular, immune (anti-tumor), and nervous system diseases[31] - Key products include Polysaccharide Peptide for Injection, Deoxyribonucleotide Sodium Injection, Thymosin for Injection, Fibrinolysin for Injection, and GM-1, with no change in main business during the reporting period[31] - The company's cardiovascular product Fibrinolysin for Injection, and immunomodulator products Deoxyribonucleotide Sodium Injection and Polysaccharide Peptide for Injection maintain high market shares, while the market share of nervous system product GM-1 is gradually increasing[36] II. Significant Changes in Major Assets During the reporting period, the company's equity investments increased due to an investment in Beijing E-Town Bio-pharmaceutical M&A Investment Center, and construction projects progressed significantly - In terms of equity assets, the company invested in Beijing E-Town Bio-pharmaceutical M&A Investment Center (Limited Partnership)[38] - For construction in progress, the main structures of the pharmaceutical production base and cardiovascular & immune product industrialization projects have been completed[38] - No significant changes occurred in fixed assets and intangible assets[38] III. Analysis of Core Competencies The company's core competencies include product assurance, R&D and patent technology advantages, advanced process technology, and a comprehensive industry chain - The technology for the company's five main products is self-developed, holding national invention patents, with a rational product structure mitigating single-product dependency risks[40] - The company possesses strong R&D capabilities in biological and biochemical drugs, holding 36 national patent technologies (including 28 invention patents), forming a biomacromolecule purification technology platform[41] - The company has established specialized biomacromolecule separation and purification technology platforms for proteins (peptides), polysaccharides, nucleotides, and functional lipids, with proprietary process technologies maturely applied in injectable product preparation[43] - The company and its controlled subsidiaries hold multi-dosage form production licenses, possessing a complete product industry chain capable of R&D, production, and sales of APIs, oral preparations, and injectable preparations[44] Part IV Management Discussion and Analysis This section discusses the company's operational performance, financial condition, and future outlook, including revenue, costs, R&D, cash flow, and investment activities I. Overview In 2016, the company achieved stable main business growth amidst pharmaceutical policy reforms, making progress in marketing, R&D, project construction, strategic investment, and intellectual property - In 2016, the company achieved total operating revenue of CNY 616 million, a 1.5% year-on-year increase; total profit of CNY 300 million, a 23.41% year-on-year increase; and net profit attributable to shareholders of CNY 258 million, a 23.48% year-on-year increase[48] 2016 Main Product Revenue Share and Gross Margin | Product | Revenue Share | Gross Margin | | :--- | :--- | :--- | | Deoxyribonucleotide Sodium Injection | 28.40% | 74.70% | | Polysaccharide Peptide for Injection | 24.63% | 63.87% | | GM1 | 20.06% | 67.13% | | Fibrinolysin for Injection | 16.98% | 70.12% | | Thymosin for Injection | 2.40% | 34.67% | | Company's Overall Gross Margin | - | 67.49% | - During the reporting period, the company's R&D expenses amounted to CNY 88.90 million, a 109.15% increase year-on-year, with R&D investment accounting for 14.43% of operating revenue[52] - The main structure of the pharmaceutical production base project, a fundraising project, was topped out in October 2016, and the HM-3 (Anti-Angiogenesis Peptide) project is in clinical Phase I research[56] - The company participated in establishing an M&A fund through related parties, investing in the next-generation biopharmaceutical industry, focusing on biomacromolecule technology, biological drugs, and cell engineering to accelerate external expansion[58][59] - During the reporting period, the company obtained 2 authorized invention patents, accumulating 36 patents (including 28 invention patents), and received honors such as "Beijing Patent Demonstration Unit" and "Beijing Biopharmaceutical Industry Leapfrog Development G20 Project Industry Leader"[60][61] II. Analysis of Main Business The company's main business revenue increased by 1.50%, with growth in immune system and cardiovascular drugs, while nervous system drug revenue declined, and R&D investment significantly increased Revenue and Cost In 2016, operating revenue grew by 1.50% to CNY 616.24 million, driven by immune system and cardiovascular drugs, with significant growth in the East China region 2016 Operating Revenue Composition (by Product) | Product Category | 2016 Amount (CNY) | Share of Operating Revenue | 2015 Amount (CNY) | Share of Operating Revenue | Year-on-Year Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Immune System Drugs | 341,944,606.01 | 55.49% | 324,839,402.60 | 53.50% | 5.27% | | Nervous System Drugs | 123,600,480.78 | 20.06% | 153,891,444.12 | 25.35% | -19.68% | | Cardiovascular and Cerebrovascular Drugs | 139,548,718.82 | 22.65% | 119,431,630.50 | 19.67% | 16.84% | | Other | 11,144,681.86 | 1.81% | 8,975,833.52 | 1.48% | 24.16% | | Total Operating Revenue | 616,238,487.47 | 100% | 607,138,310.74 | 100% | 1.50% | 2016 Operating Revenue Composition (by Region) | Region | 2016 Amount (CNY) | Share of Operating Revenue | 2015 Amount (CNY) | Share of Operating Revenue | Year-on-Year Change | | :--- | :--- | :--- | :--- | :--- | :--- | | East China | 227,108,959.22 | 36.85% | 177,114,295.34 | 29.17% | 28.23% | | Northeast China | 120,086,862.25 | 19.49% | 138,334,323.68 | 22.78% | -13.19% | | Central China | 96,947,388.99 | 15.73% | 109,031,235.29 | 17.96% | -11.08% | | North China | 109,632,070.97 | 17.79% | 108,408,444.44 | 17.86% | 1.13% | | Southwest China | 40,082,305.75 | 6.50% | 44,038,475.21 | 7.25% | -8.98% | | South China | 15,039,741.18 | 2.44% | 16,532,020.05 | 2.72% | -9.03% | | Northwest China | 7,341,159.11 | 1.19% | 13,656,875.22 | 2.25% | -46.25% | | Other | | | 22,641.51 | 0.00% | -100.00% | 2016 Main Product Gross Margin Changes | Product Category | 2016 Gross Margin | 2015 Gross Margin | Gross Margin Year-on-Year Change | | :--- | :--- | :--- | :--- | | Immune System Drugs | 68.11% | 60.07% | 8.04% | | Nervous System Drugs | 67.12% | 68.02% | -0.90% | | Cardiovascular and Cerebrovascular Drugs | 66.29% | 55.29% | 11.00% | - Sales to the top five customers accounted for 45.31% of total annual sales, and purchases from the top five suppliers accounted for 22.53% of total annual purchases[74] Expenses In 2016, sales and administrative expenses showed stable growth, while financial expenses significantly decreased due to increased short-term bank wealth management 2016 Key Expenses | Item | 2016 (CNY) | 2015 (CNY) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Selling Expenses | 88,828,723.74 | 78,253,670.98 | 13.51% | | Administrative Expenses | 69,879,075.86 | 68,019,543.97 | 2.73% | | Financial Expenses | -1,279,604.98 | -4,867,914.99 | -73.71% | - Financial expenses decreased by 73.71% year-on-year, primarily due to increased short-term bank wealth management[76] R&D Investment The company's R&D investment surged by 109.15% to CNY 88.90 million in 2016, with a significant increase in capitalized R&D expenditures, reflecting a strong focus on innovation 2016 R&D Investment | Indicator | 2016 | 2015 | 2014 | | :--- | :--- | :--- | :--- | | Number of R&D Personnel (persons) | 88 | 97 | 98 | | R&D Personnel Share | 18.00% | 22.00% | 25.00% | | R&D Investment Amount (CNY) | 88,902,351.85 | 42,506,452.69 | 32,511,677.33 | | R&D Investment as % of Operating Revenue | 14.43% | 7.00% | 5.51% | | Capitalized R&D Expenditures (CNY) | 74,250,002.65 | 12,818,941.13 | 0.00 | | Capitalized R&D Expenditures as % of R&D Investment | 83.52% | 30.16% | 0.00% | | Capitalized R&D Expenditures as % of Current Net Profit | 28.74% | 6.13% | 0.00% | - The proportion of total R&D investment to operating revenue significantly changed from the previous year, mainly due to the acquisition of new drug approvals for HM-3 (Anti-Angiogenesis Peptide), Nafamostat Mesylate, and Angiostatin, allowing for capitalization of technology transfer fees and subsequent development expenditures[78][80] - The company terminated R&D for Ornithine Aspartate, Inosine Pranobex, and Calf Blood Protein Extract Enteric-Coated Tablets, with related capitalized R&D expenditures transferred to current profit and loss[81] Cash Flow In 2016, net cash flow from operating activities increased by 25.71%, while investment cash flow saw significant changes due to wealth management and construction, and financing cash flow decreased due to the prior year's IPO 2016 Cash Flow | Item | 2016 (CNY) | 2015 (CNY) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Subtotal Cash Inflows from Operating Activities | 729,266,580.24 | 679,718,936.43 | 7.29% | | Subtotal Cash Outflows from Operating Activities | 516,373,105.64 | 510,361,860.87 | 1.18% | | Net Cash Flow from Operating Activities | 212,893,474.60 | 169,357,075.56 | 25.71% | | Subtotal Cash Inflows from Investing Activities | 122,050,671.88 | 28,728,777.01 | 324.84% | | Subtotal Cash Outflows from Investing Activities | 252,001,236.64 | 711,652,813.27 | -64.59% | | Net Cash Flow from Investing Activities | -129,950,564.76 | -682,924,036.26 | -80.97% | | Subtotal Cash Inflows from Financing Activities | | 1,095,840,700.00 | -100.00% | | Subtotal Cash Outflows from Financing Activities | 43,200,000.00 | 64,996,000.00 | -33.53% | | Net Cash Flow from Financing Activities | -43,200,000.00 | 1,030,844,700.00 | -104.19% | | Net Increase in Cash and Cash Equivalents | 39,742,909.84 | 517,277,739.30 | -92.32% | - Cash inflows from investing activities increased by 324.84%, primarily due to gains from wealth management products and collection of project deposits for the production base construction[84] - Net cash flow from financing activities decreased by 104.19%, mainly due to the increase in IPO proceeds in 2015[85] III. Non-Core Business Activities The company's non-core business income primarily stemmed from wealth management product interest, accounting for 17.27% of total profit, while other items were minor and non-recurring 2016 Non-Core Business Activities | Item | Amount (CNY) | Share of Total Profit | Sustainability | | :--- | :--- | :--- | :--- | | Investment Income | 51,831,245.83 | 17.27% | | | Asset Impairment | -22,066.31 | -0.01% | No | | Non-Operating Income | 1,687,032.78 | 0.56% | No | | Non-Operating Expenses | 448,722.56 | 0.15% | No | - Investment income primarily consists of interest gains from wealth management products[86] IV. Asset and Liability Status At the end of 2016, total assets increased by 13.97% to CNY 2.22 billion, with significant growth in long-term equity investments and construction in progress, and no asset restrictions 2016 Year-End Significant Changes in Asset Composition | Item | 2016 Year-End Amount (CNY) | Share of Total Assets | 2015 Year-End Amount (CNY) | Share of Total Assets | Change in Share | | :--- | :--- | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 1,039,147,197.76 | 46.88% | 999,404,287.92 | 51.39% | -4.51% | | Long-Term Equity Investments | 210,094,911.61 | 9.48% | 105,000,551.25 | 5.40% | 4.08% | | Construction in Progress | 131,442,789.60 | 5.93% | 12,780,903.48 | 0.66% | 5.27% | - The increase in long-term equity investments is primarily due to the company's investment in an industry M&A fund[89] - The increase in construction in progress is primarily due to the construction of the production base[89] - As of the end of the reporting period, the company had no restricted assets[90] V. Analysis of Investment Status The company's total investment remained stable, with a major equity investment in Beijing E-Town Bio-pharmaceutical M&A Investment Center, and a significant portion of raised funds used for construction projects and wealth management 2016 Total Investment | Indicator | Investment Amount During Reporting Period (CNY) | Investment Amount in Prior Period (CNY) | Change Rate | | :--- | :--- | :--- | :--- | | Total Investment | 105,000,000.00 | 105,000,000.00 | 0.00% | - The company made an equity investment in Beijing E-Town Bio-pharmaceutical M&A Investment Center (Limited Partnership), holding a 26.25% stake, with an investment gain/loss of CNY 94,360.36 for the current period[93][95] 2016 Overall Use of Raised Funds | Fundraising Year | Fundraising Method | Total Raised Funds (CNY 10k) | Total Raised Funds Used in Current Period (CNY 10k) | Total Raised Funds Cumulatively Used (CNY 10k) | Total Unused Raised Funds (CNY 10k) | | :--- | :--- | :--- | :--- | :--- | :--- | | 2015 | Public Offering of Shares | 108,094.47 | 10,681.85 | 20,942.23 | 91,315.81 | - As of the end of 2016, of the unused raised funds, CNY 413.16 million was held in dedicated bank accounts, and CNY 500 million was used to purchase wealth management products[98] 2016 Status of Projects Pledged with Raised Funds | Pledged Investment Project | Total Pledged Investment from Raised Funds (CNY 10k) | Amount Invested in Current Reporting Period (CNY 10k) | Cumulative Investment as of Period End (CNY 10k) | Investment Progress as of Period End | | :--- | :--- | :--- | :--- | :--- | | New Pharmaceutical Production Base Project | 68,085.41 | 6,497.83 | 16,068.21 | 23.60% | | New Cardiovascular and Immunomodulatory Product Industrialization Project | 28,352.17 | 630.33 | 630.33 | 2.22% | | Marketing Network Construction Project | 5,656.89 | 543.69 | 733.69 | 12.97% | | HM-Type Peptide Product Project | 6,000 | 3,010 | 3,510 | 58.50% | VI. Significant Asset and Equity Sales The company did not engage in any significant asset or equity sales during the reporting period - The company did not sell any significant assets during the reporting period[103] - The company did not sell any significant equity during the reporting period[104] VII. Analysis of Major Controlled and Invested Companies Beijing Sai'er Bio-pharmaceutical Co., Ltd., a controlled subsidiary, primarily develops, produces, and sells tablets, capsules, powders, granules, and APIs, reporting a net loss in 2016 Financial Status of Major Controlled Subsidiary Beijing Sai'er Bio-pharmaceutical Co., Ltd. | Company Name | Company Type | Main Business | Registered Capital | Total Assets (CNY) | Net Assets (CNY) | Operating Revenue (CNY) | Operating Profit (CNY) | Net Profit (CNY) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Beijing Sai'er Bio-pharmaceutical Co., Ltd. | Subsidiary | Tablets, Capsules, Powders, Granules, APIs | 28,000,000 | 27,499,524.51 | 18,859,030.33 | 11,087,299.39 | -380,924.73 | -687,535.69 | VIII. Status of Structured Entities Controlled by the Company The company did not control any structured entities during the reporting period - The company did not control any structured entities during the reporting period[105] IX. Outlook on the Company's Future Development The company anticipates growth from an aging population and chronic disease management, focusing on R&D, product innovation, management optimization, and M&A for external expansion Industry Landscape and Trends The pharmaceutical industry is driven by an aging population and chronic diseases, with significant potential in cardiovascular, oncology, and neurological markets, especially for peptide drugs - In 2015, the cardiovascular drug market in public hospitals was CNY 16.77 billion, a 5.45% year-on-year increase, with continuous growth in medication expenditure[108] - Cancer incidence in China is rising annually, with lung cancer being the most common malignant tumor, and the top 10 malignant tumors accounting for 76.39% of all cases[109] - The peptide drug market is in a rapid growth phase, with broad development prospects for prevention, diagnosis, and treatment of diseases like cancer, diabetes, and hepatitis[112] - In 2016, the expenditure on Ganglioside Sodium in key public hospitals in China was CNY 1.57 billion, demonstrating outstanding performance in the nervous system drug sector[113] Company Development Strategy The company aims to become a leading listed company with core competitiveness by enhancing R&D, product innovation, and management, while expanding through M&A funds - The company's development strategy aims to establish an excellent listed company with core competitiveness, characterized by continuously improving R&D, ensuring product innovation and continuity, advanced technology, superior management, leading market share and sales, and maximizing shareholder and employee interests[116] - The company will focus on optimizing governance and management, innovating technology and products, and conducting in-depth research into peptide biopharmaceuticals, biomaterials, and chronic disease prevention and management[116] - By participating in M&A funds, the company actively seeks investment opportunities in excellent biopharmaceutical enterprises to achieve strategic expansion and capital appreciation[116] 2017 Operating Plan For 2017, the company plans to enhance product promotion, optimize production, increase R&D investment, develop talent, upgrade IT systems, and pursue M&A, targeting 0-15% revenue growth - The company will continue to strengthen market promotion for key products, expand market development and promotion of existing approved products, and introduce new drug varieties through independent R&D, collaborative R&D, and acquisitions[118] - The fundraising projects, including the new pharmaceutical production base and the cardiovascular and immunomodulatory product industrialization project, will be fully advanced to significantly increase the company's production capacity[118] - In marketing, the company will continue to adhere to the "resident investment promotion + academic promotion" marketing model, strengthen strategic cooperation with distributors, improve marketing team building, and accumulate clinical evidence[119][120][122] - R&D plans include innovating investment and financing methods, increasing talent investment, strengthening cooperation with research institutions, adjusting and improving product structure, and concentrating efforts on key R&D projects[123][124][125] - Talent plans include improving scientific talent management systems, adhering to the principle of both integrity and ability in recruitment, strengthening talent training, and timely advancing equity incentive plans[126] - Informationization plans involve upgrading and fully implementing the ERP system to enhance the informatization level of production processes and operational management efficiency[128] - M&A plans involve actively participating in M&A fund operations to seek appropriate acquisitions and mergers of companies in the same or upstream/downstream industries, expanding the company's scale and strength[129] - For 2017, the company has set a preliminary operating target of 0-15% year-on-year growth[129] Potential Risks The company faces risks from tightening pharmaceutical policies, potential product price reductions, complex manufacturing quality issues, R&D uncertainties, and the loss of core personnel - Increasing national regulation on the pharmaceutical industry, with policies like hierarchical diagnosis, new medical insurance catalogs, payment control, and drug tendering, heightens policy risks for enterprises[130] - Changes in new drug tendering systems, medical insurance payment conditions and drug scope, coupled with intensified market competition, pose a risk of varying degrees of price reduction for the company's main products[131] - The company's main products are lyophilized powder injections and small volume injections, involving complex production processes where each step can affect product quality, posing product quality risks[133] - New drug R&D is lengthy and complex, susceptible to unpredictable factors, posing risks of technical failure or registration inability, potentially adversely affecting the company's profitability and growth capabilities[134] - The loss of core management and technical personnel could lead to the leakage of the company's core technologies, negatively impacting its R&D efforts[135] X. Registration Form for Investor Relations Activities This section records the company's investor relations activities during the reporting period, including institutional investor site visits - On November 22, 2016, the company hosted a site visit for institutional investors, with relevant information disclosed on the Shenzhen Stock Exchange's Interactive Easy platform[137] Part V Significant Matters This section details the company's profit distribution, capital reserve conversion, fulfillment of commitments, related party transactions, and other significant events during the reporting period I. Profit Distribution of Common Shares and Capital Reserve to Share Capital Conversion In 2016, the company implemented its 2015 profit distribution plan, distributing a cash dividend of CNY 3.6 per 10 shares and converting capital reserves to increase share capital by 10 shares per 10, raising total share capital to 240 million shares - On April 26, 2016, the company implemented its 2015 profit distribution plan, distributing a cash dividend of CNY 3.6 per 10 shares (tax inclusive) based on a total share capital of 120 million shares, and converting capital reserves to increase share capital by 10 shares per 10, raising the total share capital to 240 million shares[140] 2016 Annual Profit Distribution Plan | Indicator | Value | | :--- | :--- | | Bonus Shares per 10 Shares (shares) | 0 | | Cash Dividend per 10 Shares (CNY) (tax inclusive) | 2.50 | | Capital Reserve to Share Capital Conversion per 10 Shares (shares) | 0 | | Share Capital Base for Distribution Plan (shares) | 240,000,000 | | Total Cash Dividend (CNY) (tax inclusive) | 60,000,000.00 | | Distributable Profit (CNY) | 258,405,896.27 | | Cash Dividend as % of Total Profit Distribution | 100.00% | Company's Cash Dividends for Common Shares in the Last Three Years | Dividend Year | Cash Dividend Amount (tax inclusive) (CNY) | Net Profit Attributable to Common Shareholders of Listed Company in Consolidated Report for Dividend Year (CNY) | Share of Net Profit Attributable to Common Shareholders of Listed Company in Consolidated Report | | :--- | :--- | :--- | :--- | | 2016 | 60,000,000.00 | 258,405,896.27 | 23.22% | | 2015 | 43,200,000.00 | 209,273,984.37 | 20.64% | | 2014 | 54,000,000.00 | 202,571,532.22 | 26.66% | II. Fulfillment of Commitments The company's controlling shareholder, actual controller, directors, senior management, and other shareholders fulfilled all commitments made during the initial public offering or refinancing, including share reduction, lock-up, dividend, and IPO price stabilization - Controlling shareholder Ma Biao, director Ma Li, and shareholder Liu Shuqin committed that the transfer price of their shares would not be less than the offering price within 24 months after the lock-up period expires[146] - Ma Biao, Ma Li, and Liu Shuqin committed not to transfer shares issued before the initial public offering within 36 months from the date of the company's stock listing[146] - The company committed that, under compliance with regulations, if profitable in the listing year and the subsequent two years, it would distribute cash dividends to shareholders annually at no less than 20% of the distributable profit for that year[147] - The company, its controlling shareholder, directors, and senior management committed that if the company's stock price falls below net asset value per share for 20 consecutive trading days within three years of listing, they will activate a price stabilization plan, fulfilling buyback or增持 obligations[148] - Controlling shareholder Ma Biao, director Ma Li, and shareholder Liu Shuqin committed that if the company's stock closing price falls below the offering price within 6 months of listing, the lock-up period will automatically extend by 6 months[149] III. Non-Operating Fund Occupation by Controlling Shareholder and Related Parties The company reported no non-operating fund occupation by its controlling shareholder or related parties during the reporting period - The company reported no non-operating fund occupation by its controlling shareholder or related parties during the reporting period[153] IV. Board of Directors' Explanation on the Latest "Non-Standard Audit Report" The company's Board of Directors did not issue any explanation regarding a "non-standard audit report" for the latest period - The company's Board of Directors did not issue any explanation regarding a "non-standard audit report" for the latest period[154] V. Board of Directors, Supervisory Board, Independent Directors' Explanation on the Accounting Firm's "Non-Standard Audit Report" for the Current Period The company's Board of Directors, Supervisory Board, and independent directors did not issue any explanation regarding a "non-standard audit report" from the accounting firm for the current period - The company's Board of Directors, Supervisory Board, and independent directors did not issue any explanation regarding a "non-standard audit report" from the accounting firm for the current period[154] VI. Board of Directors' Explanation on Changes in Accounting Policies, Estimates, or Major Accounting Error Corrections During the Reporting Period The company adjusted its accounting policy in accordance with VAT accounting regulations, reclassifying "Business Tax and Surcharges" to "Taxes and Surcharges" in the income statement - The company adjusted its accounting policy according to the "VAT Accounting Treatment Regulations," reclassifying "Business Tax and Surcharges" to "Taxes and Surcharges" in the income statement[154] - Property tax, land use tax, vehicle and vessel use tax, stamp duty, and other related taxes originally included in administrative expenses were reclassified to "Taxes and Surcharges" starting from May 1, 2016[154] VII. Explanation of Changes in Consolidated Financial Statement Scope Compared to Prior Year The company's consolidated financial statement scope remained unchanged during the reporting period - The company's consolidated financial statement scope remained unchanged during the reporting period[155] VIII. Appointment and Dismissal of Accounting Firms The company currently employs Grant Thornton (Special General Partnership) as its domestic accounting firm, paying CNY 600,000, with signing accountants Tong Dengshu and Zhang Zaiqiang, and no change occurred during the reporting period - The company currently employs Grant Thornton (Special General Partnership) as its domestic accounting firm, with a remuneration of CNY 600,000, having served for 5 consecutive years[156] - The signing accountants are Tong Dengshu and Zhang Zaiqiang[156] - No change in accounting firms occurred during the reporting period[156] IX. Facing Suspension and Termination of Listing After Annual Report Disclosure The company did not face suspension or termination of listing after the annual report disclosure during the reporting period - The company did not face suspension or termination of listing after the annual report disclosure during the reporting period[156] X. Bankruptcy and Reorganization Related Matters The company did not have any bankruptcy and reorganization related matters during the reporting period - The company did not have any bankruptcy and reorganization related matters during the reporting period[156] XI. Significant Litigation and Arbitration Matters The company had no significant litigation or arbitration matters during the current year - The company had no significant litigation or arbitration matters during the current year[157] XII. Penalties and Rectification Status The company had no penalties or rectification situations during the reporting period - The company had no penalties or rectification situations during the reporting period[158] XIII. Integrity Status of the Company, its Controlling Shareholder, and Actual Controller The company, its controlling shareholder, and actual controller maintained good integrity status during the reporting period - The company, its controlling shareholder, and actual controller maintained good integrity status during the reporting period[159] XIV. Implementation of Equity Incentive Plans, Employee Stock Ownership Plans, or Other Employee Incentive Measures The company had no equity incentive plans, employee stock ownership plans, or other employee incentive measures implemented during the reporting period - The company had no equity incentive plans, employee stock ownership plans, or other employee incentive measures implemented during the reporting period[159] XV. Significant Related Party Transactions The company had no significant related party transactions concerning daily operations, asset/equity sales, joint investments, or creditor/debtor relationships, but invested in an M&A fund through related parties - The company had no related party transactions concerning daily operations, asset or equity acquisitions/sales, joint external investments, or related party creditor/debtor relationships during the reporting period[160][161][162][163] - The company's related parties, Saiding Fangde and Saideruibo, jointly established Yitang Saiying with Botai Fangde; Yitang Saiying invested CNY 10 million in the M&A fund as its general partner[164] - The company's related party, Saideruibo, invested CNY 130 million in the M&A fund as a limited partner, aiming to reserve resources for the company's future development by investing in promising companies[164] XVI. Significant Contracts and Their Fulfillment The company had no significant entrustment, contracting, leasing, or guarantee matters, but utilized idle raised funds to purchase multiple principal-protected bank wealth management products, enhancing capital efficiency - The company had no entrustment, contracting, leasing, or significant guarantee matters during the reporting period[167][168][169][170] 2016 Entrusted Wealth Management | Trustee Name | Product Type | Entrusted Wealth Management Amount (CNY 10k) | Actual Gain/Loss During Reporting Period (CNY 10k) | Actual Recovery of Gain/Loss During Reporting Period | | :--- | :--- | :--- | :--- | :--- | | China Merchants Bank Beijing Yizhuang Sub-branch | Principal-Protected Wealth Management Product | 58,000 | 398.52 | Fully Recovered | | China Merchants Bank Beijing Yizhuang Sub-branch | Principal-Protected Wealth Management Product | 56,000 | 93.28 | Fully Recovered | | China Merchants Bank Beijing Yizhuang Sub-branch | Principal-Protected Wealth Management Product | 55,500 | 1,116.91 | Fully Recovered | | China Merchants Bank Beijing Yizhuang Sub-branch | Principal-Protected Wealth Management Product | 3,000 | 17.74 | Fully Recovered | | China Merchants Bank Beijing Yizhuang Sub-branch | Principal-Protected Wealth Management Product | 20,000 | 177.04 | Fully Recovered | | China Merchants Bank Beijing Yizhuang Sub-branch | Principal-Protected Wealth Management Product | 20,000 | 57.86 | Fully Recovered | | China Merchants Bank Beijing Yizhuang Sub-branch | Principal-Protected Wealth Management Product | 20,000 | 58.84 | Fully Recovered | | China Merchants Bank Beijing Yizhuang Sub-branch | Principal-Protected Wealth Management Product | 20,000 | 8.55 | Fully Recovered | | China Merchants Bank Beijing Yizhuang Sub-branch | Principal-Protected Wealth Management Product | 50,000 | 14.38 | Not Recovered | | CITIC Bank Beijing Economic-Technological Development Area Sub-branch | Principal-Protected Wealth Management Product | 20,000 | 232.22 | Fully Recovered | | CITIC Bank Beijing Economic-Technological Development Area Sub-branch | Principal-Protected Wealth Management Product | 7,000 | 96.3 | Fully Recovered | | CITIC Bank Beijing Economic-Technological Development Area Sub-branch | Principal-Protected Wealth Management Product | 20,000 | 152.08 | Fully Recovered | | CITIC Bank Beijing Economic-Technological Development Area Sub-branch | Principal-Protected Wealth Management Product | 7,000 | 32.68 | Fully Recovered | | Bank of Beijing Economic-Technological Development Area Sub-branch | Notice Deposit | 2,000 | 31.23 | Fully Recovered | | Bank of Beijing Yizhuang Sub-branch | Principal-Protected Wealth Management Product | 27,000 | 513.67 | Fully Recovered | | Huaxia Bank Beijing Zhichun Sub-branch | Principal-Protected Wealth Management Product | 5,000 | 49.15 | Fully Recovered | | Huaxia Bank Beijing Zhichun Sub-branch | Principal-Protected Wealth Management Product | 4,800 | 17.04 | Fully Recovered | | Total | - | 395,300 | 3,053.11 | - | - The company used idle raised funds to purchase principal-protected bank wealth management products, aiming to generate investment income and improve capital utilization efficiency[173] XVII. Social Responsibility Status The company actively fulfills its corporate social responsibility through sound internal controls, transparent information disclosure, investor returns, employee rights, quality products, and tax compliance - The company actively fulfills its corporate social responsibility by establishing sound internal control systems, standardizing corporate governance, timely and accurate information disclosure, prioritizing investor returns, safeguarding employee rights, providing quality products, and complying with tax laws[177][178][179] - The company is not listed as a key polluting entity by environmental protection authorities and has not published a social responsibility report[179] XVIII. Explanation of Other Significant Matters The company had no other significant matters requiring explanation during the reporting period - The company had no other significant matters requiring explanation during the reporting period[179] XIX. Significant Matters of Company Subsidiaries Sai'er Bio-pharmaceutical, a controlled subsidiary, experienced GMP certificate revocation and subsequent restoration, and received an environmental administrative penalty during the reporting period - On June 29, 2016, the GMP certificate of Sai'er Bio-pharmaceutical, a controlled subsidiary, was revoked[180] - On August 18, 2016, Sai'er Bio-pharmaceutical received an administrative penalty from environmental authorities[180] - Sai'er Bio-pharmaceutical has received its "Drug GMP Certificate" back from the Beijing Food and Drug Administration, resuming normal production and sales[62] Part VI Share Changes and Shareholder Information This section details changes in the company's share capital, securities issuance, and information about shareholders and the actual controller I. Share Change Status In 2016, the company's total share capital increased from 120 million to 240 million shares due to capital reserve conversion, and some IPO restricted shares were unlocked - On April 26, 2016, the company's total share capital increased from 120 million shares to 240 million shares, primarily due to the 2015 profit distribution plan converting capital reserves to increase share capital by 10 shares per 10[183][184] - Some of the company's initial public offering (IPO) restricted shares were unlocked on June 27, 2016[184] 2016 Year-End Restricted Share Changes | Shareholder Name | Restricted Shares at Beginning of Period (shares) | Shares Unlocked in Current Period (shares) | Restricted Shares Increased in Current Period (shares) | Restricted Shares at End of Period (shares) | Reason for Restriction | | :--- | :--- | :--- | :--- | :--- | :--- | | Ma Biao | 59,616,000 | 0 | 59,616,000 | 119,232,000 | IPO Restriction | | Ma Li | 14,256,000 | 0 | 14,256,000 | 28,512,000 | IPO Restriction | | Liu Shuqin | 3,888,000 | 0 | 3,888,000 | 7,776,000 | IPO Restriction | | Wang Guang | 3,240,000 | 6,480,000 | 3,240,000 | 0 | IPO Restriction | | Beijing Aerospace Industry Investment Fund (Limited Partnership) | 8,100,000 | 16,200,000 | 8,100,000 | 0 | IPO Restriction | | Harbin Yuheng Group Co., Ltd. | 900,000 | 1,800,000 | 900,000 | 0 | IPO Restriction | | Zhang Fan | 200 | 400 | 200 | 0 | Senior Management Lock-up | II. Securities Issuance and Listing Status No new securities were issued during the reporting period, but total share capital increased due to capital reserve conversion, and some IPO restricted shares were unlocked - The company's total share capital increased from 120 million shares to 240 million shares, primarily due to the 2015 profit distribution plan converting capital reserves to increase share capital by 10 shares per 10[187] - Some of the company's initial public offering (IPO) restricted shares were unlocked on June 27, 2016[188] - The company has no existing internal employee shares[189] III. Shareholders and Actual Controller Status As of the reporting period end, the company had 22,841 common shareholders, with Ma Biao as the controlling shareholder and actual controller, holding 49.68% of shares - The total number of common shareholders at the end of the reporting period was 22,841[190] Shareholding Status of Shareholders Holding 5% or More or Top 10 Shareholders at Period End | Shareholder Name | Shareholder Nature | Shareholding Percentage | Number of Shares Held at Period End (shares) | Number of Restricted Shares Held (shares) | | :--- | :--- | :--- | :--- | :--- | | Ma Biao | Domestic Natural Person | 49.68% | 119,232,000 | 119,232,000 | | Ma Li | Domestic Natural Person | 11.88% | 28,512,000 | 28,512,000 | | Liu Shuqin | Domestic Natural Person | 3.24% | 7,776,000 | 7,776,000 | | Wang Guang | Domestic Natural Person | 1.45% | 3,480,000 | 0 | | Zhongrong Life Insurance Co., Ltd. - Participating Insurance Product | Domestic Non-State-Owned Legal Person | 0.99% | 2,378,814 | 0 | | Zhongrong Life Insurance Co., Ltd. - Universal Insurance Product | Domestic Non-State-Owned Legal Person | 0.75% | 1,789,124 | 0 | | Zhongrong Life Insurance Co., Ltd. - Traditional Insurance Product | Domestic Non-State-Owned Legal Person | 0.48% | 1,159,936 | 0 | | Industrial and Commercial Bank of China Ltd. - Fullgoal Healthcare Industry Mixed Securities Investment Fund | Domestic Non-State-Owned Legal Person | 0.43% | 1,020,951 | 0 | | Zhang Hongmei | Domestic Natural Person | 0.42% | 1,000,000 | 0 | | Zhang Hongjie | Domestic Natural Person | 0.42% | 1,000,000 | 0 | - The controlling shareholder and actual controller is Ma Biao, whose main profession and positions are Chairman and General Manager of Beijing Saisheng Pharmaceutical Co., Ltd[193][194] - Ma Biao and Ma Li are siblings, and Liu Shuqin is their mother[192] - The company's controlling shareholder and actual controller remained unchanged during the reporting period[193][195] Part VII Preferred Shares Related Matters This section confirms that the company had no preferred shares during the reporting period Preferred Shares Related Matters The company had no preferred shares during the reporting period - The company had no preferred shares during the reporting period[197] Part VIII Directors, Supervisors, Senior Management, and Employees This section details the shareholding changes, appointments, remuneration, and overall status of the company's directors, supervisors, senior management, and employees I. Shareholding Changes of Directors, Supervisors, and Senior Management During the reporting period, the total shareholdings of the company's directors, supervisors, and senior management doubled due to capital reserve conversion Shareholding Changes of Directors, Supervisors, and Senior Management | Name | Position | Shares Held at Beginning of Period (shares) | Other Changes (shares) | Shares Held at End of Period (shares) | | :--- | :--- | :--- | :--- | :--- | | Ma Biao | Chairman and General Manager | 59,616,000 | 59,616,000 | 119,232,000 | | Ma Li | Director, Deputy General Manager, and CFO | 14,256,000 | 14,256,000 | 28,512,000 | | Wang Xuefeng | Director, Deputy General Manager, and Board Secretary | 0 | 0 | 0 | | Li Jianhua | Director | 0 | 0 | 0 | | Ma Shaojing | Director | 0 | 0 | 0 | | Fu Hongzheng | Independent Director | 0 | 0 | 0 | | He Naixin | Independent Director | 0 | 0 | 0 | | Sun Yanhong | Independent Director | 0 | 0 | 0 | | Li Zhibing | Chairman of Supervisory Board | 0 | 0 | 0 | | Song Mengwei | Supervisor | 0 | 0 | 0 | | Peng Xinghua | Supervisor | 0 | 0 | 0 | | Jiang Guirong | Chief Engineer | 0 | 0 | 0 | | Zhang Fan | Marketing Director | 200 | 200 | 400 | | Total | - | 73,872,200 | 73,872,200 | 147,744,000 | II. Changes in Company Directors, Supervisors, and Senior Management The company's directors, supervisors, and senior management remained unchanged during the reporting period - The company's directors, supervisors, and senior management remained unchanged during the reporting period[200] III. Appointment Status This section details the professional backgrounds, work experience, and internal/external positions of the company's current directors, supervisors, and senior management, noting no recent regulatory penalties - Ma Biao, the company's Chairman and General Manager, holds a Ph.D. in Biochemistry, possesses multiple invention patents, and also serves as Chairman and General Manager of Sai'er Bio-pharmaceutical[200] - The company's directors, supervisors, and senior management hold key internal positions, such as Ma Li as Deputy General Manager and CFO, Wang Xuefeng as Deputy General Manager and Board Secretary, and Song Mengwei as Head of R&D Center[201][206] - Several senior executives hold concurrent positions in other entities, such as Ma Shaojing as General Manager and Director at Guoxin Venture Capital Management (Shenzhen) Co., Ltd., Fu Hongzheng as a professor at Peking University, and Sun Yanhong as an independent director at multiple companies[202][203][204][205][209] - The company's current and departed directors, supervisors, and senior management have not been penalized by securities regulatory agencies in the past three years[209] IV. Remuneration of Directors, Supervisors, and Senior Management The remuneration plan for directors, supervisors, and senior management is determined by the Board's Compensation and Assessment Committee, approved by relevant bodies, and based on performance, with Chairman Ma Biao receiving the highest pre-tax remuneration of CNY 811,700 - The remuneration plan for directors, supervisors, and senior management is drafted by the Board's Compensation and Assessment Committee and implemented after approval by the Board of Directors, Supervisory Board, and Shareholders' Meeting[210] - Remuneration is determined based on the company's "Board of Directors Compensation and Assessment Committee Work Rules," considering operating performance and work ability assessments[210] 2016 Total Pre-Tax Remuneration of Directors, Supervisors, and Senior Management | Name | Position | Total Pre-Tax Remuneration from Company (CNY 10k) | | :--- | :--- | :--- | | Ma Biao | Chairman and General Manager | 81.17 | | Ma Li | Deputy General Manager and CFO | 61.17 | | Wang Xuefeng | Deputy General Manager and Board Secretary | 61.17 | | Li Jianhua | Director | 19.64 | | Fu Hongzheng | Independent Director | 4 | | He Naixin | Independent Director | 4 | | Sun Yanhong | Independent Director | 4 | | Li Zhibing | Chairman of Supervisory Board | 4 | | Song Mengwei | Supe