NO.1 PHARMACY(SH:600833)2025-08-19 11:35Financial Performance - The company's operating revenue for the first half of 2025 was approximately ¥996.60 million, representing an increase of 11.58% compared to ¥893.17 million in the same period last year[21]. - The total profit for the first half of 2025 decreased to approximately ¥17.74 million, down 89.60% from ¥170.59 million in the previous year[21]. - The net profit attributable to shareholders for the first half of 2025 was approximately ¥14.02 million, a decline of 89.19% compared to ¥129.79 million in the same period last year[21]. - The basic earnings per share for the first half of 2025 was ¥0.0629, down 89.19% from ¥0.5818 in the previous year[20]. - The net cash flow from operating activities increased to approximately ¥55.54 million, compared to a negative cash flow of ¥14.58 million in the same period last year[21]. - The company reported a significant decrease in total profit and net profit primarily due to the absence of compensation received from property expropriation in the previous year[22]. - The company achieved a 24.58% increase in net profit attributable to shareholders after deducting non-recurring gains and losses, indicating successful business expansion and cost reduction efforts[22]. - The weighted average return on net assets decreased by 11.2 percentage points to 1.25% compared to the previous year[22]. Market Trends - The retail pharmacy market in China is projected to decline by 2.2% in 2024, with a total market size of approximately ¥2,152.17 billion, reflecting a 1.3% decrease in the first five months of 2025[28]. - The online pharmacy market is expected to reach ¥3,292 billion in 2024, with a year-on-year growth of 9.6%, and online sales accounting for 35% of the overall retail pharmacy market[29][32]. - The number of retail pharmacies is decreasing, with 39,228 closures in 2024, resulting in a closure rate of approximately 5.76%, up from 3.8% in 2023[34]. Company Strategy and Development - The company ranked 45th in the 2024-2025 China Pharmacy Value Top 100 list, improving by 7 positions from the previous year[41]. - The company is focusing on enhancing core competitiveness and high-quality development in 2025, which is a key year for completing the "14th Five-Year Plan"[41]. - The retail pharmacy O2O market is projected to grow to ¥487 billion in 2024, with a year-on-year increase of 31.3%, significantly outpacing the industry average[32]. - The company is adapting to regulatory changes, including the introduction of electronic prescriptions and price governance measures, which are expected to impact operational strategies[35][38]. - The company is positioned to leverage the growing health consciousness among consumers, driven by an aging population and increasing healthcare spending[27]. - The company is enhancing its service offerings, including chronic disease management and health consultations, to align with new health consumption policies[39]. - The company is expected to face challenges from increased competition and regulatory scrutiny in the retail pharmacy sector, necessitating a shift towards refined operational strategies[39]. - The company expanded its retail store count to 208, adding over 10 pet specialty stores, and achieved a 75.30% share of direct medical insurance stores, up 7.64 percentage points year-over-year[42]. - Online business grew by 38.5% year-over-year, with O2O business increasing by 46.1%, driven by enhanced platform collaboration and promotional activities[46]. - The company established a private equity investment fund focusing on functional food sectors, aligning with Shanghai's strategic development plans for the health industry[47]. - The self-owned brand sales increased by 67.4% year-over-year, supported by the introduction of integrated supply chain products and strategic partnerships with suppliers[49]. - The company conducted over 900 community health service activities, enhancing brand reputation and community engagement[52]. - The company launched a chronic disease management service system, with over 60,000 members registered in the first half of 2025[50]. - The company introduced innovative store formats targeting specific consumer groups, such as health stations for young mothers, to diversify product offerings[43]. - The company accelerated the development of a modern intelligent logistics center, expected to significantly reduce logistics costs and improve delivery efficiency by 2025[50]. - The company added 14 new medical insurance stores during the reporting period, enhancing its service network[42]. - The company implemented a comprehensive training program for over 100 employees in various health-related qualifications, strengthening its talent pool[51]. Financial Management - The operating cost for the reporting period was approximately CNY 831.77 million, reflecting an increase of 11.90% from CNY 743.35 million year-on-year[58]. - The company reported a credit impairment reversal of CNY 1.40 million during the reporting period, compared to a loss of CNY 270,036 in the previous year[57]. - The company’s financial expenses decreased to CNY -4.58 million from CNY -7.21 million, indicating improved financial management[58]. - The company’s short-term borrowings decreased by 48% to CNY 49.70 million from CNY 95.58 million in the previous year[65]. - The total fair value of other equity investments increased by 6,852,870.07 RMB, reaching 259,338,029.44 RMB by the end of the period[71]. - The total fair value of trading financial assets increased significantly by 159,700,000.00 RMB, resulting in a total of 289,426,029.44 RMB[71]. Subsidiary Performance - The subsidiary, HSBC Pharmaceutical, reported a net profit of 2,243.70 million RMB, an increase of 86.30% compared to the previous period due to sales growth[76]. - The First Pharmaceutical Chain subsidiary recorded a net loss of 654.02 million RMB, showing improvement from a loss of 969.23 million RMB in the previous period[76]. - The total assets of HSBC Pharmaceutical reached 108,712.20 million RMB, with a net asset value of 10,999.50 million RMB[75]. - The subsidiary Deep Sea Pharmaceutical reported a net profit of 60.75 million RMB, a recovery from a loss of 15.73 million RMB in the previous period[76]. - The subsidiary HSBC Drugstore reported a net loss of 928.12 million RMB, attributed to increased costs from new store openings[76]. Regulatory and Compliance - The company faces risks from industry policy changes, including price control pressures and increased competition from online and offline channels[79]. - The company plans to enhance its management capabilities and innovate its business model in response to regulatory changes in the pharmaceutical industry[79]. - The company has committed to ensuring business independence for its subsidiary, with a focus on maintaining separate operations in procurement, production, and sales[88]. - The company guarantees that its subsidiary will have complete asset independence, ensuring that all operational licenses and related assets are fully owned or used by the subsidiary[89]. - The company will maintain financial independence for its subsidiary, including establishing an independent accounting department and financial management system[89]. - The company has committed to ensuring personnel independence for its subsidiary, with key management not receiving compensation from the parent company[89]. - There are no significant lawsuits or arbitration matters affecting the company during the reporting period[91]. - The company and its major stakeholders have maintained a good integrity status, with no major breaches of trust reported[91]. - The company has not engaged in any non-operational fund occupation by major shareholders or related parties during the reporting period[90]. - There are no violations or guarantees reported during the reporting period[90]. - The company has not received any non-standard audit opinions in the previous annual report[91]. - The company has committed to avoiding any competitive business activities with its parent company during the reporting period[88]. - The company plans to engage in daily operational related party transactions with its controlling shareholder, Bailian Group Co., Ltd., and its subsidiaries for the year 2025[92]. Shareholder Information - The total number of ordinary shareholders as of the reporting period end is 24,694[111]. - The largest shareholder, Bailian Group Co., Ltd., holds 44.95% of the shares, totaling 100,274,734 shares[113]. - Jilin Aodong Pharmaceutical Group Co., Ltd. holds 4.93% of the shares, totaling 10,988,525 shares[113]. - The company has not reported any changes in its share capital structure during the reporting period[110]. - The company has not entered into any other significant contracts during the reporting period[107]. - There are no overdue guarantees or contingent liabilities related to guarantees[106]. Cash Flow and Assets - The total current assets as of June 30, 2025, amounted to CNY 1,155,783,284.13, an increase from CNY 1,127,001,836.27 as of December 31, 2024, reflecting a growth of approximately 2.3%[120]. - Cash and cash equivalents decreased to CNY 370,767,879.28 from CNY 436,420,035.77, representing a decline of about 15.0%[120]. - Accounts receivable decreased to CNY 157,935,555.44 from CNY 189,373,266.78, indicating a reduction of approximately 16.6%[120]. - Inventory increased significantly to CNY 424,789,975.34 from CNY 336,323,956.50, marking an increase of around 26.3%[120]. - Non-current assets totaled CNY 1,006,778.53 for long-term equity investments, remaining unchanged from the previous period[120]. - The company's total liabilities and equity structure was not detailed in the provided content, indicating a focus on asset management rather than liabilities[120]. - The company reported a notable increase in other equity instrument investments to CNY 269,726,029.44 from CNY 252,873,159.37, reflecting a growth of approximately 6.7%[120]. - The fixed assets slightly decreased to CNY 83,867,352.97 from CNY 85,146,139.48, a decline of about 1.5%[120]. Accounting Policies - The financial statements are prepared based on the "Enterprise Accounting Standards" and relevant regulations, ensuring a true and complete reflection of the company's financial status and operating results[152]. - The accounting period for the company runs from January 1 to December 31 each year[153]. - The company's accounting currency is Renminbi, while its subsidiary in Hong Kong uses US dollars[155]. - The company has established materiality thresholds for various accounting estimates, such as a single bad debt provision exceeding 10% of total receivables being considered significant[156]. - The company follows specific accounting treatments for mergers, including measuring assets and liabilities based on their book value at the merger date for same-control mergers[157]. - Directly related expenses incurred during mergers are recognized in the current period's profit and loss[158]. - The company consolidates financial statements based on control, including all subsidiaries, and offsets internal transactions[159]. - The company recognizes the operating results and cash flows of newly acquired subsidiaries from the beginning of the reporting period[160]. - Upon losing control of a subsidiary, the remaining equity investment is remeasured at fair value on the date control is lost[161]. - The company adjusts capital reserves for differences arising from the purchase of minority stakes in subsidiaries[163]. - The company confirms its share of assets and liabilities related to joint operations, recognizing both individually held assets and those shared according to its ownership percentage[164]. Inventory Management - Inventory is classified into categories such as finished goods and raw materials, and is measured at cost, including procurement and processing costs[182]. - The company uses a perpetual inventory system and applies the weighted average method for inventory valuation upon issuance[184]. - Inventory is measured at the lower of cost and net realizable value, with provisions for inventory write-downs recognized when costs exceed net realizable values[183]. - The company assesses the net realizable value of inventory based on estimated selling prices minus estimated costs to complete and sell the inventory[183]. - Provisions for inventory write-downs can be reversed if the factors leading to the write-down no longer exist, with the reversal amount recognized in current profit or loss[185]. - Low-value consumables and packaging materials are expensed using a one-time write-off method[186]. Financial Instruments - Financial assets are classified at initial recognition as either measured at amortized cost, fair value through other comprehensive income, or fair value through profit or loss[167]. - Financial liabilities are classified at initial recognition as either fair value through profit or loss or measured at amortized cost[169]. - The company recognizes financial assets when it becomes a party to the financial instrument contract, including financial assets, financial liabilities, or equity instruments[171]. - Financial assets are derecognized when the contractual rights to cash flows expire or when the asset is transferred and the risks and rewards of ownership are substantially transferred[173]. - The company uses the effective interest method to calculate interest on financial assets measured at amortized cost, with gains or losses recognized upon derecognition[172]. - The company can irrevocably designate non-trading equity investments as fair value through other comprehensive income at initial recognition[168]. - The company recognizes foreign currency transactions at the spot exchange rate on the transaction date, with any exchange differences recognized in profit or loss[165]. - The company will transfer cumulative gains or losses from other comprehensive income to profit or loss upon derecognition of financial assets[171]. - The company terminates the recognition of financial liabilities when the current obligations are fully or partially discharged, and any difference between the carrying amount and the consideration paid is recognized in the current profit or loss[175]. - Fair value of financial assets and liabilities is determined using observable inputs from active markets, or valuation techniques when active markets do not exist, prioritizing relevant observable inputs[176]. - The company assesses expected credit losses based on past events, current conditions, and forecasts of future economic conditions, with significant increases in credit risk leading to loss provisions based on the entire expected life of the financial instrument[179]. - For financial instruments with significant increases in credit risk, loss provisions are measured based on expected credit losses over the entire life, while those without significant increases are measured over the next 12 months[179].