Important Notice, Table of Contents, and Definitions Important Notice and Risk Disclosure Management confirms the report's accuracy, cautions on macroeconomic, policy, and accounts receivable risks, and states no profit distribution is planned - The company faces five major operating risks: - Large-scale system solution implementation risks: High project complexity and long implementation cycles may lead to delays due to planning flaws, technical failures, or changing client demands - Major customer loss risks: High customer concentration among large and medium-sized medical institutions means client loss would significantly impact sustainable development - Management control and gross margin fluctuation risks: Expanding business scope demands higher project management control, while overall solution business may reduce comprehensive gross margin - Technology and talent loss risks: As a technology-intensive industry, the stability of the core technical team is crucial, with risks of talent outflow and core technology leakage - National policy and macroeconomic environment change risks: National healthcare informatization policies offer industry opportunities, but significant policy or macroeconomic changes could introduce operational uncertainties5781011 - The company plans not to distribute cash dividends, issue bonus shares, or convert capital reserves into share capital13 Definitions This section defines key terms, including company entities, industry-specific systems like HIS and CIS, the 'Digital Hospital Overall Solution,' and specifies the reporting period as H1 2025 Company Profile and Key Financial Indicators Company Profile Zhejiang Horen Technology Co., Ltd. (stock code: 300550), listed on the Shenzhen Stock Exchange, is represented by Zhao Chenhui, with no changes in registered address, office address, or information disclosure locations during the reporting period Company Basic Information | Item | Content | | :--- | :--- | | Stock Abbreviation | Horen Technology | | Stock Code | 300550 | | Listing Exchange | Shenzhen Stock Exchange | | Company Full Chinese Name | 浙江和仁科技股份有限公司 | | Legal Representative | Zhao Chenhui | Key Accounting Data and Financial Indicators In H1 2025, despite nearly flat revenue, the company significantly narrowed its net loss and improved operating cash flow, indicating an overall improvement in financial performance Key Financial Indicators for H1 2025 | Indicator | Current Period | Prior Period | YoY Change | | :--- | :--- | :--- | :--- | | Operating Revenue (million yuan) | 158.88 | 160.46 | -0.99% | | Net Profit Attributable to Shareholders (million yuan) | -3.52 | -14.33 | 75.44% | | Net Profit Attributable to Shareholders (Excluding Non-recurring Items) (million yuan) | -4.41 | -15.98 | 72.38% | | Net Cash Flow from Operating Activities (million yuan) | -64.99 | -96.29 | 32.50% | | Basic Earnings Per Share (yuan/share) | -0.01 | -0.05 | 80.00% | | Weighted Average Return on Net Assets | -0.32% | -1.34% | 1.02% | Key Balance Sheet Indicators at Period End | Indicator | End of Current Period (billion yuan) | End of Prior Year (billion yuan) | Change from Beginning of Year | | :--- | :--- | :--- | :--- | | Total Assets | 1.44 | 1.46 | -1.56% | | Net Assets Attributable to Shareholders | 1.10 | 1.11 | -0.91% | - During the reporting period, the company's total non-recurring gains and losses amounted to 0.89 million yuan, primarily from fair value changes in financial assets and government subsidies33 Management Discussion and Analysis Main Business Activities During the Reporting Period The company's core business involves R&D, sales, implementation, and service of medical information and digital scenario application systems, offering overall solutions to healthcare institutions, driven by national policies and AI advancements - The company's main business is divided into two segments: Medical Information Systems (including hospital clinical information systems centered on electronic medical records and city-level smart healthcare solutions) and Digital Scenario Application Systems (extensions of clinical information systems in various medical service scenarios, such as smart outpatient and smart surgery)363739 - The company's products support domestic operating systems and databases and feature modular component assembly, enhancing productization, meeting personalized needs, and reducing development costs4243 - During the reporting period, the National Health Commission issued policies like the 'Smart Healthcare Grading Evaluation Method and Standards (2025 Edition)' and 'Tier-3 Hospital Review Standards (2025 Edition)', emphasizing data interoperability, AI applications, and medical quality, providing clear guidance and market drivers for industry development484951 Analysis of Core Competencies The company's core competencies include comprehensive solution capabilities based on proprietary clinical products, advanced technology, continuous innovation, full lifecycle services, premium client resources, and an experienced management and talent team - The company provides top-down designed, hospital-wide smart hospital overall solutions centered on clinical data interoperability, occupying a core position in medical informatization construction5859 - The company's new-generation hospital information system is one of China's largest core business systems based on HTML5 and cloud computing technology, supporting cloud deployment, group hospital applications, and integrating HIS with EMR62 - The company has established long-term partnerships with top-tier large medical institutions in military systems and multiple regions like Zhejiang, Jiangsu, Jiangxi, and Shaanxi, accumulating extensive successful cases and implementation experience64 Analysis of Main Business Operations During the reporting period, operating revenue slightly decreased, but a significant drop in operating costs boosted gross margin, while R&D investment substantially increased; medical information systems dominated revenue with improved gross margin, and regional performance varied, with strong growth in Central China Key Financial Data Year-on-Year Changes | Item | Current Period (million yuan) | Prior Period (million yuan) | YoY Change | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Operating Cost | 89.92 | 112.59 | -20.14% | - | | Financial Expenses | -2.15 | -3.09 | 30.51% | Primarily due to decreased interest income | | R&D Investment | 31.72 | 23.63 | 34.27% | Primarily due to increased R&D investment in this period | | Net Cash Flow from Investing Activities | -40.74 | 9.98 | -508.22% | Primarily due to increased purchase of wealth management products | | Net Cash Flow from Financing Activities | -33.56 | -0.95 | -3,431.93% | Primarily due to decreased loans compared to the prior period | Operating Revenue by Product or Service (million yuan) | Product/Service | Operating Revenue (million yuan) | Operating Cost (million yuan) | Gross Margin | YoY Change in Operating Revenue | YoY Change in Operating Cost | YoY Change in Gross Margin | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Scenario-based Application Systems | 34.05 | 27.18 | 20.18% | -29.01% | -32.01% | 3.53% | | Medical Information Systems | 89.12 | 44.99 | 49.51% | 0.45% | -26.70% | 18.70% | Operating Revenue by Region (million yuan) | Region | Operating Revenue (million yuan) | YoY Change in Operating Revenue | Gross Margin | YoY Change in Gross Margin | | :--- | :--- | :--- | :--- | :--- | | Northwest Region | 81.77 | -11.10% | 53.98% | 26.81% | | East China Region | 37.73 | -39.49% | 41.60% | 8.08% | | Central China Region | 26.93 | 1,699.45% | 11.22% | -29.08% | Analysis of Assets and Liabilities At period-end, total assets decreased, with a notable shift in asset structure as cash declined and contract assets rose, while short-term borrowings decreased, and some cash remained restricted due to guarantees and litigation Significant Changes in Asset Composition | Item | Proportion of Total Assets at Period End | Proportion of Total Assets at Beginning of Year | Change in Proportion | | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 28.05% | 37.08% | -9.03% | | Accounts Receivable | 22.08% | 20.66% | 1.42% | | Contract Assets | 25.59% | 20.71% | 4.88% | | Short-term Borrowings | 4.87% | 6.57% | -1.70% | - As of the end of the reporting period, 4.62 million yuan of the company's cash and cash equivalents were restricted, primarily for bill deposits, letter of guarantee deposits, migrant worker wage guarantees, and litigation-frozen funds81491 Analysis of Investment Activities During the reporting period, the company's investment increased, primarily in wealth management products using own funds, with no significant equity, non-equity, or derivative investments Overview of Entrusted Wealth Management (million yuan) | Specific Type | Source of Funds for Entrusted Wealth Management | Amount of Entrusted Wealth Management Occurred (million yuan) | Unmatured Balance (million yuan) | | :--- | :--- | :--- | :--- | | Bank Wealth Management Products | Own Funds | 60 | 30 | Analysis of Major Holding and Participating Companies The company established new subsidiaries and deregistered others to expand digital hospital business and enhance operational efficiency, with its main subsidiary, Zhejiang Meihe Institute, reporting a net loss - To accelerate digital hospital business expansion and market layout, the company established Horen Health Technology Hong Kong Co., Ltd., Nanjing Horen Digital Medical Technology Co., Ltd., Wenzhou Shukangjian Technology Industry Development Co., Ltd., and Wenzhou Shujian Technology Co., Ltd.93134 - Due to business strategy adjustments, the company deregistered Shanghai Horkangyi Technology Co., Ltd. and established and then deregistered Zhejiang Hezhong Renxin Technology Co., Ltd., neither of which had a substantial impact on operations or performance93134 Corporate Governance, Environment, and Society Corporate Governance and Social Responsibility During the reporting period, there were no changes in the company's directors, supervisors, or senior management, no profit distribution or equity incentive plans, and the company actively fulfilled its social responsibilities by protecting stakeholder rights - There were no changes in the company's directors, supervisors, and senior management during the reporting period103 - The company plans not to distribute cash dividends, issue bonus shares, or convert capital reserves into share capital for the half-year period104 - The company actively fulfills its social responsibilities, focusing on protecting the rights and interests of shareholders, employees, suppliers, and customers106107 Significant Matters Litigation and Major Contracts While no major litigation occurred, several other significant cases, including arbitration with PLA General Hospital and a lawsuit with Xi'an Construction Group, are ongoing; the company is also executing major smart hospital projects with Xinjiang TCM Hospital, Xi'an Honghui Hospital, and Xi'an Children's Hospital Other Litigation Matters (Partial) | Litigant | Amount Involved (million yuan) | Litigation Progress | | :--- | :--- | :--- | | Zhejiang Horen Technology vs. PLA General Hospital | 22.26 | Arbitration filed, not yet heard | | Zhejiang Horen Technology vs. Xi'an Construction Engineering Group Co., Ltd. et al. | 16.06 | Case filed, under normal trial | | Shanxi Zhijie Software Engineering Co., Ltd. vs. Zhejiang Horen Technology | 3.34 | Second instance judgment rendered, appeal dismissed, original judgment upheld | | Zhejiang Horen Technology vs. Nantong Yilian E-commerce Co., Ltd. | 2.79 | First instance judgment supported plaintiff, defendant appealed, second instance under trial | Performance of Major Daily Operating Contracts (Partial) | Client Name | Contract Content | Total Contract Amount (million yuan) | Overall Progress | | :--- | :--- | :--- | :--- | | Xinjiang Uygur Autonomous Region Hospital of Traditional Chinese Medicine | Smart Hospital Informatization Project | 148.16 | 42.03% | | Xi'an Honghui Hospital | Multi-campus Integrated 'Smart Hospital' Scenario Application Project | 165.87 | 96.87% | | China Construction Eighth Engineering Division Second Construction Co., Ltd. | Xi'an Children's Hospital Jingkai Campus Project Intelligent Engineering | 148.91 | 66.05% | | PLA General Hospital | Subcontract for Low-Voltage Intelligent Engineering of Outpatient and Emergency Comprehensive Building | 141.41 | Accepted but not yet settled | Share Changes and Shareholder Information Share Changes and Shareholder Information At period-end, the company's total share capital and shareholder count remained stable, with the top three shareholders identified, and the controlling shareholder's shares, along with its concerted parties, partially pledged - During the reporting period, the company's total share capital remained unchanged at 262,560,141 shares137 Top Ten Shareholders' Shareholding | Shareholder Name | Shareholding Percentage | Number of Shares Held | | :--- | :--- | :--- | | Tongce Medical Co., Ltd. | 19.01% | 49,920,315 | | Hangzhou Panyuan Investment Co., Ltd. | 15.33% | 40,260,815 | | Xiamen Silicon Valley Shaohua I Investment Partnership | 10.01% | 26,273,850 | | Hangzhou Panhong Investment Management Partnership | 5.42% | 14,240,800 | - Of the shares held by controlling shareholder Hangzhou Panyuan Investment Co., Ltd., 22,282,825 shares are pledged, representing 55.35% of its holdings; its concerted party, Hangzhou Panhong Investment Management Partnership (Limited Partnership), has 9,500,000 shares pledged139669 Bond-Related Information Bond Status The company had no bond-related information during the reporting period Financial Report Financial Statements This unaudited semi-annual financial report presents the consolidated balance sheet, income statement, and cash flow statement, detailing the company's assets, liabilities, equity, revenue, costs, and cash flows for the period Consolidated Balance Sheet Summary (June 30, 2025) | Item | Period-End Balance (billion yuan) | Beginning-of-Period Balance (billion yuan) | | :--- | :--- | :--- | | Total Assets | 1.44 | 1.46 | | Total Liabilities | 0.33 | 0.34 | | Total Equity Attributable to Parent Company Owners | 1.10 | 1.11 | Consolidated Income Statement Summary (H1 2025) | Item | Current Period Amount (million yuan) | Prior Period Amount (million yuan) | | :--- | :--- | :--- | | Total Operating Revenue | 158.88 | 160.46 | | Total Operating Costs | 150.64 | 168.68 | | Net Profit | -3.68 | -14.56 | | Net Profit Attributable to Parent Company Shareholders | -3.52 | -14.33 | Consolidated Cash Flow Statement Summary (H1 2025) | Item | Current Period Amount (million yuan) | Prior Period Amount (million yuan) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | -64.99 | -96.29 | | Net Cash Flow from Investing Activities | -40.74 | 9.98 | | Net Cash Flow from Financing Activities | -33.56 | -0.95 | | Net Increase in Cash and Cash Equivalents | -139.30 | -87.26 | Notes to Financial Statements The notes detail the company's background, financial statement preparation basis, and significant accounting policies, including revenue recognition, R&D capitalization, and financial instrument impairment, with no major policy changes and tax benefits as a key software enterprise - The company's revenue recognition policy for digital scenario application system implementation business is based on the input method according to the progress of performance; for medical information system software sales and development, revenue is recognized when the customer confirms and the right to receive payment is obtained313315 - R&D expenditure capitalization policy: The company begins capitalization after completing the project design, meeting expected requirements, and passing project approval, ceasing capitalization and transferring to intangible assets upon completion of development into standardized products ready for delivery296 - The company enjoys tax incentives, including immediate refund of VAT exceeding 3% for software products and a temporary 10% corporate income tax rate for 2025 as a key software enterprise within national planning360
和仁科技(300550) - 2025 Q2 - 季度财报