金花股份(600080) - 2025 Q2 - 季度财报

Section I Definitions This section defines specific terms and abbreviations used in the report to ensure accurate and consistent understanding of the company's disclosed information - The reporting period refers to January 1, 2025, to June 30, 2025[18] - The Company refers to Ginwa Enterprise (Group) Inc.[18] Section II Company Profile and Key Financial Indicators This section outlines the company's basic information, contact details, stock overview, key accounting data, and financial indicators for the reporting period, including non-recurring gains and losses I. Company Information This section provides the company's basic identification details, including its Chinese name, abbreviation, English name, and legal representative Company Basic Information | Indicator | Content | | :--- | :--- | | Chinese Name | 金花企业（集团）股份有限公司 (Ginwa Enterprise (Group) Inc.) | | Chinese Abbreviation | 金花股份 (Ginwa Shares) | | English Name | GINWA ENTERPRISE（GROUP）INC. | | English Abbreviation | GINWA | | Legal Representative | 邢雅江 (Xing Yajiang) | II. Contact Person and Contact Information This section lists the contact information for the company's Board Secretary and Securities Affairs Representative, facilitating communication for investors and relevant parties Contact Information | Position | Board Secretary | | :--- | :--- | | Name | 张朝阳 (Zhang Chaoyang) | | Contact Address | 西安市高新区高新三路财富中心三期南座40层 (40th Floor, South Tower, Phase III, Fortune Center, Gaoxin 3rd Road, High-tech Zone, Xi'an) | | Phone | 029-88336635 | | Fax | 029-81778626 | | Email | irm@ginwa.com.cn | III. Brief Introduction to Changes in Basic Information This section discloses any changes in the company's basic information, such as registered address, office address, website, and email, with no changes reported for the period - The company's registered address, office address, website, and email remained unchanged during the reporting period[16] IV. Brief Introduction to Changes in Information Disclosure and Document Custody Locations This section specifies the company's designated newspaper for information disclosure, the website for semi-annual reports, and the location for report custody, with no changes reported for the period - The company's selected information disclosure newspaper is "Shanghai Securities News", the report publication website is www.sse.com.cn, and the report custody location is the Board Secretary's Office[17] - There were no changes in information disclosure and document custody locations during the reporting period[17] V. Company Stock Profile This section provides basic information about the company's stock, including stock type, listing exchange, stock abbreviation, and code Company Stock Profile | Stock Type | Listing Exchange | Stock Abbreviation | Stock Code | | :--- | :--- | :--- | :--- | | A-share | Shanghai Stock Exchange | 金花股份 (Ginwa Shares) | 600080 | VI. Other Relevant Information This section discloses information about the sponsor institution that performed continuous supervision duties for the company during the reporting period - The sponsor institution performing continuous supervision duties during the reporting period was Guojin Securities Co., Ltd., with signing sponsor representatives Yao Lianjun and Wang Ke, and the continuous supervision period from March 30, 2018, to present[20] VII. Company's Key Accounting Data and Financial Indicators This section presents the company's key accounting data and financial indicators for the reporting period, showing a year-on-year decrease in both operating revenue and net profit Key Accounting Data (Jan-Jun 2025 vs. Same Period Last Year) | Indicator | Current Reporting Period (Jan-Jun) (Yuan) | Same Period Last Year (Yuan) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 241,292,963.66 | 245,965,482.81 | -1.90 | | Total Profit | 3,934,047.66 | 9,249,809.58 | -57.47 | | Net Profit Attributable to Shareholders of the Listed Company | 6,195,011.43 | 9,462,893.79 | -34.53 | | Net Profit Attributable to Shareholders of the Listed Company After Deducting Non-Recurring Gains and Losses | 6,789,957.30 | 10,031,379.73 | -32.31 | | Net Cash Flow from Operating Activities | -80,933,428.99 | -23,099,372.07 | Not Applicable | | Net Assets Attributable to Shareholders of the Listed Company (End of Period) | 1,556,108,188.16 | 1,560,494,557.82 | -0.28 | | Total Assets (End of Period) | 1,929,620,956.56 | 1,972,071,163.91 | -2.15 | Key Financial Indicators (Jan-Jun 2025 vs. Same Period Last Year) | Indicator | Current Reporting Period (Jan-Jun) | Same Period Last Year | YoY Change (%) | | :--- | :--- | :--- | :--- | | Basic Earnings Per Share (Yuan/share) | 0.0176 | 0.0261 | -32.57 | | Diluted Earnings Per Share (Yuan/share) | 0.0176 | 0.0261 | -32.57 | | Basic Earnings Per Share After Deducting Non-Recurring Gains and Losses (Yuan/share) | 0.0193 | 0.0277 | -30.32 | | Weighted Average Return on Net Assets (%) | 0.40 | 0.60 | Decrease of 0.20 percentage points | | Weighted Average Return on Net Assets After Deducting Non-Recurring Gains and Losses (%) | 0.44 | 0.64 | Decrease of 0.20 percentage points | IX. Non-Recurring Gains and Losses Items and Amounts This section details the non-recurring gains and losses items and their amounts for the reporting period, which collectively had a negative impact on net profit Non-Recurring Gains and Losses Items and Amounts (Jan-Jun 2025) | Non-Recurring Gains and Losses Item | Amount (Yuan) | | :--- | :--- | | Gains and losses from disposal of non-current assets | -49,610.58 | | Government grants recognized in current profit and loss | 231,488.11 | | Fair value changes and disposal gains/losses from financial assets and liabilities held by non-financial enterprises | -5,339,390.96 | | Capital occupation fees received from non-financial enterprises recognized in current profit and loss | 4,464,400.00 | | Other non-operating income and expenses apart from the above | -7,225.78 | | Less: Income tax impact | -105,393.34 | | Total | -594,945.87 | Section III Management Discussion and Analysis This section analyzes the company's industry status, main business, operating model, performance drivers, and core competitiveness, discussing operating conditions and potential risks during the reporting period I. Explanation of the Company's Industry and Main Business During the Reporting Period This section elaborates on the overall development trend of the pharmaceutical industry, policy impacts, and the company's main businesses and products, highlighting its leading position in orthopedic traditional Chinese medicine (I) Industry Overview The pharmaceutical industry, a strategic sector, shows diversified development driven by innovation, structural optimization, and internal-external linkages, despite a year-on-year decline in operating revenue and total profit for pharmaceutical manufacturing in H1 2025 - The pharmaceutical industry is a strategic sector vital to national economy and people's livelihoods, driven by global economic development and an aging population, exhibiting a diversified development trend of "innovation-led, structurally optimized, and internally and externally linked"[26] - In the first half of 2025, China's pharmaceutical manufacturing industry achieved cumulative operating revenue of CNY 1,227.52 billion, a 1.2% year-on-year decrease; total profit was CNY 176.69 billion, a 2.8% year-on-year decrease; and fixed asset investment decreased by 3.0% compared to the same period last year[26] - The state has intensively introduced medical policies, including "Opinions on Improving the Quality of Traditional Chinese Medicine and Promoting High-Quality Development of the Traditional Chinese Medicine Industry", "2024 Drug Review Report", and "2025 Edition of the Pharmacopoeia of the People's Republic of China", aiming to enhance the quality of traditional Chinese medicine, promote technological innovation, strengthen regulation, and optimize the medical insurance drug system[27][28][29] (II) Explanation of the Company's Main Business The company primarily engages in R&D, production, and sales of pharmaceuticals, with products covering chemical drugs, proprietary Chinese medicines, raw materials, and health products, categorized into orthopedic, immunological, pediatric, and general medicine series. Its flagship product, Jintiange Capsule, is a national Class I new drug and a leading orthopedic traditional Chinese medicine - The company operates in the pharmaceutical manufacturing industry, with its main business being the R&D, production, and sales of pharmaceuticals, covering chemical drugs, proprietary Chinese medicines, raw materials, and health products[30] - Products are categorized into four series: orthopedic (Jintiange Capsule), immunological (Transfer Factor series), pediatric (Pediatric Cough Syrup, etc.), and general medicine (Kaiseilu, etc.)[30] - The flagship product, Jintiange Capsule, is a national Class I new drug and has become a leading orthopedic traditional Chinese medicine, receiving approval for an extended protection period for traditional Chinese medicine in April 2025[30][35] 2. Operating Model The company adopts a centralized procurement and production-to-order model, establishing a nationwide investment promotion and agency sales network, and enhancing brand influence through professional academic promotion - Procurement Model: The materials department is responsible for centralized procurement, the quality department reviews supplier qualifications, and procurement costs are reduced through competitive bidding and tenders[31] - Production Model: Production is based on sales, with monthly production plans formulated according to market demand, strictly adhering to production process specifications and quality standards to ensure standardized production and product quality[31] - Sales Model: Comprising Jintiange Business Unit, Investment Promotion Department, General Medicine Department, and Marketing Department, the flagship product primarily uses an investment promotion and agency model, establishing a nationwide marketing network and adhering to professional academic promotion[32] 3. Performance Drivers During the Reporting Period During the reporting period, the company's operating revenue slightly decreased year-on-year, while net profit attributable to shareholders and non-recurring net profit both significantly declined, mainly due to increased R&D investment and investment income from the disposal of a subsidiary in the prior year Performance Overview (Jan-Jun 2025 vs. Same Period Last Year) | Indicator | Current Reporting Period (CNY 10,000) | Same Period Last Year (CNY 10,000) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 24,129.30 | 24,596.55 | -1.90 | | Net Profit Attributable to Shareholders of the Listed Company | 619.50 | 946.29 | -34.53 | | Net Profit Attributable to Shareholders of the Listed Company After Deducting Non-Recurring Gains and Losses | 679.00 | 1,003.14 | -32.31 | - The decrease in net profit was primarily due to increased R&D investment in the current reporting period and investment income recognized from the disposal of the wholly-owned subsidiary Ginwa International Hotel Co., Ltd. in the same period last year[34] 4. Company's Industry Position The company has established an industry foundation centered on pharmaceutical manufacturing, with products focused on niche areas like orthopedics, immunology, and pediatrics. Its flagship product, Jintiange Capsule, holds a leading position in orthopedic traditional Chinese medicine due to its significant efficacy and quality, further solidified by an extended protection period - The company's products are concentrated in niche areas such as orthopedics, immunology, and pediatric medicines, with its flagship product, Jintiange Capsule, holding a leading position in the field of orthopedic traditional Chinese medicine[35] - Jintiange Capsule is included in 48 authoritative directories and has 14 articles indexed in the SCI database, demonstrating its clinical efficacy and academic recognition[35] - In April 2025, Jintiange Capsule successfully obtained approval for an extended protection period for traditional Chinese medicine, further solidifying the leading position of the company's core product in the orthopedic traditional Chinese medicine field[35] II. Discussion and Analysis of Operating Conditions Facing a challenging pharmaceutical industry landscape, the company adhered to its annual operating plan, continuously strengthening its core market competitiveness and promoting high-quality development through optimized product marketing, increased R&D investment, enhanced production operations, and improved internal management 1. Product Marketing The company maintains compliant market promotion for its flagship products, deepening the "channel push + terminal pull" synergistic model, strengthening academic activities and expert network development; general medicine marketing focuses on grassroots medical markets, enhancing brand promotion and channel building to address market challenges - Flagship product sales adhere to a compliant market promotion strategy, enhancing brand influence through market control, scientific research and development, and academic promotion, deepening the "channel push + terminal pull" synergistic model[37] - General medicine marketing focuses on terminal business, guided by the principle of "collaborating with businesses, analyzing markets, assisting channels, and penetrating terminals," strengthening brand promotion, increasing coverage in grassroots markets, and maintaining product prices and market share stability[38] 2. R&D Aspects The company aligned with strategic directions, formulated annual R&D plans, successfully obtained an extended protection period for Jintiange Capsule, initiated two innovative drug projects (GWH001, GWZ003), and secured re-registration approvals for 85 varieties, laying a foundation for product line expansion - Successfully obtained approval for an extended protection period for Jintiange Capsule, deepened the construction of the process research system, and advanced stability studies for key products[39] - Completed the project initiation for two innovative drugs, GWH001 and GWZ003, and systematically advanced new drug R&D work[40] - Obtained re-registration approvals for 85 existing drug varieties, laying a solid foundation for future product line expansion[40] 3. Production Operations The company strictly adheres to drug regulatory requirements, continuously optimizes its end-to-end quality management system, strengthens quality risk assessment and pharmacovigilance, and, guided by refined management, optimizes production arrangements to ensure stable product supply and safe production - Strictly adheres to drug regulatory requirements, promotes the construction of an end-to-end quality management system, strengthens quality risk assessment, and enhances the normalized pharmacovigilance system[41] - Guided by refined management, implements a tiered monthly production plan system, optimizes production resource allocation, and establishes a safety stock mechanism for core products[41] - Regularly conducts comprehensive safety education and training for all employees, formulates systematic risk control plans, and builds a long-term hidden danger investigation and rectification mechanism to fortify the safety production defense line[41] 4. Internal Management Guided by strategic objectives, the company optimized its organizational structure, refined job responsibilities, and established a performance appraisal linkage mechanism. It strengthened talent development through internal cultivation and external recruitment, built an information-based model for precise cost monitoring, enhanced internal audit and financial management, and actively advanced fundraising investment projects - Optimized the company's organizational structure, refined job responsibilities, established a linkage mechanism between objective responsibility decomposition and performance appraisal, and promoted the upgrade of the performance management system[42] - Adopted a synergistic model of internal cultivation and external recruitment, carried out talent梯队 development and professional skill training for managers, deepened industry-university-research cooperation with universities, and increased the introduction and储备 of professional talents[42] - Built an information-based model for precise monitoring of project full-lifecycle cost data, strengthened cost reduction and efficiency improvement, and comprehensively enhanced budget management and financial data audit supervision[42] III. Analysis of Core Competitiveness During the Reporting Period The company's core competitiveness remained largely unchanged, primarily reflected in four aspects: product advantages, marketing advantages, brand advantages, and production quality management advantages, collectively supporting the company's steady development in the pharmaceutical industry 1. Product Advantages The company has formed an industry foundation centered on pharmaceutical manufacturing, with products concentrated in niche areas like orthopedics, immunology, and pediatrics. Its flagship product, Jintiange Capsule, holds a leading position in orthopedic traditional Chinese medicine, and the company actively develops related series products based on artificial tiger bone powder raw materials - The company's flagship product, Jintiange Capsule, holds a leading position in the orthopedic traditional Chinese medicine field due to its significant clinical efficacy, excellent product quality, and good market service[43] - Increased R&D investment based on artificial tiger bone powder raw materials, forming the company's core competitiveness around core orthopedic products[43] 2. Marketing Advantages The company has consistently pursued an academic promotion model for years, fostering product application and development in various medical institutions through a professional academic promotion team, collaboration with authoritative organizations, establishment of an expert network, and clinical evidence-based medicine research, while also building a nationwide marketing network - The company adheres to an academic promotion model, relying on a professional academic promotion team, collaborating with authoritative organizations, building an expert network system, and conducting multiple clinical evidence-based medicine studies[44] - Multiple national and provincial academic conferences are held annually, promoting product application in the medical field through recognition and interpretation by academic leaders[44] - The establishment of a lean marketing talent team and a nationwide marketing network is a crucial prerequisite for the company's products to directly compete in the industry[44] 3. Brand Advantages The company's "Ginwa" trademark has been recognized as a China Well-known Trademark, and its Transfer Factor series products and Jintiange Capsule have been awarded famous brand product status in Shaanxi Province and Xi'an City, with strong brand power enhancing corporate competitiveness and establishing a positive brand image - The company's "Ginwa" trademark is a China Well-known Trademark, and also a famous trademark in Shaanxi Province and Xi'an City[46] - The Transfer Factor series products and Jintiange Capsule have been rated as famous brand products in Shaanxi Province and Xi'an City[46] 4. Production Quality Management Advantages The company places high importance on the construction of its production quality management assurance system, strictly implementing quality monitoring and inspection standards from raw material procurement throughout the entire production process, ensuring stable product quality and enjoying a good market reputation - The company places high importance on the construction of its production quality management assurance system, consistently prioritizing quality[47] - From the raw material procurement stage, suppliers are strictly reviewed according to quality standards, and quality monitoring and inspection standards are rigorously implemented throughout the entire production process[47] - Product quality is stable, with no major quality issues found in inspections by various regulatory authorities, enjoying a good market reputation[47] IV. Major Operating Conditions During the Reporting Period This section analyzes the company's financial statement item changes, asset and liability situation, investment status, significant asset disposals, and major controlled and investee companies during the reporting period (I) Main Business Analysis This section provides a detailed explanation of year-on-year changes in operating revenue, cost, expenses, and net profit, and their main reasons, with R&D expenses significantly increasing Financial Statement Item Fluctuation Analysis Table (Jan-Jun 2025 vs. Same Period Last Year) | Item | Current Period Amount (Yuan) | Same Period Last Year Amount (Yuan) | Change Ratio (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 241,292,963.66 | 245,965,482.81 | -1.90 | | Operating Cost | 56,496,377.39 | 57,404,786.82 | -1.58 | | Selling Expenses | 138,720,833.17 | 140,804,713.40 | -1.48 | | Administrative Expenses | 20,802,448.96 | 24,737,155.76 | -15.91 | | Financial Expenses | -2,272,118.13 | -962,875.96 | Not Applicable | | R&D Expenses | 15,428,801.27 | 8,421,920.46 | 83.20 | | Net Profit Attributable to Shareholders of the Listed Company | 6,195,011.43 | 9,462,893.79 | -34.53 | | Net Cash Flow from Operating Activities | -80,933,428.99 | -23,099,372.07 | Not Applicable | - R&D expenses increased by 83.20% year-on-year, primarily due to increased R&D investment in the reporting period[48] - Net profit attributable to shareholders of the listed company decreased by 34.53% year-on-year, primarily due to increased R&D investment and investment income recognized from the disposal of the wholly-owned subsidiary Ginwa International Hotel Co., Ltd. in the same period last year[48] (III) Analysis of Assets and Liabilities This section analyzes the period-end changes in major balance sheet items, with significant decreases in monetary funds, trading financial assets, notes receivable, accounts payable, and contract liabilities, while prepayments, fixed assets, taxes payable, and deferred income significantly increased Asset and Liability Fluctuation (Current Period End vs. Previous Year End) | Item Name | Current Period End Amount (Yuan) | Change Ratio from Previous Year End (%) | | :--- | :--- | :--- | | Monetary Funds | 178,232,949.38 | -48.74 | | Trading Financial Assets | 9,001,559.87 | -64.02 | | Notes Receivable | 8,544,976.18 | -33.68 | | Prepayments | 66,002,965.91 | 132.36 | | Other Current Assets | 0 | -100.00 | | Fixed Assets | 174,153,477.38 | 42.77 | | Notes Payable | 39,500,000.00 | 32.55 | | Accounts Payable | 4,925,892.00 | -37.00 | | Contract Liabilities | 313,149.17 | -67.84 | | Taxes Payable | 6,505,546.53 | 44.88 | | Other Current Liabilities | 735,523.59 | -93.16 | | Lease Liabilities | 4,031,401.95 | -54.99 | | Long-term Payables | 6,566,784.02 | -49.35 | | Provisions | 0 | -100.00 | | Deferred Income | 34,396,950.00 | 65.99 | - Monetary funds decreased primarily due to increased investment in new factory construction and acquisition of fixed assets[51] - Prepayments increased primarily due to increased advance payments for procurement[51] - Fixed assets increased primarily due to the acquisition of office buildings[54] - Deferred income increased primarily due to the receipt of government grants[51] 3. Major Asset Restrictions as of the End of the Reporting Period This section discloses the company's restricted assets at period-end, including fixed assets mortgaged for bank credit and finance leases, monetary funds as bank acceptance bill deposits, and investment properties judicially frozen due to irregular guarantee cases - The company mortgaged buildings located at No. 202, Keji Fourth Road, High-tech Zone, Xi'an City, to obtain a comprehensive credit line of CNY 230 million from China Guangfa Bank Co., Ltd. Xi'an Branch[52] - The company engaged in a finance lease sale-and-leaseback transaction with Zhejiang Zheyin Financial Leasing Co., Ltd., using its own pharmaceutical manufacturing equipment as the leased asset, with a total financing amount not exceeding CNY 25 million[52] - CNY 39.50 million of monetary funds are restricted as bank acceptance bill deposits[52] - The company's general factory building of 755.31 square meters located at No. 3, Beilin Science and Technology Industrial Park, Xi'an City, was judicially frozen by Yanta District People's Court due to an irregular guarantee case involving the former controlling shareholder, which is still under trial[53] (IV) Investment Status Analysis This section analyzes the company's investments in financial assets measured at fair value, including trading financial assets and other equity instrument investments, showing a negative fair value change gain/loss for the current period and a significant amount of sales/redemptions Securities Investment Status (Jan-Jun 2025) | Asset Category | Beginning Balance (Yuan) | Fair Value Change Gain/Loss for the Period (Yuan) | Amount Sold/Redeemed for the Period (Yuan) | Ending Balance (Yuan) | | :--- | :--- | :--- | :--- | :--- | | Trading Financial Assets | 25,021,445.88 | -10,435,162.26 | 393,090,549.42 | 9,001,559.87 | | Other Equity Instrument Investments | 7,443,900.00 | 0 | 0 | 7,443,900.00 | | Accounts Receivable Financing | 6,573,412.83 | 0 | 1,501,086.64 | 5,072,326.19 | | Total | 39,038,758.71 | -10,435,162.26 | 394,591,636.06 | 21,517,786.06 | - The fair value change gain/loss for trading financial assets in the current period was -CNY 10,435,162.26[57] - The company holds various stocks and funds, including Hundsun Technologies, Poly Developments and Holdings, International Medical, Shede Spirits, SMIC, CITIC Securities, Shanghai Ailu, RemeGen, AVIC Chengdu Aircraft, Topfond, Huahong Biotech, and Jicheng Yingyingbao Private Securities Investment Fund[57][58] (V) Significant Asset and Equity Disposals The company is selling 100% equity of its wholly-owned subsidiary Ginwa International Hotel Co., Ltd., has received part of the equity transfer payment, and signed a supplementary agreement with the transferee, Western Investment Group Co., Ltd., for deferred payment of the remaining amount - The company has completed the industrial and commercial change registration procedures for Ginwa International Hotel Co., Ltd. and no longer holds its equity[59] - As of the end of this reporting period, the company has received a total of CNY 195.71 million in equity transfer payments from Western Investment Group, accounting for 56.81% of the total equity transfer price of CNY 344.5263 million[59] - Due to Western Investment Group's difficulties in raising funds, the company agreed to sign Supplementary Agreement (II) to stipulate the deferred payment period, collateral, and collection of capital occupation fees for the remaining transfer price[59][76] (VI) Analysis of Major Controlled and Investee Companies This section lists the basic information and financial data of the company's major subsidiaries and investee companies with a significant impact (over 10%) on the company's net profit, noting that some subsidiaries have negative net assets Major Controlled and Investee Companies (Unit: CNY 10,000) | Company Name | Company Type | Main Business | Registered Capital (CNY 10,000) | Total Assets (CNY 10,000) | Net Assets (CNY 10,000) | Operating Revenue (CNY 10,000) | Operating Profit (CNY 10,000) | Net Profit (CNY 10,000) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Xi'an Jishetang Pharmaceutical Co., Ltd. | Subsidiary | Pharmaceutical Sales | 100.00 | 105.14 | -74.70 | 0.46 | -5.76 | -5.75 | | Xi'an Ginwa Tiange Pharmaceutical Co., Ltd. | Subsidiary | Pharmaceutical Sales | 1,000.00 | 280.86 | -724.95 | 25.03 | -91.30 | -91.08 | | Shaanxi Yizhen Trading Co., Ltd. | Subsidiary | Wholesale | 5,000.00 | 1.16 | -147.35 | 0 | -90.01 | -90.01 | | Shaanxi Ginwa Nairuite Pharmaceutical Technology Co., Ltd. | Subsidiary | Pharmaceutical R&D | 1,800.00 | 7.37 | -0.64 | 0 | -2.94 | -2.94 | | Shaanxi Cuiqin Management Consulting Co., Ltd. | Subsidiary | Business Services | 2,000.00 | 0.70 | -2.30 | 0 | 0 | 0 | | Changzhou Huasen Medical Devices Co., Ltd. | Investee Company | Medical Device Manufacturing | 16,733.00 | 91,573.37 | 84,266.15 | 16,102.52 | 3,659.67 | 3,128.08 | - Subsidiaries such as Xi'an Jishetang Pharmaceutical Co., Ltd. and Xi'an Ginwa Tiange Pharmaceutical Co., Ltd. have negative net assets[60] V. Other Disclosures This section discloses potential risks the company may face, including industry policies, new product R&D, cost and price pressures, and quality and safety, along with corresponding countermeasures (I) Potential Risks The company faces risks from ongoing pharmaceutical industry policy reforms, long R&D cycles for new products, dual pressures of rising costs and falling prices, and increasingly stringent drug quality and safety regulations, for which it has developed corresponding countermeasures - Industry policy risk: National pharmaceutical policy reforms continue to deepen, with centralized drug procurement and medical insurance cost control policies leading to downward price pressure and profit compression[61] - New product R&D risk: Innovative R&D is characterized by long cycles, large investments, and high risks, easily constrained by market fluctuations, patent protection, drug testing, and regulatory requirements[62] - Cost and price risk: Medical insurance cost control and volume-based procurement lead to continuous declines in drug prices, while raw material and labor costs continue to rise, intensifying market competition[63] - Quality and safety risk: Drug regulatory standards are continuously upgrading, and quality management systems are increasingly完善, significantly increasing enterprise quality compliance costs, with quality deviations leading to systemic operational risks[64] Section IV Corporate Governance, Environment and Society This section discloses changes in the company's directors, supervisors, and senior management, profit distribution plan, and the list of enterprises required to disclose environmental information by law I. Changes in the Company's Directors, Supervisors, and Senior Management During the reporting period, there were multiple changes in the company's directors, supervisors, and senior management, including Sun Ming's resignation as Board Secretary and subsequent election as employee representative supervisor, Song Yanping's resignation as Deputy General Manager, Shi Zhihua's resignation as employee representative supervisor and appointment as Deputy General Manager, and Zhao Guangdong and Zhang Shoufeng's appointments as Deputy General Manager and Chief Financial Officer, respectively - Mr. Sun Ming resigned from his position as Board Secretary due to personal reasons and was subsequently elected as an employee representative supervisor of the company's Tenth Board of Supervisors[69] - Ms. Song Yanping resigned from her position as Deputy General Manager due to personal reasons[69] - Mr. Shi Zhihua resigned from his position as employee representative supervisor due to personal work adjustments and was appointed as the company's Deputy General Manager[69] - Mr. Zhao Guangdong was appointed as the company's Deputy General Manager, and Mr. Zhang Shoufeng was appointed as the company's Chief Financial Officer[69] II. Profit Distribution or Capital Reserve to Share Capital Increase Plan The company's board of directors resolved not to carry out profit distribution or capital reserve to share capital increase during the reporting period - No profit distribution or capital reserve to share capital increase will be carried out during the reporting period[70] IV. Environmental Information of Listed Companies and Their Major Subsidiaries Included in the List of Enterprises Required to Disclose Environmental Information by Law This section discloses information about the company's subsidiary included in the list of enterprises required to disclose environmental information by law - Ginwa Enterprise (Group) Inc. Xi'an Ginwa Pharmaceutical Factory was included in the list of enterprises required to disclose environmental information by law[72] Section V Significant Matters This section details the company's fulfillment of commitments, irregular guarantees, rectification of matters related to non-standard audit opinions, major litigation and arbitration, penalties for illegal activities by the company and its executives, significant related party transactions, and progress in the use of raised funds during the reporting period I. Fulfillment of Commitments This section discloses the fulfillment of commitments made by the company's actual controller, shareholders, and related parties during or continuing into the reporting period, including share increase/decrease plans and changes in equity transfer payment methods, with some commitments not yet fully fulfilled - Nanjing Jinbozhu Asset Management Co., Ltd. - Jinbozhu Heju No. 4 Private Securities Investment Fund committed to no further plans to increase or decrease listed company shares within the next 12 months, which has been fulfilled[74] - Xinyu Jinyu Enterprise Management Co., Ltd. committed to no further plans to increase or decrease listed company shares within the next 12 months, but a share reduction plan has been disclosed, so this commitment has not been fully fulfilled[74] - Western Investment Group Co., Ltd. committed to Supplementary Agreement (II) regarding the equity transfer agreement of Ginwa International Hotel Co., Ltd., only changing the payment method for the transfer price, and this commitment has not been fully fulfilled[74][76] III. Irregular Guarantees The company disclosed irregular joint liability guarantees provided by the former actual controller in the company's name, involving CNY 21.895 million. Although these guarantees lacked company approval, the company has received full margin deposits, resolving the irregular guarantee risk, while the arbitration case remains under trial - The company's former controlling shareholder, Ginwa Investment Holding Group Co., Ltd., signed a loan agreement with Xi'an Shuguang Automobile Sales and Service Co., Ltd., for which the company's former actual controller Wu Yijian and the company provided joint liability guarantees, involving CNY 21.895 million[77] - This guarantee act was a personal act of the former actual controller and did not undergo the corresponding approval and disclosure procedures of the listed company[77] - As of August 17, 2023, the company has received full margin deposits, and the irregular guarantee risk has been resolved, but the arbitration case is still under trial[77] V. Changes and Handling of Matters Related to Non-Standard Audit Opinions in the Previous Annual Report This section details the financial reporting and internal control issues highlighted by non-standard audit opinions in the previous annual report, including the commercial rationality of large prepayments, uncertainty regarding pledged time deposits, and incomplete internal control approval procedures, and outlines the company's proactive rectification measures 1. Matters Related to the Financial Report Audit Report with an Emphasis of Matter Paragraph The audit report emphasized significant uncertainties regarding the commercial rationality of the company's advance payments for gas and core raw material procurement, as well as the uncertainty of whether large time deposits were pledged - The company made an advance payment of CNY 19.80 million for gas procurement on January 24, 2025, the commercial rationality of which has significant uncertainty[78] - The company made an advance payment of CNY 10.2389 million for core raw material procurement on March 25, 2025, the commercial rationality of which has significant uncertainty[80] - The company deposited a total of CNY 39.50 million in half-year time deposits at Zhejiang Merchants Bank Xi'an Branch from March 3 to March 4, 2025, in four separate transactions, and there is significant uncertainty as to whether these time deposits were pledged[81] 2. Matters Related to the Internal Control Audit Report with an Emphasis of Matter Paragraph The internal control audit report identified issues such as incomplete approval procedures for advance business promotion fees, funds flowing to related parties through third parties, and two packaging material procurement contracts and two engineering payments lacking bidding procedures and complete approval. The company has actively taken rectification measures - In January 2024, the company made an advance payment of CNY 17 million for business promotion fees, with incomplete payment approval procedures; these advance payments were transferred out and flowed to related parties through third parties, but have since been fully recovered[82] - During 2024, the company signed two packaging material procurement contracts and issued bank acceptance bills totaling CNY 41.51 million for payment, neither of which underwent bidding procedures, and payment approval procedures were incomplete; these amounts have since been fully recovered[82] - During 2024, the company made two advance payments for engineering projects totaling CNY 30.80 million, which were paid in full after contract signing without undergoing bidding procedures, and payment approval procedures were incomplete; part of these amounts has since been recovered[82] - The company has actively taken rectification measures, improved internal control management systems, strengthened supervision and implementation, and adopted measures for identifying and holding internal responsible persons accountable[83] VII. Major Litigation and Arbitration Matters This section discloses the company's concluded investor litigation cases and an ongoing arbitration case concerning irregular guarantees, though the risk of the irregular guarantee has been mitigated by receiving margin deposits - All 590 investor litigation cases arising from information disclosure violations have been withdrawn, settled, or concluded, with no new or ongoing investor litigation cases in the first or second instance procedures[84] - The arbitration case regarding the former controlling shareholder's irregular guarantee is still under trial, but the company has received full margin deposits, and the irregular guarantee risk has been resolved[84] VIII. Alleged Violations, Penalties, and Rectification by Listed Companies and Their Directors, Supervisors, Senior Management, Controlling Shareholders, and Actual Controllers The company and its Chairman, Xing Yajiang, received a public reprimand from the Shanghai Stock Exchange for violations in information disclosure and standardized operations, and were placed under investigation by the China Securities Regulatory Commission for alleged information disclosure violations. The company's board and management attach great importance to these matters, have actively investigated and rectified them, and are strengthening internal control and compliance awareness - The company received a public reprimand from the Shanghai Stock Exchange for violations in information disclosure and standardized operations[85] - Mr. Xing Yajiang, the company's Chairman, received a "Notice of Case Filing" from the China Securities Regulatory Commission and an "Advance Notice of Administrative Penalty" from the Shaanxi Regulatory Bureau for alleged information disclosure violations[86] - Chairman Mr. Xing Yajiang again received a "Notice of Case Filing" from the China Securities Regulatory Commission for alleged violations related to information disclosure of company shareholding changes, and this investigation is ongoing[87] - The company has implemented rectification measures, including strengthening accounting, conducting specialized training, enhancing internal audit, and improving the control processes for raised funds[85] X. Significant Related Party Transactions This section discloses the company's routine related party transactions, such as leasing and acceptance of services, and the progress of significant asset disposal related party transactions during the reporting period (I) Related Party Transactions Related to Routine Operations The company engaged in routine related party transactions with related parties, including office space leasing, property management fees, utility payments, and accommodation/conference fees, all determined through market-based negotiations Routine Related Party Transactions (Jan-Jun 2025) | Related Party | Related Transaction Content | Amount of Related Transaction (Yuan) | Proportion of Similar Transactions (%) | | :--- | :--- | :--- | :--- | | Shaanxi Juxin Real Estate Development Co., Ltd. | Office space leasing | 1,709,075.16 | 27.17 | | Shaanxi Western Modern Property Management Co., Ltd. | Payment of office property fees, utility fees | 1,859,232.63 | 48.54 | | Shaanxi Yuehao Hotel Management Co., Ltd. | Payment of accommodation fees, conference fees, etc. | 223,671.11 | 14.48 | | Total | / | 3,791,978.90 | / | (II) Related Party Transactions Arising from Asset or Equity Acquisitions and Disposals The company and Western Investment Group Co., Ltd. (a related party) agreed on deferred payment for the remaining equity transfer price of Ginwa International Hotel Co., Ltd., with part of the payment received by the end of the reporting period - The company and Western Investment Group Co., Ltd. agreed on the deferred payment period, collateral, and collection of capital occupation fees for the remaining equity transfer price of Ginwa International Hotel Co., Ltd.[89] - As of the end of the reporting period, the company has received a total of CNY 195.71 million in equity transfer payments from Western Investment Group, accounting for 56.81% of the total equity transfer price of CNY 344.5263 million[89] XI. Significant Contracts and Their Fulfillment This section discloses the company's house leasing contracts as a lessee, including leasing agreements with related and non-related parties (I) Custody, Contracting, and Leasing Matters As a lessee, the company has signed multiple house leasing contracts with Shaanxi Juxin Real Estate Development Co., Ltd. (a related party), Shaanxi Jupei Real Estate Development Co., Ltd., Shaanxi Qingli Landscape Engineering Co., Ltd., and others Company's Leasing Situation as Lessee (Unit: Yuan) | Lessor Name | Leased Asset | Amount Involved in Leased Asset | Lease Start Date | Lease End Date | Basis for Determining Lease Income | Related Party Transaction | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Shaanxi Juxin Real Estate Development Co., Ltd. | House | 1,114,790.04 | March 26, 2024 | December 31, 2026 | House Lease Contract | Yes | | Shaanxi Jupei Real Estate Development Co., Ltd. | House | 1,280,512.80 | March 26, 2024 | December 31, 2026 | House Lease Contract | No | | Shaanxi Qingli Landscape Engineering Co., Ltd. | House | 1,831,440.78 | March 1, 2024 | February 28, 2026 | House Lease Contract | No | XII. Explanation of Progress in the Use of Raised Funds This section explains the overall use of the company's raised funds and details of fundraising investment projects, noting that the "New Factory Relocation and Expansion Project" has been extended to December 31, 2025, and discloses the temporary use of idle raised funds to supplement working capital (I) Overall Use of Raised Funds The company raised a total of CNY 637.5999 million through a private placement of shares, with a net amount of CNY 628.7808 million. As of the end of the reporting period, a cumulative total of CNY 550.1579 million has been invested, representing an investment progress of 87.50% Overall Use of Raised Funds (Unit: Yuan) | Source of Raised Funds | Date Funds Received | Total Raised Funds | Net Raised Funds | Committed Investment Amount in Prospectus/Offering Document | Cumulative Investment Amount as of End of Reporting Period | Cumulative Investment Progress as of End of Reporting Period (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Private Placement of Shares | March 21, 2018 | 637,599,993.94 | 628,780,819.60 | 628,780,819.60 | 550,157,945.78 | 87.50 | (II) Details of Fundraising Investment Projects The "New Factory Relocation and Expansion Project" has a budget of CNY 480 million, with a cumulative investment of CNY 399.0426 million as of the end of the reporting period, representing an investment progress of 83.13%. Due to construction and commissioning progress, this project has been extended to reach its intended usable state by December 31, 2025 Details of Fundraising Investment Projects (Unit: Yuan) | Project Name | Budget Amount | Beginning Balance | Amount Increased in Current Period | Ending Balance | Cumulative Project Investment as % of Budget (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | New Factory Relocation and Expansion Project | 656,000,000.00 | 369,316,042.24 | 82,899,710.81 | 452,215,753.05 | 68.94 | - The "New Factory Relocation and Expansion Project" cannot reach its intended usable state by the original plan of June 30, 2025, and has been extended to December 31, 2025[93] 2. Temporary Use of Idle Raised Funds to Supplement Working Capital The company's board of directors has approved the temporary use of idle raised funds not exceeding CNY 100 million to supplement working capital for a period of 12 months, which will be fully repaid before the due date - The company agreed to temporarily use idle raised funds not exceeding CNY 100 million to supplement working capital[95] - The usage period is within 12 months from the date of board approval, and the funds will be timely and fully repaid to the special raised funds account before the due date[95] Section VI Share Changes and Shareholder Information This section discloses the company's share capital changes, total number of shareholders, and the shareholding of the top ten shareholders during the reporting period, including the shareholding percentage and pledge status of the controlling shareholder and its concerted parties I. Share Capital Changes During the reporting period, there were no changes in the company's total share capital or share capital structure - During the reporting period, there were no changes in the company's total share capital or share capital structure[96] II. Shareholder Information This section details the total number of shareholders, the shareholding of the top ten shareholders, and the top ten unrestricted shareholders as of the end of the reporting period, including shareholding quantity, percentage, and pledge or freeze status, and clarifies the relationship between the controlling shareholder and its concerted parties (I) Total Number of Shareholders As of the end of the reporting period, the total number of ordinary shareholders was 20,552 - As of the end of the reporting period, the total number of ordinary shareholders was 20,552[98] (II) Shareholding of Top Ten Shareholders and Top Ten Unrestricted Shareholders as of the End of the Reporting Period This section lists the detailed shareholdings of the company's top ten shareholders and top ten unrestricted shareholders. Controlling shareholder Xing Boyue and his concerted parties collectively hold 25.40% of the shares, with most of Xing Boyue's shares pledged Top Ten Shareholders' Shareholding (as of End of Reporting Period) | Shareholder Name | Number of Shares Held at Period End (shares) | Percentage (%) | Number of Pledged, Marked, or Frozen Shares (shares) | | :--- | :--- | :--- | :--- | | 邢博越 (Xing Boyue) | 73,272,546 | 19.63 | 53,270,000 (Pledged) | | 新余金煜企业管理有限公司 (Xinyu Jinyu Enterprise Management Co., Ltd.) | 18,663,500 | 5.00 | 0 | | 杜玲 (Du Ling) | 10,974,247 | 2.94 | 7,600,000 (Pledged) | | 杨蓓 (Yang Bei) | 10,545,559 | 2.83 | 7,300,000 (Pledged) | | 金花投资控股集团有限公司 (Ginwa Investment Holding Group Co., Ltd.) | 4,550,000 | 1.22 | 4,550,000 (Frozen) | - The company's controlling shareholder and actual controller, Xing Boyue, along with Du Ling and Yang Bei, are concerted parties, collectively holding 25.40% of the company's shares[101][423] - The 4,550,000 shares held by the company's former controlling shareholder, Ginwa Investment Holding Group Co., Ltd., are frozen[100] Section VII Bond-Related Information This section states that the company had no corporate bonds (including enterprise bonds) or non-financial enterprise debt financing instruments, nor convertible corporate bonds, during the reporting period - The company had no corporate bonds (including enterprise bonds) or non-financial enterprise debt financing instruments during the reporting period[104] - The company had no convertible corporate bonds during the reporting period[104] Section VIII Financial Report This section contains unaudited financial statements, including consolidated and parent company balance sheets, income statements, cash flow statements, and statements of changes in owners' equity, along with detailed notes to the financial statements covering company overview, significant accounting policies, taxes, specific financial item notes, R&D expenses, changes in consolidation scope, equity in other entities, government grants, financial instrument risks, fair value disclosures, related parties and transactions, commitments and contingencies, post-balance sheet events, other significant matters, and supplementary information I. Audit Report This section states that this semi-annual report is unaudited - This semi-annual report is unaudited[5] II. Financial Statements This section provides the company's consolidated and parent company balance sheets, income statements, cash flow statements, and statements of changes in owners' equity for the first half of 2025, comprehensively presenting the company's financial position, operating results, and cash flow situation Consolidated Balance Sheet As of June 30, 2025, the company's consolidated total assets were CNY 1.930 billion, a 2.15% decrease from the end of the previous year; total owners' equity attributable to the parent company was CNY 1.556 billion, a 0.28% decrease from the end of the previous year Consolidated Balance Sheet Key Data (as of June 30, 2025) | Item | June 30, 2025 (Yuan) | December 31, 2024 (Yuan) | | :--- | :--- | :--- | | Total Assets | 1,929,620,956.56 | 1,972,071,163.91 | | Total Liabilities | 374,535,345.79 | 412,587,405.60 | | Total Owners' Equity Attributable to Parent Company | 1,556,108,188.16 | 1,560,494,557.82 | - Total assets decreased by 2.15% from the end of the previous year, and total owners' equity attributable to the parent company decreased by 0.28% from the end of the previous year[22] Parent Company Balance Sheet As of June 30, 2025, the parent company's total assets were CNY 1.942 billion, total liabilities were CNY 374 million, and total owners' equity was CNY 1.567 billion Parent Company Balance Sheet Key Data (as of June 30, 2025) | Item | June 30, 2025 (Yuan) | December 31, 2024 (Yuan) | | :--- | :--- | :--- | | Total Assets | 1,941,750,722.34 | 1,982,194,311.08 | | Total Liabilities | 374,268,192.60 | 411,778,501.95 | | Total Owners' Equity | 1,567,482,529.74 | 1,570,415,809.13 | Consolidated Income Statement From January to June 2025, the company's consolidated total operating revenue was CNY 241.29 million, a 1.90% year-on-year decrease; net profit attributable to parent company shareholders was CNY 6.195 million, a 34.53% year-on-year decrease; basic earnings per share were CNY 0.0176 Consolidated Income Statement Key Data (Jan-Jun 2025) | Item | H1 2025 (Yuan) | H1 2024 (Yuan) | | :--- | :--- | :--- | | Total Operating Revenue | 241,292,963.66 | 245,965,482.81 | | Total Profit | 3,934,047.66 | 9,249,809.58 | | Net Profit Attributable to Parent Company Shareholders | 6,195,011.43 | 9,462,893.79 | | Basic Earnings Per Share (Yuan/share) | 0.0176 | 0.0261 | - Total operating revenue decreased by 1.90% year-on-year, and net profit attributable to parent company shareholders decreased by 34.53% year-on-year[22] Parent Company Income Statement From January to June 2025, the parent company's operating revenue was CNY 241.08 million, and net profit was CNY 7.6481 million Parent Company Income Statement Key Data (Jan-Jun 2025) | Item | H1 2025 (Yuan) | H1 2024 (Yuan) | | :--- | :--- | :--- | | Operating Revenue | 241,078,252.63 | 245,449,717.78 | | Total Profit | 5,324,513.61 | 1,557,679.92 | | Net Profit | 7,648,101.70 | 1,097,818.35 | Consolidated Cash Flow Statement From January to June 2025, the company's consolidated net cash flow from operating activities was -CNY 80.9334 million, net cash flow from investing activities was -CNY 92.9352 million, and net cash flow from financing activities was -CNY 25.3190 million Consolidated Cash Flow Statement Key Data (Jan-Jun 2025) | Item | H1 2025 (Yuan) | H1 2024 (Yuan) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | -80,933,428.99 | -23,099,372.07 | | Net Cash Flow from Investing Activities | -92,935,173.03 | -177,977,985.07 | | Net Cash Flow from Financing Activities | -25,319,040.99 | -116,089,126.78 | | Net Increase in Cash and Cash Equivalents | -199,187,643.01 | -317,166,483.92 | - Net cash flow from operating activities significantly decreased year-on-year, primarily due to increased procurement payments during the reporting period[48] Parent Company Cash Flow Statement From January to June 2025, the parent company's net cash flow from operating activities was -CNY 82.8469 million, net cash flow from investing activities was -CNY 92.9352 million, and net cash flow from financing activities was -CNY 24.8764 million Parent Company Cash Flow Statement Key Data (Jan-Jun 2025) | Item | H1 2025 (Yuan) | H1 2024 (Yuan) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | -82,846,866.87 | -25,806,935.03 | | Net Cash Flow from Investing Activities | -92,935,173.03 | -176,940,944.01 | | Net Cash Flow from Financing Activities | -24,876,444.03 | -114,250,938.48 | | Net Increase in Cash and Cash Equivalents | -200,658,483.93 | -316,998,817.52 | Consolidated Statement of Changes in Owners' Equity From January to June 2025, the company's consolidated total owners' equity decreased by CNY 4.3981 million, primarily due to a decrease in undistributed profits resulting from profit distribution - Total comprehensive income attributable to parent company owners for the current period was CNY 6,195,011.43[125] - Distribution to owners (or shareholders) for the current period was -CNY 10,581,381.09[126] - The amount of increase/decrease for the current period (decrease indicated by "－") was -CNY 4,386,369.66[125] Parent Company Statement of Changes in Owners' Equity From January to June 2025, the parent company's total owners' equity decreased by CNY 2.9333 million, primarily due to a decrease in undistributed profits resulting from profit distribution - Total comprehensive income of the parent company for the current period was CNY 7,648,101.70[131] - Distribution to owners (or shareholde