鹭燕医药(002788) - 2025 Q2 - 季度财报

Important Notes, Table of Contents, and Definitions This section provides essential disclaimers, outlines the report's structure, lists reference documents, and defines key terms to ensure consistent understanding Important Notes The company's board and senior management guarantee the report's truthfulness, accuracy, and completeness, while the company plans no cash dividends, bonus shares, or capital reserve conversions - The company's board of directors and senior management guarantee the report's truthfulness, accuracy, and completeness, assuming legal responsibility[4] - The company's principal, head of accounting, and head of accounting department declare the financial report is true, accurate, and complete[4] - The company plans not to distribute cash dividends, issue bonus shares, or convert capital reserves into share capital[6] Table of Contents This section lists the report's nine main chapters and their starting page numbers, providing an overview of the report's overall structure - The report comprises nine main chapters, covering important notes, company profile, management discussion and analysis, corporate governance, significant events, share changes, bond information, financial reports, and other submitted data[8] Catalogue of Reference Documents This section discloses the list of reference documents available for inspection during the reporting period, including signed financial statements and public announcements, with the designated location being the company's securities affairs department - Reference documents include financial statements signed and sealed by the legal representative, head of accounting, and head of accounting department[10] - Reference documents are available at the company's Securities Affairs Department[10] Definitions This section provides definitions for common terms used in the report, including company abbreviations, legal regulations, governance bodies, reporting period, and specific pharmaceutical industry policies, ensuring consistent understanding for readers - The reporting period refers to January-June 2025[11] - Key pharmaceutical industry policy terms such as "Two-Invoice System," "DTP Pharmacy," "Centralized Procurement," "Volume-Based Procurement," "Dual-Channel Medical Insurance," "GMP," and "GSP" are explained[11] Company Profile and Key Financial Indicators This section presents the company's fundamental information and a summary of its key financial performance and position during the reporting period Company Profile This section provides the company's basic identification information, including its stock ticker, code, listing exchange, Chinese and foreign names, and legal representative - Stock Abbreviation: Luyan Medicine, Stock Code: 002788, Listing Exchange: Shenzhen Stock Exchange[13] - The company's legal representative is Wu Jinxiang[13] Contact Persons and Information This section provides contact details for the company's board secretary and securities affairs representative, facilitating information inquiries and communication for investors - The Board Secretary is Ye Quanqing, and the Securities Affairs Representative is Ruan Cuiting[14] - Contact address for both is 1004 Anling Road, Huli District, Xiamen City, with telephone number 0592-8129338[14] Other Information This section states that the company's contact information, disclosure and reference locations, and other relevant data remained unchanged during the reporting period, referring to the 2024 annual report for details - The company's registered address, office address, website, and email address remained unchanged during the reporting period[15] - Information disclosure and reference locations remained unchanged during the reporting period[16] Key Accounting Data and Financial Indicators This section discloses key accounting data and financial indicators for the current and prior reporting periods, showing a slight revenue increase but declines in net profit, non-recurring net profit, operating cash flow, and return on equity Key Accounting Data and Financial Indicators (Current Period vs. Prior Year Period) | Indicator | Current Period (yuan) | Prior Year Period (yuan) | Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 10,400,082,294.54 | 10,306,033,349.96 | 0.91% | | Net Profit Attributable to Shareholders of Listed Company | 154,529,883.50 | 190,373,536.68 | -18.83% | | Net Profit Attributable to Shareholders of Listed Company After Deducting Non-Recurring Gains and Losses | 153,471,103.05 | 186,997,493.86 | -17.93% | | Net Cash Flow from Operating Activities | 210,717,990.08 | 295,807,463.06 | -28.77% | | Basic Earnings Per Share (yuan/share) | 0.40 | 0.49 | -18.37% | | Weighted Average Return on Net Assets | 4.80% | 6.27% | -1.47% | | Total Assets (Period-end) | 12,654,560,500.42 | 12,638,595,480.94 | 0.13% | | Net Assets Attributable to Shareholders of Listed Company (Period-end) | 3,179,255,473.03 | 3,162,233,658.74 | 0.54% | Differences in Accounting Data Under Domestic and Overseas Accounting Standards The company states that there are no differences in net profit and net assets between financial reports disclosed under international or overseas accounting standards and Chinese accounting standards during the reporting period - The company's financial reports for the reporting period show no differences in net profit and net assets when disclosed under International Accounting Standards versus Chinese Accounting Standards[19] - The company's financial reports for the reporting period show no differences in net profit and net assets when disclosed under overseas accounting standards versus Chinese Accounting Standards[20] Non-Recurring Gains and Losses and Amounts This section lists the non-recurring gains and losses and their amounts for the reporting period, totaling 1.06 million yuan, primarily comprising government subsidies, disposal gains/losses on non-current assets, and other non-operating income/expenses Non-Recurring Gains and Losses and Amounts | Item | Amount (yuan) | | :--- | :--- | | Gains and losses from disposal of non-current assets | -93,223.46 | | Government subsidies recognized in current profit or loss (excluding those closely related to the company's normal operations, compliant with national policies, enjoyed according to fixed standards, and having a continuous impact on the company's profit or loss) | 1,602,555.38 | | Other non-operating income and expenses apart from the above | 402,967.06 | | Less: Income tax impact | 669,105.75 | | Impact on minority interests (after tax) | 184,412.78 | | Total | 1,058,780.45 | Management Discussion and Analysis This section provides an in-depth analysis of the company's business operations, financial performance, core competencies, and risk factors during the reporting period Principal Business Activities During the Reporting Period The company focuses on pharmaceutical distribution and retail, building a comprehensive pharmaceutical circulation service system primarily through direct sales, extending into pharmaceutical manufacturing, and actively exploring AI and big data applications in healthcare - The company's principal business includes the distribution of pharmaceuticals, traditional Chinese medicine decoction pieces, and medical devices, as well as pharmaceutical retail chains, with pharmaceutical wholesale sales being the primary source of revenue[29] - The company has established an industry chain centered on pharmaceutical distribution, extending into pharmaceutical manufacturing, and actively exploring the application of artificial intelligence and big data in healthcare services[29] - In 2023, the company ranked 15th among China's top 100 pharmaceutical wholesale enterprises by main business revenue and has maintained its position as the largest pharmaceutical circulation enterprise in Fujian Province for fifteen consecutive years[26] - During the reporting period, the company achieved total operating revenue of 10.40 billion yuan, a year-on-year increase of 0.91%; net profit attributable to shareholders of the listed company was 155 million yuan, a year-on-year decrease of 18.83%[31] Basic Industry Situation and Company's Industry Position The pharmaceutical circulation industry is undergoing structural changes driven by healthcare reforms, with policies promoting digital regulation, payment reforms, centralized procurement, and retail chain transformation, while the company maintains a leading position in both wholesale and retail sectors - The National Healthcare Security Administration expanded the coverage of its "intelligent monitoring system," achieving full-process digital supervision of drug procurement, distribution, and use for over 90% of designated medical institutions[27] - The 11th batch of national centralized procurement launched in July 2025, optimizing bidding rules and guiding enterprises towards "quality competition + cost control + reasonable profit"[27] - In 2023, the company ranked 15th among China's top 100 pharmaceutical wholesale enterprises by main business revenue and has maintained its position as the largest pharmaceutical circulation enterprise in Fujian Province for fifteen consecutive years[26] - The company's retail segment entered the "2024-2025 China Pharmacy Value List Top 100" at 67th place[26] Industry Development Stage and Cyclical Characteristics The pharmaceutical circulation industry, driven by deepening healthcare reforms, is characterized by "quality improvement, efficiency enhancement, and innovation," with accelerating concentration and professionalization in retail, and as a basic livelihood industry, it exhibits no significant cyclicality or seasonality - In 2025, the pharmaceutical circulation industry exhibits distinct characteristics of "quality improvement, efficiency enhancement, and innovation"[27] - Industry concentration is accelerating, with leading enterprises driven by a "M&A + digitalization" dual strategy[28] - As a sub-industry of the pharmaceutical sector, the pharmaceutical circulation industry has no significant cyclicality or seasonality[28] Principal Business Operations The company's main business involves the distribution of pharmaceuticals, traditional Chinese medicine decoction pieces, and medical devices, along with pharmaceutical retail chains, primarily through direct sales, covering medical institutions across Fujian Province and expanding into other regions through acquisitions - The company's principal business includes the distribution of pharmaceuticals, traditional Chinese medicine decoction pieces, and medical devices, as well as pharmaceutical retail chains, with pharmaceutical wholesale sales being the primary source of revenue[29] - The company has achieved 100% coverage of secondary and above medical institutions in Fujian Province and is deeply cultivating the rural three-tier medical and health service network led by county-level hospitals[29] - The company has expanded its pharmaceutical distribution business through mergers and acquisitions into regions such as Sichuan, Jiangxi, Hainan, and Hong Kong[30] - The company is actively investing in the traditional Chinese medicine decoction pieces business, with its subsidiaries Xiamen Yanlaifu Pharmaceutical Co., Ltd. and Bozhou Traditional Chinese Medicine Decoction Pieces Factory continuously expanding their operations[30] - The company and its wholly-owned subsidiaries have obtained third-party logistics qualifications for pharmaceuticals and medical devices, providing third-party logistics services[30] Key Performance Drivers During the Reporting Period Facing deepening healthcare reforms and expanded centralized procurement, the company implemented a "one platform + two drivers" strategy, enhancing pharmaceutical distribution, expanding medical device procurement, optimizing retail networks, boosting modern Chinese medicine production, developing new logistics and AI-assisted diagnostic businesses, and upgrading group management - The company adheres to a "one platform + two drivers" development strategy, with Luyan Grand Health as the platform and modern traditional Chinese medicine industry and new technology industries as the drivers[31] - Pharmaceutical distribution business: fully leverage channel advantages, seize opportunities in national negotiation and centralized procurement, focus on innovative business expansion and value-added service extension[31] - Medical device business: continuously deepen the development of capabilities in high-value consumables, low-value consumables, diagnostic reagents, and medical equipment, actively engaging in centralized procurement business[32] - Pharmaceutical retail business: optimize store network layout; as of June 30, 2025, the company has 291 directly operated pharmacies[33] - Modern traditional Chinese medicine business: enhance production capacity for traditional Chinese medicine decoction pieces, expand product categories, and orderly prepare for the production of the Bozhou modern traditional Chinese medicine production project[33][34] - New business formats: solidly advance logistics groupization, with the Sichuan Provincial Modern Pharmaceutical Logistics Center officially commencing operations, and independently developed AI-assisted diagnostic products such as ECG and fetal heart monitoring have launched channel sales[34] - Group management upgrade: comprehensively advance across four dimensions—organizational system, institutional processes, talent development, and corporate culture—optimizing operational indicator control and strengthening internal control compliance[35] Analysis of Core Competencies The company's core competencies include a comprehensive direct terminal coverage network, stable long-term relationships with hospitals and suppliers, clear strategic planning, a supply chain-based operating system, an experienced management team, and strong corporate culture and brand advantages - Comprehensive, direct terminal coverage network: established an efficient distribution and logistics system covering Fujian Province, expanded business to Sichuan, Jiangxi, Hainan, and Hong Kong, with 291 directly operated stores[36] - Long-term stable cooperative relationships with secondary and above hospital clients and upstream suppliers: ensuring the safety and stability of capital recovery, forming strategic synergy with well-known domestic and international pharmaceutical companies[37] - Strategic planning and implementation capability advantages: centered on a "horizontal + vertical + artificial intelligence" three-dimensional strategy, achieving cross-regional development through a "four-stage" development model, and strategically positioning in modern traditional Chinese medicine and third-party logistics[38] - Supply chain management-based operating system advantages: established a standardized capital allocation management system, optimized procurement and sales processes, implemented strict inventory management, and built an effective information service system[39][40] - Management advantages: the management team possesses rich operational experience in the context of healthcare reform, expanding cross-regionally through mergers and acquisitions and introducing standardized transformation systems, integrating operational departments to enhance efficiency, and establishing a centralized procurement mechanism[41][42] - Corporate culture and brand advantages: adhering to the corporate culture of "self-improvement and pursuit of brilliance," enjoying high goodwill and reputation, with "Luyan" and "Yanlaifu" recognized as famous trademarks[43] Analysis of Principal Business During the reporting period, the company's operating revenue slightly increased by 0.91%, but higher operating costs, selling expenses, administrative expenses, and R&D investments led to a 28.77% decrease in net cash flow from operating activities, while pharmaceutical retail revenue grew significantly Year-on-Year Changes in Key Financial Data | Indicator | Current Period (yuan) | Prior Year Period (yuan) | Change (%) | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 10,400,082,294.54 | 10,306,033,349.96 | 0.91% | | | Operating Cost | 9,661,434,491.75 | 9,534,887,241.86 | 1.33% | | | Selling Expenses | 234,193,210.50 | 224,483,488.13 | 4.33% | | | Administrative Expenses | 160,132,453.54 | 154,205,353.75 | 3.84% | | | Financial Expenses | 96,313,861.13 | 103,155,384.68 | -6.63% | | | Income Tax Expense | 49,887,206.91 | 54,388,975.52 | -8.28% | | | R&D Investment | 2,835,547.03 | 2,737,832.10 | 3.57% | | | Net Cash Flow from Operating Activities | 210,717,990.08 | 295,807,463.06 | -28.77% | | | Net Cash Flow from Investing Activities | -110,445,071.24 | -190,278,518.76 | 41.96% | Mainly due to reduced investment in construction in progress | | Net Cash Flow from Financing Activities | -108,886,472.53 | -170,315,157.01 | 36.07% | Mainly due to reduced loan repayments and interest expenses | | Net Increase in Cash and Cash Equivalents | -8,801,515.24 | -64,726,202.71 | 86.40% | Net outflows from investing and financing activities decreased year-on-year, leading to a smaller decrease in cash balance than in the prior year | Operating Revenue Composition (by Industry, Product, Region) | Category | Item | Current Period Amount (yuan) | % of Operating Revenue | Prior Year Period Amount (yuan) | % of Operating Revenue | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | By Industry | Pharmaceutical Wholesale | 9,404,621,858.13 | 90.43% | 9,418,533,860.94 | 91.39% | -0.15% | | | Pharmaceutical Retail | 688,503,477.93 | 6.62% | 575,350,275.83 | 5.58% | 19.67% | | | Pharmaceutical Manufacturing | 278,994,424.60 | 2.68% | 287,327,065.03 | 2.79% | -2.90% | | By Product | Pharmaceuticals | 8,652,491,828.79 | 83.20% | 8,549,369,032.28 | 82.95% | 1.21% | | | Medical Devices | 1,200,335,751.92 | 11.54% | 1,175,956,879.22 | 11.41% | 2.07% | | | Traditional Chinese Medicine Decoction Pieces | 438,527,538.79 | 4.22% | 463,537,235.26 | 4.50% | -5.40% | | By Region | Fujian Province | 7,276,210,716.82 | 69.96% | 7,241,420,800.75 | 70.26% | 0.48% | | | Sichuan Province | 1,801,225,520.55 | 17.32% | 1,671,091,441.04 | 16.21% | 7.79% | | | Jiangxi Province | 992,447,681.52 | 9.54% | 1,054,306,013.00 | 10.23% | -5.87% | Industries, Products, or Regions Accounting for Over 10% of Company's Operating Revenue or Operating Profit | Category | Item | Operating Revenue (yuan) | Operating Cost (yuan) | Gross Margin (%) | Operating Revenue Change (%) | Operating Cost Change (%) | Gross Margin Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | By Industry | Pharmaceutical Wholesale | 9,404,621,858.13 | 8,828,048,126.84 | 6.13% | -0.15% | 0.21% | -0.34% | | By Product | Pharmaceuticals | 8,652,491,828.79 | 8,133,253,551.28 | 6.00% | 1.21% | 1.51% | -0.28% | | | Devices | 1,200,335,751.92 | 1,098,032,585.38 | 8.52% | 2.07% | 1.13% | 0.85% | | By Region | Fujian Province | 7,276,210,716.82 | 6,774,493,749.62 | 6.90% | 0.48% | 0.99% | -0.47% | | | Sichuan Province | 1,801,225,520.55 | 1,675,287,522.17 | 6.99% | 7.79% | 8.34% | -0.48% | Analysis of Non-Principal Business During the reporting period, the company had no non-principal business activities to analyze - The company had no non-principal business analysis during the reporting period[49] Analysis of Assets and Liabilities At the end of the reporting period, total assets and net assets attributable to shareholders slightly increased, with accounts receivable rising by 2.52% of total assets and inventory decreasing by 2.35%, while short-term borrowings and contract liabilities increased, and certain assets were restricted Significant Changes in Asset Composition | Item | Period-end Amount (yuan) | % of Total Assets | Prior Year-end Amount (yuan) | % of Total Assets | % Change in Proportion | | :--- | :--- | :--- | :--- | :--- | :--- | | Monetary Capital | 513,847,920.20 | 4.06% | 576,849,591.87 | 4.56% | -0.50% | | Accounts Receivable | 6,228,896,358.77 | 49.22% | 5,901,606,192.07 | 46.70% | 2.52% | | Inventory | 2,571,079,864.30 | 20.32% | 2,864,755,977.45 | 22.67% | -2.35% | | Fixed Assets | 1,329,618,012.72 | 10.51% | 1,320,678,345.01 | 10.45% | 0.06% | | Construction in Progress | 504,690,196.79 | 3.99% | 471,482,048.38 | 3.73% | 0.26% | | Short-term Borrowings | 3,928,894,395.91 | 31.05% | 3,874,674,322.37 | 30.66% | 0.39% | | Contract Liabilities | 36,188,656.71 | 0.29% | 30,536,928.45 | 0.24% | 0.05% | | Long-term Borrowings | 579,290,733.39 | 4.58% | 648,408,776.05 | 5.13% | -0.55% | | Lease Liabilities | 89,282,781.05 | 0.71% | 87,328,368.61 | 0.69% | 0.02% | Asset Restriction Status | Item | Book Balance (yuan) | Book Value (yuan) | Restriction Type | Restriction Details | | :--- | :--- | :--- | :--- | :--- | | Monetary Capital | 181,724,531.20 | 181,724,531.20 | ETC freeze, restricted use | Frozen funds, bank acceptance bill deposits, letter of guarantee deposits, etc | | Accounts Receivable | 8,781,883.17 | 8,737,973.75 | Pledge | Used for bank pledged loans | | Fixed Assets | 694,543,481.51 | 574,838,133.05 | Mortgage | Used for bank mortgaged loans | | Intangible Assets | 125,964,226.52 | 107,494,013.32 | Mortgage | Used for bank mortgaged loans | | Construction in Progress | 92,096,693.29 | 92,096,693.29 | Mortgage | Used for bank mortgaged loans | | Total | 1,103,110,815.69 | 964,891,344.61 | | | Analysis of Investment Status The company's total investment for the reporting period was 83.80 million yuan, a 55.96% decrease year-on-year, primarily due to reduced long-term asset investments, focusing on construction in progress, capital increases in associates, and acquisition of minority equity in subsidiaries - The investment amount for the reporting period was 83.80 million yuan, a 55.96% decrease compared to the prior year period[53] - Major investments include 80.23 million yuan in new fixed assets, intangible assets, and other long-term assets, of which 64.94 million yuan was invested in construction in progress[53] - Capital increase of 2.09 million yuan in associate company Xiamen Zhangbutao Memorial Hospital Co., Ltd[53] - Acquisition of minority equity in subsidiaries totaled 1.47 million yuan[53] Disposal of Major Assets and Equity During the reporting period, the company did not dispose of any major assets or significant equity - The company did not dispose of any major assets during the reporting period[57] - The company did not dispose of any major equity during the reporting period[58] Analysis of Major Holding and Associate Companies This section lists major subsidiaries significantly impacting the company's net profit, including Fuzhou Luyan Pharmaceutical Co., Ltd. and Quanzhou Luyan Pharmaceutical Co., Ltd., both commercial wholesale entities contributing substantial operating revenue and net profit Major Subsidiaries and Associate Companies with Over 10% Impact on Company's Net Profit | Company Name | Company Type | Principal Business | Registered Capital (yuan) | Total Assets (yuan) | Net Assets (yuan) | Operating Revenue (yuan) | Operating Profit (yuan) | Net Profit (yuan) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Fuzhou Luyan Pharmaceutical Co., Ltd. | Subsidiary | Commercial Wholesale | 100,000,000.00 | 583,214,522.75 | 105,653,389.28 | 1,108,003,222.98 | 24,563,432.78 | 18,405,340.34 | | Quanzhou Luyan Pharmaceutical Co., Ltd. | Subsidiary | Commercial Wholesale | 100,000,000.00 | 400,116,053.49 | 118,402,461.40 | 780,957,092.30 | 26,705,810.57 | 21,764,219.73 | Risks Faced by the Company and Countermeasures The company faces multiple risks, including intensified market competition, industry policy changes (centralized procurement, medical insurance payments), external guarantees, accounts receivable and inventory management, cross-regional expansion, subsidiary management, drug quality, and goodwill impairment, which it addresses through supply chain strengthening, digital transformation, and optimized credit policies - Risk of intensified market competition: industry consolidation is accelerating, with dual-track competition from national giants and regional leaders, requiring the company to strengthen supply chain synergy and digital transformation[60] - Industry policy risk: normalized centralized procurement challenges profit models, medical insurance negotiations strengthen the dominance of manufacturing enterprises, increasing liquidity management difficulties for distribution enterprises[60] - External guarantee risk: there is a risk that subsidiaries may fail to repay debts on time, leading the company to bear guarantee responsibilities, particularly concerning concealed guarantee matters of Chengdu Hecchuang Pharmaceutical Group Co., Ltd. before its acquisition[61] - Accounts receivable management risk: delays in settlement by medical insurance departments or hospitals, or rapid growth in direct sales business, may lead to extended payment terms, requiring dynamic optimization of credit policies[61] - Inventory management risk: pharmaceutical circulation requires high inventory levels, strict drug shelf-life management, and carries the risk of inventory losses[62] - Cross-regional expansion and M&A risk: there is a challenge of accurately identifying hidden risks and formulating differentiated strategies for various regional market characteristics[62] - Risk of inadequate subsidiary management: despite establishing a comprehensive internal management and control system, operational risks due to inadequate management still exist[63] - Drug and medicinal material quality risk: quality issues may arise at all stages of drug production and circulation, and the quality of traditional Chinese medicinal materials is affected by various factors, potentially leading to regulatory penalties[63][64] - Goodwill impairment risk: if the operating performance of acquired companies does not meet expectations, it may lead to goodwill impairment, significantly impacting the company's performance[64][65] Formulation and Implementation of Market Value Management System and Valuation Enhancement Plan The company has not formulated a market value management system nor disclosed a valuation enhancement plan - The company has not formulated a market value management system[66] - The company has not disclosed a valuation enhancement plan[66] Implementation of "Dual Improvement in Quality and Returns" Action Plan The company has not disclosed any announcement regarding the "Dual Improvement in Quality and Returns" action plan - The company has not disclosed an announcement regarding the "Dual Improvement in Quality and Returns" action plan[66] Corporate Governance, Environment, and Society This section covers changes in the company's directors, supervisors, and senior management, profit distribution plans, employee incentive schemes, environmental information disclosure, and social responsibility Changes in Directors, Supervisors, and Senior Management During the reporting period, Cai Meizhen, Li Cuiping, and Lin Biyun resigned from their supervisor positions due to supervisory board reforms - Cai Meizhen (Chairperson of the Supervisory Board, Employee Supervisor), Li Cuiping (Supervisor), and Lin Biyun (Supervisor) resigned on May 13, 2025, due to supervisory board reforms[68] Profit Distribution and Capital Reserve Conversion to Share Capital for the Current Reporting Period The company plans not to distribute cash dividends, issue bonus shares, or convert capital reserves into share capital for the half-year period - The company plans not to distribute cash dividends, issue bonus shares, or convert capital reserves into share capital for the half-year period[69] Implementation of Company's Equity Incentive Plans, Employee Stock Ownership Plans, or Other Employee Incentive Measures During the reporting period, the company had no equity incentive plans, employee stock ownership plans, or other employee incentive measures in place or implemented - The company had no equity incentive plans, employee stock ownership plans, or other employee incentive measures and their implementation during the reporting period[70] Environmental Information Disclosure The listed company and its major subsidiaries are not included in the list of enterprises required to disclose environmental information by law - The listed company and its major subsidiaries are not included in the list of enterprises required to disclose environmental information by law[71] Social Responsibility During the reporting period, the company had no specific social responsibility matters requiring special mention - The company had no social responsibility matters[71] Significant Events This section details the company's commitments, related party transactions, external guarantees, litigation, penalties, and other significant matters during the reporting period Commitments During the reporting period, there were no commitments made by the company's actual controller, shareholders, related parties, acquirers, or the company itself that were either fulfilled or overdue and unfulfilled by the end of the reporting period - During the reporting period, there were no commitments made by the company's actual controller, shareholders, related parties, acquirers, or the company itself that were either fulfilled or overdue and unfulfilled by the end of the reporting period[73] Non-Operating Fund Occupation by Controlling Shareholder and Other Related Parties During the reporting period, there was no non-operating fund occupation by the controlling shareholder or other related parties of the listed company - During the reporting period, there was no non-operating fund occupation by the controlling shareholder or other related parties of the listed company[74] Illegal External Guarantees During the reporting period, the company had no illegal external guarantees - The company had no illegal external guarantees during the reporting period[75] Appointment and Dismissal of Accounting Firms The company's half-year financial report was not audited - The company's half-year report was not audited[76] Board of Directors' and Supervisory Board's Explanations on "Non-Standard Audit Report" for the Current Reporting Period During the reporting period, the company had no non-standard audit report - The company had no non-standard audit report during the reporting period[77] Board of Directors' Explanations on "Non-Standard Audit Report" for the Prior Year During the reporting period, the company had no non-standard audit report for the prior year - The company had no non-standard audit report for the prior year during the reporting period[77] Bankruptcy and Reorganization Matters During the reporting period, the company did not experience any bankruptcy or reorganization-related matters - The company did not experience any bankruptcy or reorganization-related matters during the reporting period[77] Litigation Matters The company is involved in a major lawsuit where its subsidiary, Chengdu Hecchuang Pharmaceutical Group Co., Ltd., is being pursued for guarantee liability due to concealed guarantees by former shareholders before acquisition, involving 218.68 million yuan, currently in enforcement, with the company facilitating repayment through collateralized assets Major Litigation and Arbitration Matters | Basic Information on Litigation (Arbitration) | Amount Involved (10,000 yuan) | Whether a Provision for Liabilities has been Formed | Progress of Litigation (Arbitration) | Outcome and Impact of Litigation (Arbitration) | Enforcement of Litigation (Arbitration) Judgment | | :--- | :--- | :--- | :--- | :--- | :--- | | Chengdu Hecchuang Pharmaceutical Group Co., Ltd. is being pursued for guarantee liability by creditors due to concealed external guarantee matters by former shareholders before its acquisition. | 21,867.62 | No | In enforcement | Ruling that Guiyang Dechangxiang Pharmaceutical Co., Ltd. pay trust loan principal of 200 million yuan and interest of 35.80 million yuan to Shandong International Trust Co., Ltd., with Chengdu Hecchuang Pharmaceutical Group Co., Ltd. and others bearing joint and several guarantee liability. | Currently promoting the priority repayment of debts with proceeds from the realization of collateralized assets. | - The company has 93 other pending litigation cases, including 60 effective lawsuits initiated as plaintiff, totaling 96.65 million yuan; and 33 ongoing lawsuits, totaling 49.73 million yuan[79] Penalties and Rectification During the reporting period, the company had no penalties or rectification situations - The company had no penalties or rectification situations during the reporting period[80] Integrity Status of the Company, its Controlling Shareholder, and Actual Controller During the reporting period, the company, its controlling shareholder, and actual controller had no integrity issues - The company had no integrity issues during the reporting period[81] Major Related Party Transactions During the reporting period, the company had no major related party transactions related to daily operations, asset/equity acquisitions or disposals, joint external investments, related party creditor-debtor relationships, or dealings with affiliated financial companies - The company had no major related party transactions related to daily operations during the reporting period[82] - The company had no related party transactions involving asset or equity acquisitions or disposals during the reporting period[83] - The company had no related party transactions involving joint external investments during the reporting period[84] - The company had no major related party creditor-debtor relationships during the reporting period[85] - There were no deposits, loans, credit lines, or other financial transactions between the company and affiliated financial companies or related parties[86] Major Contracts and Their Performance During the reporting period, the company had no trusteeship, contracting, or leasing matters, but maintained significant guarantees, primarily for subsidiaries, totaling 127.49% of its net assets, with 1.59 billion yuan for entities with a debt-to-asset ratio exceeding 70% - The company had no trusteeship, contracting, or leasing situations during the reporting period[89][90][91] External Guarantees by the Company and its Subsidiaries (Excluding Guarantees for Subsidiaries) | Name of Guaranteed Party | Guarantee Limit (10,000 yuan) | Actual Guarantee Amount (10,000 yuan) | Guarantee Type | Guarantee Period | Whether Fulfilled | | :--- | :--- | :--- | :--- | :--- | :--- | | Guiyang Dechangxiang Pharmaceutical Co., Ltd. | 20,000 | 21,867.62 | Joint and several liability guarantee | Three years from the loan disbursement date | No | - Guarantees for subsidiaries: As of the end of the reporting period, the total approved guarantee limit for subsidiaries was 8.63 billion yuan, with an actual guarantee balance of 3.83 billion yuan[110] - The total actual guarantee amount (A4+B4+C4) accounts for 127.49% of the company's net assets[111] - Of which: the debt guarantee balance provided directly or indirectly for guaranteed parties with a debt-to-asset ratio exceeding 70% was 1.59 billion yuan[111] - The company had no entrusted wealth management during the reporting period[112] - The company had no other major contracts during the reporting period[113] Explanation of Other Significant Matters During the reporting period, the company had no other significant matters requiring explanation - The company had no other significant matters requiring explanation during the reporting period[114] Significant Matters of Company Subsidiaries Subsidiary Chengdu Hecchuang Pharmaceutical Group Co., Ltd. is involved in a major lawsuit for guarantee liability due to concealed guarantees by former shareholders before acquisition, currently in enforcement with partial creditor repayment, and has also won a lawsuit against Guizhou Mingrun Construction Engineering Co., Ltd., recovering 4.20 million yuan - Subsidiary Chengdu Hecchuang Pharmaceutical Group Co., Ltd. is being pursued for guarantee liability by creditors due to concealed guarantee matters by former shareholders before its acquisition, involving a significant amount[115] - Creditors have received 127.67 million yuan in debt repayment, and the company will continue to promote the priority use of collateral for debt repayment[115][117] - Chengdu Hecchuang filed a lawsuit demanding 39.70 million yuan plus interest from Guizhou Mingrun Construction Engineering Co., Ltd. and Hecchuang Ruida, and was awarded 31.63 million yuan plus interest, with 4.20 million yuan already recovered through enforcement[117] Share Changes and Shareholder Information This section details changes in the company's share capital, restricted shares, securities issuance, shareholder numbers, and holdings of directors, supervisors, and senior management, as well as any changes in controlling shareholder or actual controller Share Change Status During the reporting period, the company's total share capital remained unchanged at 388,516,736 shares, with restricted shares decreasing by 207,566 shares due to changes in locked-up shares from executive share reductions, and unrestricted shares increasing accordingly Share Change Status | Item | Number Before This Change (shares) | Percentage Before This Change (%) | Increase/Decrease in This Change (shares) | Number After This Change (shares) | Percentage After This Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | I. Restricted Shares | 6,930,501 | 1.78% | -207,566 | 6,722,935 | 1.73% | | II. Unrestricted Shares | 381,586,235 | 98.22% | 207,566 | 381,793,801 | 98.27% | | III. Total Shares | 388,516,736 | 100.00% | 0 | 388,516,736 | 100.00% | - The reason for share changes was the reduction of shares by some senior executives in 2024, leading to changes in locked-up shares for some senior executives at the beginning of 2025[120] Changes in Restricted Shares During the reporting period, the total number of restricted shares decreased by 207,566 shares, with Zhu Mingguo and Lei Ming's restricted shares being released, while Cai Meizhen, Lin Biyun, and Li Cuiping saw an increase due to executive lock-up rules Changes in Restricted Shares | Shareholder Name | Number of Restricted Shares at Beginning of Period (shares) | Number of Restricted Shares Released This Period (shares) | Number of Restricted Shares Increased This Period (shares) | Number of Restricted Shares at End of Period (shares) | Reason for Restriction | | :--- | :--- | :--- | :--- | :--- | :--- | | Li Weiyang | 3,027,409 | 0 | 0 | 3,027,409 | Executive lock-up shares | | Zhang Junying | 2,693,007 | 0 | 0 | 2,693,007 | Executive lock-up shares | | Zhu Mingguo | 750,000 | 150,000 | 0 | 600,000 | Executive lock-up shares | | Lei Ming | 361,593 | 90,398 | 0 | 271,195 | Executive lock-up shares | | Cai Meizhen | 95,521 | 0 | 31,841 | 127,362 | Executive lock-up shares | | Lin Biyun | 2,057 | 0 | 686 | 2,743 | Executive lock-up shares | | Li Cuiping | 914 | 0 | 305 | 1,219 | Executive lock-up shares | | Total | 6,930,501 | 240,398 | 32,832 | 6,722,935 | | Securities Issuance and Listing During the reporting period, the company had no securities issuance or listing activities - The company had no securities issuance or listing activities during the reporting period[123] Number of Shareholders and Shareholding Status At the end of the reporting period, the company had 23,453 common shareholders, with Xiamen Medicon Technology Co., Ltd. as the controlling shareholder (35.53% stake), whose shares are pledged, and the actual controller Mr. Wu Jinxiang and his spouse Wang Jun, along with Xiamen Santai Technology Co., Ltd., acting as parties in concert - The total number of common shareholders at the end of the reporting period was 23,453[124] - Xiamen Medicon Technology Co., Ltd. holds a 35.53% stake, making it the largest shareholder, with 22,523,834 shares pledged[125] - The actual controller Mr. Wu Jinxiang, Xiamen Medicon Technology Co., Ltd. controlled by him, Xiamen Santai Technology Co., Ltd., and his spouse Wang Jun are parties in concert[125] - Among the top 10 unrestricted shareholders, Xiamen Medicon Technology Co., Ltd. holds 138,030,674 A-shares[125] Changes in Shareholdings of Directors, Supervisors, and Senior Management During the reporting period, there were no changes in the shareholdings of the company's directors, supervisors, and senior management, as detailed in the 2024 annual report - The shareholdings of the company's directors, supervisors, and senior management remained unchanged during the reporting period[127] Changes in Controlling Shareholder or Actual Controller During the reporting period, there were no changes in the company's controlling shareholder or actual controller - The company's controlling shareholder remained unchanged during the reporting period[128] - The company's actual controller remained unchanged during the reporting period[128] Preferred Share Information During the reporting period, the company had no preferred shares - The company had no preferred shares during the reporting period[129] Bond Information This section confirms that the company had no bond-related matters during the reporting period Bond Information During the reporting period, the company had no bond-related matters - The company had no bond-related matters during the reporting period[131] Financial Report This section presents the company's unaudited half-year financial statements, including balance sheets, income statements, cash flow statements, and statements of changes in owners' equity, along with detailed notes on accounting policies, taxes, and financial statement items Audit Report The company's half-year financial report was not audited - The company's half-year financial report was not audited[133] Financial Statements This section provides the company's consolidated and parent company balance sheets, income statements, and cash flow statements for the first half of 2025, along with statements of changes in owners' equity, offering a comprehensive view of its financial position, operating results, and cash flows Key Data from Consolidated Balance Sheet (Period-end Balance) | Item | Period-end Balance (yuan) | | :--- | :--- | | Total Assets | 12,654,560,500.42 | | Total Liabilities | 9,446,277,356.53 | | Total Owners' Equity | 3,208,283,143.89 | Key Data from Consolidated Income Statement (First Half of 2025) | Item | First Half of 2025 (yuan) | | :--- | :--- | | Total Operating Revenue | 10,400,082,294.54 | | Operating Profit | 203,115,256.37 | | Total Profit | 203,326,833.17 | | Net Profit | 153,439,626.26 | | Net Profit Attributable to Parent Company Shareholders | 154,529,883.50 | Key Data from Consolidated Cash Flow Statement (First Half of 2025) | Item | First Half of 2025 (yuan) | | :--- | :--- | | Net Cash Flow from Operating Activities | 210,717,990.08 | | Net Cash Flow from Investing Activities | -110,445,071.24 | | Net Cash Flow from Financing Activities | -108,886,472.53 | | Net Increase in Cash and Cash Equivalents | -8,801,515.24 | Company Basic Information Luyan Pharmaceutical Co., Ltd., established on September 3, 2008, and listed on the Shenzhen Stock Exchange in February 2016, with a registered capital of 388.52 million yuan, is headquartered in Xiamen, primarily engaged in pharmaceutical distribution and retail, and its financial statements were approved by the board on August 22, 2025 - Luyan Pharmaceutical Co., Ltd. was established on September 3, 2008, and listed on the Shenzhen Stock Exchange on February 18, 2016, with stock code "002788"[169] - As of June 30, 2025, the company's registered capital was 388.52 million yuan, and its total share capital was 388.52 million shares[169] - The company's principal business includes the distribution of pharmaceuticals, traditional Chinese medicine decoction pieces, and medical devices, as well as pharmaceutical retail chains[170] - The financial statements were approved for issuance by the Board of Directors on August 22, 2025[170] Basis of Financial Statement Preparation The company prepares its financial statements on a going concern basis, adhering to Enterprise Accounting Standards and relevant regulations, and assesses its going concern ability as reasonable - The company prepares its financial statements on a going concern basis, in accordance with Enterprise Accounting Standards, their application guidelines, and interpretations[171] - The company also discloses financial information in accordance with the China Securities Regulatory Commission's "Rules for Information Disclosure by Companies Issuing Securities to the Public No. 15 - General Provisions on Financial Reports (Revised 2023)"[171] - The company assessed its ability to continue as a going concern for 12 months from the end of the reporting period and found no matters affecting its going concern ability[172] Significant Accounting Policies and Estimates This section details the company's significant accounting policies and estimates for financial statement preparation, covering areas such as compliance with accounting standards, accounting period, business cycle, functional currency, business combinations, consolidated financial statements, financial instruments, fair value measurement, inventory, contract assets/liabilities, long-term equity investments, fixed assets, and revenue recognition - The financial statements prepared by the company comply with Enterprise Accounting Standards and accurately and completely reflect its financial position[174] - The company's accounting year runs from January 1 to December 31 of the Gregorian calendar, its normal operating cycle is one year, and its functional currency is RMB[175][176][177] - Assets and liabilities acquired by the company in business combinations are measured at book value under common control and at fair value under non-common control[179][180] - The company prepares consolidated financial statements based on its own and its subsidiaries' financial statements, determining the scope of consolidation based on control[182][183] - The company classifies financial assets as those measured at amortized cost, at fair value through profit or loss, and at fair value through other comprehensive income[203] - For financial assets measured at amortized cost, the company recognizes loss provisions based on expected credit losses[209] - The company uses the cost model for subsequent measurement of investment properties and the straight-line method for depreciation of fixed assets[245][248] - The company's revenue recognition principle is to recognize revenue when the customer obtains control of the related goods[270] - Significant accounting judgments and estimates include the measurement of expected credit losses for accounts receivable, goodwill impairment, and the recognition of deferred income tax assets[295] Taxation This section outlines the company's main tax types and rates, including VAT, urban maintenance and construction tax, corporate income tax, education surcharges, and local education surcharges, noting various preferential tax rates for small and micro-enterprises, Hainan Free Trade Port enterprises, and Western Development encouraged industries Major Tax Types and Rates | Tax Type | Tax Base | Tax Rate | | :--- | :--- | :--- | | VAT | Taxable income | 13%, 9%, 6%, 5%, 3%, 1%, 0% | | Urban Maintenance and Construction Tax | Amount of turnover tax payable | 7%, 5% | | Corporate Income Tax | Taxable income | Specific details in description (25%, 20%, 15%) | | Education Surcharge | Amount of turnover tax payable | 3% | | Local Education Surcharge | Amount of turnover tax payable | 2% | - Except for a few subsidiaries enjoying preferential tax rates, the corporate income tax rate for the company and its domestic subsidiaries is 25%[298] - Some small and micro-profit enterprises calculate their taxable income at 25% and pay corporate income tax at a 20% rate[299] - Encouraged industry enterprises registered and substantially operating in the Hainan Free Trade Port are subject to corporate income tax at a reduced rate of 15%[299] - Encouraged industry enterprises registered and substantially operating in Sichuan Province are subject to corporate income tax at a reduced rate of 15%[299] - Some private non-enterprise units are exempt from VAT and corporate income tax, and income from agricultural, forestry, animal husbandry, and fishery projects is exempt from corporate income tax[300] Notes to Consolidated Financial Statement Items This section provides detailed notes for each item in the consolidated financial statements, including monetary capital, accounts receivable, inventory, fixed assets, construction in progress, goodwill, restricted assets, short-term borrowings, and key income and cash flow figures - Monetary Capital: Period-end balance of 513.85 million yuan, of which 12.92 million yuan is deposited overseas[302] - Accounts Receivable: Period-end book value of 6.23 billion yuan, with bad debt provision of 110.75 million yuan[313] - Inventory: Period-end book value of 2.57 billion yuan, with inventory impairment provision of 8.99 million yuan[341] - Long-term Equity Investments: Period-end book value of 47.15 million yuan, primarily investments in associates[346] - Fixed Assets: Period-end book value of 1.33 billion yuan, including fixed assets with uncompleted property certificates totaling 100.36 million yuan[360][362] - Construction in Progress: Period-end book value of 504.69 million yuan, primarily including the Luyan Modern Traditional Chinese Medicine Industrial Park Phase I project and Luyan Pharmaceutical Hainan Headquarters Base[365] - Goodwill: Period-end original book value of 303.50 million yuan, with impairment provision of 14.22 million yuan[374][376] - Assets with Restricted Ownership or Use Rights: Period-end total book value of 964.89 million yuan, including monetary capital, fixed assets, intangible assets, construction in progress, and accounts receivable[394] - Short-term Borrowings: Period-end balance of 3.93 billion yuan, primarily pledged loans, mortgaged loans, guaranteed loans, and credit loans[395] - Dividends Payable: Period-end balance of 135.98 million yuan, representing common stock dividends payable according to the 2024 equity distribution plan[404][443] - Operating Revenue and Operating Cost: Current period operating revenue of 10.40 billion yuan, operating cost of 9.66 billion yuan[445] - Investment Income: Current period amount of -9.37 million yuan, primarily from long-term equity investment income accounted for using the equity method, gains from derecognition of financial assets measured at amortized cost, and gains from derecognition of accounts receivable financing[461] - Net Cash Flow from Operating Activities: Current period amount of 210.72 million yuan[488] R&D Expenses During the reporting period, the company's total R&D expenses were 2.84 million yuan, all expensed, primarily consisting of employee compensation, material costs, and R&D service fees, showing a slight increase from the prior year Composition of R&D Expenses | Item | Amount Incurred This Period (yuan) | Amount Incurred Last Period (yuan) | | :--- | :--- | :--- | | Employee Compensation | 2,723,015.55 | 2,168,181.17 | | Material Costs | 14,814.24 | 515,443.06 | | R&D Service Fees | 73,205.30 | 20,865.95 | | Other Expenses | 24,511.94 | 33,341.92 | | Total | 2,835,547.03 | 2,737,832.10 | | Of which: Expensed R&D expenses | 2,835,547.03 | 2,737,832.10 | | Capitalized R&D expenses | 0 | 0 | Changes in Consolidation Scope During the reporting period, the company established a new subsidiary, Chengdu Lushan Hall Health Management Co., Ltd., which was included in the consolidation scope from its date of establishment - During the reporting period, the company established a new subsidiary, Chengdu Lushan Hall Health Management Co., Ltd., which was included in the consolidation scope from its date of establishment[499] [Interests in Other Entities](index=124&type=section&id=8.