华润医药(03320) - 2025 - 中期业绩

Interim Results Announcement Condensed Consolidated Statement of Profit or Loss Total revenue increased by 2.5% to RMB 131,866.8 million, and gross profit grew by 2.8% to RMB 21,509.6 million, though net profit and profit attributable to owners decreased due to one-off impairment impacts Condensed Consolidated Statement of Profit or Loss | Metric | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Revenue | 131,866,817 | 128,597,588 | +2.5% | | Cost of sales | (110,357,203) | (107,664,092) | +2.5% | | Gross profit | 21,509,614 | 20,933,496 | +2.8% | | Other income | 849,442 | 811,260 | +4.7% | | Other gains and losses | (1,086,255) | (656,769) | -65.4% | | Selling and distribution expenses | (10,010,130) | (9,378,405) | +6.7% | | Administrative expenses | (3,186,557) | (3,044,405) | +4.7% | | Other expenses, net | (1,038,382) | (1,012,033) | +2.6% | | Finance income | 271,275 | 372,154 | -27.1% | | Finance costs | (1,006,278) | (1,177,992) | -14.6% | | Finance costs, net | (735,003) | (805,838) | -8.8% | | Share of profits of associates and joint ventures | 113,236 | 198,770 | -43.0% | | Profit before tax | 6,415,965 | 7,046,076 | -8.9% | | Income tax expense | (1,362,328) | (1,505,520) | -9.5% | | Profit for the period | 5,053,637 | 5,540,556 | -8.8% | | Profit attributable to equity holders of the Company | 2,077,282 | 2,604,806 | -20.3% | | Non-controlling interests | 2,976,355 | 2,935,750 | +1.4% | | Basic and diluted earnings per share (RMB) | 0.33 | 0.41 | -19.5% | - Net profit and profit attributable to equity holders of the Company decreased, primarily due to one-off items such as impairment of associates; excluding this impact, net profit slightly decreased by 1.3% year-on-year, and profit attributable to equity holders of the Company slightly decreased by 4.7% year-on-year[54] Condensed Consolidated Statement of Comprehensive Income Total comprehensive income for the period was RMB 5,038.5 million, a 9.5% decrease from RMB 5,565.8 million in the prior year, mainly due to lower profit and exchange differences Condensed Consolidated Statement of Comprehensive Income | Metric | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Profit for the period | 5,053,637 | 5,540,556 | -8.8% | | Other comprehensive income (after tax) | (15,149) | 25,217 | -160.1% | | - Exchange differences on translation of operations outside Mainland China | (16,654) | 26,777 | -162.2% | | - Share of other comprehensive income of associates | 144 | (1,560) | -109.2% | | - Share of other comprehensive income of associates | 1,361 | – | N/A | | Total comprehensive income for the period | 5,038,488 | 5,565,773 | -9.5% | | Attributable to equity holders of the Company | 2,065,943 | 2,630,370 | -21.5% | | Non-controlling interests | 2,972,545 | 2,935,403 | +1.3% | Condensed Consolidated Statement of Financial Position Total equity increased by 14.2% to RMB 112,034.8 million as of June 30, 2025, driven by growth in assets, particularly trade and other receivables, alongside increased liabilities and borrowings Condensed Consolidated Statement of Financial Position | Metric | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change | | :--- | :--- | :--- | :--- | | Non-current assets | | | | | Property, plant and equipment | 25,568,020 | 20,988,872 | +21.8% | | Right-of-use assets | 6,359,911 | 4,918,458 | +29.3% | | Investment properties | 1,716,507 | 1,673,690 | +2.6% | | Intangible assets | 11,015,822 | 8,507,954 | +29.5% | | Goodwill | 24,294,206 | 22,368,811 | +8.6% | | Interests in associates | 6,254,242 | 5,536,147 | +13.0% | | Interests in joint ventures | 267,253 | 22,924 | +1065.9% | | Other non-current financial assets | 765,876 | 584,325 | +31.1% | | Deferred tax assets | 2,188,426 | 1,968,756 | +11.2% | | Other non-current assets | 5,350,269 | 5,344,804 | +0.1% | | Total non-current assets | 83,780,532 | 71,914,741 | +16.5% | | Current assets | | | | | Inventories | 41,935,741 | 37,052,579 | +13.2% | | Trade and other receivables | 101,908,572 | 93,929,934 | +8.5% | | Other current financial assets | 29,641,070 | 28,211,657 | +5.1% | | Amounts due from related parties | 992,519 | 1,262,265 | -21.4% | | Tax recoverable | 241,292 | 222,147 | +8.6% | | Pledged and time deposits | 10,636,874 | 8,703,691 | +22.2% | | Cash and cash equivalents | 17,673,922 | 16,424,739 | +7.6% | | Assets classified as held for sale | 38,917 | 38,567 | +0.9% | | Total current assets | 203,068,907 | 185,845,579 | +9.3% | | Current liabilities | | | | | Trade and other payables | 82,784,395 | 80,742,110 | +2.5% | | Contract liabilities | 3,384,926 | 4,224,594 | -19.9% | | Lease liabilities | 533,032 | 520,268 | +2.5% | | Amounts due to related parties | 887,063 | 875,778 | +1.3% | | Borrowings | 53,831,777 | 42,702,306 | +26.1% | | Bonds payable | 2,040,117 | 2,150,582 | -5.1% | | Tax payable | 815,636 | 954,898 | -14.5% | | Defined benefit liabilities | 48,753 | 51,388 | -5.1% | | Liabilities held for sale | 243 | – | N/A | | Total current liabilities | 144,325,942 | 132,221,924 | +9.2% | | Non-current liabilities | | | | | Borrowings | 17,583,347 | 17,866,213 | -1.6% | | Bonds payable | 7,998,336 | 4,997,673 | +60.0% | | Lease liabilities | 764,333 | 768,138 | -0.5% | | Deferred tax liabilities | 2,244,857 | 1,915,360 | +17.2% | | Defined benefit liabilities | 762,130 | 773,542 | -1.5% | | Other non-current liabilities | 1,135,660 | 1,130,192 | +0.5% | | Total non-current liabilities | 30,488,663 | 27,451,118 | +11.1% | | Total equity | 112,034,834 | 98,087,278 | +14.2% | Notes to the Unaudited Interim Financial Information This section provides essential supplementary information on the basis of preparation, accounting policies, segment data, revenue, expenses, and key balance sheet items, clarifying the Group's financial performance and position 1. Company Information - China Resources Pharmaceutical Group Limited is incorporated in Hong Kong, listed on the HKEX, and primarily engaged in the manufacturing, distribution, and retail of pharmaceutical and healthcare products[12] 2. Basis of Preparation, Changes in Accounting Policies and Disclosures - The interim financial information is prepared in accordance with the HKEX Listing Rules and HKAS 34, and has been reviewed by KPMG[13][15] - HKAS 21 (Revised) 'The Effects of Changes in Foreign Exchange Rates—Lack of Exchangeability' was applied this period, with no material impact on the interim financial information[17] 3. Segment Information - The Group has four reportable operating segments: pharmaceutical manufacturing, pharmaceutical distribution, pharmaceutical retail, and other business operations[21] Segment Information | Segment | H1 2025 Revenue (RMB thousand) | H1 2024 Revenue (RMB thousand) | Y-o-Y Change | H1 2025 Performance (RMB thousand) | H1 2024 Performance (RMB thousand) | Y-o-Y Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Manufacturing segment | 24,808,280 | 23,793,197 | +4.3% | 7,442,942 | 7,488,846 | -0.6% | | Distribution segment | 108,329,727 | 105,882,386 | +2.3% | 3,897,856 | 3,955,896 | -1.5% | | Retail segment | 5,514,645 | 4,949,379 | +11.4% | 79,316 | 49,635 | +59.8% | | Others | 70,276 | 58,097 | +21.0% | 46,766 | 29,069 | +61.0% | | Total | 138,722,928 | 134,683,059 | +3.0% | 11,466,880 | 11,523,446 | -0.5% | 4. Revenue Revenue by Source | Revenue Source | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Sales of pharmaceutical products | 131,793,391 | 128,536,011 | +2.5% | | Rental income from operating leases of investment properties | 73,426 | 61,577 | +19.2% | | Total Revenue | 131,866,817 | 128,597,588 | +2.5% | Revenue by Geographical Market | Geographical Market | H1 2025 Revenue (RMB thousand) | H1 2024 Revenue (RMB thousand) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Mainland China | 131,344,541 | 127,948,007 | +2.7% | | Hong Kong and others | 522,276 | 649,581 | -19.6% | 5. Other Income Other Income Sources | Other Income Source | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Service fee income | 305,333 | 375,948 | -18.8% | | Government grants | 324,586 | 227,577 | +42.6% | | Others | 219,523 | 207,735 | +5.7% | | Total | 849,442 | 811,260 | +4.7% | 6. Other Gains and Losses Other Gains and Losses | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Impairment loss on property, plant and equipment | (206) | (16) | | Impairment loss on intangible assets | (32,803) | (815) | | Impairment loss on interests in associates | (392,463) | – | | Impairment loss on trade and other receivables, net | (608,800) | (590,198) | | Gain/(loss) on disposal of property, plant and equipment and right-of-use assets, net | 4,920 | (1,694) | | Loss on derecognition of trade and bills receivables measured at fair value through other comprehensive income | (88,870) | (113,471) | | Fair value changes of financial assets at fair value through profit or loss | 61,247 | 23,082 | | Others | (29,280) | 26,343 | | Total | (1,086,255) | (656,769) | - Impairment loss on interests in associates was the primary reason for the significant increase in other gains and losses in H1 2025, reaching RMB 392,463 thousand, compared to zero in the prior period[29] 7. Finance Costs, Net Finance Costs, Net | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Interest on borrowings | 886,787 | 1,021,326 | -13.1% | | Interest on bonds payable | 85,938 | 117,763 | -27.0% | | Interest on lease liabilities | 32,604 | 31,645 | +3.0% | | Interest on defined benefit liabilities | 2,161 | 2,825 | -23.5% | | Less: Interest capitalised on property, plant and equipment | (1,212) | (2,539) | -52.3% | | Total finance costs | 1,006,278 | 1,177,992 | -14.6% | | Finance income — interest | (271,275) | (372,154) | -27.1% | | Net finance costs | 735,003 | 805,838 | -8.8% | - The capitalisation rate for H1 2025 was 3.15% to 3.50%, lower than 4.60% in H1 2024[30] 8. Profit Before Tax Profit Before Tax Components | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Cost of inventories | 109,630,879 | 107,026,942 | +2.4% | | Research and development expenditure | 970,848 | 939,014 | +3.4% | | Depreciation of property, plant and equipment | 1,171,848 | 993,166 | +18.0% | | Depreciation of right-of-use assets | 396,758 | 338,835 | +17.1% | | Amortisation of intangible assets | 318,947 | 296,019 | +7.7% | | Provision for slow-moving and obsolete inventories | 15,736 | 30,575 | -48.5% | | Lease expenses not included in lease liabilities | 61,494 | 66,870 | -8.0% | | Exchange losses, net | 5,792 | 33,553 | -82.7% | 9. Income Tax Income Tax | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | PRC corporate income tax | 1,611,015 | 1,616,963 | | Reversal of temporary differences and provisions | (254,635) | (105,495) | | Total | 1,362,328 | 1,505,520 | - The Group is assessing the impact of the global anti-dilution tax base model rules ('Pillar Two Model Rules'), concluding it is unlikely to have a material impact on the consolidated financial statements[34] 10. Earnings Per Share Profit Attributable to Ordinary Equity Holders | Item | H1 2025 (RMB thousand) | H1 2024 (RMB thousand) | | :--- | :--- | :--- | | Profit attributable to ordinary equity holders of the Company for basic EPS calculation | 2,073,328 | 2,604,806 | | Less: Dividends declared by subsidiaries to restricted share owners during the period | (3,954) | – | Weighted Average Number of Ordinary Shares | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Weighted average number of ordinary shares in issue for basic EPS calculation | 6,282,510,461 | 6,282,510,461 | - Basic and diluted earnings per share are consistent, as the restricted share incentive scheme is anti-dilutive[36] 11. Dividends - The Board resolved to declare an interim dividend of RMB 0.072 per ordinary share for the six months ended June 30, 2025 (H1 2024: RMB 0.083), totaling RMB 452 million[37] Dividends Recognised as Distribution | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Dividends recognised as distribution to ordinary equity holders of the Company during the period: 2024 final (RMB 0.052 per share) | 326,691 | – | | 2023 final (RMB 0.154 per share) | – | 967,507 | 12. Property, Plant and Equipment - In H1 2025, the Group purchased property, plant and equipment of approximately RMB 1,225.1 million, a 39.7% increase from RMB 877.2 million in the prior period[41] - In H1 2025, the Group disposed of assets with a net book value of approximately RMB 19.9 million, generating a net gain on disposal of approximately RMB 0.6 million, compared to a net loss on disposal of approximately RMB 1.7 million in the prior period[41] 13. Other Non-current Financial Assets Other Non-current Financial Assets | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Equity investments at fair value through other comprehensive income | 69,435 | 69,435 | | Equity investments at fair value through profit or loss | 696,441 | 514,890 | | Total | 765,876 | 584,325 | - Equity investments at fair value through profit or loss are primarily engaged in pharmaceutical R&D, distribution, and related operations, and do not meet the criteria of solely payments of principal and interest[42] 14. Trade and Other Receivables Trade and Other Receivables | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Bills receivable | 683,739 | 1,057,307 | | Contract assets | 54,297 | 64,596 | | Trade receivables | 92,376,246 | 83,694,249 | | Impairment allowance | (3,514,385) | (2,910,797) | | Prepayments | 3,737,744 | 4,069,522 | | Other receivables | 8,970,081 | 8,341,151 | | Impairment allowance | (399,150) | (386,094) | | Total | 101,908,572 | 93,929,934 | - Trade receivables typically have credit terms of 30 to 365 days, while bills receivable generally mature within 30 to 180 days[43] Aging of Trade Receivables (net of impairment allowance) | Aging of Trade Receivables (net of impairment allowance) | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | 0 to 30 days | 19,001,914 | 19,403,995 | | 31 to 60 days | 11,186,870 | 11,950,773 | | 61 to 90 days | 10,079,834 | 7,656,996 | | 91 to 180 days | 19,401,912 | 17,219,042 | | 181 to 365 days | 20,728,425 | 18,158,794 | | Over 1 year | 8,462,906 | 6,393,852 | | Total | 88,861,861 | 80,783,452 | Aging of Bills Receivable (based on issue date) | Aging of Bills Receivable (based on issue date) | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | 0 to 30 days | 279,599 | 615,874 | | 31 to 60 days | 90,780 | 173,400 | | 61 to 90 days | 85,601 | 66,667 | | 91 to 180 days | 227,759 | 201,366 | | Total | 683,739 | 1,057,307 | Other Current Financial Assets | Other Current Financial Assets | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade and bills receivables at fair value | 20,510,229 | 18,988,711 | | Financial products at fair value | 9,070,849 | 9,222,946 | | Equity investments at fair value through profit or loss | 59,992 | – | | Total | 29,641,070 | 28,211,657 | 15. Trade and Other Payables Trade and Other Payables | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade payables | 42,738,165 | 40,062,416 | | Bills payable | 17,109,593 | 18,535,915 | | Accrued salaries | 3,096,136 | 3,740,147 | | Other taxes payable | 960,258 | 942,129 | | Other payables | 16,937,457 | 15,703,647 | | Refund liabilities | 1,163,958 | 1,224,330 | | Amounts payable for acquisition of subsidiaries | 778,828 | 533,526 | | Total | 82,784,395 | 80,742,110 | - Credit terms for goods purchased range from 30 to 90 days, and bills payable mature within 30 to 180 days[45] Aging of Trade Payables (based on invoice date) | Aging of Trade Payables (based on invoice date) | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | 0 to 30 days | 21,056,480 | 19,815,023 | | 31 to 60 days | 7,699,286 | 7,415,293 | | 61 to 90 days | 3,752,799 | 3,380,817 | | Over 90 days | 10,229,600 | 9,451,283 | | Total | 42,738,165 | 40,062,416 | Aging of Bills Payable (based on issue date) | Aging of Bills Payable (based on issue date) | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | 0 to 30 days | 4,257,304 | 5,652,836 | | 31 to 60 days | 2,794,727 | 3,473,684 | | 61 to 90 days | 2,835,625 | 2,918,458 | | Over 90 days | 7,221,937 | 6,490,937 | | Total | 17,109,593 | 18,535,915 | Management Discussion and Analysis This section analyzes China's pharmaceutical industry trends, reviews the Group's overall performance and strategic initiatives across manufacturing, distribution, and retail segments, and highlights progress in digital transformation and social responsibility Industry Overview - China's GDP grew by 5.3% year-on-year in H1 2025, with overall stable economic operations[47] - China's pharmaceutical industry is undergoing structural adjustments, with short-term overall growth pressure; in H1 2025, revenue for large-scale pharmaceutical manufacturing decreased by 1.2% year-on-year, and total profit decreased by 2.8%[48] - Long-term drivers for the pharmaceutical industry include an aging population, 'Healthy China' initiatives, and enhanced innovation capabilities[48] - Traditional Chinese Medicine policies are strengthening, innovative drug development receives full-chain support, and AI technology will empower all aspects of the pharmaceutical industry[49] - Coordinated development and governance of healthcare, medical services, and pharmaceuticals are deepening, with expanded centralized procurement, full implementation of DRG/DIP payment reforms, and ongoing anti-corruption efforts benefiting leading and well-regulated enterprises[50] Group Performance and Highlights - The Group actively implements national strategies, fosters new quality productive forces, strengthens strategic emerging industry layouts, promotes R&D innovation, achieves steady revenue growth, and enhances operational resilience[51] - The Group is a leading integrated pharmaceutical company in China, ranking third overall in the industry, with its pharmaceutical manufacturing business ranking second among the top 100 pharmaceutical industrial enterprises, and its pharmaceutical distribution business ranking third in scale[51] - CR Sanjiu rose to 29th in Ipsos' '2025 China Brand Influence Index (BII)', while 'Jianzhong', 'Dong-E-E-Jiao', and 'Yuting' were listed among 'China's 500 Most Valuable Brands'[52] Group Performance and Highlights | Metric | H1 2025 (RMB million) | H1 2024 (RMB million) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Total Revenue | 131,866.8 | 128,597.6 | +2.5% | | Gross Profit | 21,509.6 | 20,933.5 | +2.8% | | Overall Gross Margin | 16.3% | 16.3% | Flat | | Net Profit | 5,053.6 | 5,540.6 | -8.8% | | Profit Attributable to Owners of the Company | 2,077.3 | 2,604.8 | -20.3% | | Basic Earnings Per Share (RMB) | 0.33 | 0.41 | -19.5% | | Interim Dividend (RMB per share) | 0.072 | 0.083 | -13.2% | - Excluding the impact of one-off items such as impairment of associates, the Group's net profit slightly decreased by 1.3% year-on-year, and profit attributable to owners of the Company slightly decreased by 4.7% year-on-year[54] Pharmaceutical Business The pharmaceutical business saw 4.3% segment revenue growth, with increases across all sub-segments, driven by strategic initiatives including industrial integration, R&D investment, full-chain development, and international expansion to enhance competitiveness (1) Financial Performance Pharmaceutical Business Segment Revenue | Pharmaceutical Business Segment Revenue | H1 2025 (RMB million) | H1 2024 (RMB million) | Y-o-Y Growth | | :--- | :--- | :--- | :--- | | Traditional Chinese Medicine (TCM) | 13,062.0 | 11,968.7 | +9.1% | | - OTC drugs | 8,656.4 | 9,472.0 | -8.6% | | - Prescription drugs | 4,405.6 | 2,496.7 | +76.5% | | Chemical Drugs | 8,928.3 | 9,497.4 | -6.0% | | - OTC drugs | 2,490.4 | 2,620.7 | -5.0% | | - Prescription drugs | 5,775.6 | 6,192.3 | -6.7% | | - APIs | 662.3 | 684.4 | -3.2% | | Biologics | 1,269.6 | 1,134.9 | +11.9% | | Nutritional Health Products and Others | 1,548.4 | 1,192.2 | +29.9% | | Total | 24,808.3 | 23,793.2 | +4.3% | - The gross margin for the pharmaceutical business was 59.3%, a slight decrease of 0.8 percentage points from the prior year[55] - Revenue from TCM prescription drugs increased by 76.5% year-on-year, mainly due to the acquisition of Tasly Pharmaceutical; nutritional health products and other businesses saw significant revenue growth of 29.9%, primarily due to the acquisition of Sichuan Nangere Biotechnology Co., Ltd[57] - As of the reporting period, the Group operated 83 production bases and 561 production lines, manufacturing 944 products, with 555 included in the National Medical Insurance Catalog and 235 in the Essential Drug List[56] (2) Key Initiatives a. Promoting Industrial Integration and Strengthening External Development - Completed acquisitions of Nangere and Tasly Pharmaceutical, accelerating business integration, consolidating a leading position in the TCM industry, and enhancing TCM innovation capabilities[58] - Following the consolidation of Green Cross Hong Kong, implemented a business center penetration management model to enhance the competitiveness of the blood products segment[58] - Established China Resources Pharmaceutical (Chengdu) Innovation Investment Fund Partnership (Limited Partnership) with a fund size of RMB 1 billion, focusing on investments in innovative chemical drugs, biologics, and high-end medical devices[59] - CR Double-Crane reached an exclusive cooperation agreement with Henan Zhongshuai Pharmaceutical for Dextromethylphenidate Hydrochloride Extended-Release Capsules (Guanzhu) in Mainland China[60] - CR Sanjiu and Nanjing Aierpu Regenerative Medical Technology reached a joint development cooperation for the HiCM–188 (iPSC cardiomyocyte) project, expanding into the cell therapy sector[60] b. Fostering New Quality Productive Forces and Enhancing Innovation Momentum - Continued to increase R&D investment, with total R&D expenditure of RMB 1.25 billion during the reporting period; as of the end of the period, there were 476 R&D projects, including 178 new drug projects[61] - Operates 2 national key laboratories, 4 national engineering technology research centers, and other R&D platforms, with a team of 3,868 R&D professionals, of whom 42.0% hold master's or doctoral degrees[61] - In TCM, 1 classic formula (Yiqi Qingfei Granules) was successfully approved; in biologics, 10% Human Immunoglobulin for Intravenous Injection was successfully approved for production[62] - In chemical drugs, obtained 19 chemical drug registration approvals, including Levetiracetam Oral Solution, and 4 products passed generic drug consistency evaluations[62] - Received 1 national/provincial-level award and 7 national/provincial-level project approvals[63] - Actively expanded external innovation and cooperation, establishing strategic partnerships with Hong Kong Nano and Advanced Materials Institute, Hong Kong University of Science and Technology, Sichuan University, and others to build an innovation ecosystem[64] c. Strengthening Full Industrial Chain Construction and Enhancing Industrial Competitiveness - Upstream, promoted self-sufficiency of key raw materials, adding over 1,500 mu of medicinal herb cultivation bases for Lysimachia, Wild Chrysanthemum, Plantago, etc[65] - In the blood products sector, cumulative plasma collection reached 320 tons in H1, a 7.2% year-on-year increase, exceeding the industry average growth rate[65] - Midstream, continuously promoted cost reduction, efficiency improvement, and quality enhancement; CR Jiangzhong fully implemented 22 lean projects, ensuring product supply through production process innovation and organizational optimization[66] - Downstream, vigorously promoted marketing model transformation and actively participated in centralized procurement, with 141 products selected in national centralized drug procurement[67] - Strengthened online drug channel expansion, establishing strategic partnerships with JD Pharmacy, Ali Health Pharmacy, Ping An Good Doctor, and others[67] d. Promoting International Development and Expanding New Growth Areas - Its Xuesaitong preparations have gained market access in 15 countries globally, and Dihydroartemisinin-Piperaquine tablets received their first Global Fund procurement order[68] - Established Dong-E-E-Jiao International Co., Ltd. in Hong Kong to build an overseas business hub, and signed a strategic cooperation agreement with Korea Cheong Kwan Jang[68] - Medical devices have advanced registration applications in over 50 countries, and plasma collection products hold over 20% market share in Europe[69] Pharmaceutical Distribution and Retail Business Pharmaceutical distribution revenue grew by 2.3% and retail by 11.4%, largely due to high-value DTP business, with the Group enhancing market coverage and services through integrated coordination, deep marketing, and business model innovation (1) Financial Performance Pharmaceutical Distribution and Retail Business Performance | Business Segment | H1 2025 Revenue (RMB million) | H1 2024 Revenue (RMB million) | Y-o-Y Growth | Gross Margin | | :--- | :--- | :--- | :--- | :--- | | Pharmaceutical Distribution | 108,329.7 | 105,882.4 | +2.3% | 5.9% | | Pharmaceutical Retail | 5,514.6 | 4,949.4 | +11.4% | 6.1% | - Pharmaceutical retail business growth was primarily driven by rapid revenue growth in high-value direct-to-patient (DTP) business, with DTP revenue approximately RMB 3.76 billion, a year-on-year increase of approximately 14.1%[70] - Retail business gross margin decreased by 0.4 percentage points to 6.1%, mainly due to the increased proportion of lower-margin DTP business revenue[70] (2) Key Initiatives - As of the reporting period, the pharmaceutical distribution network covered 28 provinces nationwide with approximately 220,000 customers; there were 704 self-operated retail pharmacies, including 279 DTP pharmacies (187 'dual-channel' pharmacies)[71] - Promoted integrated business coordination, deepened strategic key account management system construction, strengthened value chain synergy, and optimized product resource acquisition mechanisms[72] - Accelerated the shift from traditional commercial distribution to a dual-driven model of distribution plus deep marketing, strategically focusing on specialty drugs, chronic diseases, and retail[73] - Deep marketing business covers 31 provinces, 18,000 medical terminals, and 68,000 retail stores[73] - Medical device distribution revenue increased by 8% year-on-year, strengthening product introduction with 7 products introduced through centralized negotiation and 11 new terminal innovation service projects in H1[73] - CR Regional Testing Center officially commenced operations, building a comprehensive testing service system covering 'in-hospital—out-of-hospital—home' scenarios[73] - Promoted business model innovation, collaborating with over 10 key hospitals on COE (Center of Excellence) projects, assisting commercial insurance in building digital platforms, and launching a new 'medical + pharmaceutical + insurance' three-dimensional linkage paradigm[74] - Continuously strengthened professional pharmacy construction, optimized operating categories, improved operational quality, fully launched the 'Run Care' doctor-patient management platform, managing 820,000 patients[74] Accelerating Digital and Intelligent Transformation to Empower Business Quality and Efficiency - Deepened intelligent manufacturing, completing the development and implementation of smart breeding platforms for the donkey industry, TCM material planting and traceability management, and plasma station SCRM systems[75] - 4 production bases received the '2025 Provincial/Municipal Advanced Smart Factory' honor[75] - Empowered pharmaceutical distribution by fully promoting deep integration of digitalization with business, centered around platforms such as 'Runyao Mall', 'Runyaotong', 'Run Care', and 'Runyao Premium'[76] - Implemented 'Runyaotong' digital field promotion assistant in Hubei, Henan, Hunan, and other regions, and launched drug traceability code platforms in Shanghai, Beijing, Inner Mongolia, and other regions[76] Adhering to Green Development and Practicing Social Responsibility - Participated in drafting the 'Construction Standards for Low-Carbon Logistics Parks in the Pharmaceutical Industry' and led the drafting of three group standards, including the 'Guidelines for Building Waste-Free Factories in Pharmaceutical Enterprises'[77] - Actively deployed distributed photovoltaic power generation projects, with 2 production bases completing grid connection for 4.1 MW rooftop distributed photovoltaic power generation projects, providing over 4.34 million kWh of clean electricity and reducing carbon emissions by approximately 2,500 tons annually[77] - MSCI-ESG rating maintained 'A' for three consecutive years, with CR Sanjiu upgraded from BB to A, and Dong-E-E-Jiao from B to BB[77] - Upgraded transportation vehicles in pharmaceutical distribution, gradually phasing out traditional fuel vehicles and introducing new energy vehicles[77] Outlook and Future Strategies The Group aims to be a trusted, innovation-driven leader, focusing on five strategic directions: innovation, optimized layout, external expansion, operational excellence, and digital/AI empowerment, to enhance competitiveness and consolidate its industry-leading position - Adhere to innovation-driven development, focusing on major disease areas such as oncology, autoimmune diseases, and cardiovascular/cerebrovascular diseases, strengthening the construction of differentiated innovative R&D platforms[79] - Adhere to optimized layout, consolidating and enhancing business advantages in TCM and chemical drugs, vigorously developing biologics, specialty drugs, high-end medical devices, synthetic biology, and other fields[79] - Adhere to external expansion, continuing to increase investment and M&A efforts, leveraging the pioneering role of industrial funds[79] - Adhere to operational excellence, deeply implementing differentiated classified management and improving management quality[79] - Adhere to digital and AI empowerment, exploring the application of new technologies like artificial intelligence in R&D, production, and sales to help improve enterprise operational efficiency and quality[80] Other Information This section covers the Group's liquidity, financial resources, asset pledges, contingent liabilities, human resources, post-reporting events, and interim dividend declaration, alongside corporate governance, securities trading compliance, and audit committee review of interim results Liquidity and Financial Resources - As of June 30, 2025, cash and cash equivalents amounted to RMB 17,673.9 million, primarily denominated in RMB and HKD[81] - Approximately 75.4% of total bank borrowings are due within one year (December 31, 2024: 70.5%)[82] Liquidity and Financial Resources | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current Ratio | 1.4：1 | 1.4：1 | | Net Debt-to-Equity Ratio | 57.2% | 52.3% | Cash Flow | Cash Flow | H1 2025 (RMB million) | H1 2024 (RMB million) | | :--- | :--- | :--- | | Net cash from operating activities | 1,531.0 | (1,019.9) | | Net cash used in investing activities | (5,017.3) | (3,460.5) | | Net cash from financing activities | 4,731.2 | 2,115.9 | Pledge of Assets - As of June 30, 2025, the Group's total borrowings were RMB 71,415.1 million, of which RMB 2,987.6 million were pledged, representing 4.2% of total bank borrowings[85] - Certain trade and bills receivables with a total net book value of RMB 1,553.1 million were pledged as security[85] Contingent Liabilities - As of June 30, 2025, the Group had no significant contingent liabilities[86] Human Resources - As of June 30, 2025, the Group employed approximately 86,000 staff in Mainland China and Hong Kong[87] - Remuneration is determined based on performance, experience, and market rates, with performance-based incentives granted on a discretionary basis, and other benefits including medical insurance and training[87] Events After the Reporting Period - The Group had no significant events after the reporting period and up to the date of this announcement[88] Declaration of Dividends - The Board resolved to declare an interim dividend of RMB 0.072 per share for the six months ended June 30, 2025 (H1 2024: RMB 0.083)[89] - The interim dividend will be paid on October 31, 2025, by default in HKD cash at an exchange rate of RMB 1.0 to HKD 1.0957, amounting to HKD 0.0789 per share[89] - Shareholders may elect to receive dividends in RMB by submitting the dividend currency election form by 4:30 p.m. on October 13, 2025[89][90] - To determine shareholders entitled to the interim dividend, the Company will suspend share transfer registration from September 15 to September 16, 2025[91] Corporate Governance - The Company has adopted the Corporate Governance Code set out in Appendix C1 of the HKEX Listing Rules[92] - During the reporting period, the Company complied with the Corporate Governance Code, except for the temporary dual role of Chairman and CEO, which has been rectified with Mr. Cheng Jie's appointment as President[92] - The Chairman of the Board was unable to attend the Annual General Meeting held on May 23, 2025, due to other work commitments, which does not comply with Code Provision F.2.2[94] Standard Code for Securities Transactions - The Company has adopted the Standard Code set out in Appendix C3 of the Listing Rules, and Directors have confirmed compliance throughout the reporting period[96] Purchase, Sale or Redemption of Listed Securities - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any listed securities during the reporting period or up to the date of this announcement, nor did they hold any treasury shares[97] Review of Interim Results by KPMG - The interim financial information is unaudited but has been reviewed by KPMG in accordance with Hong Kong Standard on Review Engagements 2410, resulting in an unmodified review report[98] Audit Committee - The Company's Audit Committee has reviewed the Group's unaudited condensed consolidated interim results for the six months ended June 30, 2025[99] Publication of Interim Results and 2025 Interim Report on HKEX and Company Website - The interim results announcement has been published on the HKEX website and the Company's website, and the 2025 interim report will also be published and sent to shareholders who wish to receive a printed copy[100]