康缘药业(600557) - 2025 Q2 - 季度财报

Section I Definitions This section defines common terms used in the report to ensure a clear understanding of professional terminology Definitions of Common Terms This chapter provides definitions of common terms used in the report to ensure a clear understanding of professional terminology - One Body, Two Wings: A research and development strategy with traditional Chinese medicine as the core, complemented by chemical and biological drugs[14] - Innovative Drug BD: Business development for innovative drugs, achieving business growth through strategic collaborations, licensing deals, and M&A[14] - Medical Insurance Catalog: Standards for drug payment by national basic medical insurance, work-related injury insurance, and maternity insurance funds[14] Section II Company Profile and Key Financial Indicators The company's key financial indicators for the reporting period show performance pressure, with significant declines in operating revenue, total profit, and net profit attributable to the parent company, and a substantial decrease in net cash flow from operating activities. The company completed the acquisition of 100% equity in Zhongxin Pharmaceutical in December 2024 and retrospectively adjusted the 2024 semi-annual data. As of June 30, 2025, the company's total share capital decreased due to the repurchase and cancellation of shares Company Information The company's Chinese name is Jiangsu Kangyuan Pharmaceutical Co., Ltd., abbreviated as Kangyuan Pharmaceutical, with Gao Haixin as its legal representative - Company's Chinese Name: Jiangsu Kangyuan Pharmaceutical Co., Ltd., Chinese Abbreviation: Kangyuan Pharmaceutical[16] - Company's Legal Representative: Gao Haixin[16] Contact Person and Information The company's Board Secretary is Pan Peng, Securities Affairs Representative is Chen Yanxi, and the contact address is Jiangning Industrial City, Lianyungang Economic and Technological Development Zone, Jiangsu Province - Board Secretary: Pan Peng, Securities Affairs Representative: Chen Yanxi[17] - Contact Address: Jiangning Industrial City, Lianyungang Economic and Technological Development Zone, Jiangsu Province[17] Overview of Basic Information Changes The company's registered and office addresses are both located in Jiangning Industrial City, Lianyungang Economic and Technological Development Zone, Jiangsu Province, with no historical changes during the reporting period - The company's registered and office addresses are both located in Jiangning Industrial City, Lianyungang Economic and Technological Development Zone, Jiangsu Province[18][19] - Historical changes in the company's registered address: None[18] Overview of Information Disclosure and Document Custody Location Changes The company designates China Securities Journal, Shanghai Securities News, Securities Daily, and Securities Times as information disclosure newspapers, with the semi-annual report published on the Shanghai Stock Exchange website, and documents available at the company's Securities Affairs Department and the Shanghai Stock Exchange - Selected information disclosure newspapers: China Securities Journal, Shanghai Securities News, Securities Daily, Securities Times[20] - Website address for semi-annual report publication: www.sse.com.cn[20](index=20&type=chunk) Company Stock Overview The company's stock is A-shares, listed and traded on the Shanghai Stock Exchange, with stock abbreviation Kangyuan Pharmaceutical and stock code 600557 - Stock Type: A-shares, Listing Exchange: Shanghai Stock Exchange, Stock Abbreviation: Kangyuan Pharmaceutical, Stock Code: 600557[21] Company's Key Accounting Data and Financial Indicators During the reporting period, the company's key financial indicators showed performance pressure, with significant declines in operating revenue, total profit, and net profit attributable to the parent company, and a substantial decrease in net cash flow from operating activities. The company completed the acquisition of 100% equity in Zhongxin Pharmaceutical in December 2024 and retrospectively adjusted the 2024 semi-annual data. As of June 30, 2025, the company's total share capital decreased due to the repurchase and cancellation of shares - The company completed the acquisition of 100% equity in Zhongxin Pharmaceutical in December 2024 and retrospectively adjusted the previously disclosed 2024 semi-annual data[25] - As of June 30, 2025, the company's total outstanding share capital was 566,158,806 shares, a decrease of 15,638,646 shares from the beginning of the period, primarily due to the repurchase and cancellation of shares[26] Key Accounting Data 2025 Semi-Annual Key Accounting Data (Consolidated Statements) | Indicator | Current Period (Jan-Jun) | Prior Year (Adjusted) | Change Ratio (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 1,641,577,928.56 yuan | 2,257,799,801.27 yuan | -27.29 | | Total Profit | 180,782,407.71 yuan | 277,264,175.33 yuan | -34.80 | | Net Profit Attributable to Parent Company Shareholders | 142,369,353.66 yuan | 237,742,953.92 yuan | -40.12 | | Net Profit Attributable to Parent Company Shareholders After Deducting Non-Recurring Gains and Losses | 119,995,673.79 yuan | 220,704,704.05 yuan | -45.63 | | Net Cash Flow from Operating Activities | 144,348,147.85 yuan | 369,230,610.83 yuan | -60.91 | | Net Assets Attributable to Parent Company Shareholders (Period-End) | 4,656,945,168.31 yuan | 4,514,575,814.65 yuan | 3.15 | | Total Assets (Period-End) | 6,833,386,551.55 yuan | 6,906,762,381.38 yuan | -1.06 | Key Financial Indicators 2025 Semi-Annual Key Financial Indicators (Consolidated Statements) | Indicator | Current Period (Jan-Jun) | Prior Year (Adjusted) | Change Ratio (%) | | :--- | :--- | :--- | :--- | | Basic Earnings Per Share (yuan/share) | 0.25 | 0.41 | -39.02 | | Diluted Earnings Per Share (yuan/share) | 0.25 | 0.41 | -39.02 | | Basic Earnings Per Share After Deducting Non-Recurring Gains and Losses (yuan/share) | 0.21 | 0.38 | -44.74 | | Weighted Average Return on Net Assets (%) | 3.10 | 4.76 | Decrease of 1.66 percentage points | | Weighted Average Return on Net Assets After Deducting Non-Recurring Gains and Losses (%) | 2.62 | 4.42 | Decrease of 1.80 percentage points | Non-Recurring Gains and Losses Items and Amounts During the reporting period, the company's total non-recurring gains and losses amounted to 22.3737 million yuan, primarily from government subsidies recognized in current profit or loss and gains/losses from entrusted investments or asset management, also affected by non-current asset disposal gains/losses and non-operating income/expenses 2025 Semi-Annual Non-Recurring Gains and Losses Items and Amounts | Non-Recurring Gains and Losses Item | Amount (yuan) | | :--- | :--- | | Gains and losses from disposal of non-current assets | -878,220.04 | | Government grants recognized in current profit or loss | 25,266,214.82 | | Gains and losses from entrusted investments or asset management | 4,790,088.55 | | Other non-operating income and expenses apart from the above | -2,213,708.25 | | Less: Income tax impact | 3,888,556.49 | | Impact on minority interests (after tax) | 702,138.72 | | Total | 22,373,679.87 | Section III Management Discussion and Analysis This section provides an in-depth analysis of the company's industry, business operations, core competitiveness, and key financial performance during the reporting period, along with potential risks and investor return initiatives Description of the Company's Industry and Main Business Operations During the Reporting Period Kangyuan Pharmaceutical operates in the pharmaceutical manufacturing industry, primarily engaged in drug R&D, production, and sales, with a focus on innovative traditional Chinese medicine development, while actively expanding into chemical and biological drugs. The company's business model covers the entire process from R&D to sales. The pharmaceutical industry faces challenges from centralized procurement and homogeneous competition, but the traditional Chinese medicine industry is rapidly developing with policy support. The company holds a leading position in the industry, with outstanding R&D capabilities and intelligent manufacturing prowess Company's Main Business - The company holds 214 drug production approvals, including 50 exclusive varieties[32] - Key traditional Chinese medicine product lines focus on respiratory and infectious diseases (e.g., Jinzhen Oral Liquid, Reduning Injection), cardiovascular and cerebrovascular diseases (e.g., Ginkgo Diterpene Lactone Glucamine Injection), gynecological diseases (e.g., Guizhi Fuling Capsules), and orthopedic diseases (e.g., Fufang Nanxing Analgesic Plaster)[32] - The R&D pipeline includes 79 innovative drug projects, with 7 improved traditional Chinese medicine new drugs and 19 classic formula new drugs[32] - During the reporting period, 1 traditional Chinese medicine registration approval was obtained, 3 traditional Chinese medicine new drugs applied for production, 4 traditional Chinese medicine new drugs entered Phase III clinical trials, and 15 traditional Chinese medicine new drugs entered Phase II clinical trials[33] - For overseas business, the company obtained 2 natural health product marketing licenses in Canada and 2 proprietary traditional Chinese medicine marketing licenses in Hong Kong[33] Company's Business Model - R&D Model: Driven by scientific and technological innovation, building an internationally advanced innovative drug R&D system, implementing a 'develop one generation, plan one generation' strategy, and focusing on unmet clinical needs[35] - Procurement Model: A dedicated procurement center is responsible for the centralized bidding and procurement of all materials required for the company's R&D, production, and operations, optimizing the supplier base and reducing procurement costs[37] - Production Model: Strictly adheres to GMP standards for product manufacturing, utilizing an ERP system for refined management of the entire production process, ensuring drug production supply and quality[38] - Sales Model: Primarily adopts a professional academic promotion model, building its own sales team, enhancing product awareness and physician recognition through academic activities, with main customers being pharmaceutical commercial companies[39] Industry Overview - The pharmaceutical industry faces challenges from the normalization of centralized drug procurement and homogeneous competition[40] - In the first half of 2025, driven by factors such as accelerated innovative drug exports and AI technology empowerment, the pharmaceutical industry showed significant structural differentiation[40] - The traditional Chinese medicine industry is highly valued by national policies, with 14 new traditional Chinese medicines approved for market in the first half of 2025, exceeding the total number for the entire year of 2024[41] Industry-Related Policies and Regulations - Medical Insurance: By 2025, approximately 80% of national统筹 regions will largely achieve instant settlement, and by 2026, all national medical institutions will achieve full collection and upload of drug traceability codes[43] - Pharmaceuticals: The State Council issued the 'Anti-Monopoly Guidelines in the Pharmaceutical Field,' and the National Healthcare Security Administration and National Health Commission released 'Several Measures to Support High-Quality Development of Innovative Drugs,' increasing support for innovative drug R&D[45][46] - Industry Regulation: Fourteen departments jointly issued the 'Key Points for Correcting Malpractices in Pharmaceutical Procurement and Sales and Medical Services in 2025,' continuously deepening governance in the pharmaceutical procurement and sales sector[47] Company's Industry Position - The company is a National Technology Innovation Demonstration Enterprise, National Key High-tech Enterprise, National Innovative Pilot Enterprise, National Intellectual Property Demonstration Enterprise, and one of the Top 100 Pharmaceutical Industrial Enterprises in China[48] - The company's 'Modern Traditional Chinese Medicine Intelligent Factory Based on 5G+Digital Twin' was awarded the title of 'Excellent Intelligent Factory'[48] - The company ranked first for the eighth time in the '2025 China Traditional Chinese Medicine R&D Strength Top 50 Ranking'[48] - The company successfully entered the 'Top 100 Chinese Pharmaceutical Industrial Enterprises by Main Business Revenue in 2024' list[48] Discussion and Analysis of Operations In the first half of 2025, influenced by external environment, pharmaceutical policies, and market demand fluctuations in respiratory and cardiovascular/cerebrovascular diseases, the company experienced temporary performance pressure and declining sales. The company actively responded by continuously strengthening internal governance, deepening marketing academic leadership and compliance, accelerating R&D achievements, and steadily advancing new drug development. Concurrently, the company achieved specific operational results in sales, production management, and corporate culture development Overview - In the first half of 2025, the company faced temporary performance pressure, with declining sales performance[49] - During the reporting period, the company's consolidated statements achieved operating revenue of 1.642 billion yuan, net profit attributable to shareholders of 142 million yuan, and net operating cash flow of 144 million yuan[49] - R&D achievements accelerated, with the traditional Chinese medicine new drug Yunu Jian Granules obtaining registration approval, and multiple innovative traditional Chinese, chemical, and biological drugs entering clinical stages[50] - Obtained 2 natural health product marketing licenses in Canada and 2 proprietary traditional Chinese medicine marketing licenses in Hong Kong[51] Detailed Introduction to Company's Operations R&D Aspects The company adheres to the 'One Body, Two Wings' R&D strategy, with continuous traditional Chinese medicine R&D achievements and deep pipeline布局 in chemical and biological innovative drugs. Multiple traditional Chinese medicine new drugs entered late-stage clinical trials, biological drugs made progress in neurological, metabolic, and autoimmune fields, and the Class 1 innovative chemical drug Flunopiperazine Tablets completed Phase II clinical trials. Technology platform and soft power construction improved simultaneously, with 5 national-level projects approved and 80 invention patents applied for - Traditional Chinese medicine R&D achievements continuously materialized: Yunu Jian Granules obtained drug registration certificate; Lianshen Gengnian Granules, Guben Xiaozhen Granules, and Epimedium Total Flavonoids Capsules obtained drug clinical trial approval notices[54] - Traditional Chinese medicine products: Suxin Tongqiao Granules, Shuangyu Granules, Reduning Granules are in Pre-NDA stage; Maxing Zhixiao Granules, Jiuwei Shufeng Pingchuan Granules, Cistanche Runtong Oral Liquid, Phlebitis Granules are in Phase III clinical trials; Longqi Capsules, LWDH Glycoside Tablets are in NDA stage[55] - Class 1 innovative biological drugs: ZX1305 Injection (optic nerve injury) completed Phase IIa clinical trials; ZX1305E Eye Drops (neurotrophic keratitis), ZX2021 Injection (overweight or obesity; type 2 diabetes), ZX2010 Injection (type 2 diabetes; overweight or obesity) are in Phase II clinical trials[56] - Class 1 innovative chemical drugs: Flunopiperazine Tablets (Alzheimer's disease) completed Phase II clinical trials; Quinolicin Tablets (benign prostatic hyperplasia), WXSH0493 Tablets (hyperuricemia), SIPI-2011 Tablets (ventricular arrhythmia) are in Phase II clinical trials; KYS2301 Gel (atopic dermatitis) obtained clinical approval[61][62] - Technology Platform and Soft Power Construction: 5 national-level projects approved, 80 invention patents applied for, 33 'dual-core' papers published, and 15 SCI papers published[64] Sales Aspects The company reshaped academic leadership for core products, optimized promotional content, facilitated 10 products into guideline consensus, and conducted over 4,500 brand-specific events. Systematized training enhanced marketing personnel's professional capabilities and compliance awareness, completing academic capability certification for nearly 2,600 marketing staff. Deepened tiered management expanded terminal market coverage for core products and supported the development of diverse business formats such as OTC, channel sales, and new retail - Completed the update and iteration of 248 sets of product academic materials, promoting 10 products including Reduning Injection and Guizhi Fuling Capsules into 6 guideline consensuses[66] - Cumulatively conducted over 4,500 brand-specific events, covering over 35,000 person-times[67] - Conducted nearly 100 compliance training sessions, completing academic capability certification for nearly 2,600 marketing personnel[68] - Strengthened refined terminal management, strictly focused on increasing volume at core terminals, promoted grassroots market development, and meticulously planned the out-of-hospital market, advancing OTC sales and price maintenance[70][71] Production Management Aspects The company is committed to building a zero-risk production management system, continuously advancing intelligent manufacturing research and construction, enhancing intelligence levels, and completing the development and operation of 3 production process models. Strengthened quality management and research, improved supplier management, enhanced production quality management documents, achieved a 100% first-pass yield for finished products, and successfully passed 3 GMP compliance inspections by national, provincial, and municipal drug regulatory authorities - Based on the 'National Key Laboratory for Process Control and Intelligent Manufacturing Technology of Traditional Chinese Medicine' platform, continuously improved intelligence levels, completing the development and operation of 3 production process models[73] - Established a quality heterogeneous database, cumulatively collecting 4.39 million online near-infrared spectra and 827 batches of physical property data[73] - Improved supplier qualification cancellation and circuit breaker supply mechanisms, enhancing supplier quality control; completed the upgrade of 43 production quality management documents, achieving a 100% first-pass yield for finished products[74] - Successfully passed 3 GMP compliance, special, and unannounced inspections by national, provincial, and municipal drug regulatory authorities[74] Corporate Culture Development Aspects The company fostered a strong atmosphere of striving for excellence, holding over 90 training events in the first half of the year, covering approximately 5,500 person-times. Through the Kangyuan Online Academy and AI coaching platform, it simultaneously enhanced knowledge accumulation, capability improvement, and business empowerment, reshaping the business training model for marketing personnel - In the first half of the year, a total of over 90 training events were held, covering approximately 5,500 person-times[75] - Introduced an AI coaching system to reshape the business training model for marketing personnel, and equipped with professional e-coaches to comprehensively empower the marketing team's professional capabilities[76] Analysis of Core Competitiveness During the Reporting Period Under the new normal of high-quality development in the pharmaceutical industry, the company adheres to innovation-driven strategies, consolidates core business advantages, steadily advances R&D and production technology innovation, actively expands the industrial chain, and continuously enhances its core competitiveness. Core competitiveness is primarily reflected in product advantages, technology and R&D advantages, and production process advantages Product Advantages - As of the end of the reporting period, the company had obtained a total of 214 drug production approvals (147 traditional Chinese medicines, 61 chemical drugs, and 6 raw materials), of which 50 were exclusive traditional Chinese medicine varieties[77] - The company has 4 protected traditional Chinese medicine varieties: Epimedium Total Flavonoids Capsules, Jiuwei Xifeng Granules, Shenwu Yishen Tablets, and Qiwei Tongbi Oral Liquid[77] - A total of 117 of the company's products are listed in the 2024 National Medical Insurance Catalog, including 48 Class A, 69 Class B, and 25 exclusive varieties[77] - A total of 43 varieties are included in the National Essential Drug List, of which 6 are exclusive varieties[77] Technology and R&D Advantages - As of the end of the reporting period, the company had cumulatively obtained 756 authorized invention patents and owned 58 traditional Chinese medicine new drugs (47 of which are exclusive varieties), positioning its R&D strength as leading among domestic traditional Chinese medicine enterprises[78] - The company has a scientific research and innovation team composed of nearly 800 researchers from various specialties[78] - The company has successively established national-level scientific research platforms such as the National Postdoctoral Research Workstation, National Certified Enterprise Technology Center, and National Key Laboratory for Process Control and Intelligent Manufacturing Technology of Traditional Chinese Medicine[78] - Established a 'industry-university-research' collaborative innovation mechanism, co-building research centers/platforms with universities and research institutes such as Nanjing University of Chinese Medicine and Shanghai Institute of Materia Medica, Chinese Academy of Sciences[78] Production Process Advantages - The company highly values the application of modern pharmaceutical new technologies in traditional Chinese medicine production, continuously exploring the path of technologically innovative intelligent manufacturing for traditional Chinese medicine[79] - The company's products maturely apply a series of new technologies, processes, and equipment, including membrane separation, macroporous resin adsorption, and continuous countercurrent extraction[79] - The company continuously promotes 'intelligent transformation and digital upgrading,' successively achieving digital upgrades for intelligent extraction and refining factories for traditional Chinese medicine, intelligent injection workshops for traditional Chinese medicine, and intelligent solid preparation factories for traditional Chinese medicine[79] - As one of the 6 pilot units for intelligent supervision of traditional Chinese medicine injections by the National Medical Products Administration, the company carried out the construction of a full-process intelligent supervision system, represented by Reduning Injection[80] - The company's 'Digital Extraction and Refining Factory' was listed as one of the first batch of intelligent manufacturing pilot demonstration projects by the Ministry of Industry and Information Technology[81] Key Operating Performance During the Reporting Period During the reporting period, the company's operating revenue and various expenses decreased year-on-year, with significant declines in sales and R&D expenses. Financial expenses turned from negative to positive, primarily due to macroeconomic interest rate cuts. Net cash flow from operating activities and net cash flow from investing activities both decreased substantially. The company's asset and liability structure underwent multiple changes, with decreases in trading financial assets, other current assets, other non-current assets, accounts payable, employee compensation payable, treasury stock, and surplus reserves, while receivables financing, prepayments, notes payable, and taxes payable increased. The company's trading financial assets at period-end were 20 million yuan, a 50% decrease from the beginning of the period. Jiangsu Kangyuan Sunshine Pharmaceutical Co., Ltd., a significant subsidiary, achieved operating revenue of 277.84 million yuan and net profit of 14.42 million yuan during the reporting period Analysis of Main Business Analysis of Changes in Relevant Financial Statement Items for 2025 Semi-Annual Period | Item | Current Period Amount (yuan) | Prior Year Amount (yuan) | Change Ratio (%) | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 1,641,577,928.56 | 2,257,799,801.27 | -27.29 | Product sales fell short of expectations | | Operating Cost | 478,019,238.39 | 574,523,708.86 | -16.80 | | | Sales Expenses | 571,377,252.05 | 854,434,478.61 | -33.13 | Product sales fell short of expectations | | Administrative Expenses | 166,768,880.59 | 211,227,085.87 | -21.05 | | | Financial Expenses | -780,531.04 | -5,496,283.99 | N/A | Macroeconomic interest rate cuts, reduced interest income | | R&D Expenses | 246,565,004.87 | 363,995,534.19 | -32.26 | Reduced R&D project milestone expenditures | | Net Cash Flow from Operating Activities | 144,348,147.85 | 369,230,610.83 | -60.91 | Higher cash collection in the prior year | | Net Cash Flow from Investing Activities | -227,265,238.25 | 46,064,902.08 | N/A | Higher recovery of bank wealth management products in the prior year | | Net Cash Flow from Financing Activities | -23,172,212.90 | -318,288,310.45 | N/A | Cash dividends distributed and shares repurchased in the prior year | | Other Income | 28,079,094.46 | 42,645,880.99 | -34.16 | Higher government subsidies in the prior year | | Non-Operating Income | 301,626.74 | 10,809,360.42 | -97.21 | Accounts payable not required to be paid transferred in the prior year | | Non-Operating Expenses | 4,122,557.37 | 6,508,013.46 | -36.65 | Higher donations in the prior year | Analysis of Assets and Liabilities Changes in Assets and Liabilities for 2025 Semi-Annual Period | Item | Current Period-End Amount (yuan) | % of Total Assets | Prior Year-End Amount (yuan) | % of Total Assets | Change from Prior Year-End (%) | Reason for Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Trading Financial Assets | 20,000,000.00 | 0.29 | 40,000,000.00 | 0.58 | -50.00 | Higher recovery of bank wealth management products in the current period | | Receivables Financing | 316,772,248.88 | 4.64 | 174,623,132.05 | 2.53 | 81.40 | Increased acceptance collection in the current period | | Prepayments | 47,876,096.90 | 0.70 | 26,562,911.57 | 0.38 | 80.24 | Higher prepayments for current accounts in the current period | | Other Current Assets | 38,805,477.62 | 0.57 | 87,127,580.55 | 1.26 | -55.46 | Reclassification of taxes payable reduced in the current period | | Other Non-Current Assets | 18,199,936.13 | 0.27 | 64,402,198.69 | 0.93 | -71.74 | Reduced prepayments for long-term assets in the current period, with some converted to assets | | Notes Payable | 109,177,870.35 | 1.60 | 37,698,661.68 | 0.55 | 189.61 | Bank acceptance bills issued in the current period not yet due for payment | | Accounts Payable | 119,584,318.36 | 1.75 | 189,174,321.63 | 2.74 | -36.79 | Increased payment for purchases in the current period | | Employee Compensation Payable | 13,654,368.10 | 0.20 | 29,058,146.10 | 0.42 | -53.01 | Year-end bonuses accrued on an accrual basis paid in the current period | | Taxes Payable | 51,443,556.75 | 0.75 | 34,988,075.94 | 0.51 | 47.03 | Corporate income tax accrued in the current period | | Treasury Stock | 0.00 | 0.00 | 211,978,588.90 | 3.07 | -100.00 | Shares repurchased by the company before December 31, 2024, were cancelled during the reporting period | | Surplus Reserves | 0.00 | 0.00 | 76,254,078.46 | 1.10 | -100.00 | Shares repurchased by the company before December 31, 2024, were cancelled during the reporting period | Analysis of Investment Status Changes in Financial Assets Measured at Fair Value for 2025 Semi-Annual Period | Asset Category | Beginning of Period Amount (yuan) | Fair Value Change Gain/Loss for Current Period (yuan) | Cumulative Fair Value Change Included in Equity (yuan) | Impairment Provision for Current Period (yuan) | Purchase Amount for Current Period (yuan) | Sale/Redemption Amount for Current Period (yuan) | Other Changes (yuan) | End of Period Amount (yuan) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Trading Financial Assets | 40,000,000.00 | | | | 475,000,000.00 | 495,000,000.00 | | 20,000,000.00 | | Receivables Financing | 174,623,132.05 | | | | | 142,149,116.83 | | 316,772,248.88 | | Other Non-Current Financial Assets | 11,210,107.40 | -3,014,448.79 | | | | | | 8,195,658.61 | | Total | 225,833,239.45 | -3,014,448.79 | | | 475,000,000.00 | 495,000,000.00 | 139,134,668.04 | 344,967,907.49 | Analysis of Major Holding and Participating Companies Key Financial Data of Jiangsu Kangyuan Sunshine Pharmaceutical Co., Ltd. | Company Name | Company Type | Main Business | Registered Capital (ten thousand yuan) | Total Assets (ten thousand yuan) | Net Assets (ten thousand yuan) | Operating Revenue (ten thousand yuan) | Operating Profit (ten thousand yuan) | Net Profit (ten thousand yuan) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Jiangsu Kangyuan Sunshine Pharmaceutical Co., Ltd. | Subsidiary | Tablets, hard capsules, soft capsules, granules, solutions, gels, rubber plasters, oral liquids, syrups, pre-processing and extraction of traditional Chinese medicine | 4,800.00 | 42,476.82 | 31,269.96 | 27,784.44 | 1,695.33 | 1,442.20 | Other Disclosure Matters The company faces risks from policy changes (e.g., centralized drug procurement, medical insurance policy adjustments), product quality control (raw material procurement, production management), and R&D (long cycle, high investment, uncertain review, lower-than-expected commercialization). The company addresses these by closely monitoring policies, building a full lifecycle quality management system, continuously conducting precise R&D, and establishing risk management mechanisms. The company consistently prioritizes investor returns, having cumulatively repurchased and cancelled 12,338,346 shares in 2024, with a repurchase amount of 185.9 million yuan, accounting for 47.44% of net profit attributable to the parent company. The company engages in multi-level investor relations management to actively communicate enterprise value Potential Risks - Policy Change Risk: The pharmaceutical industry is highly influenced by policies, and centralized drug procurement, medical insurance policy adjustments, etc., may bring significant impacts[89] - Product Quality Control Risk: Primarily stems from inherent risks (quality standards, adverse reactions) and management risks (raw and auxiliary material procurement, manufacturing, distribution and storage, clinical use)[90] - R&D Risk: Innovative drug R&D has a long cycle, high investment, and high risk; new drug approval standards and timelines are uncertain, and commercialization may fall short of expectations[92] Implementation of 'Quality Improvement, Efficiency Enhancement, and High Returns' in H1 2025 - In 2024, the company cumulatively repurchased and cancelled 12,338,346 shares, with a total payment of 185,909,622.90 yuan. This repurchase amount is treated as 2024 cash dividends, accounting for 47.44% of the net profit attributable to shareholders of the parent company in the consolidated statements[94] - In the first half of 2025, the company issued 25 interim announcements, 2 periodic reports, held 1 shareholders' meeting, 1 online performance briefing, and responded to 15 investor questions on the SSE 'e-interaction' platform, actively building communication bridges with investors[95] Section IV Corporate Governance, Environment, and Society This section details changes in the company's governance structure, including board and senior management personnel, outlines profit distribution plans, and reports on environmental information disclosure and social responsibility initiatives Changes in Company Directors, Supervisors, and Senior Management During the reporting period, changes occurred in the company's board of directors, with Sun Xiaobo and Lü Aiping elected as independent directors, and Xiao Wei resigning as chairman - Sun Xiaobo and Lü Aiping were elected as independent directors[97] - Xiao Wei resigned as chairman[97] Profit Distribution or Capital Reserve Conversion Plan The company did not propose a semi-annual profit distribution plan or capital reserve conversion to share capital plan - Not applicable to semi-annual proposed profit distribution plan or capital reserve conversion to share capital plan[98] Status and Impact of Company's Equity Incentive Plan, Employee Stock Ownership Plan, or Other Employee Incentive Measures The company's 2022 restricted stock incentive plan, due to the failure to meet the 2024 company-level performance conditions, resulted in 3,300,300 restricted shares from both the initial grant and reserved portions being ineligible for lifting restrictions, and were repurchased and cancelled on May 29, 2025 - The 2022 restricted stock incentive plan, due to the failure to meet the 2024 company-level performance conditions, resulted in 3,300,300 restricted shares from both the initial grant and reserved portions being ineligible for lifting restrictions, and were repurchased and cancelled on May 29, 2025[99] Environmental Information of Listed Companies and Their Major Subsidiaries Included in the List of Enterprises Required to Disclose Environmental Information by Law The parent company, Jiangsu Kangyuan Pharmaceutical Co., Ltd., was included in the '2025 Lianyungang City List of Enterprises Required to Disclose Environmental Information by Law' - The parent company, Jiangsu Kangyuan Pharmaceutical Co., Ltd., was included in the '2025 Lianyungang City List of Enterprises Required to Disclose Environmental Information by Law'[101] Specifics of Consolidating and Expanding Poverty Alleviation Achievements, Rural Revitalization, and Other Work During the reporting period, the company actively engaged in public welfare, investing 200,000 yuan in targeted poverty alleviation and 3.012 million yuan in charitable donations - During the reporting period, the company invested 200,000 yuan in targeted poverty alleviation[102] - Charitable donations amounted to 3.012 million yuan[102] Section V Significant Matters This section covers the fulfillment of commitments, significant related-party transactions, and the status of major contracts, including asset acquisitions and debt arrangements Fulfillment of Commitments The company's controlling shareholder, Kangyuan Group, and actual controller, Mr. Xiao Wei, continuously fulfilled their commitments to avoid horizontal competition and reduce related-party transactions, with strict adherence during the reporting period - The company's controlling shareholder, Kangyuan Group, and actual controller, Mr. Xiao Wei, continuously fulfilled their commitment to avoid horizontal competition, with no instances of horizontal competition[104] - Kangyuan Group and Mr. Xiao Wei continuously fulfilled their commitment to reduce related-party transactions, with all business dealings conducted on fair and equitable principles, and information disclosure obligations fulfilled as required[104] Significant Related-Party Transactions During the reporting period, the company engaged in multiple related-party transactions in ordinary operations, including sales of goods to related parties, provision of processing services, purchases of goods and acceptance of labor, acceptance of services, and property leases. The company advanced the construction of 'Kangyuan Pharmaceutical Science and Technology Park Project Building No. 1' and subsequent work for the acquisition of 100% equity in Jiangsu Zhongxin Pharmaceutical Co., Ltd., with Zhongxin Pharmaceutical's original shareholder Nanjing Kangzhu increasing its stake in the company to align interests. The company has related-party creditor-debtor relationships with Kangyuan Group, with some debt repayment linked to the marketing approval of Zhongxin Pharmaceutical's pipeline drugs Related-Party Transactions Related to Ordinary Operations 2025 Semi-Annual Related-Party Transactions Related to Ordinary Operations | Related-Party Transaction Category | Related Party | 2025 Estimated Amount (ten thousand yuan) | Cumulative Transaction Amount in Reporting Period (ten thousand yuan) | | :--- | :--- | :--- | :--- | | Sales of goods to related parties | Jiangsu Kangyuan Pharmaceutical Commercial Co., Ltd. and its subsidiaries | 43,000.00 | 15,215.23 | | Lease of properties to related parties | Jiangsu Kangyuan Group Co., Ltd. and its subsidiaries | 403.67 | 201.83 | | Provision of processing services to related parties | Jiangsu Kangyuan Group Co., Ltd. and its subsidiaries | 350.00 | 73.66 | | Purchase of goods and acceptance of labor | Jiangsu Kangyuan Ecological Agriculture Development Co., Ltd. | 10,000.00 | 118.74 | | Purchase of goods and acceptance of labor | Jiangsu Kangyuan Group Co., Ltd. and its other subsidiaries | 1,600.00 | 426.40 | | Purchase of goods and acceptance of labor | Jiangsu Anxilai Biotechnology Development Co., Ltd. | 5,800.00 | 2,400.81 | | Acceptance of services from related parties | Lianyungang Kangyuan Property Management Co., Ltd. | 4,400.00 | 1,103.89 | | Acceptance of services from related parties | Jiangsu Kangyuan Group Co., Ltd. and its other subsidiaries | 3,600.00 | 2,071.88 | | Acceptance of property leases from related parties | Jiangsu Kangyuan Group Co., Ltd. | 151.32 | 8.40 | | Total | | 69,304.99 | 21,620.84 | Related-Party Transactions Involving Asset or Equity Acquisition/Disposal - The 'Kangyuan Pharmaceutical Science and Technology Park Project Building No. 1' construction project has completed main structure acceptance, with exterior decoration largely finished, and interior decoration, air conditioning, laboratory installation, and outdoor ancillary works fully entering the construction phase, expected to be completed by the end of November 2025[112] - The company completed the acquisition of 100% equity in Jiangsu Zhongxin Pharmaceutical Co., Ltd., a controlled subsidiary of controlling shareholder Kangyuan Group, in December 2024, making Zhongxin Pharmaceutical a wholly-owned subsidiary of the company[114] - Nanjing Kangzhu, the original shareholder of Zhongxin Pharmaceutical, increased its stake in the company by 2,478,700 shares between February 24 and 26, 2025, with an investment of 34,228,626.33 yuan, to align interests and incentivize the R&D team[115] Related-Party Creditor-Debtor Relationships - The company has not yet repaid historical and new interest to Kangyuan Group, and the remaining principal balance will be paid in installments after Zhongxin Pharmaceutical's corresponding pipeline drugs obtain marketing approval; if R&D fails, part of the principal will not need to be repaid[117] Related-Party Fund Borrowing and Lending | Related Party | Borrowing/Lending Amount (yuan) | Start Date | Due Date | Description | | :--- | :--- | :--- | :--- | :--- | | Jiangsu Kangyuan Group Co., Ltd. | 393,495,604.01 | 2016 to 2024 | — | Historical principal debt of Zhongxin to Kangyuan Group | Major Contracts and Their Fulfillment During the reporting period, the company had no significant guarantee matters and did not disclose other major contracts - During the reporting period, the company had no significant litigation or arbitration matters[107] - During the reporting period, the company had no significant guarantee matters[106] Section VI Share Changes and Shareholder Information This section details changes in the company's share capital, including share repurchases and cancellations, restricted share movements, and provides an overview of the shareholder structure and holdings of directors, supervisors, and senior management Changes in Share Capital During the reporting period, the company's total share capital decreased by 15,638,646 shares due to the repurchase and cancellation of shares and restricted stock, with the total share capital at period-end being 566,158,806 shares Table of Share Capital Changes 2025 Semi-Annual Share Capital Changes | Change Type | Quantity Before This Change (shares) | Increase/Decrease in This Change (shares) | Quantity After This Change (shares) | | :--- | :--- | :--- | :--- | | Restricted Shares | 3,300,300 | -3,300,300 | 0 | | Unrestricted Tradable Shares | 578,497,152 | -12,338,346 | 566,158,806 | | Total Shares | 581,797,452 | -15,638,646 | 566,158,806 | Explanation of Share Capital Changes - On February 6, 2025, the company cancelled 12,338,346 shares repurchased through centralized bidding transactions, completing the share repurchase plan[122] - The remaining 3,300,300 restricted shares from the 2022 restricted stock incentive plan were repurchased and cancelled on May 29, 2025, due to the failure to meet the 2024 company-level performance conditions[123] Changes in Restricted Shares During the reporting period, all of the company's restricted shares (3,300,300 shares) were released from restrictions and cancelled, resulting in 0 restricted shares at period-end - During the reporting period, the company's restricted shares at the beginning of the period were 3,300,300 shares, with 0 shares released from restrictions, 0 shares added, and 0 restricted shares at the end of the reporting period[125][126] - The reason for the restrictions was the restricted shares granted under the 2022 restricted stock incentive plan that had not yet been released from restrictions, which were repurchased and cancelled on May 29, 2025[125][126] Shareholder Information As of the end of the reporting period, the total number of common shareholders was 34,581. Among the top ten shareholders, Jiangsu Kangyuan Group Co., Ltd. is the controlling shareholder, holding 31.12% of shares, and is a party acting in concert with Shanghai Yinyie Investment Co., Ltd. - Yinyie Gongyu No. 10 Private Securities Investment Fund and Mr. Xiao Wei Total Number of Shareholders - Total number of common shareholders as of the end of the reporting period: 34,581[127] Table of Shareholdings of Top Ten Shareholders and Top Ten Tradable Shareholders (or Unrestricted Shareholders) as of the End of the Reporting Period Shareholdings of Top Ten Shareholders as of the End of the Reporting Period | Shareholder Name | Shares Held at Period-End (shares) | Percentage (%) | Shareholder Nature | | :--- | :--- | :--- | :--- | | Jiangsu Kangyuan Group Co., Ltd. | 176,173,467 | 31.12 | Domestic Non-State-Owned Legal Person | | Lianyungang Kangbei'er Medical Devices Co., Ltd. | 31,870,567 | 5.63 | Domestic Non-State-Owned Legal Person | | Central Huijin Asset Management Co., Ltd. | 17,886,480 | 3.16 | Other | | Xiao Wei | 17,003,232 | 3.00 | Domestic Natural Person | | Hong Kong Securities Clearing Company Limited | 14,037,865 | 2.48 | Other | | Shanghai Yinyie Investment Co., Ltd. - Yinyie Gongyu No. 10 Private Securities Investment Fund | 11,945,196 | 2.11 | Other | | Dacheng Fund - Agricultural Bank of China - Dacheng China Securities Financial Asset Management Plan | 5,006,780 | 0.88 | Other | | Southern Fund - Agricultural Bank of China - Southern China Securities Financial Asset Management Plan | 4,991,664 | 0.88 | Other | | Boshi Fund - Agricultural Bank of China - Boshi China Securities Financial Asset Management Plan | 4,799,004 | 0.85 | Other | | ICBC Credit Suisse Fund - Agricultural Bank of China - ICBC Credit Suisse China Securities Financial Asset Management Plan | 4,697,480 | 0.83 | Other | - Among the top ten shareholders, Jiangsu Kangyuan Group Co., Ltd., Shanghai Yinyie Investment Co., Ltd. - Yinyie Gongyu No. 10 Private Securities Investment Fund, and Mr. Xiao Wei are parties acting in concert[130] - Lianyungang Kangbei'er Medical Devices Co., Ltd. is a related party of Kangyuan Group[130] Information on Directors, Supervisors, and Senior Management During the reporting period, the shareholdings of several of the company's directors and senior management decreased due to the repurchase and cancellation of restricted shares Changes in Shareholdings of Current and Resigned Directors, Supervisors, and Senior Management During the Reporting Period Changes in Shareholdings of Current and Resigned Directors, Supervisors, and Senior Management During the Reporting Period | Name | Position | Shares Held at Beginning of Period (shares) | Shares Held at End of Period (shares) | Change in Shares During Reporting Period (shares) | Reason for Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Wang Zhenzhong | Director | 210,000 | 90,000 | -120,000 | Repurchase and cancellation of restricted shares | | Yang Yongchun | Director | 210,000 | 90,000 | -120,000 | Repurchase and cancellation of restricted shares | | Gao Haixin | Director | 140,000 | 60,000 | -80,000 | Repurchase and cancellation of restricted shares | | Chen Xuebin | Director | 56,000 | 24,000 | -32,000 | Repurchase and cancellation of restricted shares | | Liu Quan | Senior Management | 140,000 | 60,000 | -80,000 | Repurchase and cancellation of restricted shares | | Wang Chuanlei | Senior Management | 140,000 | 60,000 | -80,000 | Repurchase and cancellation of restricted shares | | Pan Yu | Senior Management | 140,000 | 60,000 | -80,000 | Repurchase and cancellation of restricted shares | | Xian Feipeng | Senior Management | 40,000 | 0 | -40,000 | Repurchase and cancellation of restricted shares | | Jiang Suocheng | Senior Management | 25,000 | 0 | -25,000 | Repurchase and cancellation of restricted shares | | Wang Tuanjie | Senior Management | 20,000 | 0 | -20,000 | Repurchase and cancellation of restricted shares | Section VII Bond-Related Information This section confirms the absence of company bonds, enterprise bonds, non-financial enterprise debt financing instruments, and convertible corporate bonds during the reporting period Corporate Bonds (Including Enterprise Bonds) and Non-Financial Enterprise Debt Financing Instruments During the reporting period, the company had no issued or unexpired corporate bonds, enterprise bonds, or non-financial enterprise debt financing instruments - Not applicable to corporate bonds (including enterprise bonds) and non-financial enterprise debt financing instruments[137] Convertible Corporate Bonds During the reporting period, the company had no convertible corporate bonds - Not applicable to convertible corporate bonds[137] Section VIII Financial Report This section presents the company's unaudited semi-annual financial statements, including balance sheets, income statements, cash flow statements, and statements of changes in owners' equity, along with detailed notes on accounting policies, tax information, and financial instrument risks Audit Report This semi-annual report is unaudited - This semi-annual report is unaudited[7] Financial Statements This section includes the company's unaudited consolidated and parent company balance sheets, income statements, cash flow statements, and statements of changes in owners' equity for the first half of 2025. The consolidated statements show a stable asset and liability structure, but significant year-on-year declines in operating revenue and net profit, and a substantial decrease in net cash flow from operating activities Consolidated Balance Sheet Key Data from Consolidated Balance Sheet as of June 30, 2025 | Item | June 30, 2025 (yuan) | December 31, 2024 (yuan) | | :--- | :--- | :--- | | Total Assets | 6,833,386,551.55 | 6,906,762,381.38 | | Total Liabilities | 1,979,587,689.84 | 2,201,671,889.94 | | Total Owners' Equity | 4,853,798,861.71 | 4,705,090,491.44 | Parent Company Balance Sheet Key Data from Parent Company Balance Sheet as of June 30, 2025 | Item | June 30, 2025 (yuan) | December 31, 2024 (yuan) | | :--- | :--- | :--- | | Total Assets | 6,489,160,245.66 | 6,546,790,343.68 | | Total Liabilities | 1,409,471,966.44 | 1,632,982,123.88 | | Total Owners' Equity | 5,079,688,279.22 | 4,913,808,219.80 | Consolidated Income Statement Key Data from 2025 Semi-Annual Consolidated Income Statement | Item | 2025 Semi-Annual (yuan) | 2024 Semi-Annual (yuan) | | :--- | :--- | :--- | | Total Operating Revenue | 1,641,577,928.56 | 2,257,799,801.27 | | Total Profit | 180,782,407.71 | 277,264,175.33 | | Net Profit | 148,708,370.27 | 231,746,787.61 | | Net Profit Attributable to Parent Company Shareholders | 142,369,353.66 | 237,742,953.92 | | Basic Earnings Per Share (yuan/share) | 0.25 | 0.41 | Parent Company Income Statement Key Data from 2025 Semi-Annual Parent Company Income Statement | Item | 2025 Semi-Annual (yuan) | 2024 Semi-Annual (yuan) | | :--- | :--- | :--- | | Operating Revenue | 1,501,494,616.26 | 2,116,653,383.13 | | Total Profit | 195,153,011.08 | 280,910,425.20 | | Net Profit | 165,880,059.42 | 238,773,762.50 | Consolidated Cash Flow Statement Key Data from 2025 Semi-Annual Consolidated Cash Flow Statement | Item | 2025 Semi-Annual (yuan) | 2024 Semi-Annual (yuan) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 144,348,147.85 | 369,230,610.83 | | Net Cash Flow from Investing Activities | -227,265,238.25 | 46,064,902.08 | | Net Cash Flow from Financing Activities | -23,172,212.90 | -318,288,310.45 | | Net Increase in Cash and Cash Equivalents | -106,091,304.81 | 97,126,448.08 | Parent Company Cash Flow Statement Key Data from 2025 Semi-Annual Parent Company Cash Flow Statement | Item | 2025 Semi-Annual (yuan) | 2024 Semi-Annual (yuan) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 149,268,749.16 | 304,972,060.93 | | Net Cash Flow from Investing Activities | -160,742,048.38 | 143,319,448.90 | | Net Cash Flow from Financing Activities | -23,172,212.90 | -334,583,961.45 | | Net Increase in Cash and Cash Equivalents | -34,647,513.63 | 113,826,794.00 | Consolidated Statement of Changes in Owners' Equity - Total comprehensive income attributable to owners of the parent company for the current period was 142,369,353.66 yuan[156] - Owners' contributions and capital reductions in the current period led to a decrease of 120,085,864.44 yuan in owners' equity attributable to the parent company, primarily due to the repurchase and cancellation of shares and restricted stock[156] Parent Company Statement of Changes in Owners' Equity - Total comprehensive income for the current period was 165,880,059.42 yuan[163] - Owners' contributions and capital reductions in the current period led to a decrease of 1,651,274.04 yuan in owners' equity, primarily due to the repurchase and cancellation of shares and restricted stock[163] Company Basic Information Jiangsu Kangyuan Pharmaceutical Co., Ltd. was established on December 2, 2000, and listed on the Shanghai Stock Exchange on September 18, 2002. The company's share capital has undergone multiple changes, with a total issued share capital of 566,158,806 shares as of June 30, 2025. The company's business scope covers the R&D, production, and sales of traditional Chinese medicine, chemical drugs, and biological drugs. Its parent company is Jiangsu Kangyuan Group Co., Ltd., and the actual controller is Xiao Wei - The company was established on December 2, 2000, and listed on the Shanghai Stock Exchange on September 18, 2002[165] - As of June 30, 2025, the company's total issued share capital was 566,158,806 shares, and its registered capital was 566,158,806 yuan[181](index=18