复旦张江(01349) - 2025 - 中期财报

Company's Major Financial Indicators This section presents the company's key financial performance indicators and accounting data for the reporting period Major Accounting Data and Financial Indicators For the six months ended June 30, 2025, the company's revenue decreased by 4.42% year-on-year, while net profit and total profit significantly declined by over 90%; net cash flow from operating activities increased by 125% year-on-year, and R&D investment as a percentage of operating revenue increased by 7.57 percentage points | Indicator | Jan-Jun 2025 (RMB thousands) | Jan-Jun 2024 (RMB thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 390,083 | 408,124 | -4.42 | | Profit/(Loss) before Income Tax | 5,622 | 72,187 | -92.21 | | Profit/(Loss) for the Period | 5,622 | 70,344 | -91.89 | | Net Profit Attributable to Shareholders of the Listed Company | 5,715 | 70,473 | -91.89 | | Net Cash Flow from Operating Activities | 62,212,859 | 27,649,549 | 125.00 | | Basic Earnings Per Share (RMB/share) | 0.01 | 0.07 | -85.71 | | R&D Investment as % of Operating Revenue | 45.63 | 38.06 | Increased by 7.57 percentage points | - Total profit and net profit attributable to shareholders of the listed company significantly decreased, primarily due to increased R&D expenses in the current period and compensation/liquidated damages recognized in the prior year from terminating cooperation with Shanghai Huizheng[9] - Net cash flow from operating activities increased, mainly due to the growth in cash received from sales of goods and provision of services during the reporting period[9] Differences in Accounting Data under Domestic and Overseas Accounting Standards Since February 24, 2020, the company has prepared overseas financial statements in accordance with Chinese Enterprise Accounting Standards, thus there are no differences in accounting data under domestic and overseas accounting standards for this reporting period - Disclosure of differences in accounting data under domestic and overseas accounting standards is not applicable for this reporting period[10] Non-recurring Gains and Losses Items and Amounts During the reporting period, the company's total non-recurring gains and losses amounted to RMB 15,206,999, primarily from disposal gains/losses of non-current assets, government grants, and fair value changes/disposal gains/losses of financial assets and liabilities | Non-recurring Gains and Losses Item | Amount (RMB) | Notes (if applicable) | | :--- | :--- | :--- | | Disposal gains/losses of non-current assets | 203,055 | | | Government grants recognized in current profit or loss | 6,850,812 | | | Gains/losses from changes in fair value of financial assets and liabilities held by non-financial enterprises and gains/losses from disposal of financial assets and liabilities | 8,257,294 | Primarily interest or income from bank structured deposits and wealth management products | | Other non-operating income and expenses apart from the above | -103,860 | | | Less: Impact on minority interests (after tax) | 302 | | | Total | 15,206,999 | | Management Discussion and Analysis This section provides a comprehensive review of the Group's financial performance, business operations, R&D strategies, core competencies, and risk factors Financial Review for the Six Months Ended June 30, 2025 During the reporting period, the company's operating revenue decreased by 4% year-on-year, mainly due to reduced sales of its core product, Libaoduo®; operating costs increased due to higher per-unit production costs of Libaoduo® impacted by centralized procurement; selling expenses surged by 59%, while administrative expenses decreased by 13%; R&D expenses continued to grow by 15%; net profit significantly dropped by 92% year-on-year, primarily due to compensation and liquidated damages recognized in the prior year; the company maintains a stable financial position with no bank borrowings or asset pledges, actively managing cash through structured deposits Operating Revenue For the six months ended June 30, 2025, the Group's operating revenue was approximately RMB 390,083 thousand, a 4% year-on-year decrease, primarily from sales of medical and diagnostic products | Indicator | Jan-Jun 2025 (RMB thousands) | Jan-Jun 2024 (RMB thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 390,083 | 408,124 | -4 | | Main Revenue Source | Sales of Medical and Diagnostic Products | Sales of Medical and Diagnostic Products | Largely consistent | Revenue from Sales of Pharmaceutical and Diagnostic Products Revenue from sales of medical and diagnostic products was RMB 383,924 thousand, accounting for 98.42% of main business revenue, a 6% year-on-year decrease; Aile®, Libaoduo®, and Fumeida® were the main contributing products, accounting for 49%, 30%, and 20% respectively | Indicator | Jan-Jun 2025 (RMB thousands) | Jan-Jun 2024 (RMB thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue from Sales of Medical and Diagnostic Products | 383,924 | 408,113 | -6 | | Proportion of Main Business Revenue | 98.42% | - | - | | Aile® Contribution Ratio | 49% | - | - | | Libaoduo® Contribution Ratio | 30% | - | - | | Fumeida® Contribution Ratio | 20% | - | - | - The sales and promotion of Aile® and Fumeida®, two photodynamic products, are managed by the Group's sales team[14] Operating Costs Cost of main business was RMB 39,774 thousand, a 35.29% year-on-year increase; the increase in operating costs was mainly due to higher per-unit production costs of Libaoduo® caused by reduced output due to centralized procurement; the proportion of main business cost to main business revenue rose to 10%, but the overall gross profit margin remained largely stable | Indicator | Jan-Jun 2025 (RMB thousands) | Jan-Jun 2024 (RMB thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Cost of Main Business | 39,774 | 29,400 | 35.29 | | Proportion of Operating Costs | 100.00% | - | - | | Cost of Main Business as % of Main Business Revenue | 10% | 7% | Increased by 3 percentage points | - The increase in operating costs was mainly due to Libaoduo® being affected by centralized procurement, leading to a decrease in output and an increase in per-unit production costs[15] Selling and Administrative Expenses Selling expenses significantly increased by 59% year-on-year to RMB 181,910 thousand, primarily for marketing and academic promotion; administrative expenses decreased by 13% year-on-year to RMB 20,303 thousand, mainly due to lower salary expenses | Indicator | Jan-Jun 2025 (RMB thousands) | Jan-Jun 2024 (RMB thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Selling Expenses | 181,910 | 114,493 | 59 | | Administrative Expenses | 20,303 | 23,374 | -13 | - The increase in selling expenses mainly includes marketing and academic promotion fees, salary expenses, depreciation and amortization expenses, business entertainment expenses, and travel expenses[16] - The decrease in administrative expenses was mainly due to lower salary expenses in the current reporting period compared to the prior year[16] Research and Development Expenses R&D expenses were RMB 177,976 thousand, a 15% year-on-year increase, mainly due to the steady progress of R&D projects; the company adopts a conservative capitalization policy for R&D projects, with most in-progress project expenditures recognized as expenses | Indicator | Jan-Jun 2025 (RMB thousands) | Jan-Jun 2024 (RMB thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | R&D Expenses | 177,976 | 154,593 | 15 | | Total R&D Investment | 177,976 | 155,330 | 15 | - The company adopts a relatively conservative and prudent capitalization policy for R&D projects, with most in-progress project expenditures recognized as expenses when incurred[17] Net Finance Income Net finance income was approximately RMB 392 thousand, a 76.6% year-on-year decrease, primarily due to reduced interest income | Indicator | Jan-Jun 2025 (RMB thousands) | Jan-Jun 2024 (RMB thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Net Finance Income | 392 | 1,676 | -76.6 | - The decrease in finance income was mainly due to a reduction in interest income during the reporting period compared to the prior year[18] Other Income Other income was RMB 8,746 thousand, a 59% year-on-year decrease, mainly due to a reduction in government grants recognized during the year | Indicator | Jan-Jun 2025 (RMB thousands) | Jan-Jun 2024 (RMB thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Other Income | 8,746 | 21,114 | -59 | - The decrease in other income was mainly due to a reduction in government grants recognized during the year[19] Income Tax Expense The Group's main subsidiaries are recognized as high-tech enterprises, applying a preferential tax rate of 15%; Hong Kong subsidiary Fengyi Holdings is subject to Hong Kong profits tax, but no assessable profits were generated during the reporting period, thus no Hong Kong profits tax was accrued; applicable tax rates and policies remained unchanged from the prior year - The Company, Taizhou Fudan-Zhangjiang, and Shanghai Suyuan Biotechnology Co., Ltd. are all recognized as high-tech enterprises, applying a 15% corporate income tax rate[20] - Fengyi (Hong Kong) Holdings Limited is subject to Hong Kong profits tax, but no estimated assessable profits were generated during the reporting period, thus no Hong Kong profits tax was accrued[20] - As of June 30, 2025, the relevant tax rates and tax policies applicable to the Group remained unchanged compared to the first half of 2024[21] Net Profit and Net Profit Margin The Group's net profit was approximately RMB 5,622 thousand, a year-on-year decrease of about 92%; net profit margin declined from 17% in the prior year to 1%, primarily due to compensation and liquidated damages recognized in the prior year | Indicator | Jan-Jun 2025 (RMB thousands) | Jan-Jun 2024 (RMB thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Net Profit | 5,622 | 70,344 | -92 | | Net Profit Margin | 1% | 17% | Decreased by 16 percentage points | - The decrease in net profit margin was mainly due to the compensation and liquidated damages recognized by the Company in the prior year after terminating cooperation with Shanghai Huizheng[22] Profit Attributable to Shareholders of the Company Profit attributable to shareholders of the Company was approximately RMB 5,715 thousand, a 92% year-on-year decrease | Indicator | Jan-Jun 2025 (RMB thousands) | Jan-Jun 2024 (RMB thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Profit Attributable to Shareholders of the Company | 5,715 | 70,473 | -92 | Liquidity and Financial Resources The Group's funds primarily originate from internal earnings, proceeds from listings, government grants, and commercial loans; as of June 30, 2025, cash and cash equivalents amounted to RMB 1,106,490,805; the company adopts a conservative financial policy, centrally managing funds and utilizing structured deposit products to enhance returns on idle capital - The Group's funds primarily originate from internal earnings, proceeds from listings, government grants, and commercial loans[24] | Indicator | Jun 30, 2025 (RMB) | Jun 30, 2024 (RMB) | | :--- | :--- | :--- | | Cash and Cash Equivalents | 1,106,490,805 | 1,222,481,006 | - The Group has no outstanding bank borrowings, and the debt-to-equity ratio is not applicable[24] - During the reporting period, the Group subscribed to structured deposit products to effectively utilize idle funds[25] Bank Financing As of June 30, 2025, the Group had no outstanding bank financing - As of June 30, 2025, the Group had no outstanding bank financing[27] Foreign Exchange Risk Most of the Group's transactions occur in the domestic market, and exchange rate fluctuations have no significant impact on operating results and financial position - Most of the Group's transactions occur in the domestic market, and exchange rate fluctuations will not have a significant impact on the Group's operating results and financial position[28] Asset Pledges As of June 30, 2025, the Group had no asset pledges - As of June 30, 2025, the Group had no asset pledges[29] Future Plans for Material Investments or Capital Assets As of June 30, 2025, the Group has no material future plans for capital expenditures - As of June 30, 2025, the Group has no material future plans for capital expenditures[30] Dividends The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Company's Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2025[31] Contingent Liabilities As of June 30, 2025, the directors did not identify any material contingent liabilities; the company holds a 39.5663% equity interest in Shanghai Handu Pharmaceutical Technology Co., Ltd., recording an investment loss of approximately RMB 2.132 million; additionally, the company holds equity instruments of TuHURA Biosciences, Inc., with a fair value of approximately RMB 5,747 - As of June 30, 2025, the Company's directors did not identify any material contingent liabilities[32] - The net carrying amount of the Group's long-term equity investments was RMB 253,145 thousand, of which the equity interest in Shanghai Handu Pharmaceutical Technology Co., Ltd. ("Handu Pharmaceutical") was approximately RMB 221,739 thousand, accounting for 8.72% of the Group's total assets[33] - During the reporting period, an investment loss of approximately RMB 2.132 million was recorded for Handu Pharmaceutical[33] - The Group holds 360 ordinary shares of TuHURA Biosciences, Inc., with a fair value of approximately RMB 5,747[37] Subscription of Wealth Management Products and Structured Deposits During the reporting period, the company subscribed to multiple structured deposit products totaling RMB 1 billion using its own idle funds and temporarily idle raised funds; all these products have matured and been redeemed, yielding a total return of approximately RMB 8.26 million, aiming to enhance capital returns while ensuring fund safety and liquidity - The Company entered into structured deposit product agreements with Pudong Development Bank, Ping An Bank, and Bank of China, subscribing to structured deposit products totaling RMB 1 billion[41] - The aforementioned structured deposit products have all matured and been redeemed, with the return range consistent with the disclosed range, showing no material deviation[42] - During the reporting period, the Group obtained total returns of approximately RMB 8.26 million from purchasing structured deposits and wealth management products[43] Business Review The Group focuses on innovative R&D, manufacturing, and marketing of biopharmaceuticals, strategically prioritizing photodynamic and antibody-drug conjugate (ADC) therapies; China's pharmaceutical industry policies support innovative drug development, with promising market prospects for dermatological and anti-tumor drugs; the company's core products, Aile®, Fumeida®, and Libaoduo®, hold advantages in their respective fields, with ongoing expansion of new indications and drug development; R&D investment continues to increase, but Libaoduo® faces price reduction risks due to centralized procurement; the company is committed to strengthening core technological advantages, enriching its product portfolio, and actively addressing market challenges Description of the Company's Industry and Main Business during the Reporting Period The Group primarily engages in innovative R&D, manufacturing, and marketing of biopharmaceuticals, with a core focus on addressing unmet clinical needs and providing effective solutions; China's pharmaceutical industry is rapidly developing with policy support, and innovative drugs are protected by full-chain policies; the dermatological drug market continues to grow, with unmet needs in the treatment of condyloma acuminatum and port-wine stains; the anti-tumor drug market is vast, and liposomal doxorubicin and other cyclic anti-tumor drugs hold significant importance Industry Overview of the Group China's pharmaceutical industry, as a strategic emerging industry, receives intensive national policy support emphasizing accelerated innovative drug development, optimized review and approval processes, and expanded payment channels; the dermatological drug market continues to grow, with a projected CAGR of 6.32% from 2024-2028; the anti-tumor drug market is enormous, with global oncology spending expected to reach $370 billion by 2027, and innovative formulations like liposomal doxorubicin offering significant advantages - National policies intensively support the development of innovative drugs, including the "Government Work Report," "Key Tasks for Deepening Medical and Healthcare System Reform in 2024" issued by the General Office of the State Council, and the "Implementation Plan for Full-Chain Support of Innovative Drug Development" approved by the State Council Executive Meeting[45] - China's dermatological drug market size is projected to grow from RMB 2.779 billion in 2024 to RMB 3.551 billion in 2028, with a compound annual growth rate of 6.32%[47] - Global oncology spending is expected to reach $370 billion by 2027, and liposomal doxorubicin offers significant advantages over traditional doxorubicin, such as longer action time, lower cardiotoxicity, and better tumor targeting[49][50] Main Sales Products of the Group The Group's main business revenue primarily comes from the sales of Aile® (photodynamic drug for condyloma acuminatum), Fumeida® (photodynamic drug for port-wine stains), and Libaoduo® (long-circulating doxorubicin hydrochloride liposome injection); both Aile® and Fumeida® are global first-in-class drugs, filling therapeutic gaps in their respective fields and being included in clinical guidelines; Libaoduo®, as the first domestic generic of Doxil, offers advantages in improving efficacy and reducing toxicity - Aile® is the world's first photodynamic drug for condyloma acuminatum, significantly reducing recurrence rates, filling therapeutic gaps in special areas, and included in "Dermatology and Venereology" textbooks and clinical treatment guidelines[52][53] - Fumeida® is the world's first photodynamic drug for port-wine stains, boasting significant advantages such as stable compound structure, low phototoxicity, rapid metabolism, short light avoidance period, high cure rate, low scar incidence, and low recurrence rate[53] - Libaoduo® is the first domestic generic of Doxil, utilizing stealth liposome technology, which offers advantages in tumor therapeutics such as improved efficacy, reduced cardiotoxicity, myelosuppression, and hair loss, and is included in multiple cancer diagnosis and treatment guidelines[55] Discussion and Analysis of Operating Performance The Group adheres to innovation and R&D as its core, strategically focusing on photodynamic drugs and antibody-drug conjugates (ADCs); photodynamic drugs continue to expand new indications and compounds for skin diseases, precancerous lesions, and tumor visualization; the ADC drug R&D pipeline is progressing smoothly, with multiple projects entering clinical trial stages and commercial production capabilities already established; during the reporting period, core product sales revenue was affected by centralized procurement, leading to a price reduction for Libaoduo®, which is expected to adversely impact future sales revenue Research Strategy and Review The Group's R&D strategy focuses on photodynamic drugs and antibody-drug conjugates (ADCs); photodynamic drugs continue to advance clinical research for the treatment of condyloma acuminatum, port-wine stains, acne, cervical precancerous lesions, actinic keratosis, and intraoperative visualization diagnosis for glioblastoma, bladder cancer, and breast cancer; for ADC drugs, anti-Trop2, anti-Her2, and anti-DLL3 antibody-drug conjugates are all progressing through different stages of clinical research, and a linker-drug platform has been established - The Group's innovative R&D areas focus on photodynamic drugs for skin diseases and precancerous lesions, photodynamic drugs for intraoperative tumor visualization, antibody-drug conjugates for tumors, and other drugs with proprietary patents or technological barriers[57] - The photodynamic drug R&D pipeline primarily focuses on two directions: photodynamic therapy (PDT) and photodynamic diagnosis (PDD), including expanding clinical new indications for marketed drugs and developing new photosensitizing compounds and supporting medical devices[58] - The Aminolevulinic Acid Hydrochloride powder for the treatment of HPV-infected cervical precancerous lesions and moderate-to-severe acne has completed Phase II clinical trials, and Phase III studies will be initiated as soon as possible[62][63] - The Aminolevulinic Acid Hydrochloride oral solution powder for intraoperative visualization of high-grade glioblastoma has completed enrollment for confirmatory clinical trials and will submit a marketing application as soon as possible[65] - The Phase I clinical trial application for FZ-P001 Sodium for injection (Class 1 new chemical drug) for intraoperative visualization of malignant lesions in cancer has been accepted[67] - Phase III clinical research for anti-Trop2 antibody-drug conjugate SN38 for triple-negative breast cancer is ongoing; ADC projects such as anti-Her2 antibody-drug conjugate BB05, anti-Trop2 antibody-drug conjugate BB05, and anti-DLL3 antibody-drug conjugate BB05 are all undergoing Phase I/II clinical research[70][72] Industrialization Operations and Review During the reporting period, the Group's operating revenue decreased by 4% year-on-year; Aile® sales revenue increased by 2% year-on-year, while Fumeida® decreased by 7%; Libaoduo® sales revenue decreased by 16% year-on-year due to centralized procurement, with market retail prices gradually lowering from May 1, 2025; Taizhou Fudan-Zhangjiang's ADC workshop has been completed and put into production, providing assurance for the industrialization of ADC projects; the company will strengthen the competitiveness of its own sales team and expand hospital and department access - During the reporting period, the Group's operating revenue decreased by 4% compared to the prior year[75] | Product | YoY Change in Sales Revenue | | :--- | :--- | | Aile® | Increased by 2% | | Fumeida® | Decreased by 7% | | Libaoduo® | Decreased by 16% | - Libaoduo®'s market retail price was adjusted and gradually lowered from May 1, 2025, due to centralized procurement rules and changes in market competition[75] - Taizhou Fudan-Zhangjiang's newly built antibody-drug conjugate workshop has achieved commercial-scale mass production capability for the anti-Trop2 antibody-drug conjugate SN38 project and completed commercial production technology transfer and proposed Phase III clinical trial sample production for the anti-Her2 antibody-drug conjugate BB05 project[76] Significant Changes in the Company's Operating Performance and Future Impact during the Reporting Period The company's anti-tumor drug Libaoduo® was not selected in the tenth batch of national centralized procurement, leading to adjustments in its sales strategy and pricing, with market retail prices decreasing by no less than 35% from May 1, 2025; this is expected to adversely impact the company's sales revenue for the 2025 fiscal year and subsequent periods, potentially leading to a risk of single-product losses - The Company's anti-tumor drug Libaoduo® was not selected in the tenth batch of national centralized procurement[80] - From May 1, 2025, Libaoduo®'s market retail price will be gradually lowered, with a reduction of no less than 35%[80] - This price adjustment for Libaoduo® is expected to adversely impact the company's sales revenue for the 2025 fiscal year and subsequent periods[80] Analysis of Core Competitiveness during the Reporting Period The company's core competitiveness lies in innovative drug R&D, technological platform advantages, industrial promotion, production quality control, and its management and technical teams; during the reporting period, multiple photodynamic and ADC R&D projects made progress, with some reaching international leading levels; the company possesses four major technology platforms: genetic engineering, photodynamic, nanotechnology, and oral solid preparations; R&D investment continues to grow, and multiple government grants and awards have been received Core Competitiveness Analysis The company uses unmet clinical needs and unique therapeutic effects as criteria for new drug R&D project initiation and evaluation, seeking balanced development between innovative generics and first-in-class drugs; core competencies include R&D innovation advantages in pipeline projects (e.g., Hemoporfin US Phase II clinical, multiple new indications for Aminolevulinic Acid Hydrochloride), technological platform advantages (genetic engineering, photodynamic, nanotechnology, oral solid preparations), academic promotion advantages, a stringent production quality control system, and a stable and youthful management and technical team - The Company adheres to satisfying unmet and unsatisfactory clinical treatment needs and demonstrating unique therapeutic effects as decisive factors for new drug R&D project initiation and evaluation[81] | R&D Area | Project Name | Proposed Indication | Progress Achieved | Comparison with Industry Technology Level | | :--- | :--- | :--- | :--- | :--- | | Photodynamic Drug R&D | Hemoporfin (F0026) | Port-wine Stains | US Phase II clinical study ongoing | International leading level: new compound, new indication | | Photodynamic Drug R&D | Aminolevulinic Acid Hydrochloride – CIN (F0005) | HPV-infected Cervical Lesions | Phase II clinical study completed | International leading level: new indication | | Photodynamic Drug R&D | Aminolevulinic Acid Hydrochloride – Acne (F0014) | Acne | Phase II clinical study completed | International leading level: new indication | | ADC Drug R&D | Anti-DLL3 Antibody-Drug Conjugate BB05 (F0041) | Tumor | Phase I clinical study ongoing | International leading level: new compound | - The Group insists on academic promotion as its primary marketing method, utilizing diverse online platform channels to form a mature network service system[83] - The Group adheres to Chinese cGMP standards and refers to US FDA and European EMA cGMP requirements to establish comprehensive production and quality management regulations and systems[85] Events Seriously Affecting Core Competitiveness and Responses during the Reporting Period During the reporting period, no events occurred that severely impacted the company's core competitiveness - Not applicable[86] Core Technologies and R&D Progress The company has established four core technology platforms: genetic engineering, photodynamic, nanotechnology, and oral solid preparations, strategically focusing on photodynamic drugs and antibody-drug conjugates; during the reporting period, the clinical study of Aminolevulinic Acid Hydrochloride granules for adjuvant use in bladder cancer surgical resection completed its first patient enrollment, and the Phase I clinical trial application for FZ-P001 Sodium for injection for intraoperative visualization of malignant lesions in cancer was accepted; total R&D investment amounted to RMB 177,976,257, a 14.58% year-on-year increase, accounting for 45.63% of operating revenue; the number of R&D personnel was 155, and government grants and awards totaling approximately RMB 11.055 million were received - The Company has formed genetic engineering technology, photodynamic technology, nanotechnology, and oral solid preparation technology platforms, strategically focusing on photodynamic drugs and antibody-drug conjugates[87] - The Company's photodynamic technology is at a world-leading level, with marketed products covering two of the four categories: hematoporphyrin, aminolevulinic acid hydrochloride, verteporfin, and hemoporfin[87] - Nanoparticle formulation R&D presents technological barriers, and the Company has established a nanotechnology platform and successfully launched Libaoduo®[88][89] - In March 2025, the confirmatory clinical study of Aminolevulinic Acid Hydrochloride granules for adjuvant use in surgical resection of non-muscle invasive bladder cancer completed its first subject enrollment[91] - In June 2025, the Phase I clinical trial application for FZ-P001 Sodium for injection for intraoperative visualization of malignant lesions in cancer was accepted[91] | Indicator | Jan-Jun 2025 (RMB) | Jan-Jun 2024 (RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Expensed R&D Investment | 177,976,257 | 154,592,537 | 15.13 | | Capitalized R&D Investment | – | 737,612 | -100.00 | | Total R&D Investment | 177,976,257 | 155,330,149 | 14.58 | | Total R&D Investment as % of Operating Revenue | 45.63 | 38.06 | Increased by 7.57 percentage points | | Indicator | Jan-Jun 2025 | Jan-Jun 2024 | | :--- | :--- | :--- | | Number of Company R&D Personnel | 155 | 180 | | Proportion of R&D Personnel to Total Company Staff (%) | 17.24 | 19.72 | | Total R&D Personnel Remuneration (RMB) | 36,390,548 | 43,950,526 | | Average R&D Personnel Remuneration (RMB) | 234,778 | 244,170 | - During the reporting period, the Group received government grants and awards totaling approximately RMB 11.055 million for various R&D and industrialization projects[96] Risk Factors The company faces risks associated with long R&D cycles, high costs, and uncertain outcomes for new drugs; loss of core technical personnel could impact technological leadership and sustained profitability; a relatively singular product portfolio means leading products are vulnerable to policy and market competition, potentially adversely affecting operations and financial performance; Libaoduo®'s non-selection in national centralized procurement led to a significant price reduction, with 2025 sales revenue projected to decrease by over 50% year-on-year, potentially resulting in single-product losses - New drug R&D to market launch can take ten years or more, is costly, and has significant uncertainty in outcomes[97] - The loss of core technical personnel could adversely affect the Company's core competitiveness and sustained profitability[98] - The Company's product portfolio is relatively singular, with leading products Aile®, Libaoduo®, and Fumeida® accounting for a large proportion of total sales revenue[99] - Libaoduo® was not selected in the tenth batch of national centralized procurement, leading to a price reduction of no less than 35% in its market retail price, with 2025 sales revenue projected to decrease by over 50% year-on-year, potentially resulting in single-product losses[102] Outlook The Group will continue to uphold its biopharmaceutical development philosophy of innovative R&D, manufacturing, and marketing, strategically focusing on photodynamic technology and antibody-drug conjugates (ADCs); it will increase investment and rapidly advance R&D, registration, and industrialization to achieve a solid advantageous position in niche pharmaceutical markets and the capital market, aiming to become an innovator and leader in the biopharmaceutical industry - The Group will strategically focus on the photodynamic technology field, comprehensively developing from special devices to innovative drugs, rapidly advancing R&D, registration, and industrialization to achieve a comprehensive, long-term, absolute advantageous and leading position in this field[105] - The Group will rapidly advance the R&D and industrialization of antibody-drug conjugates (ADCs), actively participate in market competition, and expand industrial scale and capabilities[105] - The company will focus on strengthening and consolidating core technological advantages, enriching its product portfolio, promoting the industrialization of R&D achievements, and building a globally renowned photodynamic brand[79] Corporate Governance, Environmental and Social Responsibility This section outlines the company's corporate governance practices, board and management changes, employee information, and social responsibility initiatives Changes in Directors, Supervisors, Senior Management, and Core Technical Personnel During the reporting period, there were no changes in the company's directors, supervisors, senior management, or core technical personnel - Not applicable[106] Profit Distribution or Capital Reserve Conversion Plan The company's proposed semi-annual profit distribution plan is no distribution or capital reserve conversion | Whether to Distribute or Convert | No | | :--- | :--- | | Number of Bonus Shares per 10 Shares (shares) | Not applicable | | Dividend per 10 Shares (RMB) (tax inclusive) | Not applicable | | Number of Shares Converted from Capital Reserve per 10 Shares (shares) | Not applicable | Status and Impact of Company's Equity Incentive Plans, Employee Stock Ownership Plans, or Other Employee Incentive Measures For the six months ended June 30, 2025, the company had no existing effective incentive plans, employee stock ownership plans, or other incentive schemes - For the six months ended June 30, 2025, the Company had no existing effective incentive plans, employee stock ownership plans, or other incentive schemes[107] Corporate Governance Practices The company has adopted the Corporate Governance Code in Appendix C1 of the Hong Kong Listing Rules; except for Code Provision C.2.1 (separation of Chairman and Chief Executive roles), the company has complied with the principles and code provisions set out in the Code during the reporting period; the company's directors have complied with the code of conduct for securities transactions - The Company has adopted the Corporate Governance Code in Appendix C1 of the Hong Kong Listing Rules[108] - Except for Code Provision C.2.1 (the roles of Chairman and Chief Executive should be separate), the principles and code provisions set out in the Code have been met during the reporting period[110] - Mr. Zhao Dajun serves as both Chairman and General Manager (Chief Executive), an arrangement the Board believes is more beneficial for the company's development at the current stage[111] - All directors confirmed compliance with the standards stipulated in the code of conduct during the reporting period[112] Audit Committee The company's Audit Committee is responsible for reviewing financial reports, internal controls, and corporate governance, and making recommendations to the Board; the committee comprises two independent non-executive directors and one non-executive director, with Mr. Lin Zhaorong serving as Chairman; the committee has reviewed the Group's unaudited interim results and report, deeming them compliant with applicable accounting standards and the Hong Kong Listing Rules - The Company's Audit Committee is responsible for auditing financial reports, reviewing internal controls and corporate governance, and making relevant recommendations to the Board[114] - The committee members consist of Mr. Lin Zhaorong (Chairman), Mr. Wang Hongguang (Independent Non-Executive Director), and Mr. Shen Bo (Non-Executive Director)[114] - The Audit Committee has reviewed the Group's unaudited interim results and report for the six months ended June 30, 2025, and believes they are prepared in compliance with applicable accounting standards and the Hong Kong Listing Rules, with sufficient disclosures made[114] Independent Non-Executive Directors During the reporting period, the company fully complied with the Hong Kong Listing Rules regarding independent non-executive directors, and all independent non-executive directors confirmed their independence - During the reporting period, the Company fully complied with Rules 3.10(1), 3.10(2), and 3.21 of the Hong Kong Listing Rules regarding independent non-executive directors[115] Independence of Independent Non-Executive Directors In accordance with Listing Rule 3.13, each of the company's independent non-executive directors has confirmed their independence to the company, and the company considers them independent - In accordance with Listing Rule 3.13, each of the Company's independent non-executive directors has confirmed their independence to the Company. Based on the confirmation from the independent non-executive directors, the Company considers them independent[116] Employees and Remuneration As of June 30, 2025, the Group had 899 employees, with staff costs of RMB 101,818,230, a 13.58% year-on-year decrease; the company offers competitive remuneration and benefits, adjusted based on market conditions and employee performance | Indicator | Jun 30, 2025 | Jun 30, 2024 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Number of Employees | 899 | 913 | -1.53 | | Staff Costs (RMB) | 101,818,230 | 117,815,229 | -13.58 | - The Group provides competitive remuneration and benefits based on market conditions and employees' experience and qualifications, with performance-based compensation[117] Purchase, Sale or Redemption of Listed Securities For the six months ended June 30, 2025, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities, nor did they hold any treasury shares - For the six months ended June 30, 2025, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities (including treasury shares)[118] Environmental Information of Listed Companies and their Major Subsidiaries Included in the List of Enterprises Required to Disclose Environmental Information by Law Not applicable - Not applicable[119] Specific Progress in Consolidating and Expanding Poverty Alleviation Achievements, Rural Revitalization, etc. During the reporting period, the company's labor union directly procured agricultural products totaling RMB 61,425 from farmers in impoverished mountainous areas of Rongjiang County, Guizhou, contributing to rural revitalization - During the reporting period, the Company's labor union directly procured agricultural products totaling RMB 61,425 from farmers in impoverished mountainous areas of Rongjiang County, Guizhou, actively contributing to rural revitalization and supporting farmers[119] Other Significant Matters This section covers various significant matters including commitment fulfillment, related party transactions, use of raised funds, and other material events Fulfillment of Commitments As of June 30, 2025, except for commitments already fulfilled, there were no changes in the commitments made by the company's shareholders, related parties, and the company itself, and all parties involved complied with the relevant disclosed commitments - As of June 30, 2025, except for commitments already fulfilled, the aforementioned commitments remained unchanged, and all parties involved complied with the relevant disclosed commitments[121] Non-operating Fund Occupation by Controlling Shareholders and Other Related Parties during the Reporting Period Not applicable - Not applicable[122] Irregular Guarantees Not applicable - Not applicable[122] Half-Year Report Audit Status The financial information of the Group for the reporting period contained in this report has not been audited by the auditors - The financial information of the Group for the reporting period contained in this report has not been audited by the auditors[122] Changes and Handling of Matters Related to Non-Standard Audit Opinions in the Previous Year's Annual Report Not applicable - Not applicable[123] Matters Related to Bankruptcy Reorganization Not applicable - Not applicable[123] Material Litigation and Arbitration Matters During the reporting period, the Group had no material litigation or arbitration matters - During the reporting period, the Group had no material litigation or arbitration matters[123] Listed Company and its Directors, Supervisors, Senior Management, Controlling Shareholders, Actual Controllers Suspected of Violations, Penalties, and Rectification Not applicable - Not applicable[123] Explanation of the Integrity Status of the Company, its Controlling Shareholders, and Actual Controllers during the Reporting Period Not applicable - Not applicable[123] Material Related Party Transactions The company has ongoing related party transactions with Shanghai Pharmaceuticals Holding Co., Ltd., primarily involving sales and distribution agreements - The company has ongoing related party transactions with Shanghai Pharmaceuticals Holding Co., Ltd., primarily involving sales and distribution agreements[124] Explanation of Progress in Use of Raised Funds The company's net proceeds from its A-share listing in 2020 amounted to RMB 974.3239 million; as of June 30, 2025, cumulative utilized raised funds totaled RMB 842.3589 million, with a remaining balance of RMB 186.9575 million; the Hemoporfin US registration project has been extended to December 31, 2025, due to external environmental factors; the company uses temporarily idle raised funds for cash management, not exceeding RMB 180 million - The Company completed its initial public offering of A-shares and listing on the STAR Market of the Shanghai Stock Exchange on June 19, 2020, with net proceeds of RMB 974.3239 million[125] | Planned Project | Budgeted Use Amount (RMB millions) | Amount Used in Reporting Period (RMB millions) | Cumulative Utilized Amount (RMB millions) | Balance as of Jun 30, 2025 (RMB millions) | | :--- | :--- | :--- | :--- | :--- | | Hemoporfin US Registration Project | 230.00 | 7.9428 | 67.5988 | 162.4012 | | Biopharmaceutical Innovation R&D and Sustainable Development Project | 240.00 | – | 240.00 | – | | Acquisition of Minority Equity in Taizhou Fudan-Zhangjiang Project | 180.00 | – | 180.00 | – | | Over-raised Funds | – | – | 324.3239 | – | | Interest on Raised Funds | – | – | 30.4362 | 24.5563 | | Total | 650.00 | 7.9428 | 842.3589 | 186.9575 | - The "Hemoporfin US Registration Project" implementation period has been adjusted to December 31, 2025, due to external environmental factors[129] - The Company agreed to use temporarily idle raised funds not exceeding RMB 180 million for cash management[127] Explanation of Other Significant Matters As of June 30, 2025, and up to the publication date of this report, the company has no other significant matters - As of June 30, 2025, and up to the publication date of this report, the Company has no other significant matters[128] Share Changes and Shareholder Information This section details changes in the company's share capital, information on major shareholders, and shareholdings of directors, supervisors, and senior management Changes in Share Capital During the reporting period, there were no changes in the company's total ordinary share capital or share capital structure - During the reporting period, there were no changes in the Company's total ordinary share capital or share capital structure[130] Shareholder Information As of the end of the reporting period, the company had a total of 19,877 ordinary shareholders, comprising 19,737 A-share holders and 140 H-share holders; HKSCC NOMINEES LIMITED, Shanghai Pharmaceuticals Holding Co., Ltd., and Xinqi Phase II Venture Capital Enterprise were the top three shareholders; major shareholders Shanghai Industrial (Group) Co., Ltd. and Shanghai Pharmaceuticals collectively held 20.27% of the company's shares | Indicator | Quantity | | :--- | :--- | | Total Number of Ordinary Shareholders at Period End | 19,877 | | Of which: Number of A-share Shareholders | 19,737 | | Number of H-share Shareholders | 140 | | Shareholder Name | Shares Held at Period End (shares) | Percentage (%) | | :--- | :--- | :--- | | HKSCC NOMINEES LIMITED | 254,827,740 | 24.58 | | Shanghai Pharmaceuticals Holding Co., Ltd. | 210,142,560 | 20.27 | | Xinqi Phase II Venture Capital Enterprise | 156,892,912 | 15.14 | | Yang Zongmeng | 74,375,494 | 7.18 | | Wang Haibo | 56,099,327 | 5.41 | - Shanghai Industrial (Group) Co., Ltd. and Shanghai Pharmaceuticals collectively held 20.27% of the company's shares[135] Information on Directors, Supervisors, Senior Management, and Core Technical Personnel During the reporting period, core technical personnel Wang Luochun's shareholding decreased by 452,625 shares; Directors Zhao Dajun, Xue Yan, and Supervisor Qu Yanan held company shares; the company has established and implemented the "Management System for Directors, Supervisors, and Senior Management Holding and Trading Company Shares," with no violations found during the reporting period | Name | Position | Shares Held at Beginning of Period (shares) | Shares Held at End of Period (shares) | Change in Shares (shares) | Reason for Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Wang Luochun | Core Technical Personnel | 1,170,000 | 717,375 | -452,625 | Secondary market trading | | Name | Position | Share Class | Number of Shares Held (shares) | Percentage of Total Issued Shares | | :--- | :--- | :--- | :--- | :--- | | Zhao Dajun | Director | A-share | 15,620,710 | 1.51% | | Xue Yan | Director | A-share | 1,980,000 | 0.19% | | Xue Yan | Director | H-share | 50,000 | 0.00% | | Qu Yanan | Supervisor | A-share | 39,000 | 0.00% | - The Company has adopted the "Management System for Directors, Supervisors, and Senior Management Holding and Trading Company Shares"[139] - During the reporting period, all directors, supervisors, and relevant employees complied with the system, and no violations were found[140] Consolidated Balance Sheet As of June 30, 2025, the Group's total assets were RMB 2,541,453,272, a 1.74% decrease from the end of 2024; total current assets were RMB 1,593,438,095, and total non-current assets were RMB 948,015,177; total liabilities were RMB 261,015,209, a 7.19% decrease from the end of 2024; total equity attributable to parent company shareholders was RMB 2,279,821,312 | Indicator | Jun 30, 2025 (RMB) | Dec 31, 2024 (RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Total Assets | 2,541,453,272 | 2,586,502,623 | -1.74 | | Total Current Assets | 1,593,438,095 | 1,606,778,507 | -0.83 | | Total Non-Current Assets | 948,015,177 | 979,724,116 | -3.24 | | Total Liabilities | 261,015,209 | 281,225,518 | -7.19 | | Total Equity Attributable to Parent Company Shareholders | 2,279,821,312 | 2,304,567,412 | -1.07 | Company Balance Sheet As of June 30, 2025, the Company's total assets were RMB 2,464,163,363, a 1.06% decrease from the end of 2024; total current assets were RMB 1,463,422,499, and total non-current assets were RMB 1,000,740,864; total liabilities were RMB 205,128,063, a 5.50% decrease from the end of 2024; total shareholders' equity was RMB 2,259,035,300 | Indicator | Jun 30, 2025 (RMB) | Dec 31, 2024 (RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Total Assets | 2,464,163,363 | 2,490,546,568 | -1.06 | | Total Current Assets | 1,463,422,499 | 1,472,419,765 | -0.61 | | Total Non-Current Assets | 1,000,740,864 | 1,018,126,803 | -1.71 | | Total Liabilities | 205,128,063 | 217,064,267 | -5.50 | | Total Shareholders' Equity | 2,259,035,300 | 2,273,482,301 | -0.63 | Consolidated Income Statement For the six months ended June 30, 2025, the Group achieved operating revenue of RMB 390,083,112, a 4.42% year-on-year decrease; net profit was RMB 5,622,200, a significant 92.01% year-on-year decrease; net profit attributable to parent company shareholders was RMB 5,715,142, a 91.89% year-on-year decrease; basic earnings per share were RMB 0.01 | Indicator | Jan-Jun 2025 (RMB) | Jan-Jun 2024 (RMB) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 390,083,112 | 408,123,863 | -4.42 | | Operating Profit | 5,726,060 | 72,223,824 | -92.07 | | Total Profit | 5,622,200 | 72,186,951 | -92.21 | | Net Profit | 5,622,200 | 70,344,013 | -92.01 | | Net Profit Attributable to Parent Company Shareholders | 5,715,142 | 70,473,064 | -91.89 | | Basic Earnings Per Share (RMB) | 0.01 | 0.07 | -85.71 | Company Income Statement For the six months ended June 30, 2025, the Company achieved operating revenue of RMB 355,263,421, a 4.26% year-on-year increase; net profit was RMB 15,917,475, a 56.82% year-on-year decrease | Indicator | Jan-Jun 2025 (RMB) | Jan-Jun 2024 (RMB) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 355,263,421 | 340,740,051 | 4.26 | | Operating Profit | 15,955,880 | 37,165,160 | -57.07 | | Total Profit | 15,917,475 | 36,864,504 | -56.82 | | Net Profit | 15,917,475 | 36,864,504 | -56.82 | Consolidated Cash Flow Statement For the six months ended June 30, 2025, the Group's net cash flow from operating activities was RMB 62,212,859, a 125.00% year-on-year increase; net cash flow used in investing activities was RMB (8,277,485), compared to a net inflow in the prior year; net cash flow used in financing activities was RMB (3,638,269); the net increase in cash was RMB 50,205,176 | Indicator | Jan-Jun 2025 (RMB) | Jan-Jun 2024 (RMB) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 62,212,859 | 27,649,549 | 125.00 | | Net Cash Flow (Used in)/Generated from Investing Activities | (8,277,485) | 4,326,668 | -291.29 | | Net Cash Flow Used in Financing Activities | (3,638,269) | (5,522,836) | -34.13 | | Net Increase in Cash | 50,205,176 | 26,585,009 | 88.85 | | Cash Balance at Period End | 1,106,490,805 | 1,222,481,006 | -9.49 | Company Cash Flow Statement For the six months ended June 30, 2025, the Company's net cash flow from operating activities was RMB 53,254,422, compared to a net outflow in the prior year; net cash flow from investing activities was RMB 3,289,015, an 89.84% year-on-year decrease; net cash flow used in financing activities was RMB (3,638,269); the net increase in cash was RMB 52,905,168 | Indicator | Jan-Jun 2025 (RMB) | Jan-Jun 2024 (RMB) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Net Cash Flow Generated from/(Used in) Operating Activities | 53,254,422 | (1,236,887) | 4410.67 | | Net Cash Flow Generated from Investing Activities | 3,289,015 | 32,387,174 | -89.84 | | Net Cash Flow Used in Financing Activities | (3,638,269) | (5,489,073) | -33.71 | | Net Increase in Cash | 52,905,168 | 25,661,214 | 106.17 | | Cash Balance at Period End | 996,245,555 | 1,092,955,646 | -8.85 | Consolidated Statement of Changes in Equity For the six months ended June 30, 2025, the Group's total comprehensive income attributable to parent company shareholders was RMB 5,618,376, a significant 92.05% year-on-year decrease; retained earnings decreased by RMB 31,097,163 due to dividend distribution | Indicator | Jan-Jun 2025 (RMB) | Jan-Jun 2024 (RMB) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Net Profit Attributable to Parent Company Shareholders | 5,715,142 | 70,473,064 | -91.89 | | Total Comprehensive Income Attributable to Parent Company Shareholders | 5,618,376 | 70,613,805 | -92.05 | | Distribution to Shareholders | (31,097,163) | (72,560,047) | -57.00 | Company Statement of Changes in Equity For the six months ended June 30, 2025, the Company's net profit was RMB 15,917,475, a 56.82% year-on-year decrease; retained earnings decreased by RMB 31,097,163 due to dividend distribution | Indicator | Jan-Jun 2025 (RMB) | Jan-Jun 2024 (RMB) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Net Profit | 15,917,475 | 36,864,504 | -56.82 | | Distribution to Shareholders | (31,097,163) | (72,560,047) | -57.00 | Notes to Financial Statements This section provides detailed explanations of the Group's significant accounting policies, estimates, tax information, and specific financial statement items Company Information Shanghai Fudan-Zhangjiang Bio-Pharmaceutical Co., Ltd. was established in 1996, and after several capital changes, its registered capital and share capital amounted to RMB 103,657,210 as of May 11, 2023; the company primarily engages in innovative R&D, manufacturing, and marketing of biopharmaceuticals - Shanghai Fudan-Zhangjiang Bio-Pharmaceutical Co., Ltd. was established in the People's Republic of China on November 11, 1996[155] - As of May 11, 2023, the company's registered capital and share capital changed to RMB 103,657,210[158] - The Group's main business activities include researching, developing, and selling self-developed biopharmaceutical knowledge in China, providing contract research services to clients, manufacturing and selling pharmaceutical and diagnostic products, and offering other medical services[158] Significant Accounting Policies and Estimates The Group's financial statements are prepared in accordance with "Enterprise Accounting Standards" and related regulations, on a going concern basis; key accounting policies and estimates include financial instrument classification and measurement, inventory valuation, fixed asset depreciation, intangible asset amortization, R&D expenditure capitalization, revenue recognition, government grants, deferred income tax assets and liabilities, and lease accounting; critical judgments and assumptions involve government grant recognition, expected credit loss measurement, and income tax and deferred income tax asset recognition - These financial statements are prepared in accordance with the "Enterprise Accounting Standards" issued by the Ministry of Finance and related regulations, on a going concern basis[163][164] - The Group classifies financial assets into those measured at amortized cost, at fair value through other comprehensive income, and at fair value through profit or loss, based on the business model for managing financial assets and the characteristics of contractual cash flows[177] - Expenditures in the research phase are recognized as current period expenses when incurred; expenditures in the development phase are capitalized if they simultaneously meet the conditions of technical feasibility, management's intention, generation of economic benefits, resource support, and reliable measurement[212][214] - The Group recognizes loss provisions for financial assets measured at amortized cost based on expected credit losses[181] - The Company and some subsidiaries are recognized as high-tech enterprises, calculating income tax at a preferential rate of 15%, and it is assumed that high-tech enterprise recognition will continue in future years[241] Taxation The Group primarily applies corporate income tax, value-added tax, and urban maintenance and construction tax; the company, Taizhou Pharmaceutical, and Suyuan Bio are all recognized as high-tech enterprises, applying a preferential corporate income tax rate of 15%; Fengyi Holdings is subject to Hong Kong profits tax, but no assessable profits were generated during the reporting period; the company and Taizhou Pharmaceutical, as advanced manufacturing enterprises, benefit from a VAT additional deduction policy | Tax Type | Tax Base | Tax Rate | | :--- | :--- | :--- | | Corporate Income Tax | Taxable Income | 15% and 16.5% | | Value-Added Tax | Taxable Value Added | 13%, 6%, and 3% | | Urban Maintenance and Construction Tax | Amount of VAT Paid | 5% and 7% | - The Company, Taizhou Fudan-Zhangjiang Pharmaceutical Co., Ltd., and Shanghai Suyuan Biotechnology Co., Ltd. are all recognized as high-tech enterprises, applying a 15% corporate income tax rate[242][243] - Fengyi (Hong Kong) Holdings Limited did not generate assessable profits during the reporting period, thus no Hong Kong profits tax was accrued[243] - The Company and Taizhou Pharmaceutical, as advanced manufacturing enterprises, enjoy an additional 5% deduction on current deductible input VAT from January 1, 2023, to December 31, 2027, to reduce their VAT payable[244] Notes to Consolidated Financial Statements This section details the specific circumstances of each item in the consolidated financial statements; it covers the composition, changes, and impairment provisions for current assets and liabilities such as cash and bank balances, notes receivable, accounts receivable, other receivables, and inventories; non-current assets like long-term equity investments, fixed assets, intangible assets, and construction in progress are detailed regarding their carrying value, depreciation, amortization, and impairment; additionally, it itemizes various expenses (selling, administrative, R&D, finance), other income, investment income, credit and asset impairment losses, income tax expense, and the composition and reasons for changes in earnings per share; supplementary cash flo