Financial Performance - In the first half of 2022, the company's revenue and gross profit were RMB 165.6 million and RMB 79.7 million, respectively, representing a decrease of approximately 22.7% and 32.6% compared to the same period in 2021 [22]. - Total revenue decreased by approximately 22.7% from RMB 214.2 million in the first half of 2021 to RMB 165.6 million in the first half of 2022, primarily due to a decline in sales volume [33]. - Gross profit decreased by approximately 32.6% from RMB 118.2 million in the first half of 2021 to RMB 79.7 million in the first half of 2022, consistent with the revenue decline [38]. - Operating profit decreased significantly to RMB 7,178 thousand, a decline of 84.7% from RMB 46,848 thousand in the previous year [112]. - The net loss for the period was RMB 7,077 thousand, compared to a profit of RMB 43,809 thousand in the same period last year [112]. - Total comprehensive income for the period was RMB (5,215) thousand, a decrease from RMB 43,254 thousand in 2021 [116]. - The company reported a basic loss per share of RMB (1) for the period, compared to earnings of RMB 6 in the same period last year [116]. - The company reported a basic loss of RMB 7,037,000 for the six months ended June 30, 2022, compared to a profit of RMB 43,919,000 for the same period in 2021, reflecting a significant decline in performance [165]. Sales and Product Performance - The sales decline was primarily due to COVID-19 control measures in China, which restricted the sales of cough and cold medications, leading to reduced sales of the product "Shuanghuanglian Oral Liquid" [22]. - The revenue from the main product, Shuanghuanglian Oral Liquid, was RMB 65,381,000, a decrease from RMB 123,102,000 in the same period last year [148]. - Sales revenue of the Double Huanglian Oral Liquid (10ml) dropped by approximately 50.2% from RMB 89.5 million in the first half of 2021 to RMB 44.6 million in the first half of 2022 [34]. - Sales revenue of the Double Huanglian Injection increased by approximately 42.0% from RMB 23.1 million in the first half of 2021 to RMB 32.8 million in the first half of 2022, attributed to promotional activities [34]. - The core product "Kaifuding" of the joint venture "Jiangxi Yongfeng Kande Pharmaceutical Co., Ltd." passed consistency evaluation in July, and sales are expected to gradually recover [28]. - The product "Atomoxetine Capsules," for treating attention deficit hyperactivity disorder, was approved for market launch in June and is expected to contribute to sales gradually [28]. Research and Development - The subsidiary "Jiaheng (Zhuhai Hengqin) Pharmaceutical Technology Co., Ltd." has obtained a drug production license and is currently working on 18 R&D projects, including 4 traditional Chinese medicine projects [27]. - The company plans to significantly increase R&D expenses this year, which is expected to bring new products and growth points for the company's medium to long-term development [27]. - Research and development costs increased to RMB 10,005,000 from RMB 6,070,000 year-on-year [156]. Financial Position and Liabilities - As of June 30, 2022, total short-term and long-term borrowings amounted to approximately RMB 281.3 million, an increase from RMB 236.9 million as of December 31, 2021 [49]. - The debt-to-equity ratio increased from 36.1% as of December 31, 2021, to 44.0% as of June 30, 2022, mainly due to increased bank borrowings [57]. - The company's total liabilities decreased to RMB 302,381 thousand as of June 30, 2022, from RMB 309,418 thousand at the beginning of the year, indicating improved financial stability [130]. - The company's current liabilities increased to RMB 487,890 thousand from RMB 489,266 thousand at the end of 2021 [121]. - The company's equity attributable to shareholders decreased to RMB 641,383 thousand from RMB 658,169 thousand at the end of 2021 [125]. Cash Flow and Investments - The company experienced a net cash outflow from operating activities of RMB (46,345) thousand for the six months ended June 30, 2022, compared to a cash inflow of RMB 35,801 thousand in the previous year [136]. - The net cash used in investing activities was RMB (11,799) thousand for the first half of 2022, a substantial improvement from RMB (254,374) thousand in the same period of 2021 [136]. - Financing activities generated a net cash inflow of RMB 28,536 thousand in the first half of 2022, contrasting with a cash outflow of RMB (23,925) thousand in the prior year [136]. - Cash and cash equivalents decreased to RMB 52,627 thousand from RMB 81,063 thousand at the end of 2021, indicating a liquidity contraction [182]. - The company incurred tax expenses of RMB 456,000 for the six months ended June 30, 2022, compared to RMB 4,840,000 for the same period in 2021, showing a substantial decrease in tax liabilities [160]. Shareholder Information and Corporate Governance - The major shareholder, Mr. Cao Changcheng, holds 495,374,000 shares, representing 65.75% of the equity [68]. - Full Bliss Holdings Limited and Rayford both hold 180,180,000 shares, each representing 23.91% of the equity [77]. - The company has a stock option plan adopted on June 14, 2018 [81]. - As of June 30, 2022, there are 16,000,000 unexercised stock options under the share option scheme, representing approximately 2.11% of the company's issued share capital [83]. - The board proposed to extend the exercise period of the unexercised stock options from the original expiry date of July 19, 2020, to June 13, 2028, to encourage long-term commitment from eligible participants [83]. - The company has complied with all applicable code provisions of the corporate governance code during the reporting period, except for one specific provision [88]. - The audit committee consists of three independent non-executive directors and has been active in overseeing the financial reporting process and internal controls [89].
福森药业(01652) - 2022 - 中期财报