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春立医疗(01858) - 2022 - 中期财报
2022-09-23 11:35

Cover and Table of Contents Company Information This section provides essential company details, including board and supervisory committee members, company secretary, authorized representatives, registered address, principal place of business, website, and auditor - Executive Directors include Ms. Shi Wenling, Mr. Xie Fengbao, Mr. Shi Chunbao, and Ms. Yue Shujun3 - The company's auditor is Da Xin Certified Public Accountants (Special General Partnership)3 Management Discussion and Analysis Despite pandemic challenges, the company achieved steady revenue growth in H1 2022 through a "volume-for-price" strategy under national artificial joint procurement policies, advancing product registration, R&D, market network, and financial performance Industry Overview and Competitive Advantages In H1 2022, national artificial joint volume-based procurement policies reshaped the industry, with the company leveraging its comprehensive medical device registrations, strong R&D, high-end ceramic joint products, and extensive sales network to establish significant competitive advantages - National artificial joint volume-based procurement policies were progressively implemented across provinces, significantly influencing the industry landscape4 - As of June 30, 2022, the company held 59 medical device registration certificates and filing credentials in China, making it one of the domestic enterprises with the most comprehensive joint prosthesis registrations5 - The company was the first domestic enterprise to obtain registration for BIOLOX®delta fourth-generation ceramic joint prosthesis products and the first to possess registration for BIOLOX®OPTION tapered ceramic heads in 202010 Financial Review For the six months ended June 30, 2022, revenue increased by 18.39% to RMB 571 million, driven by joint prosthesis volume-for-price and rapid growth in spine and sports medicine products, while net profit slightly increased by 0.92% to RMB 157 million despite rising R&D expenses Product Category Revenue (RMB Thousand) | Product Category | H1 2022 Revenue (RMB Thousand) | H1 2021 Revenue (RMB Thousand) | YoY Growth | | :--- | :--- | :--- | :--- | | Joint Prosthesis Products | 524,208 | 462,134 | 13.43% | | Spine Products | 41,105 | 18,535 | 121.77% | | Sports Medicine Products | 4,544 | 1,141 | 298.25% | | Total | 571,392 | 482,631 | 18.39% | - Gross margin decreased from 76.51% in the prior period to 74.52%, primarily due to increased raw material prices and lower unit selling prices from volume-based procurement policies16 - R&D expenses significantly increased by 111.19% year-on-year to RMB 72.3 million, representing 12.65% of revenue, mainly due to increased investment in new areas such as joint robots, PRP, sports medicine, and dentistry19 - Net profit increased by 0.92% year-on-year to RMB 157 million, as the company maintained stable profits through internal cost reduction, efficiency improvements, and external market expansion via a "volume-for-price" strategy22 Liquidity and Financial Resources As of June 30, 2022, the company's liquidity decreased to RMB 1.107 billion from RMB 1.737 billion at the beginning of the year, primarily due to net cash outflow from operating activities of RMB 81.5 million and investing activities of RMB 510 million - Net cash outflow from operating activities was approximately RMB 81.5 million, primarily due to increased cash expenses for sales, R&D, and higher accounts receivable32 - Net cash outflow from investing activities was approximately RMB 510 million, mainly due to new wealth management investments32 - As of June 30, 2022, the principal amount of unredeemed structured deposit wealth management products subscribed by the company was RMB 738 million32 Use of Proceeds The company utilized net proceeds of approximately RMB 186 million from H-share global offering and RMB 1.067 billion from A-share listing on the STAR Market, primarily for developing the Daxing production base, R&D activities, expanding marketing networks, and supplementing working capital H-share Proceeds Use (RMB Million) | H-share Proceeds Use | Available Amount (RMB Million) | Amount Expended as of 2022/6/30 (RMB Million) | Remaining Amount (RMB Million) | | :--- | :--- | :--- | :--- | | Development of Daxing New Production Base Phase I | 92.93 | 87.25 | 5.68 | | R&D Activities | 37.55 | 21.59 | 15.96 | | Expansion of Marketing and Distribution Network | 37.17 | 37.17 | 0.00 | | Working Capital and Others | 18.21 | 18.21 | 0.00 | | Total | 185.86 | 164.22 | 21.64 | - Net proceeds from A-share offering amounted to RMB 1.067 billion, used to replace RMB 128 million of self-raised funds previously invested and to purchase RMB 415 million in wealth management products with idle proceeds2628 Future Outlook The company anticipates benefiting from an aging population, increased per capita income, and expanded medical insurance coverage, planning to enrich product lines, enhance innovation, expand brand influence, and optimize talent development to achieve its goal of becoming a globally renowned orthopedic medical device manufacturer - The company plans to develop advanced customized individual joint prosthesis products using new materials and 3D reconstruction technologies to meet broader patient needs and achieve higher profit margins35 - Plans include establishing a product R&D center at the new Daxing production base and leveraging platforms such as academician expert workstations and postdoctoral research workstations to strengthen R&D talent cultivation and collaboration with external institutions36 Corporate Governance and Other Information This section details the company's corporate governance practices, compliance with securities dealing codes by directors and supervisors, and shareholding details of directors, supervisors, and major shareholders, confirming adherence to HKEX Listing Rules' Corporate Governance Code Corporate Governance and Compliance The company maintains high corporate governance standards, complying with all code provisions of the Corporate Governance Code in Appendix 14 of the HKEX Listing Rules during the reporting period, with the Audit Committee having reviewed the interim financial statements - The Board believes that the company has complied with all code provisions of the Corporate Governance Code during the reporting period41 - The Board's Audit Committee has reviewed the company's consolidated financial statements for the six months ended June 30, 202243 Interests of Directors, Supervisors and Major Shareholders As of June 30, 2022, controlling shareholders Mr. Shi Chunbao and Ms. Yue Shujun (a married couple) collectively controlled 54.42% of the company's total issued share capital, with detailed interests of directors, supervisors, and major shareholders in A and H shares disclosed Interests of Directors (Shares and Percentage of Total Share Capital) | Director Name | Share Class | Number of Shares | Nature of Interest | Percentage of Total Share Capital | | :--- | :--- | :--- | :--- | :--- | | Mr. Shi Chunbao | A-share | 113,685,435 | Beneficial Owner | 29.58% | | | H-share | 1,155,250 | Beneficial Owner | 0.3006% | | | A-share | 95,447,900 | Spouse's Interest | 24.84% | | Ms. Yue Shujun | A-share | 95,447,900 | Beneficial Owner | 24.84% | | | A-share | 113,685,435 | Spouse's Interest | 29.58% | | | H-share | 1,155,250 | Spouse's Interest | 0.3006% | - CITIC Securities Co., Ltd. holds 19,750,000 A-shares through its controlled entities, representing 5.14% of the total share capital47 Review Report This section presents the review report by Da Xin Certified Public Accountants (Special General Partnership) on the company's 2022 interim financial statements, concluding that no matters were identified suggesting the statements were not prepared in accordance with enterprise accounting standards or did not fairly reflect the company's financial position, operating results, and cash flows in all material respects - The review institution is Da Xin Certified Public Accountants (Special General Partnership)50 - The review conclusion states that "nothing has come to our attention that causes us to believe that the financial statements are not prepared in accordance with enterprise accounting standards, nor do they fairly reflect in all material respects," indicating a standard limited assurance conclusion with no material issues identified51 Financial Statements This section includes the company's unaudited consolidated and parent company financial statements for the period ended June 30, 2022, and comparative periods, comprising the balance sheet, income statement, cash flow statement, and statement of changes in equity, comprehensively reflecting the company's financial position, operating results, and cash flows Consolidated Balance Sheet As of June 30, 2022, total assets were RMB 3.107 billion, a slight increase from RMB 3.000 billion at the beginning of the year, with total liabilities remaining stable at RMB 531 million and equity attributable to parent company shareholders increasing to RMB 2.576 billion Consolidated Balance Sheet (RMB) | Item | June 30, 2022 (RMB) | December 31, 2021 (RMB) | | :--- | :--- | :--- | | Total Current Assets | 2,500,429,723.24 | 2,447,763,881.22 | | Total Non-current Assets | 606,472,609.72 | 551,893,480.23 | | Total Assets | 3,106,902,332.96 | 2,999,657,361.45 | | Total Current Liabilities | 441,738,289.37 | 439,618,888.24 | | Total Non-current Liabilities | 89,060,560.51 | 90,961,086.73 | | Total Liabilities | 530,798,849.88 | 530,579,974.97 | | Total Shareholders' Equity | 2,576,103,483.08 | 2,469,077,386.48 | Consolidated Income Statement In H1 2022, the company achieved operating revenue of RMB 571 million, an 18.4% year-on-year increase, with operating profit at RMB 175 million (down from RMB 182 million), and net profit stable at RMB 157 million, a 0.9% increase Consolidated Income Statement (RMB) | Item | Current Period (RMB) | Prior Period (RMB) | | :--- | :--- | :--- | | Operating Revenue | 571,391,616.43 | 482,631,531.05 | | Operating Profit | 174,637,494.77 | 182,432,709.61 | | Total Profit | 172,397,259.62 | 182,250,045.85 | | Net Profit | 156,982,496.60 | 155,555,218.93 | | Basic Earnings Per Share | 0.41 | 0.45 | Consolidated Cash Flow Statement In H1 2022, net cash flow from operating activities was a RMB 81.51 million outflow, from investing activities a RMB 510.36 million outflow, and from financing activities a RMB 38.13 million outflow, resulting in a RMB 629.64 million decrease in cash and cash equivalents Consolidated Cash Flow Statement (RMB) | Item | Current Period (RMB) | Prior Period (RMB) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | -81,512,729.59 | 18,949,001.41 | | Net Cash Flow from Investing Activities | -510,359,121.29 | -108,484,921.71 | | Net Cash Flow from Financing Activities | -38,133,052.89 | -1,277,869.50 | | Net Increase/Decrease in Cash and Cash Equivalents | -629,642,997.67 | -91,283,894.57 | Consolidated Statement of Changes in Shareholders' Equity As of June 30, 2022, total equity attributable to parent company shareholders was RMB 2.576 billion, an increase from RMB 2.469 billion at the beginning of the period, primarily due to RMB 157 million in net profit, partially offset by RMB 49.96 million in dividend distribution - Beginning balance of equity attributable to parent company shareholders was RMB 2.469 billion71 - Total comprehensive income (i.e., net profit) for the period was RMB 157 million, increasing shareholders' equity71 - Profit distribution (distribution to shareholders) for the period decreased shareholders' equity by RMB 49.96 million71 Notes to Financial Statements This section provides detailed notes to the financial statements, covering the company's basic information, basis of preparation, significant accounting policies and estimates, taxation, notes to major items in consolidated financial statements, related party transactions, commitments and contingencies, and other significant matters Company Profile and Basis of Preparation Beijing Chunli Zhengda Medical Devices Co., Ltd., established in 1998 and headquartered in Beijing, is listed on the HKEX (01858.HK) and Shanghai Stock Exchange STAR Market (688236.SH) within the medical device industry, with financial statements prepared on a going concern basis - The company was listed on the Hong Kong Stock Exchange in March 2015 and on the Shanghai Stock Exchange STAR Market in December 202177 - Financial statements are prepared on a going concern basis, with the ability to continue as a going concern for at least 12 months from the end of the reporting period78 Significant Accounting Policies and Estimates This section details the company's key accounting policies and estimates, including revenue recognition upon customer obtaining control, impairment of financial instruments using the expected credit loss model, inventory valuation at the lower of cost or net realizable value using the weighted-average method, and depreciation of fixed assets using the straight-line method - Revenue Recognition: The company recognizes revenue when the customer obtains control of the related goods or services; for distribution, upon dealer's receipt; for direct sales and delivery, upon actual use by the hospital; for overseas sales, upon customs export declaration125126 - Expected Credit Loss: The company accounts for impairment of financial assets based on expected credit losses; for receivables without significant financing components, the simplified approach is used to measure loss allowances at an amount equal to the lifetime expected credit losses9899 - Inventory Valuation: Inventories are valued using the weighted-average method upon issuance and measured at the lower of cost or net realizable value at period-end103 Notes to Major Items in Consolidated Financial Statements This section provides detailed notes on key consolidated financial statement items, including accounts receivable increasing to RMB 657 million with an 8.14% bad debt provision, inventory rising to RMB 182 million, fixed assets significantly increasing to RMB 287 million due to transfers from construction in progress, and substantial R&D expenses primarily for new projects, with RMB 491 million in wealth management products purchased with idle funds - Accounts receivable balance increased from RMB 439 million at the beginning of the year to RMB 657 million, with bad debt provision increasing from RMB 39.2 million to RMB 53.48 million accordingly147148 - Fixed assets book value increased from RMB 178 million at the beginning of the year to RMB 362 million, primarily due to RMB 180 million transferred from construction in progress166 - Market development expenses of RMB 121 million were a major component of selling expenses212 - Technical service fees, employee compensation, and material consumption were the main expenditures within R&D expenses, collectively accounting for over 75% of total R&D expenses214 Related Party Relationships and Transactions The company's actual controllers are Mr. Shi Chunbao and Ms. Yue Shujun, a married couple; during the reporting period, the company conducted sales of goods totaling RMB 2.56 million with Beijing Meizhuo Medical Devices Co., Ltd., a related party, and disclosed key management personnel compensation of RMB 2.11 million - The company's actual controllers are Mr. Shi Chunbao (Executive Director) and Ms. Yue Shujun (Executive Director and Deputy General Manager), a married couple, who collectively hold 54.72% of the company's voting rights248 - Sales of goods to related party Beijing Meizhuo Medical Devices Co., Ltd. amounted to RMB 2,564,968.32, representing 0.45% of similar transactions for the period251 - Total compensation paid to key management personnel for the period was RMB 2,109,438.92252