Jiangsu wuzhong(600200)2019-04-19 16:00Financial Performance - In 2018, the company reported a consolidated net profit of -285,568,326.57 yuan, with the parent company's net profit at -247,011,914.23 yuan[7]. - The parent company had an undistributed profit at the beginning of the year of 84,320,174.46 yuan, ending the year with an undistributed profit of -203,117,689.42 yuan[7]. - The company did not distribute profits for the year 2018 due to the reported losses[7]. - The company's operating revenue for 2018 was CNY 1,701,627,607.60, a decrease of 42.52% compared to the previous year[23]. - The net profit attributable to shareholders was a loss of CNY 285,568,326.57, representing a decline of 314.54% year-on-year[23]. - The company reported a basic earnings per share of -CNY 0.396, down 314.05% from CNY 0.185 in 2017[23]. - The total assets at the end of 2018 were CNY 4,617,910,901.74, a slight decrease of 0.36% from the previous year[23]. - The company achieved operating revenue of CNY 1,701.63 million, a decrease of 42.52% compared to the previous year, with main business revenue dropping by 42.63%[69]. - The company reported a net profit attributable to the parent company of CNY -285.57 million, a decline of 314.54% year-on-year[69]. Industry and Market Analysis - The company has indicated that there are industry risks that may affect future performance, as discussed in the operational analysis section of the report[9]. - In 2018, the pharmaceutical manufacturing industry reported a total revenue of 239.86 billion yuan, reflecting the impact of medical insurance cost control and price reduction policies[38]. - The dye industry faced supply tightness due to environmental pressures, leading to sustained high prices for dyes throughout 2018[42]. - The national average residential price index reached 14,678 yuan per square meter in 2018, with a year-on-year increase of 5.09%[44]. - The biopharmaceutical industry in China has been steadily increasing in profitability since the 1980s, becoming one of the fastest-growing and most profitable sectors in the pharmaceutical industry[108]. - By 2020, China's biopharmaceutical market is projected to become the second largest globally, following the United States, according to IMS Health[112]. - The chemical drug formulation sector remains dominant in China's pharmaceutical market, with generics still leading while self-developed drugs are on the rise[114]. - The chemical raw material drug industry in China has shown signs of recovery in recent years, driven by new domestic medical reform policies and stricter industry regulations[116]. Research and Development - The company has over 30 ongoing research projects in the pharmaceutical sector and holds 28 effective patents, including 25 invention patents[49]. - The company is committed to enhancing its R&D capabilities and has plans for team expansion and investment in new technologies and products post-acquisition[49]. - The total R&D investment for the year 2018 amounted to CNY 40,414,843.77, representing 2.38% of total operating revenue[85]. - The company capitalized 33.29% of its R&D expenditures, with CNY 13,455,910.52 being capitalized[85]. - The company’s R&D personnel accounted for 11% of the total workforce, with 197 employees dedicated to R&D[85]. - The company has a total of 7,533.73 million RMB in cumulative R&D investment for its major projects[140]. - The company is actively pursuing consistency evaluations for several products, including Trimetazidine sustained-release tablets and Lansoprazole injection[140]. Product and Segment Performance - The pharmaceutical segment achieved a total revenue of CNY 1,309.60 million, an increase of CNY 146.06 million, or 12.55% year-on-year[57]. - The gross profit for the pharmaceutical segment was CNY 504.57 million, up CNY 77.37 million, or 18.11% compared to the previous year[57]. - The chemical segment reported a revenue of CNY 238.54 million, a significant decline of CNY 410.62 million, or 63.25% year-on-year due to environmental regulations[63]. - The gross profit for the chemical segment decreased to CNY 59.27 million, down CNY 114.66 million, or 65.92% year-on-year[63]. - The real estate sector reported revenue of CNY 128.79 million, a decline of 64.27%, with a gross margin of 15.87%, an increase of 10.42 percentage points[70]. - The company’s main business in the pharmaceutical sector generated revenue of CNY 1,309.60 million, an increase of 12.55%, with a gross margin of 38.53%, up by 1.81 percentage points[70]. Compliance and Environmental Initiatives - The company is actively pursuing environmental remediation and has developed a detailed rectification plan to ensure compliance with safety and environmental standards[65]. - The company is focusing on technological advancements in environmental protection and has initiated a transition towards cleaner production methods[66]. - The company has invested heavily in environmental protection equipment and technology to comply with stricter national safety and environmental standards[171]. - The company emphasizes process management and environmental safety, implementing a long-term mechanism for efficiency and compliance with national standards[186]. Sales and Marketing Strategies - The sales model remains unchanged, primarily utilizing terminal sales, distribution, and OTC models, with hospitals accounting for 48.17% of total revenue[151][154]. - The increase in sales expenses is primarily due to expanded marketing expenditures aimed at developing the pharmaceutical business market[167]. - Sales expenses for the pharmaceutical business amounted to RMB 408.96 million, an increase of 41.71% compared to the previous year, accounting for 31.23% of operating income[167]. Strategic Initiatives - The company has established a wholly-owned subsidiary to enhance its investment capabilities in the pharmaceutical sector, aiming for strategic acquisitions and partnerships[66]. - The company has established a technology center and has a research team of over 50 personnel, accounting for more than 10% of total employees, with 3 provincial high-tech products developed[177]. - The company has established a complete industrial chain covering gene drugs, chemical drugs, and modern traditional Chinese medicine, with a diverse range of production lines[117]. - The company is implementing measures to enhance production processes, product quality, and sales channels to mitigate the impact of these challenges[117].