KMYY(SH:600518)2023-04-28 16:00Financial Performance - The company reported a net profit of -2,688,674,014.61 CNY for 2022, a decrease of 133.96% compared to the previous year[4]. - Total operating revenue for 2022 was 4,180,150,329.54 CNY, representing a slight increase of 0.67% from 2021[17]. - The net cash flow from operating activities was -749,961,986.24 CNY, a decline of 450.11% compared to the previous year[17]. - As of the end of 2022, the total assets amounted to 15,111,759,138.19 CNY, down 5.87% from the end of 2021[17]. - The company's net assets attributable to shareholders decreased by 30.01% to 6,947,130,703.24 CNY by the end of 2022[17]. - The company plans no profit distribution or capital reserve transfer for 2022[4]. - The company's undistributed profits reached -26,004,732,013.55 CNY by the end of 2022[4]. - The basic earnings per share for 2022 was -0.19 CNY, a decrease of 133.33% compared to 0.57 CNY in 2021[18]. - The diluted earnings per share for 2022 was also -0.19 CNY, reflecting the same percentage decrease of 133.33% from the previous year[18]. - The net profit attributable to shareholders for Q4 2022 was -1,802,903,818.18 CNY, with a total annual net profit of -1,690,774,213.81 CNY across all four quarters[19]. - The operating revenue for Q4 2022 reached 1,458,342,620.92 CNY, contributing to a total annual revenue of approximately 4.18 billion CNY[19]. - The weighted average return on equity for 2022 was -31.87%, an improvement of 88.52% from -120.39% in 2021[18]. - The net cash flow from operating activities for Q4 2022 was -412,997,081.86 CNY, indicating ongoing cash flow challenges[19]. - Non-recurring gains and losses for 2022 totaled -1,180,124,269.62 CNY, significantly impacting the overall financial performance[21]. Business Strategy and Operations - The company is focusing on the traditional Chinese medicine sector, leveraging its integrated operational advantages and strong product quality to capture market opportunities[22]. - The management has implemented strategic adjustments to enhance operational stability and compliance, aiming for sustainable growth in the core business[22]. - The company is committed to innovation and collaboration in the traditional Chinese medicine field, aligning with national health initiatives and increasing consumer demand[22]. - The company signed a strategic cooperation agreement with the government of Dingxi City to promote the healthy development of the traditional Chinese medicine industry, focusing on planting, processing, and storage of medicinal materials[23]. - The company established a new display center for fresh-cut traditional Chinese medicinal materials, which is expected to reduce logistics and procurement costs for pharmaceutical companies by improving quality levels[23]. - The company launched a new version of the "Kangmei Pharmacy Mall" mini-program to provide precise procurement services for wholesale pharmaceutical companies[24]. - The company participated in major trade exhibitions, showcasing its core products such as traditional Chinese medicinal pieces and ginseng, which received widespread recognition[24]. - The company formed seven special working groups to focus on key projects, including resource integration and sales business projects, to achieve its annual strategic goals[27]. - The company improved its internal control system by hiring a third-party consulting firm to optimize and rectify internal control deficiencies, resulting in the creation of the "Kangmei Pharmaceutical Internal Control Manual (2022)"[28]. - The company was recognized as one of the "Stable and Qualified Enterprises" in product quality by a national magazine, enhancing its brand reputation[25]. - The company established a long-term cooperation relationship with Shandong Zhongping Pharmaceutical Co., focusing on standardized planting bases for medicinal materials[24]. - The company’s products received multiple awards, including recognition as "High-tech Products" in Guangdong Province, enhancing its market competitiveness[26]. - The company actively engaged in cultural brand building, aiming to enhance its economic strength through cultural initiatives and value creation[25]. Research and Development - The company has built a 3,000 square meter research and development platform for traditional Chinese medicine, which includes various functional modules for pharmacological research and high-throughput sequencing[34]. - The joint venture company focused on developing traditional Chinese medicine formula granules and health products, resulting in the application of two national standards, with one officially published[35]. - The company launched a new strategic development plan in November 2022, focusing on becoming a leading brand in traditional Chinese medicine with a comprehensive service model[36]. - The traditional Chinese medicine segment is the company's core pillar, with over 1,000 types of products and more than 20,000 specifications currently in production[37]. - The company has verified 113 standard varieties of traditional Chinese medicine (TCM) formula granules, successfully filed 81 varieties, and achieved mass production of 113 varieties with 358 batches as of December 31, 2022[39]. - The company has applied for 84 technology patents, with 56 granted, including 13 invention patents and 43 utility model patents as of December 31, 2022[38]. - The company is committed to improving user data collection to better understand market needs and product effectiveness[88]. - The company is investing heavily in R&D, with a budget increase of 25% for new technology development[138]. Market Expansion and Sales - The company has signed contracts with over 1,000 medical institutions, serving a total of 8.24 million patient visits as of December 31, 2022[38]. - The company has developed a smart pharmacy model that integrates online and offline services, enhancing user experience and optimizing prescription review processes[38]. - The company is actively participating in the revision of national TCM standards and has established multiple industry standards for TCM products[40]. - The company aims to strengthen brand promotion and expand the influence of its proprietary TCM products, focusing on high-demand therapeutic areas[41]. - The company is developing a three-in-one medical and health platform that integrates chain health hospitals, TCM clinics, and rehabilitation departments in collaboration with various medical institutions[42]. - The company has established a nationwide layout of traditional Chinese medicine markets through self-construction and acquisitions, including Anhui Bozhou, Puning, Gansu, and Xining[43]. - The company is transitioning from a single rental and sales model to an integrated operation model, focusing on online and offline integration, with recent strategies including tailored approaches for each market[43]. - The health products segment includes successful development of various ginseng products, with plans to enhance R&D capabilities and expand the product series to meet diverse consumer needs[44]. - The pharmaceutical commercial segment is a major revenue contributor, with a focus on optimizing supply chain management and expanding into high-margin products[45]. - The company is positioned as a leading player in the traditional Chinese medicine industry, with a comprehensive operational model and strong integration capabilities[49]. - The company operates nine production bases across multiple provinces, capable of producing over 1,000 varieties and more than 20,000 specifications of traditional Chinese medicine products[49]. - The company has established strategic partnerships with major e-commerce platforms like Tmall and JD.com, enhancing its online sales presence[54]. - The company has developed 21 high-quality traditional Chinese medicine pieces recognized as high-tech products in Guangdong Province[51]. Corporate Governance and Compliance - The company has implemented a comprehensive internal control system to address deficiencies and enhance risk management[168]. - The company has maintained a strict quality control system, ensuring no major quality safety incidents occurred during the year[170]. - The company achieved ISO management system certifications, including ISO9001, ISO14001, and ISO45001, reinforcing its commitment to quality management[170]. - The company has enhanced financial control by refining financial management systems and improving fund management across subsidiaries[170]. - The company has established a three-in-one mixed performance evaluation system to enhance management performance and align it with organizational goals[168]. - The company has committed to maintaining independence in assets, personnel, finance, governance, and business operations as per the commitment letter from its controlling shareholder[132]. - The company organized independent director and supervisory board field investigations to enhance understanding of subsidiary operations and provide management suggestions[129]. - The company actively communicates with investors to ensure transparency and fairness in information disclosure[131]. - The company has implemented a third-party professional agency to optimize internal control and rectify deficiencies[129]. - The company has proposed to increase the expected amount of daily related transactions for 2022, indicating ongoing operational needs[157]. Social Responsibility - The company invested over CNY 1.4 million in healthcare resources for grassroots regions, enhancing public health services[195]. - The company supported 1,079 registered poor households in Yunnan Province, creating approximately 8,360 job opportunities, with an average annual income increase of CNY 3,000 per person[193]. - The company contributed CNY 697,100 to poverty alleviation and rural revitalization projects, with CNY 600,900 in cash and CNY 96,200 in material donations[191]. - Over 8,300 students from Jieyang were assisted in pursuing higher education through the Jieyang University Student Foundation, promoting local employment and entrepreneurship[194]. - The company plans to leverage its full industry chain advantages in traditional Chinese medicine to further enhance corporate social responsibility and promote local economic development[196]. Legal and Regulatory Issues - The company has a significant legal case involving a financial loan dispute, with a first-instance judgment requiring it to pay approximately 2.82 billion CNY, impacting its net profit for 2022 by 609.16 million CNY[124]. - The company received administrative penalties from the China Securities Regulatory Commission, with fines totaling 2 million yuan for several executives due to inaccurate disclosures[150]. - The Shanghai Stock Exchange publicly reprimanded the company for inaccurate earnings forecasts in 2019 and 2020, leading to disciplinary actions against key executives[150].