CONBA(SH:600572)2019-06-18 16:00Financial Performance - The net profit attributable to the parent company for 2018 was RMB 803,794,506.60, with a distributable profit at the end of the year amounting to RMB 1,887,252,523.05[6]. - The total distributable profit at the end of 2018 was RMB 2,165,483,293.53, after accounting for the previous year's undistributed profit and legal reserves[6]. - The company's operating revenue for 2018 was CNY 6,786,645,292.78, representing a 28.20% increase compared to CNY 5,293,966,778.84 in 2017[27]. - The net profit attributable to shareholders for 2018 was CNY 803,794,506.60, an increase of 13.03% from CNY 711,116,240.43 in 2017[27]. - The net profit after deducting non-recurring gains and losses was CNY 756,347,021.41, which is an 8.31% increase from CNY 698,309,967.14 in 2017[27]. - The total assets at the end of 2018 were CNY 10,713,404,733.02, a 13.73% increase from CNY 9,420,221,233.95 in 2017[27]. - The basic earnings per share for 2018 was CNY 0.30, up 7.14% from CNY 0.28 in 2017[28]. - The company achieved a total revenue of 6.787 billion yuan in 2018, representing a year-on-year growth of 28.20%[61]. - The net profit attributable to shareholders was 804 million yuan, up 13.03% compared to the previous year[61]. - The net profit attributable to shareholders after deducting non-recurring gains and losses was 756 million yuan, up by 8.31% year-on-year[74]. Dividend and Share Repurchase - The company plans to distribute a cash dividend of RMB 1.5 per 10 shares, totaling RMB 385,505,597.85, after repurchasing 97,282,881 shares for RMB 585,017,792.34[6]. - The company repurchased a total of 50,451,611 shares, accounting for 1.89% of the total share capital, with a total payment of CNY 311,364,563.44[30]. - The company repurchased 50,451,611 shares, accounting for 1.89% of the total share capital, for employee stock ownership plans and convertible bonds[110]. Risk Management - The company has not reported any significant risks that could materially affect its operations during the reporting period[10]. - The company has implemented measures to address various risks, including industry policy risks and product quality control risks[10]. Audit and Compliance - The company’s financial report has been audited by Tianjian Accounting Firm, which issued a standard unqualified audit opinion[6]. - The company has a commitment to ensuring the accuracy and completeness of its financial reports, as stated by its senior management[6]. Market and Product Development - The company plans to continue expanding its market presence and investing in new product development to drive future growth[29]. - The company focuses on pharmaceutical R&D, manufacturing, and distribution, with a product structure based on modern traditional Chinese medicine and specialty chemical drugs[41]. - The company’s product forms include over 20 types, such as tablets, capsules, injections, and syrups, targeting various therapeutic areas including cardiovascular, digestive, and respiratory diseases[43]. - The company has increased the number of brand or product series with sales revenue exceeding 500 million RMB from 2 to 3, with one product surpassing 1 billion RMB in sales in 2018[49]. - The company has applied for over 200 patents, with more than 100 granted, and is currently developing nearly 20 innovative drugs[54]. - The company’s core technologies include new techniques for extraction and separation of traditional Chinese medicine, quality control, and process control, which enhance its competitive position in the industry[54]. - The company’s well-known brands include Kang En Bei, Qian Lie Kang, and Zhen Shi Ming, with significant market shares in their respective segments[55]. Sales and Revenue Growth - The pharmaceutical industry in China achieved a main business revenue of 2,398.63 billion RMB, representing a year-on-year growth of 12.6%[45]. - The pharmaceutical industrial revenue reached 6.678 billion yuan, with a year-on-year increase of 31.70%, accounting for 98.39% of total revenue[61]. - The sales revenue of the "big brand and big variety" project reached 5.076 billion yuan, a growth of 37.15% year-on-year[63]. - The "Kang En Bei" brand intestinal inflammation series achieved sales of 668 million yuan, growing by 25.59%[63]. - The "Jin Di" brand compound fish mint syrup saw a sales increase of 100.11%, reaching 357 million yuan[63]. - The sales volume of "Dan Shen Chuan Xiong" injection reached 9.201 million units, with a revenue increase of 70.05% to 1.760 billion yuan[63]. - The company’s sales expenses increased by 49.84% to 3.42 billion RMB, indicating a significant rise in marketing efforts[75]. - The company’s R&D expenses rose by 21.37% to 183.39 million RMB, reflecting a commitment to innovation[75]. Inventory and Cash Flow - The net cash flow from operating activities for 2018 was CNY 545,776,464.50, a decrease of 23.58% compared to CNY 714,146,959.45 in 2017[27]. - The company’s cash flow from operating activities decreased by 23.58% to 545.78 million RMB, indicating potential liquidity challenges[75]. - The company's inventory management led to a reduction in stock levels, with a significant decrease in inventory for injectable products[86]. - The company reported a significant decrease in inventory levels for products such as Melatonin Sodium[88]. Research and Development - The total R&D expenditure for the period was CNY 183,388,884.77, accounting for 2.70% of total operating revenue[96]. - The number of R&D personnel was 892, representing 9.56% of the total workforce, indicating a strong focus on innovation[96]. - The company has 108 ongoing research projects, including 63 chemical drugs and 24 traditional Chinese medicines[153]. - The company is actively investing in innovative drug research and consistency evaluation to enhance its product portfolio[153]. - The company’s R&D investment in Ginkgo biloba product development was CNY 815.14 million, marking a 63.50% increase compared to the previous year[154]. Strategic Partnerships and Acquisitions - The company invested 950 million yuan in Jiahe Biopharmaceutical Co., becoming its second-largest shareholder[64]. - The company invested 300.35 million RMB to acquire a 41% stake in Jiangxi Tianshikang, achieving full ownership[68]. - The company acquired a 25.33% stake in Jiahe Biotech for a cost of RMB 95,255,000, contributing a net loss of RMB -2,349,090 since acquisition[181]. - The company acquired a 41% stake in Jiangxi Tianshikang for RMB 31,310,070, which generated a net profit of RMB 3,358,990 during the reporting period[181]. Regulatory Environment - The establishment of the National Healthcare Security Administration has initiated significant reforms in the pharmaceutical industry, emphasizing quality and cost control[121]. - The 4+7 pilot program for centralized procurement has transformed the pricing model for pharmaceuticals, benefiting high-quality and cost-effective therapeutic products[122]. - The company is actively participating in the consistency evaluation of its key products to align with national procurement initiatives[122]. - The company is conducting various studies on its key prescription drugs to comply with the new DRGs payment system being implemented by the National Healthcare Security Administration[123]. Market Trends - The pharmaceutical manufacturing industry is expected to continue growing, driven by national healthcare reforms and increasing health demands[113]. - The company is focusing on optimizing its product structure through R&D and acquisitions to enhance its competitive position in the market[117]. - The company is focusing on the development of generic drugs that are equivalent in quality and efficacy to original drugs, as per the government's policy[130].