BHC(SH:600721)2019-04-28 16:00Financial Performance - The company's net profit for 2018 was -799,158,062.38 CNY, with a cumulative distributable profit of -1,807,404,994.82 CNY, resulting in no cash dividend distribution for the year [6]. - Operating revenue for 2018 was 419,189,442.94 CNY, a slight decrease of 0.07% compared to 419,502,543.16 CNY in 2017 [22]. - The net loss attributable to shareholders for 2018 was -807,864,681.82 CNY, representing a 43.21% increase in losses compared to -564,115,292.91 CNY in 2017 [22]. - The company's total assets decreased by 38.59% to 1,248,330,745.21 CNY at the end of 2018, down from 2,032,765,005.73 CNY in 2017 [23]. - The basic earnings per share for 2018 was -2.0177 CNY, a decline of 43.21% from -1.4089 CNY in 2017 [24]. - The weighted average return on equity for 2018 was -61.31%, a decrease of 33.15 percentage points from -28.16% in 2017 [24]. - Cash flow from operating activities improved significantly to 80,553,717.37 CNY in 2018, compared to -50,260,023.26 CNY in 2017, marking a 260.27% increase [22]. - The company's net assets attributable to shareholders decreased by 46.93% to 913,643,129.67 CNY at the end of 2018, down from 1,721,507,811.49 CNY in 2017 [23]. - The company has faced continuous net losses for the last two accounting years, which may lead to a delisting risk warning as per the Shanghai Stock Exchange regulations [7]. Revenue and Profitability Trends - In Q1 2018, the company reported revenue of ¥111,926,381.39, which decreased to ¥58,672,336.96 in Q4 2018, indicating a significant decline in revenue over the year [26]. - The net profit attributable to shareholders was ¥31,614,198.05 in Q1 2018, but the company faced a loss of ¥877,945,622.59 in Q4 2018, reflecting a downward trend in profitability [26]. - The net cash flow from operating activities showed fluctuations, with a positive cash flow of ¥3,903,750.27 in Q1 and a substantial increase to ¥61,269,325.32 in Q4 2018 [26]. - The company reported non-recurring gains of ¥10,936,376.25 for the year, which included government subsidies and asset disposal gains [28]. - The total operating revenue for 2018 was 419 million yuan, a decrease of 31.31 million yuan compared to the previous year, resulting in a net loss attributable to shareholders of 808 million yuan [43]. Asset Management and Investments - The company recognized an impairment loss of 908.18 million yuan for the goodwill related to the acquisition of Nanjing Huawai, with a remaining goodwill of 173 million yuan [44]. - The company has developed multiple mature technology platforms in drug research, including chiral synthesis and controlled-release formulation technologies [40]. - The company has a low turnover rate among high-end technical personnel, ensuring a stable and strong core research team [41]. - The company plans to enhance its core competitiveness in the pharmaceutical sector by expanding research and development, technology transfer, and clinical services [48]. - The company aims to improve the profitability of traditional businesses by adjusting and transforming existing operations [48]. Market and Competitive Landscape - The company is actively engaged in innovative drug development, particularly in oncology, hypertension, and diabetes, targeting both novel and clinically validated drug targets [34]. - The company is facing challenges in its foreign trade business due to rising domestic operating costs and fluctuations in Sino-U.S. trade relations [43]. - The company plans to expand its pharmaceutical research and development capabilities, focusing on technology transfer and development income [57]. - The company faces risks related to a potential decline in R&D business due to new regulations affecting the development and transfer of "old category 3" drugs [84]. - Rising R&D costs are anticipated as the company expands its pharmaceutical services, leading to increased total costs in the medical and healthcare sectors [84]. Corporate Governance and Compliance - The company has implemented a comprehensive internal control system to strengthen supervision and mitigate financial risks [46]. - The company has maintained a strict separation from its controlling shareholder in terms of business, personnel, assets, and finances [182]. - The company has ensured timely and accurate information disclosure, adhering to regulatory requirements [184]. - The board of directors has actively participated in meetings, with attendance rates for key members being high [186]. - The company has not faced any penalties from securities regulatory authorities in the past three years [175]. Shareholder Structure and Management - The total number of ordinary shares is 400,386,394, which accounts for 100% of the shares [144]. - The top shareholder, Xinjiang Production and Construction Corps, holds 79,525,087 shares, representing 19.86% of the total shares [151]. - The company has a total of 42,962,409 shares under limited sale conditions, which will be tradable after 12 months from the issuance completion date [154]. - The company has a management salary scheme that determines the remuneration for directors and supervisors [172]. - The current board includes experienced professionals from various sectors, enhancing the company's governance [170]. Future Outlook and Strategic Initiatives - The company plans to achieve a total revenue of 3.18 billion in 2019, with 2.95 billion expected from the pharmaceutical sector [81]. - The company aims to enhance its research and development capabilities by increasing investment in biopharmaceuticals and expanding its CRO services to improve market competitiveness [80]. - The company plans to enter new markets in Europe, with an initial investment of $150 million [102]. - The company is investing $200 million in research and development for new technologies aimed at improving user experience [106]. - The company is focusing on expanding its market presence and enhancing its product offerings through strategic acquisitions in the pharmaceutical industry [80].