BHC(SH:600721)2019-06-14 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]. - Total 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 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]. - The company reported a significant increase in cash flow from operating activities, generating 80,553,717.37 CNY in 2018, compared to a negative cash flow of -50,260,023.26 CNY in 2017, marking a 260.27% improvement [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 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]. Operational Highlights - 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]. - The company did not engage in any non-operating fund occupation by controlling shareholders or related parties during the reporting period [7]. - 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]. Research and Development - The company’s main business focuses on drug discovery, research, and technology services, providing integrated solutions for new drug development [34]. - The company has a strong focus on innovative drug development in areas such as oncology, hypertension, and diabetes, targeting both novel and clinically validated drug targets [34]. - The company has established multiple mature technology platforms, including chiral synthesis and controlled-release formulation technologies, enhancing its competitive edge in drug development [40]. - The company plans to strengthen its core pharmaceutical research and development business while expanding its capabilities in clinical services and technology transfer [48]. - 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]. Financial Management and Strategy - The company has committed to enhancing its internal control systems and risk management practices to mitigate financial risks [46]. - The company has initiated a comprehensive asset management review to improve operational efficiency and asset utilization [47]. - 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 intends to establish an industrial merger fund to enhance capital strength and promote growth through mergers and acquisitions [80]. - The company is focusing on expanding its market presence and enhancing its operational scale through strategic acquisitions in the pharmaceutical industry [80]. Shareholder and Governance - The company has not proposed any cash dividend distribution plans despite having positive distributable profits for the reporting period [90]. - The board of directors is required to develop a profit distribution plan based on the company's operational conditions and market environment when profits meet distribution criteria [87]. - The company has not distributed dividends in the past three years, with net profits reported as negative in 2018 (-807.86 million RMB) and 2017 (-564.12 million RMB) [89]. - The company has performance commitments for net profits of at least 1.47 billion RMB for 2018 and a cumulative net profit of no less than 370 million RMB from 2016 to 2018 [91]. - The company has maintained a clear ownership structure with no disputes or potential disputes regarding its equity holdings [107]. Compliance and Risk Management - The company has ensured compliance with relevant laws and regulations, with no violations reported [110]. - The company has not faced any significant lawsuits or administrative penalties that could materially impact its operations [113]. - The company has a complete business system and operates independently in the market without significant competition from related parties [112]. - The company has actively engaged with investors through various communication channels to address their concerns [184]. - The company maintained effective internal control over financial reporting as of December 31, 2018, with no significant deficiencies identified [192]. Employee and Management - The company has a total of 723 employees, with 55 in the parent company and 668 in major subsidiaries [176]. - The company has implemented a composite salary system consisting of base salary, performance pay, and various subsidies [177]. - The total remuneration for all directors, supervisors, and senior management during the reporting period amounted to 219.03 million [172]. - The management team has extensive experience in the healthcare and pharmaceutical industries, enhancing the company's strategic positioning [169]. - The company has established a clear decision-making process for executive compensation, ensuring transparency and accountability [172].