NO.1 PHARMACY(SH:600833)2020-04-13 16:00Financial Performance - The company's net profit attributable to shareholders for 2019 was CNY 53,089,382.56, representing a 12.51% increase compared to CNY 47,186,332.49 in 2018[4]. - The operating income for 2019 was CNY 1,243,169,488.29, reflecting a growth of 5.65% from CNY 1,176,665,762.11 in the previous year[19]. - The net cash flow from operating activities increased by 144.43% to CNY 104,601,581.36, up from CNY 42,793,435.99 in 2018[21]. - The basic earnings per share for 2019 was CNY 0.24, a 14.29% increase from CNY 0.21 in 2018[20]. - The company achieved a 100.79% increase in net profit attributable to shareholders after deducting non-recurring gains and losses, driven by operational improvements and expanded sales channels[21]. - The diluted earnings per share also stood at CNY 0.24, consistent with the basic earnings per share[20]. - The company reported a total non-operating income of RMB 15,620,341.80 in 2019, a decrease of 45.1% compared to RMB 28,525,164.36 in 2018[25]. - The company achieved a total revenue of 1,243.17 million RMB, representing a year-on-year growth of 5.65%[47]. - The main business revenue reached 1,183.82 million RMB, with a growth of 5.55% compared to the previous year[47]. - The net profit after deducting non-recurring gains and losses surged by 100.79% to 37.47 million RMB[47]. - The retail business generated revenue of 728.83 million RMB, up 7.22% year-on-year, while the wholesale business revenue was 454.99 million RMB, growing by 2.99%[49][48]. Assets and Investments - The total assets of the company at the end of 2019 were CNY 1,216,551,640.88, a 12.70% increase from CNY 1,079,466,351.75 in 2018[19]. - The company's net assets attributable to shareholders increased by 9.47% to CNY 725,329,730.23 from CNY 662,560,731.44 in 2018[19]. - The company’s other equity investments increased from RMB 198,867,750.37 at the beginning of the period to RMB 226,108,279.89 at the end, reflecting a change of RMB 27,240,529.52[27]. - The company’s other equity investment increased from CNY 198,867,750.37 to CNY 226,108,279.89, with a change of CNY 27,240,529.52 during the reporting period[78]. Business Operations - The company’s retail and wholesale business remains unchanged, focusing on pharmaceuticals, food, medical devices, and health products[30]. - The company has enhanced its pharmaceutical service capabilities, providing medication guidance and health consulting, which aligns with the "Healthy China Strategy" and supports business growth[33]. - The company has expanded its online business significantly, collaborating with major platforms like JD.com and Tmall, leading to an increase in retail sales proportion[42]. - The company is adapting to the "Internet + Healthcare" trend, integrating online and offline resources to improve consumer experience and expand market reach[34]. - The company has developed innovative store formats to cater to diverse consumer needs, enhancing its competitive edge in the market[40]. - The company opened 5 new stores, bringing the total number of stores to 98[50]. - Online business revenue reached 26.87 million RMB during the reporting period[50]. - The company established a logistics distribution center covering 20,610.16 square meters, enhancing logistics efficiency[65]. Challenges and Strategies - The company faces challenges from rising labor costs, rental expenses, and regulatory impacts from policies like "Two Invoice System" and volume-based procurement[90]. - The company aims to transform its wholesale business from a traditional distributor to a service provider, focusing on professional products and services[94]. - The company plans to enhance its logistics system to adapt to new retail and health consumption trends, integrating professional services with operations[95]. - The company is positioned to capitalize on the trend of prescription outflow from medical institutions, which is expected to significantly benefit the retail pharmaceutical sector[91]. - The company will explore new business models, including "Internet + Healthcare," to meet diverse consumer demands in the health sector[99]. Profit Distribution and Shareholder Relations - The company proposed a cash dividend of CNY 0.75 per 10 shares, totaling CNY 16,731,476.03, which accounts for 31.52% of the net profit attributable to shareholders[4]. - The company has revised its profit distribution policy to ensure reasonable returns to investors, with a cash dividend not less than 30% of the net profit attributable to shareholders if certain conditions are met[105]. - The company has a policy of prioritizing cash dividends, with the option to issue stock dividends if the board believes it benefits shareholders and the company's stock price is misaligned with its capital structure[106]. - The board must consider various factors, including profit situation and shareholder returns, when formulating profit distribution plans, and independent directors must provide clear opinions[107]. - The company’s monitoring committee oversees the execution of cash dividend policies and ensures compliance with decision-making procedures[111]. - The company has not proposed a cash profit distribution plan for the reporting period despite having positive distributable profits, which requires detailed disclosure of reasons and intended use of retained earnings[113]. Governance and Compliance - The company has commitments from its controlling shareholder, Bailian Group, to avoid engaging in any business that competes with the company during the period of control[114]. - Bailian Group has pledged to ensure that the company maintains operational independence, including procurement, production, and sales, following the transfer of shares[114]. - The company has established a commitment to maintain independent financial accounting and management systems post-share transfer[114]. - The company will ensure that its senior management does not receive compensation from Bailian Group or its controlled entities[114]. - The company has a robust internal control system to ensure compliance and protect investor interests[182]. - The company ensures timely and accurate information disclosure to all shareholders, maintaining transparency[184]. - The independent auditor issued a standard unqualified opinion on the internal control audit report for the fiscal year 2019[189]. - The company has not disclosed any significant risks identified by the supervisory board during the reporting period[188]. Employee and Management Structure - The company has a total of 841 employees, with 269 in the parent company and 572 in major subsidiaries[170]. - The company has implemented a flexible compensation policy, including annual salary, position salary, and performance-based pay[171]. - The total remuneration for directors and senior management during the reporting period amounted to CNY 5.976 million[166]. - The company has a structured remuneration management system for senior management based on performance assessments and responsibilities[166]. - The company has established a performance evaluation system linking management compensation to business performance[180]. Accounting and Financial Reporting - The company implemented changes to accounting policies, including the separation of "receivables" into "notes receivable" and "accounts receivable," with the previous year's ending balance for "accounts receivable" at ¥73,887,974.36[116]. - The new financial instrument standards resulted in a decrease in available-for-sale financial assets by ¥193,523,950.37 for the consolidated statements and ¥192,915,087.97 for the parent company[117]. - The company reported a year-end balance of ¥111,946,351.53 for "accounts receivable" under the new standards, slightly adjusted from the previous reporting[119]. - The total cash and cash equivalents reported were ¥387,981,524.20, remaining unchanged under the new financial instrument standards[119]. - The company’s financial assets and liabilities were reclassified according to the new measurement categories, impacting the overall financial position[119].