Shanghai Pharma(SH:601607)2019-03-28 16:00Dividend and Shareholder Returns - The company plans to distribute a cash dividend of RMB 4.10 per 10 shares (including tax) to all shareholders, subject to approval at the 2018 annual general meeting[3]. - As of December 31, 2018, the company had a distributable reserve amounting to RMB 1.81 billion[121]. - In 2018, the company's earnings per share (EPS) increased to 4.10, up from 3.80 in 2017, representing a growth of 7.89%[124]. - The company has not proposed any cash profit distribution plan for ordinary shareholders despite having positive distributable profits[125]. Financial Performance - The company's operating revenue for 2018 was CNY 159,084,396,948.33, representing a 21.58% increase compared to CNY 130,847,181,884.59 in 2017[16]. - The net profit attributable to shareholders for 2018 was CNY 3,881,062,861.27, a 10.24% increase from CNY 3,520,645,566.99 in 2017[16]. - The net cash flow from operating activities for 2018 was CNY 3,135,113,763.53, up 18.36% from CNY 2,648,808,869.16 in 2017[16]. - The total assets at the end of 2018 reached CNY 126,879,334,502.88, a 34.49% increase from CNY 94,344,475,177.12 in 2017[16]. - The company's net assets attributable to shareholders increased by 14.64% to CNY 39,013,570,426.62 at the end of 2018 from CNY 34,030,840,901.51 in 2017[16]. - The weighted average return on equity for 2018 was 10.34%, a decrease of 0.39 percentage points from 10.73% in 2017[18]. - The net profit margin for 2018 was 30.02%, slightly down from 30.68% in 2017[124]. Research and Development - The company invested RMB 1.06 billion in R&D, marking a 34.22% increase year-on-year, which accounted for 5.45% of the industrial sales revenue[40]. - The company reported a significant increase in R&D expenses, which contributed to a 13.85% growth in net profit after excluding non-recurring gains and losses[16]. - The company is focusing on innovative drug development, with 18.70% of R&D investment directed towards innovative drugs and 19.93% towards generic drugs[40]. - The company has ongoing clinical trials for several new drugs, including SPH3127 for hypertension and SPH1188 for non-small cell lung cancer[77]. - The company has submitted a total of 32 consistency evaluation projects to the CDE, with 4 approved and 14 accepted during the reporting period[79]. Market Position and Strategy - The company maintained its position in the top tier of the pharmaceutical industry, focusing on five major therapeutic areas and producing nearly 700 drug varieties[28]. - The company aims to enhance its international business and capital operations to achieve steady growth in operational performance and profitability[28]. - The company is actively expanding into five core business areas: financial investment, pharmaceuticals, infrastructure, real estate, and consumer goods, while also exploring new sectors such as elderly care, environmental protection, and new energy[185]. - The company plans to accelerate its international development by participating in global competition and seeking opportunities for investment and exports in countries along the Belt and Road[107]. Risks and Challenges - There are no significant risks that could materially affect the company's operations during the reporting period[5]. - The pharmaceutical industry in 2018 experienced structural reforms, with significant changes in medical insurance and drug procurement policies, leading to a slowdown in market growth[26]. - The company faces risks from industry policy changes, including price reductions and procurement policies, which may impact profit margins[108]. - The company reported a significant increase in capitalized research and development expenses, which rose by 167.55% to 165,698,846.78 yuan, accounting for 0.13% of total assets[62]. Corporate Governance and Compliance - The company received standard unqualified audit reports from PwC and Deloitte for its financial statements prepared under Chinese and Hong Kong accounting standards, respectively[2]. - The board of directors approved the complete annual performance as of December 31, 2018, during the meeting held on March 28, 2019[2]. - The company has adhered to its non-competition commitments as confirmed by its major shareholders during the reporting period[126]. - The company has confirmed the independence of four independent non-executive directors according to the Hong Kong Listing Rules[195]. Social Responsibility and Environmental Impact - The company has actively engaged in social responsibility initiatives, including poverty alleviation efforts, as detailed in its 2018 Social Responsibility Report[166]. - Environmental protection measures have been implemented, with the company classified as a key pollutant discharge unit, and compliance with relevant regulations has been reported[167]. Share Capital and Ownership - The total number of shares issued increased from 2,688,910,538 to 2,842,089,322, with an increase of 153,178,784 shares[175]. - The top ten shareholders hold a total of 1,988,000,000 shares, representing approximately 69.94% of the total shares[181]. - HKSCC NOMINEES LIMITED holds 31.08% of the shares, with an increase of 153,549,404 shares during the reporting period[181]. - The company has no changes in restricted shares during the reporting period, maintaining a total share capital of 2,842,089,322 shares[177].