CISEN(SH:603367)2020-04-28 16:00Financial Performance - The net profit attributable to the parent company for 2019 was CNY 514,580,078, with a proposed cash dividend of CNY 2.68 per 10 shares, totaling approximately CNY 120,695,867, which accounts for 23.46% of the net profit[6]. - The distributable profit for 2019, after accounting for statutory reserves and dividends, was CNY 2,010,922,090.80, with retained earnings carried forward to future years amounting to CNY 1,890,226,223.98[7]. - The company's operating revenue for 2019 was approximately CNY 4.11 billion, representing an 8.00% increase compared to CNY 3.81 billion in 2018[27]. - Net profit attributable to shareholders was CNY 514.58 million, a 2.19% increase from CNY 503.54 million in the previous year[27]. - The net profit after deducting non-recurring gains and losses was CNY 475.97 million, showing a slight decrease of 1.05% from CNY 481.03 million in 2018[27]. - The company's total assets increased by 5.44% to CNY 5.53 billion at the end of 2019, compared to CNY 5.25 billion at the end of 2018[27]. - Basic earnings per share rose to CNY 1.14, a 2.70% increase from CNY 1.11 in 2018[27]. - The weighted average return on equity decreased to 11.79%, down 0.88 percentage points from 12.67% in 2018[27]. - The company achieved a total revenue of CNY 4.11 billion in 2019, representing an 8.00% increase compared to the previous year[62]. - Net profit for the company reached CNY 515 million, marking a 2.19% growth year-over-year[62]. Cash Flow and Financial Position - The net cash flow from operating activities decreased significantly by 55.43% to CNY 181.26 million from CNY 406.68 million in 2018[27]. - The company reported a decrease in cash flow from operating activities due to increased operational payments compared to the previous year[64]. - Net cash flow from investing activities decreased due to an increase in monetary fund investment compared to the same period last year[64]. - Net cash flow from financing activities decreased due to the reasons related to new borrowings received[64]. - The company's accounts receivable financing increased to ¥127,522,982.71, representing 2.30% of total assets[81]. - The company's prepayments rose significantly by 111.36% to ¥50,756,767.97, accounting for 0.92% of total assets[81]. - The company's trading financial assets reached ¥1,976,591,539.02, making up 35.72% of total assets, a notable increase from the previous period[81]. - The company's other receivables decreased by 35.54% to ¥15,666,504.89, which is 0.28% of total assets[81]. - The company's short-term borrowings amounted to ¥100,000,000.00, representing 1.81% of total assets[81]. - The company's tax payable increased by 54.72% to ¥56,660,385.55, which is 1.02% of total assets[81]. Market and Industry Overview - In 2019, the pharmaceutical manufacturing industry achieved revenue of CNY 23,908.6 billion, a year-on-year increase of 7.4%[47]. - The total profit for the pharmaceutical manufacturing sector reached CNY 3,119.5 billion in 2019, growing by 5.9% year-on-year[47]. - The gross profit margin for the pharmaceutical manufacturing industry was approximately 13.05%, an increase of 0.3 percentage points compared to the previous year[47]. - The total revenue of China's pharmaceutical manufacturing industry reached ¥2.39 trillion in 2019, with a year-on-year growth of 7.40%[87]. - The total profit of the pharmaceutical manufacturing industry was ¥312 billion in 2019, reflecting a year-on-year increase of 5.90%[87]. - The implementation of the "4+7" centralized procurement policy led to an average price reduction of 52% for selected drugs[93]. - The pharmaceutical manufacturing market in China is projected to exceed 3.5 trillion yuan by 2022, growing approximately 1 trillion yuan from 2018[139]. Research and Development - Research and development expenses amounted to CNY 310.56 million, accounting for 7.55% of total revenue[58]. - The company has maintained a research and development investment ratio of over 6% of sales for sustainable development, with a total R&D expenditure of 310.56 million CNY in 2019[106]. - There are over 70 ongoing projects focusing on complex injectables, specialty drugs, and generic drug consistency evaluation, aimed at addressing major clinical needs in various therapeutic areas[108]. - The company is conducting Phase I clinical trials for two new Class 1 drugs targeting tumor treatment and drug-resistant tuberculosis infections[108]. - The company has completed pharmaceutical research or bioequivalence clinical trials for 4 oral formulations and 6 injectable formulations, which are about to be registered[108]. - The company has established a raw material drug production base, ensuring supply and cost advantages for new drug projects and high-end generic drugs[109]. - The company is developing medical nutrition foods as a key direction, with two projects for enteral nutrition suspension liquids nearing registration[112]. - The company has received one approval for generic drug consistency evaluation and has submitted two products for evaluation during the reporting period[112]. - The company has collaborated with CROs on four products, leveraging external resources for R&D projects not supported by existing resources[106]. - The company has a total of 792 R&D personnel and has built several national and provincial-level R&D innovation platforms[107]. Sales and Marketing Strategy - The company has established a comprehensive sales system and market support structure, including various departments for different product categories[44]. - The company has a dual sales model, utilizing both direct sales to hospitals and retail pharmacies and distribution through pharmaceutical companies[43]. - The company aims to enhance its market share in the OTC product segment by increasing collaboration with top retail chains[124]. - The company is focusing on expanding its sales network and increasing its presence in county-level and grassroots markets[124]. - The company intends to develop a comprehensive sales network covering both domestic and international markets, including e-commerce platforms[146]. Risk Management and Compliance - The company has not faced any significant risks that could materially impact its operations during the reporting period[11]. - The company has maintained compliance with regulations regarding non-operational fund occupation and external guarantees[11]. - The company is actively monitoring policy changes in the pharmaceutical industry to mitigate risks associated with regulatory compliance[155]. - The company has established a risk management framework to address potential safety production risks and ensure compliance with safety regulations[156]. - The company has implemented a product traceability system and a monthly drug safety report to address quality complaints and ensure accountability[152]. Corporate Governance and Shareholder Relations - The board of directors is responsible for proposing the profit distribution plan, which must be approved by the shareholders' meeting, ensuring the participation of minority shareholders[165]. - The company has committed to maintaining the rights of minority shareholders in the decision-making process regarding profit distribution, including providing various channels for feedback[165]. - The company's independent directors are involved in reviewing and approving the profit distribution proposals, ensuring transparency and accountability[165]. - The company has a commitment to avoid competition with other enterprises controlled by its actual controller, ensuring a focus on its core business[174]. - The controlling shareholder, Chenxin Technology Group, and major shareholder Qian Ding Investment have committed not to engage in any competitive business with Chenxin Pharmaceutical[175]. Dividend Policy - The company implemented a stable profit distribution policy, prioritizing cash dividends, with a cash dividend of 120,695,866.82 RMB distributed in 2019, representing 23.46% of the net profit attributable to ordinary shareholders[169]. - The cash dividend policy stipulates that during the mature stage without major capital expenditures, cash dividends should account for at least 80% of the total distribution; during the mature stage with major expenditures, at least 40%; and during the growth stage with major expenditures, at least 20%[165]. - The company has a continuous and stable profit distribution policy, ensuring that dividends are distributed annually when conditions allow, with the possibility of mid-term distributions[168]. - In 2019, the company distributed 2.68 RMB per 10 shares as cash dividends, compared to 2.62 RMB in 2018 and 1.60 RMB in 2017[169]. Audit and Compliance - The company’s financial statements received a standard unqualified audit opinion from Da Xin Certified Public Accountants[5]. - The company has appointed Da Xin Accounting Firm with an audit fee of CNY 900,000 for the current year[191]. - The company has not encountered any major accounting errors or issues during the reporting period[191].