LZYY(SH:603368)2021-03-29 16:00Financial Performance - The net profit attributable to shareholders for 2020 was CNY 711,713,755.11, with a distributable profit of CNY 2,361,722,008.75[4] - The company's operating revenue for 2020 was approximately CNY 15.67 billion, representing a year-over-year increase of 5.46% compared to CNY 14.86 billion in 2019[17] - The net profit attributable to shareholders for 2020 was approximately CNY 711.71 million, a 3.84% increase from CNY 685.43 million in 2019[17] - The net cash flow from operating activities increased significantly by 60.97% to approximately CNY 664.69 million in 2020, compared to CNY 412.91 million in 2019[17] - The total assets of the company at the end of 2020 were approximately CNY 14.81 billion, reflecting a 23.83% increase from CNY 11.96 billion at the end of 2019[17] - The basic earnings per share for 2020 was CNY 1.96, up 3.70% from CNY 1.89 in 2019[18] - The weighted average return on equity for 2020 was 15.34%, a decrease of 1.51 percentage points from 16.85% in 2019[18] - The company achieved a total revenue of CNY 1,566,866.30 million, representing a year-on-year growth of 5.46%[56] - The net profit attributable to shareholders was CNY 71,171.38 million, with a year-on-year increase of 3.84%[56] Dividend Policy - The company proposed a cash dividend of CNY 6.00 per 10 shares (including tax) for the 2020 fiscal year[4] - The company has established a cash dividend policy, committing to distribute at least 20% of its distributable profits annually in cash dividends[135] - In 2020, the company distributed a cash dividend of 6.00 RMB per 10 shares, totaling 217,461,361.20 RMB, which represents 30.55% of the net profit attributable to ordinary shareholders[139] - The cash dividend payout ratio for 2019 was 30.24%, slightly lower than the 30.55% in 2020[139] Audit and Compliance - The audit report for the fiscal year 2020 was issued by Zhongqin Wanxin Accounting Firm with a standard unqualified opinion[4] - The company has confirmed that all board members attended the board meeting for the annual report[4] - The company has committed to avoiding and minimizing related party transactions to protect the interests of all shareholders[144] - The controlling shareholder has pledged to comply with legal procedures for related party transactions and ensure fair market conditions[144] - The company appointed Zhongqin Wanxin Accounting Firm as the financial audit and internal control audit institution for the year 2020, with an audit fee of 600,000 RMB[151] Business Operations and Strategy - The company is focusing on expanding its core pharmaceutical wholesale and retail business while enhancing its supply chain services and developing e-commerce capabilities[28] - The company operates under the "Two Invoice System" for drug distribution, which aims to enhance transparency in the pharmaceutical supply chain[11] - The company is actively expanding its store layout and developing specialized pharmacies, including DTP pharmacies and chronic disease pharmacies, to enhance retail service capabilities[32] - The company is leveraging its channel resources to provide diversified value-added services, enhancing its market share and customer relationships[44] - The company is focusing on integrating online and offline services to create a "new retail" model, aiming for sustained growth in its retail business[32] Market and Industry Trends - The pharmaceutical circulation market in China has grown from CNY 150.5 billion in 2000 to CNY 2,366.7 billion in 2019, a growth of 14.73 times over 20 years[37] - The concentration of the pharmaceutical circulation industry is increasing, with the top 20 wholesale companies accounting for 61.5% of the national market in 2019, up 2.5 percentage points year-on-year[38] - The overall industry remains strong, with a trend towards consolidation and increased demand driven by population growth and aging demographics, despite short-term impacts from the pandemic[105] Risk Management - The report includes a detailed description of potential risks that the company may face in the future[4] - The company is exposed to risks from ongoing healthcare policy changes, including the normalization of "two-invoice system" and "4+7 volume-based procurement" policies[128] - The company's accounts receivable management is under pressure due to the expansion of sales scale and longer collection cycles from hospital clients[130] Corporate Social Responsibility - The company has invested over RMB 8 million in poverty alleviation projects over the past three years, helping 12 impoverished villages and implementing 15 assistance projects[165] - The company has actively participated in poverty alleviation through consumption, employment, and industrial support, aligning its business development with regional poverty alleviation efforts[165] - The company received recognition as an advanced private enterprise in the national "Ten Thousand Enterprises Helping Ten Thousand Villages" poverty alleviation initiative[165] Research and Development - R&D expenses surged by 214.53% to CNY 8.74 million, reflecting the company's commitment to innovation[77] - The company has filed for 7 utility model patents, with 2 already granted, enhancing its R&D capabilities[70] - The company plans to increase R&D investment to advance the construction of traditional Chinese medicine (TCM) formula granules, aiming for completion within the year[120] Logistics and Distribution - The company has established a comprehensive logistics distribution network covering 14 prefecture-level cities in Guangxi, enhancing its delivery capabilities[52] - The company completed the construction of the Yulin Logistics Operation Center project, enhancing its logistics capabilities[60] Financial Position - The company's debt-to-asset ratio stood at 63.23%, indicating a stable and reasonable debt structure[186] - The company maintained an "AA" credit rating with a stable outlook, reflecting strong debt repayment capability and low default risk[186] - Cash and cash equivalents at the end of the period rose by 82.53% to ¥3,495,890,508.14, up from ¥1,915,191,245.33, attributed to increased cash receipts from sales and funds from convertible bonds[99] Convertible Bonds - The company issued 802.20 million yuan in convertible bonds, with a conversion price adjusted from 34.94 yuan to 24.47 yuan per share[178] - The convertible bonds, named "Liuyao Convertible Bonds," were listed for trading on February 24, 2020, with a maturity date of January 16, 2026[200]