DALI PHARMACEUTICAL(SH:603963)2023-08-28 16:00Financial Performance - The company's operating revenue for the first half of 2023 was approximately ¥59.57 million, a decrease of 14.51% compared to ¥69.68 million in the same period last year[19]. - The net profit attributable to shareholders for the first half of 2023 was a loss of approximately ¥10.78 million, compared to a loss of ¥8.49 million in the same period last year[19]. - The net profit attributable to shareholders after deducting non-recurring gains and losses was approximately ¥13.51 million, compared to a loss of ¥11.27 million in the same period last year[19]. - The net cash flow from operating activities for the first half of 2023 was approximately -¥19.96 million, compared to -¥9.58 million in the same period last year[19]. - The total assets at the end of the reporting period were approximately ¥466.00 million, a decrease of 7.44% from ¥503.49 million at the end of the previous year[19]. - The net assets attributable to shareholders at the end of the reporting period were approximately ¥390.37 million, a decrease of 2.69% from ¥401.16 million at the end of the previous year[19]. - The basic earnings per share for the first half of 2023 was -¥0.0491, compared to -¥0.0386 in the same period last year[19]. - The diluted earnings per share for the first half of 2023 was -¥0.0491, compared to -¥0.0386 in the same period last year[19]. - The weighted average return on net assets for the first half of 2023 was -2.72%, a decrease of 0.67 percentage points from -2.05% in the same period last year[19]. - The weighted average return on net assets after deducting non-recurring gains and losses was -3.41%, a decrease of 0.69 percentage points from -2.72% in the same period last year[19]. Industry Trends and Government Policies - The pharmaceutical manufacturing industry is experiencing increased policy activity, with 4,984 acceptance numbers for consistency evaluations, involving 720 varieties from 929 companies, showing a year-on-year increase[24]. - The National Medical Insurance Bureau aims to expand the number of drugs under centralized procurement to 450, which will influence drug market prices significantly[26]. - The 2022 Drug Directory includes 2,967 types of drugs, with 1,586 Western medicines and 1,381 traditional Chinese medicines, effective from March 1, 2023[27]. - The government emphasizes the need for supply-side structural reforms in the pharmaceutical industry to meet the rising health consumption demands of the population[30]. Company Strategy and Focus - The company is focusing on the development of traditional Chinese medicine, with the government launching 26 key projects to support its high-quality development[29]. - The company anticipates that the ongoing healthcare reforms and aging population will create new growth opportunities in the pharmaceutical sector[25]. - The company is committed to enhancing the management of centralized procurement and drug pricing to ensure better access to medications[29]. - The company is actively involved in the development and application of new drugs to improve public health outcomes[25]. - The company is preparing for new rounds of drug procurement to ensure competitive pricing and availability of essential medications[29]. - The company aims to leverage favorable policies in the Chinese medicine industry to create new development opportunities[37]. - The company is committed to enhancing the quality control of traditional Chinese medicine materials to improve overall product quality[36]. - The company is actively exploring new market opportunities and adjusting marketing strategies to mitigate the impact of policy changes[56]. Product Development and Quality Control - The company has 20 varieties and 44 specifications of injectable drugs approved, with 16 varieties included in the National Basic Medical Insurance Directory[39]. - The main products include "Zhongjing®" Xinaojing Injection and Shenmai Injection, both of which are classified as essential medicines under national insurance[40]. - The company emphasizes quality, reputation, innovation, and development as its core values, integrating modern pharmaceutical technology with traditional Chinese medicine[38]. - The company has implemented a quality management system to monitor and evaluate suppliers, ensuring compliance with material quality standards[41]. - The company is actively enhancing product quality through collaborations with universities and ongoing research projects, including the quality improvement of Huangqi Injection[66][67]. - The company is conducting post-marketing studies on its leading products to ensure safety and efficacy, which is crucial in light of recent adverse reactions associated with traditional Chinese medicine injections[95]. - The company emphasizes the importance of safety in traditional Chinese medicine injections and has implemented a drug safety committee to address potential risks[96]. Market Challenges and Risks - The company faced risks from centralized procurement policies, which significantly impacted sales volumes of certain products, particularly in the Hubei and Guangdong provinces[85]. - The company is cautious about advancing certain fundraising projects due to pressures from new pharmaceutical regulations and market conditions[100]. - The company is facing risks of declining operating performance due to complex and uncertain market conditions, and is enhancing product market promotion and competitiveness[97]. - The company has recognized production losses due to policy impacts on product sales, and is planning to optimize production capacity and resource allocation[99]. - The company faces risks from fluctuations in raw material prices, particularly for key ingredients like artificial musk and ginseng, which are influenced by various external factors[103]. Environmental and Compliance Efforts - The company reported a total wastewater discharge of 0.4172 tons in the first half of the year, with an average COD concentration of 49 mg/L[112]. - The company achieved a total nitrogen discharge of 0.00068 tons, with an average ammonia nitrogen concentration of 0.08 mg/L[112]. - The average concentration of particulate matter emissions from the natural gas boiler was 9.1 mg/m3, well below the maximum allowable concentration of 20 mg/m3[113]. - The company maintained a noise level of 57.1 dB during the day and 45.9 dB at night, both within the permissible limits[114]. - The company has established an emergency response plan for environmental risks, updated in December 2021[116]. - The company achieved a solid waste treatment rate of 100% during the reporting period[114]. Shareholder and Corporate Governance - The total number of ordinary shareholders as of the end of the reporting period was 25,818[136]. - The largest shareholder, Yang Junxiang, holds 51,204,200 shares, representing 23.31% of the total shares, with a decrease of 4,819,300 shares during the reporting period[138]. - The second-largest shareholder, Lixing Industrial Co., Ltd., holds 41,193,750 shares, accounting for 18.75% of the total shares[138]. - The company reaffirmed its commitment to shareholder interests by implementing measures to avoid conflicts of interest in related party transactions[128]. - There were no significant legal disputes or arbitration matters reported during the period, indicating a stable operational environment[127]. Research and Development - The company is investing 200 million yuan in research and development for new technologies aimed at enhancing product efficiency[125]. - Research and development expenses for the first half of 2023 were CNY 583,576.33, slightly up from CNY 541,197.46 in the same period of 2022, indicating a growth of 7.8%[156]. - The company collaborates with various universities to enhance the quality standards of its products, such as the research on the production technology of medicinal materials for Shenmai Injection[93]. Financial Management - The company has not reported any changes in accounting policies or prior period error corrections during this reporting period[175]. - The company’s financial statements comply with the enterprise accounting standards, reflecting its financial position, operating results, changes in equity, and cash flows accurately[190]. - The company’s accounting policies are based on the enterprise accounting standards and relevant regulations[189].