ZHEJIANG ZHENYUAN(SZ:000705)2021-03-26 16:00Financial Performance - The company's operating revenue for 2020 was ¥3,439,840,440.43, representing a 6.06% increase compared to ¥3,243,149,411.12 in 2019[19]. - The net profit attributable to shareholders decreased by 57.75% to ¥89,392,934.21 in 2020 from ¥211,570,678.31 in 2019[19]. - The net profit attributable to shareholders after deducting non-recurring gains and losses was ¥65,322,517.64, a 7.34% increase from ¥60,854,530.04 in 2019[19]. - The net cash flow from operating activities increased by 30.80% to ¥154,814,640.09 in 2020 from ¥118,359,124.14 in 2019[19]. - Basic earnings per share decreased by 57.14% to ¥0.27 in 2020 from ¥0.63 in 2019[19]. - Total assets at the end of 2020 were ¥2,701,279,049.18, a 4.35% increase from ¥2,588,554,088.01 at the end of 2019[19]. - The net assets attributable to shareholders at the end of 2020 were ¥1,741,455,077.20, a 3.05% increase from ¥1,689,964,066.17 at the end of 2019[19]. - The total operating revenue for 2020 was approximately CNY 3.44 billion, representing a year-on-year increase of 6.06% compared to CNY 3.24 billion in 2019[44]. - The pharmaceutical industrial segment generated CNY 714.12 million, accounting for 20.76% of total revenue, which is a decrease of 2.74% from the previous year[44]. - The pharmaceutical commercial segment saw revenue of CNY 2.73 billion, making up 79.24% of total revenue, with an increase of 8.64% year-on-year[44]. - The health service segment achieved a remarkable growth of 127.37%, with revenue reaching CNY 60 million compared to CNY 26.39 million in the previous year[44]. Dividend Distribution - The company plans to distribute a cash dividend of 0.70 RMB per 10 shares to all shareholders, based on a total of 334,123,286 shares[5]. - In 2020, the company achieved a net profit of CNY 34,658,076.07, with a proposed cash dividend of CNY 0.70 per 10 shares, totaling CNY 23,388,630.02[85]. - The company distributed a cash dividend of CNY 0.60 per 10 shares in 2019, amounting to CNY 20,047,397.16, based on a net profit of CNY 32,171,579.78[84]. - The cash dividend for 2019 was ¥20,047,397.16, accounting for 9.48% of the net profit attributable to ordinary shareholders[86]. - The cash dividend for 2018 was ¥10,023,698.58, which was 14.14% of the net profit attributable to ordinary shareholders[86]. - The total distributable profit for the current period is ¥217,439,948.75, with the cash dividend amounting to 100% of the total profit distribution[87]. - The company has a clear cash dividend policy that aligns with its articles of association and shareholder resolutions[83]. - The company has maintained a consistent approach to profit distribution over the past three years, ensuring transparency and clarity in its dividend policies[82]. - The cash dividend for 2020 represents 26.16% of the net profit attributable to ordinary shareholders[86]. Risk Management and Governance - The company emphasizes the importance of accurate financial reporting and has declared that the financial report is true, accurate, and complete[4]. - The company is subject to various risks and has outlined potential future challenges and corresponding measures in its annual report[5]. - The company is focusing on enhancing its internal control management system to strengthen risk management and improve governance structure[41]. - The company plans to enhance its internal control system and improve governance structures to ensure compliance and risk management[76]. - The company faces risks from industry policy changes, market competition, and challenges in drug research and development, and will adapt its strategies accordingly[78][79]. - The company will continue to optimize its management and operational capabilities to respond to intensified market competition and evolving retail ecosystems[79]. - The company has committed to deepening cooperation with research institutions to accelerate drug innovation and consistency evaluations[79]. - The company has established a dedicated environmental protection department to oversee compliance with environmental laws, reporting no major environmental issues during the reporting period[120]. - The company emphasizes the protection of shareholder rights, particularly for minority shareholders, through transparent information disclosure[113]. Innovation and Development - The company holds 22 invention patents and has established multiple research centers, showcasing its commitment to innovation and technology in pharmaceutical development[34]. - The company has made significant progress in product innovation, with the approval of injectable esomeprazole sodium and ongoing development of other key formulations[40]. - The company has strengthened its innovation-driven development strategy, focusing on new product R&D and collaboration with high-end research institutions[49]. - The company is investing 100 million RMB in R&D for new technologies aimed at enhancing product efficiency[150]. - The company is exploring participation in biopharmaceutical and health industry funds to identify new projects and growth points[74]. Market Performance and Expansion - The company generated over 150 million in tax-free sales from two specific pharmaceutical products, indicating strong market performance in its core offerings[27]. - The company operates nearly 150 retail chain stores, achieving recognition as one of the top 100 pharmacy chains in China, with two stores reporting sales exceeding 100 million[28]. - Online sales grew by over 90% during the year, driven by new e-commerce models such as mobile micro-stores and live streaming sales[39]. - The company added 8 new retail stores, bringing the total to 146, and established 20 new medicinal herb bases, totaling 80 bases over an area exceeding 17,000 acres[39]. - The company anticipates continued growth in the pharmaceutical industry, supported by increasing health awareness and government policies promoting traditional Chinese medicine[70]. - The company plans to enhance its brand and quality, aiming for improved value and market capitalization during the "14th Five-Year Plan" period[73]. - The company aims to expand its retail chain through a "four-in-one" strategy of direct sales, franchising, optimization, and acquisitions[74]. - The company is considering strategic acquisitions to enhance its product portfolio, with a budget of 500 million RMB allocated for potential deals[150]. Financial Management and Audit - The company received a standard unqualified audit report from Tianjian Accounting Firm for the 2020 financial year[166]. - The audit committee held 8 meetings during the reporting period to review the company's financial reports and internal control self-assessment[162]. - The supervisory board held 6 meetings to review the company's financial status and compliance with legal regulations[165]. - The company reported a good financial condition with no illegal activities during the reporting period[166]. - The internal control self-assessment report was disclosed on March 27, 2021, confirming that all units evaluated accounted for 100% of the company's total assets and revenue[170]. - The audit report was signed on March 25, 2021, by Tianjian Accounting Firm, confirming compliance with accounting standards[176]. - The company has established an independent financial management department, ensuring separation from the controlling shareholder[159]. - The company has a salary assessment system linking senior management's compensation to individual performance and company operations[168]. Environmental Responsibility - The company reported a total wastewater discharge of 894,000 tons, adhering to pollution discharge standards without exceeding limits[117]. - Zhenyuan Pharmaceutical's hazardous waste management includes a standardized storage facility with concrete flooring and emergency measures in place, ensuring safe handling and disposal[120]. - The company’s air pollution control system operates in accordance with national standards, ensuring emissions meet the required limits[122]. - The company has established a medical emergency material reserve library, providing significant support for public health emergency systems[111]. - The hazardous waste disposal is managed by qualified external units, ensuring compliance with environmental safety standards[120]. Shareholder Structure and Management - The total number of shares outstanding is 334,123,286, with limited shares increasing from 52,139,647 to 52,151,210 during the reporting period[126]. - The largest shareholder, Shaoxing Zhenyuan Health Industry Group Co., Ltd., holds 24.93% of the shares, totaling 83,300,474 shares[129]. - The company has not undergone any changes in its controlling shareholder during the reporting period[134]. - The actual controller of the company is the Shaoxing Municipal Government State-owned Assets Supervision and Administration Commission, which has not changed during the reporting period[134]. - The company has not reported any changes in the equity situation of its controlling and participating shareholders during the reporting period[133]. - The current board members and senior management have a total of 86,250 shares held at the beginning of the period, with no new purchases or sales during the reporting period[143]. - The company has maintained stability in its management structure, with no significant changes in shareholding among current directors and supervisors[141]. - The company’s governance structure includes a mix of experienced professionals and independent directors, ensuring compliance and strategic oversight[145].