Foci Pharmaceutical(SZ:002644)2022-03-15 16:00Financial Performance - The company's operating revenue for 2021 was CNY 817,640,826.02, representing a year-on-year increase of 22.39% compared to CNY 668,051,013.92 in 2020[18]. - The net profit attributable to shareholders for 2021 was CNY 93,258,956.07, a decrease of 13.66% from CNY 111,981,040.00 in 2020[18]. - The net profit attributable to shareholders after deducting non-recurring gains and losses was CNY 42,928,548.17, showing a significant increase of 190.68% compared to CNY 18,731,623.70 in 2020[18]. - The net cash flow from operating activities for 2021 was CNY 11,854,642.44, down 81.15% from CNY 62,888,162.80 in 2020[18]. - The total assets at the end of 2021 were CNY 2,352,093,709, reflecting a decrease of 1.47% from CNY 2,387,181,792 at the end of 2020[19]. - The net assets attributable to shareholders at the end of 2021 were CNY 1,614,577,062, an increase of 2.05% from CNY 1,591,159,687 at the end of 2020[19]. - The company reported a total of CNY 50,330,407.90 in non-recurring gains and losses for 2021, compared to CNY 93,249,416.30 in 2020[25]. - In 2021, the company achieved a revenue of CNY 817.64 million, an increase of 22.39% compared to the previous year[41]. - The net profit attributable to shareholders was CNY 93.26 million, a decrease of 13.66% year-on-year[41]. - The pharmaceutical sector contributed CNY 798.52 million, accounting for 97.66% of total revenue, with a year-on-year growth of 20.66%[45]. Dividend and Profit Distribution - The company reported a profit distribution plan based on a total of 510,657,000 shares, proposing a cash dividend of 0.10 RMB per 10 shares (including tax) with no bonus shares issued[5]. - The cash dividend distribution accounted for 100% of the total profit distribution amount[126]. - The company distributed cash dividends of 0.10 yuan per 10 shares, totaling 5,106,570.00 yuan, based on a total share capital of 510,657,000 shares[127]. - The company distributed a total cash dividend of 61.2788 million yuan for the 2020 profit distribution[141]. Internal Control and Governance - The company acknowledged significant internal control deficiencies in financial reporting, which investors should be aware of[5]. - The company has established and revised 209 internal control management systems to enhance operational compliance and risk management[129]. - The company identified one significant defect in financial reporting during the reporting period[135]. - The company reported a total of 1 significant defect and 1 non-financial reporting defect[135]. - The company has implemented measures to correct the identified defects and improve financial reporting accuracy[131]. - The company plans to enhance inter-departmental communication and strengthen investment project tracking management[131]. - The company aims to improve the quality of financial report preparation to ensure accuracy and completeness[131]. - The company will continue to address the identified defects and enhance financial control capabilities[131]. - The company has a comprehensive internal control evaluation report that includes all units with 100% asset and revenue coverage[133]. - The company will disclose the full internal control evaluation report on March 16, 2022[133]. - The company has established standards for identifying defects, categorizing them into significant, important, and general defects[134]. - The company is committed to ensuring that financial reports meet the standards of truthfulness and accuracy[134]. - The company has improved its investor relations management by diversifying communication channels with investors[137]. - The company is committed to improving its governance structure and internal control systems in compliance with relevant laws and regulations[87]. Market and Industry Trends - The pharmaceutical industry in China is experiencing strong growth due to increasing demand driven by economic development and an aging population[28]. - The company is focusing on high-quality development in the traditional Chinese medicine sector, supported by favorable government policies[28]. - In 2021, the Chinese pharmaceutical manufacturing industry achieved a year-on-year value-added growth of 24.8%, with monthly industrial value-added growth exceeding 8% consistently[31]. - The number of new Chinese medicine applications accepted by the CDE reached approximately 1,360, with 60 new drug applications, marking a 114.29% increase from 2020[31]. - The "14th Five-Year" National Medical Security Plan supports the integration of traditional Chinese medicine into the healthcare system, promoting its role in disease prevention and treatment[30]. Research and Development - The company plans to establish a research institute in Shanghai to enhance its R&D capabilities and attract high-quality research talent[33]. - The company has established multiple R&D platforms, including partnerships with several universities to enhance innovation in traditional Chinese medicine[40]. - The company completed the first phase of research on ancient classic prescriptions, aiming to develop new products and enhance its market position[57]. - Research and development expenses increased by 25.84% to ¥19,357,135.92 in 2021, representing 2.37% of operating revenue, compared to 2.30% in 2020[58]. - The number of R&D personnel increased by 7.19% to 164, with the proportion of R&D staff in the total workforce rising to 12.66%[58]. Operational Efficiency and Cost Management - The company achieved a significant increase in manufacturing costs, with total manufacturing expenses rising to ¥140,097,906.30, accounting for 23.57% of operating costs[50]. - The total cost of direct materials was ¥355,702,133.27, accounting for 59.83% of operating costs, an increase from 68.05% in 2020, primarily due to rising raw material prices[50]. - The company plans to enhance its operational efficiency through strategic adjustments and cost management initiatives[160]. - The company has implemented cost control measures that are expected to improve profit margins in the upcoming fiscal year[187]. Social Responsibility and Community Engagement - The company donated over 6 million yuan in pandemic prevention materials during the COVID-19 outbreak[144]. - The company actively engages in social responsibility initiatives, including health lectures and free medical services in rural communities[144]. - The company has employed 100 local farmers through its poverty alleviation initiatives, generating an additional income of CNY 1.8 million for local farmers[146]. - The company conducted technical training for local farmers, benefiting 2,050 impoverished households in mountainous areas[146]. - The company has established a special fund to assist employees in financial difficulties, demonstrating its commitment to employee welfare[142]. Strategic Planning and Future Outlook - The company plans to focus on high-quality development in 2022, emphasizing the integration of its main business sectors and achieving breakthroughs in new product development and market expansion[75]. - The company aims to enhance its marketing management to achieve over 1 billion CNY in market size, single product sales, and customer base[77]. - The company is committed to maintaining a strong financial position while pursuing growth opportunities in emerging markets[188]. - The company has outlined plans for further investment in digital transformation initiatives to enhance customer engagement and operational efficiency[189]. - The company provided optimistic guidance for the next fiscal year, anticipating continued revenue growth[183]. Corporate Governance and Management - The company has a strong emphasis on maintaining a qualified and experienced board of directors and management team to drive strategic decisions[96]. - The management team includes experienced professionals, with the current general manager having served since January 2020[105]. - The board of directors consists of independent directors, ensuring corporate governance and oversight[107]. - The independent directors have extensive backgrounds in finance and law, contributing to strategic decision-making[106]. - The company has a structured remuneration system for directors and senior management based on performance metrics[108]. - The independent directors did not raise any objections regarding company matters during the reporting period[114]. - The board actively monitored the company's operational and financial conditions, ensuring compliance with regulations and internal policies[115]. - The company maintained a focus on risk management and the impact of external factors on its operations[115]. Adjustments and Compliance - The company has made adjustments to its financial statements for previous years due to accounting errors, ensuring compliance with accounting standards[19]. - The company adjusted its financial statements for previous years, impacting the net profit for 2018, 2019, and 2020 by CNY -1,360,373.29, -3,745,541.67, and -3,963,073.09 respectively[155]. - The total assets were adjusted by CNY 2,609,359.03, 85,794,867.83, and 120,049,283.56 for the years 2018, 2019, and 2020 respectively[155]. - The company has implemented new accounting policies in accordance with the revised leasing standards effective from January 1, 2021, with no significant impact on its financial results[153].