一心堂(002727) - 2023 Q2 - 季度财报

Dividend and Share Capital Policies - The company plans not to distribute cash dividends, issue bonus shares, or convert capital reserve into share capital[10] Risk Factors - The company's business operations are subject to various risk factors, including macroeconomic and market risks, as well as risks related to its main business[15] Fixed Assets and Depreciation - The company's fixed assets are depreciated using the straight-line method with varying depreciation periods and rates for different categories such as buildings, machinery, electrical equipment, transportation equipment, and tools[28] Investment Properties - The company's investment properties are accounted for based on their acquisition cost, construction cost, or other relevant costs, with subsequent expenditures capitalized if they meet the recognition criteria[26] Long-term Equity Investments - The company's long-term equity investments are initially measured at cost, with adjustments made for additional investments or disposals, and dividends or profits recognized as investment income[22] Financial Instruments - The company's financial instruments are classified and measured at fair value, with changes in fair value recognized in other comprehensive income for certain categories[17] - The company employs an expected credit loss model to assess financial instrument impairment, considering historical data and macroeconomic factors[88] - The company determines the fair value of financial instruments by referencing observable market prices and deducting incremental costs directly attributable to the disposal of the asset[89] Held-for-Sale Assets - The company's held-for-sale assets are measured at the lower of their carrying amount and fair value less costs to sell, with any impairment losses recognized in the current period[19] Business Combinations - The company's business combinations are accounted for using the acquisition method, with the cost of the combination determined based on the fair value of the assets given, liabilities incurred, and equity instruments issued[21] - In business combinations, assets and liabilities acquired in a business combination under common control are measured at their carrying amounts at the date of acquisition. The difference between the carrying amount of net assets acquired and the consideration paid is adjusted against capital reserves[54] - The initial recognition amount of the consideration involves contingent consideration, which is included in the merger cost at its fair value on the acquisition date. Adjustments to contingent consideration within 12 months post-acquisition due to new evidence will adjust the goodwill[57] Subsidiaries and Associates - The company's subsidiaries and associates are accounted for using the equity method, with adjustments made for any differences between the carrying amount and the share of net assets[24] Construction in Progress - The company's construction in progress is accounted for based on the actual costs incurred, with any necessary adjustments made for impairments or changes in circumstances[30] Borrowing Costs - Borrowing costs include interest on borrowings, amortization of discounts or premiums, ancillary costs, and exchange differences arising from foreign currency borrowings. Costs directly attributable to the acquisition, construction, or production of qualifying assets are capitalized when expenditures are incurred, borrowing costs are incurred, and activities necessary to prepare the asset for its intended use or sale have begun. Capitalization ceases when the asset is ready for its intended use or sale[31] Biological Assets - Consumable biological assets are measured at the lower of cost and net realizable value at the balance sheet date. If the factors causing impairment have reversed, the impairment loss is reversed up to the amount previously recognized, and the reversal is recognized in profit or loss[32] Intangible Assets - The company reviews the useful lives and amortization methods of finite-lived intangible assets at the end of each period. Changes are treated as changes in accounting estimates[33] Contract Liabilities - Contract liabilities represent the company's obligation to transfer goods or services to customers for which it has received or is entitled to receive consideration. These are recognized when the company has an unconditional right to payment or when the customer has paid[39] Post-Employment Benefits - Post-employment benefits are classified as defined contribution plans or defined benefit plans. Contributions to defined contribution plans are recognized as expenses or capitalized as part of asset costs during the period when employees render services[40] Income Taxes - The company uses the balance sheet liability method to account for income taxes. Deferred tax assets and liabilities are recognized for temporary differences, except for certain transactions that do not affect accounting profit or taxable income[48] - The company reviews the carrying value of deferred tax assets at each balance sheet date. If future taxable income is unlikely to cover the deferred tax asset benefits, the carrying value is reduced[70] Operating Leases - For operating leases, the company recognizes lease payments on a straight-line basis over the lease term. Variable lease payments not included in the lease receivable are recognized in profit or loss when incurred[53] Step-by-Step Non-Controlling Acquisitions - For step-by-step non-controlling acquisitions, the accounting treatment depends on whether the transactions are considered a "package deal." If not, the initial investment cost in individual financial statements is the sum of the pre-acquisition equity book value and the new investment cost on the acquisition date[58] Long-term Deferred Expenses - Long-term deferred expenses are recorded at actual cost and amortized evenly over the project's benefit period[59] Revenue Recognition - The company's pharmaceutical wholesale business recognizes revenue when goods are delivered and signed for by customers, with no significant financing component involved[64] Government Subsidies - Government subsidies are recognized and measured based on specific criteria, including policy-related preferential loan interest subsidies, which may reduce deferred income or be directly recorded in current profits[65] Share Capital and Equity - The company issued 6,026,392 convertible bonds with a total face value of 602,639,200 yuan in 2019, which increased the total share capital by 22,420,714 shares due to conversions by November 2, 2020[73] - In 2020, the company granted 5,122,000 restricted shares to 91 incentive recipients at a price of 10.42 yuan per share, raising a total of 53,371,240 yuan[73] - In 2022, the company approved the release of 343,200 restricted shares for 30 incentive recipients and 1,494,600 restricted shares for 86 recipients, meeting the conditions for the first and second unlocking periods, respectively[74] - The company repurchased and canceled 110,000 restricted shares from 6 incentive recipients who left the company, rendering them ineligible for incentives[75] - An additional 47,100 restricted shares were repurchased and canceled from 6 ineligible incentive recipients[76] - 23.46 million restricted shares were unlocked for 25 incentive recipients as the second lock-up period ended[77] - 146.31 million restricted shares were unlocked for 82 incentive recipients as the third lock-up period ended[77] - The company's total share capital as of June 30, 2023, was RMB 596,023,425.00[80] - The company's total equity at the end of the first half of 2023 was RMB 5,979,405,523.54, with a capital reserve of RMB 2,154,085,294.17 and undistributed profits of RMB 2,867,975,073.18[100] - The company's comprehensive income for the first half of 2023 was RMB 319,671,420.80, contributing to the increase in total equity[96] - The company allocated RMB 238,409,370.00 for profit distribution to shareholders during the first half of 2023[96] - The company's capital reserve increased by RMB 411,527.85 due to owner contributions and capital reductions[96] - The company's total equity at the beginning of the period was RMB 5,242,192,544.41, with a net increase of RMB 199,116,891.65 during the period[103] - Comprehensive income for the period amounted to RMB 348,662,381.62[103] - The company repurchased and canceled 10,000 restricted shares due to the disqualification of one incentive object, with a total repurchase amount of RMB 110,000.00[108] - The company's total equity at the end of the period was RMB 5,441,309,436.06[106] - The company granted 878,000 restricted shares to 31 incentive objects at a price of RMB 19.08 per share, raising RMB 16,752,240.00[108] - The company's capital reserve increased by RMB 5,873,359.53 during the period[103] - The company's undistributed profit increased by RMB 169,808,224.12 during the period[103] - The company's inventory shares decreased by RMB 23,545,308.00 during the period[103] - The company's total equity increased by RMB 29,308,667.53 due to owner contributions and capital reductions[103] - The company's profit distribution to owners (or shareholders) amounted to RMB -178,854,157.50[103] Business Operations - The company operates in a wide range of sectors including pharmaceutical wholesale and retail, medical device sales, internet services, and more[81] Inventory Valuation - Inventory is measured at the lower of cost or net realizable value, with provisions made for obsolete and slow-moving inventory[88] - The company's inventory valuation and impairment provisions are influenced by factors such as the purpose of holding inventory and post-balance sheet events[89] Impairment Testing - The company conducts impairment tests for non-current assets, including intangible assets with indefinite useful lives, when there are indications of potential impairment[89] Accounts Receivable - The accounts receivable for wholesale transactions at the end of the period amounted to RMB 30,133,037.37, with a bad debt provision of RMB 1,921,772.53, representing a 6.38% provision rate[171] - The total accounts receivable at the end of the period were RMB 111,022,795.57, with a total bad debt provision of RMB 13,807,755.74, representing a 12.44% provision rate[171] - The accounts receivable for medical insurance payments at the end of the period amounted to RMB 471,136.49, with a bad debt provision of RMB 358,066.70, representing a 76.00% provision rate[171] - The accounts receivable for commercial insurance at the end of the period amounted to RMB 80,147,664.70, with a bad debt provision of RMB 11,430,115.10, representing a 14.26% provision rate[171] - The accounts receivable for payment settlement platforms at the end of the period amounted to RMB 270,957.01, with a bad debt provision of RMB 97,801.41, representing a 36.09% provision rate[171] - The total bad debt provision for the period was RMB 19,182,300.84, with a total recovery or reversal of RMB 39,374.44[171] - Accounts receivable totaled 1,711,746,059.16 yuan, with 1,550,002,965.01 yuan (90.5%) within 1 year, 114,272,080.88 yuan (6.7%) between 1-2 years, 37,550,646.72 yuan (2.2%) between 2-3 years, and 9,920,366.55 yuan (0.6%) over 3 years[188] - The top 5 customers accounted for 13.99% of total accounts receivable, with Customer A having the largest balance of 69,332,539.13 yuan (4.05%)[191] Cash and Cash Equivalents - The company's cash and cash equivalents decreased from 3,511,631,958.78 yuan to 3,110,893,151.81 yuan, with restricted funds amounting to 524,436,957.46 yuan due to bill acceptance guarantees[179] Bank Acceptance Bills - Bank acceptance bills increased significantly from 913,200.00 yuan to 3,968,955.57 yuan[180] Subsidiaries and Consolidated Financial Statements - The company has 47 subsidiaries included in the consolidated financial statements as of June 30, 2023[196] - The financial statements are prepared in accordance with Chinese Accounting Standards and the disclosure requirements of the China Securities Regulatory Commission[197] Financial Assets - The company's financial assets measured at fair value through profit or loss remained unchanged at 8,356,564.57 yuan, related to the acquisition of Sichuan Bencaotang Pharmaceutical Co., Ltd[179] Actual Controller - The company's actual controller is Mr. Ruan Hongxian, a natural person[195] Going Concern - The company assessed that there are no significant factors affecting its ability to continue as a going concern for the next 12 months[199] Accounting Policies and Estimates - The company's accounting policies and estimates cover financial instruments, financial asset impairment, and revenue recognition, among others[200] Tax Incentives and Rates - Yunnan Hongxiang Traditional Chinese Medicine Technology Co., Ltd. enjoys tax exemption and a 25% corporate income tax rate[117] - Yunnan Dianxian Transportation Co., Ltd. benefits from small and micro enterprise tax incentives, with a reduced tax rate of 20% on taxable income between 1 million and 3 million yuan[123] - Guangxi Hongxiang Yixintang Pharmaceutical Co., Ltd. continues to enjoy the Western Development tax incentive, with a reduced corporate income tax rate of 15%[124] - Sichuan Hongxiang Yixintang Pharmaceutical Chain Co., Ltd. and Guizhou Hongxiang Yixintang Pharmaceutical Chain Co., Ltd. both benefit from the Western Development tax incentive, with a reduced corporate income tax rate of 15%[124][126] - Yunnan Hongyun Pharmaceutical Supply Chain Co., Ltd. has a corporate income tax rate of 15%[117] - Yunnan Sancai Space Advertising Co., Ltd. and Shanxi Hongxiang Yixintang Pharmaceutical Co., Ltd. both have a corporate income tax rate of 25%[117] - Yunnan Yunshang Youpin E-commerce Co., Ltd. and Yunnan Xingjiyuan Biotechnology Co., Ltd. both have a corporate income tax rate of 25%[117] - Yunnan Fuling Industrial Co., Ltd. and Yunnan Yuntianma Co., Ltd. both enjoy tax exemption and a 25% corporate income tax rate[118] - Yunnan Yunxian Medicinal Materials Co., Ltd. benefits from tax incentives as per the relevant regulations[118] - Yunnan Hongyun Pharmaceutical Service Co., Ltd. has a corporate income tax rate of 25%[117] - Yunnan Hongyun Pharmaceutical Supply Chain Co., Ltd. enjoys a reduced corporate income tax rate of 15% under the Western Development preferential tax policy for the first half of 2023[127] - Yiyun Medical Industry Development (Yunnan) Co., Ltd. benefits from a reduced corporate income tax rate of 20% on taxable income up to 1 million yuan and 25% on taxable income between 1-3 million yuan for the first half of 2023[131] - Mianyang Bencaotang Pharmacy Chain Co., Ltd. qualifies as a small and low-profit enterprise, enjoying a reduced corporate income tax rate of 20% on taxable income up to 1 million yuan and 50% on taxable income between 1-3 million yuan[134] - Yunnan Hongxiang Traditional Chinese Medicine Technology Co., Ltd. is exempt from corporate income tax on profits from primary agricultural product processing and applies a 25% tax rate on non-primary processing profits for the first half of 2023[148] - Small-scale VAT taxpayers with monthly sales below 100,000 yuan are exempt from VAT, while those with higher sales enjoy a reduced VAT rate of 1% instead of 3% from January 1, 2023, to December 31, 2027[145] - Yunnan Dianxian Transportation Co., Ltd. qualifies for tax incentives under the national encouraged industries policy, specifically for "highway container and van transportation," allowing self-assessment and tax reduction benefits[149] - Sichuan Hongxiang Yixintang Pharmaceutical Chain Co., Ltd. enjoys a reduced corporate income tax rate of 15% under the Western Development Strategy, effective from 2021 to 2030[150] - Guizhou Hongxiang Yixintang benefits from a 15% corporate income tax rate due to its alignment with the "unified distribution and sales network construction" under the Western Development Strategy[151] - Chongqing Hongxiang Yixintang Pharmaceutical Co., Ltd. continues to apply a 15% corporate income tax rate for the first half of 2023 under the Western Development Strategy[153] - Sichuan Yixintang Pharmaceutical Chain Co., Ltd. maintains a 15% corporate income tax rate for the first half of 2023 under the Western Development Strategy[154] - Hongxiang Traditional Chinese Medicine Technology Co., Ltd. exempts income tax on its agricultural primary processing business, while applying a 25% tax rate to non-agricultural processing income[155] - Hainan Hongxiang Yixintang Pharmaceutical Chain Co., Ltd. benefits from a 15% corporate income tax rate from 2020 to 2024 under the Hainan Free Trade Port policy[156] - Yunnan Traditional Chinese Medicine Co., Ltd. exempts income tax on its agricultural primary processing business and applies a 25% tax rate to non-agricultural processing income[158] - Yiyun Medical Industry Development (Yunnan) Co., Ltd. enjoys reduced corporate income tax rates for small and micro-profit enterprises, with specific reductions based on taxable income thresholds[158] - Guang'an Changyu Pharmaceutical Co., Ltd. qualifies as a small and micro-profit enterprise, enjoying a reduced corporate income tax rate of 20% on taxable income up to RMB 1 million, with 25% of the income included in taxable income, and 50% of the income included for taxable income between RMB 1 million and RMB 3 million[160] - Yunnan Yunxian Medicinal Materials Co., Ltd. has opted for the small and micro-profit enterprise tax优惠政策, benefiting from a reduced corporate income tax rate of 20% on taxable income up to RMB 1 million, with 25% of the income included in taxable income, and 25% of the income included for taxable income between RMB 1 million and RMB 3 million for the period from January 1, 2022, to December 31, 2024[162] - Yunnan Fuling Industrial Co., Ltd. qualifies as a small and micro-profit enterprise, enjoying a reduced corporate income tax rate of 20% on taxable income up to RMB 1 million, with 25% of the income included in taxable income, and 25% of the income included for taxable income between RMB 1 million and RMB 3 million for the period from January 1, 2022, to December 31, 2024[174] - Yunnan Yuntianma Co., Ltd. qualifies as a small and micro-profit enterprise, enjoying a reduced corporate income tax rate of 20% on taxable income up to RMB 1 million, with 25% of the income included in taxable income, and 25% of the