By-health(SZ:300146)2020-04-21 16:00Market Overview - In 2018, the Chinese dietary supplement market exceeded RMB 460 billion, with an industry growth rate of 10%-15%[4]. - The company has identified a sixfold growth potential in the VDS market, driven by increasing health awareness and an aging population[4]. - The health service industry is projected to reach a total scale of 16 trillion CNY by 2030, driven by national health strategies and increasing consumer health awareness[111]. - The dietary supplement market in China has significant growth potential, with current consumption levels far below those of developed countries[112]. Company Performance - The company's operating revenue for 2019 was CNY 5,261,799,439.25, representing a 20.94% increase compared to CNY 4,350,775,627.15 in 2018[30]. - The net profit attributable to shareholders for 2019 was a loss of CNY 355,889,615.46, a decrease of 135.51% from a profit of CNY 1,002,184,999.85 in 2018[30]. - The net cash flow from operating activities for 2019 was CNY 1,536,520,103.03, an increase of 13.90% compared to CNY 1,349,053,224.88 in 2018[30]. - The total assets at the end of 2019 were CNY 8,330,710,280.66, a decrease of 14.91% from CNY 9,790,445,489.84 at the end of 2018[30]. - The basic earnings per share for 2019 was -CNY 0.24, a decrease of 134.78% from CNY 0.69 in 2018[30]. Strategic Initiatives - The company aims to transition from "squeezed growth" to leading a recovery growth in the VDS industry, with a focus on "activation" as the key strategy for 2020[5]. - The company has established a strategic logic for the acquisition of LSG focusing on cross-border e-commerce, internationalization, and the probiotic niche market[6]. - The company has initiated a "user asset operation," "e-commerce digitalization," and "super supply chain" as key strategic projects for future growth[6]. - The company plans to enhance brand strength by increasing investment in brand assets, viewing it as an investment in the future[6]. Acquisitions and Partnerships - The company has been actively seeking strategic partnerships and acquisitions in the global VDS market, although it faced challenges with goodwill impairment in its first overseas acquisition[5]. - The company completed the cash acquisition of Life-Space Group (LSG) in August 2018 and held 100% equity after registration in July 2019, aiming to leverage synergies in brand, channel, R&D, and global supply chain[18]. - The company is expanding its brand matrix by acquiring overseas brands such as "Pentavite" and "Life-Space" to enhance its market presence[113]. Financial Policies and Dividends - The company has committed to maintaining a conservative financial policy while exploring growth opportunities in the VDS sector[5]. - The company plans to distribute a cash dividend of RMB 3.60 per 10 shares (including tax) based on a total of 1,582,492,554 shares for the 2019 profit distribution proposal[19]. - The total cash dividend amount for 2019 was RMB 569,697,319.44, representing 100% of the distributable profit of RMB 691,796,454.40[133]. Research and Development - The company has focused on expanding its product offerings, including new soft capsule devices and cleaning equipment for production[46]. - The company published 47 research papers in 2019, enhancing its academic influence and promoting a vibrant academic atmosphere[54]. - The company has established six provincial-level and above innovation research platforms as of the end of the reporting period[79]. Challenges and Risks - The company acknowledges that the pandemic has impacted production and sales activities, leading to a short-term operational effect[9]. - The company faces risks from rising raw material prices and potential shortages, which could affect profit margins[13]. - The company recognizes intensified competition in the industry due to the entry of international leaders and large pharmaceutical companies[15]. Corporate Governance - The company has maintained a sound and effective corporate governance structure, ensuring compliance with relevant laws and regulations[137]. - The company has committed to enhancing its operational efficiency and profitability following the completion of the asset acquisition[137]. - The company has established a robust governance framework, including a shareholders' meeting, board of directors, and supervisory board, which have operated in accordance with legal requirements[137]. Social Responsibility - The company has been actively fulfilling its corporate social responsibility, including the establishment of 16 Hope Primary Schools and conducting nearly 3,500 public welfare activities[176]. - The company donated 10 million yuan to establish a special fund for combating COVID-19 and provided over 83,000 vitamin C and protein powder packages to hospitals[177].