威高股份(01066) - 2023 - 中期业绩

Performance Overview Overall Performance For the six months ended June 30, 2023, revenue decreased by 2.6% to RMB 6.90 billion, and net profit attributable to owners of the parent declined 21.3% to RMB 1.20 billion, primarily due to volume-based procurement and a high prior-year base Key Financial Indicators for H1 2023 | Indicator | H1 2023 (Unaudited) | H1 2022 (Restated) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | RMB 6.90 Billion | RMB 7.08 Billion | -2.6% | | Profit attributable to owners of the Company | RMB 1.20 Billion | RMB 1.52 Billion | -21.3% | | Profit attributable to owners of the Company (excluding special items) | RMB 1.20 Billion | RMB 1.42 Billion | -15.8% | | Basic earnings per share | RMB 0.27 | RMB 0.33 | -18.2% | - The Board recommended an interim dividend of RMB 0.0734 per share for the six months ended June 30, 2023, a decrease from RMB 0.086 in the prior year period[3] Financial Statements Unaudited Condensed Consolidated Statement of Comprehensive Income During the reporting period, revenue was RMB 6.90 billion, down 2.6%, gross profit was RMB 3.54 billion, down 4.4%, and gross margin decreased from 52.4% to 51.4%; finance costs significantly increased by 93.1% to RMB 138 million, leading to a net profit attributable to owners of the parent of RMB 1.20 billion, down 21.3% Key Consolidated Statement of Comprehensive Income Data (Unit: RMB Thousand) | Item | H1 2023 | H1 2022 (Restated) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 6,897,700 | 7,078,689 | -2.6% | | Gross profit | 3,543,479 | 3,708,004 | -4.4% | | Selling expenses | (1,321,107) | (1,257,774) | +5.0% | | Research and development expenses | (294,558) | (249,126) | +18.2% | | Finance costs | (138,174) | (71,577) | +93.1% | | Profit before tax | 1,468,339 | 1,945,532 | -24.5% | | Profit attributable to owners of the Company | 1,197,767 | 1,522,133 | -21.3% | Unaudited Condensed Consolidated Statement of Financial Position As of June 30, 2023, the company's total assets were RMB 33.94 billion, largely consistent with the end of 2022, with trade and other receivables increasing by 12.0% to RMB 7.94 billion; total liabilities were RMB 10.36 billion, with current liabilities increasing by 10.0%, and total equity remained stable at RMB 23.58 billion Key Consolidated Statement of Financial Position Data (Unit: RMB Thousand) | Item | June 30, 2023 | December 31, 2022 (Restated) | Change | | :--- | :--- | :--- | :--- | | Total assets | 33,935,728 | 33,402,339 | +1.6% | | - Non-current assets | 15,184,394 | 15,114,839 | +0.5% | | - Current assets | 18,751,334 | 18,287,500 | +2.5% | | Total liabilities | 10,356,272 | 9,819,055 | +5.5% | | - Current liabilities | 6,603,430 | 6,005,158 | +10.0% | | - Non-current liabilities | 3,752,842 | 3,814,897 | -1.6% | | Total equity | 23,579,456 | 23,582,284 | -0.01% | Unaudited Condensed Consolidated Statement of Cash Flows During the reporting period, net cash inflow from operating activities was RMB 1.12 billion, largely stable year-on-year, while net cash outflow from investing activities significantly decreased by 73.9% to RMB 268 million; net cash outflow from financing activities substantially increased to RMB 1.25 billion, primarily for loan repayments and dividend payments, resulting in cash and cash equivalents decreasing to RMB 5.17 billion at period-end Key Consolidated Statement of Cash Flows Data (Unit: RMB Thousand) | Item | H1 2023 | H1 2022 (Restated) | Change | | :--- | :--- | :--- | :--- | | Net cash inflow from operating activities | 1,117,151 | 1,132,320 | -1.3% | | Net cash outflow from investing activities | (268,164) | (1,028,014) | -73.9% | | Net cash outflow from financing activities | (1,246,076) | (4,754) | Substantial Increase | | Net decrease in cash and cash equivalents | (397,089) | 99,552 (Net Increase) | From Increase to Decrease | | Cash and cash equivalents at end of period | 5,167,185 | 5,604,254 | -7.8% | Notes to the Financial Statements Company Overview and Accounting Policies The company, incorporated in China, primarily engages in the R&D, manufacturing, and sales of medical devices, orthopedic products, interventional products, pharmaceutical packaging, and blood management products, with financial statements prepared under HKAS 34 and consistent accounting policies - The company's principal businesses span multiple sectors including medical devices, orthopedics, interventional products, pharmaceutical packaging, and blood management, alongside financing operations[11] - The financial statements for the current period adopted newly revised Hong Kong Financial Reporting Standards, which had no significant impact on the Group's financial position or performance[13] Revenue and Segment Information The Group's business is divided into six operating segments, with medical device products remaining the largest revenue source, accounting for over 50% with a slight 0.6% year-on-year increase; orthopedic products saw a significant 33.5% year-on-year revenue decrease due to volume-based procurement, while interventional products showed strong performance with a 20.4% year-on-year revenue increase, and pharmaceutical packaging and blood management businesses maintained steady growth External Sales Revenue by Segment (Unit: RMB Thousand) | Segment | H1 2023 | H1 2022 (Restated) | YoY Change | | :--- | :--- | :--- | :--- | | Medical device products | 3,568,392 | 3,548,294 | +0.6% | | Orthopedic products | 797,103 | 1,198,810 | -33.5% | | Interventional products | 947,598 | 785,928 | +20.6% | | Pharmaceutical packaging | 1,061,119 | 1,056,174 | +0.5% | | Blood management | 523,488 | 489,483 | +6.9% | | Total | 6,897,700 | 7,078,689 | -2.6% | Profit by Segment (Unit: RMB Thousand) | Segment | H1 2023 | H1 2022 (Restated) | YoY Change | | :--- | :--- | :--- | :--- | | Medical device products | 660,716 | 623,738 | +5.9% | | Orthopedic products | 102,713 | 490,640 | -79.1% | | Interventional products | 45,628 | 89,040 | -48.8% | | Pharmaceutical packaging | 421,526 | 451,853 | -6.7% | | Blood management | 65,382 | 96,643 | -32.3% | | Other | 38,583 | 30,633 | +25.9% | | Total | 1,334,548 | 1,782,547 | -25.1% | Management Discussion and Analysis Business Segment Review During the period, the Group's gross margin decreased from 52.4% to 51.4% due to volume-based procurement; medical device revenue slightly increased by 0.4%, while orthopedic revenue declined 33.5% due to policy impacts, and interventional business revenue grew strongly by 18.9% - The Group actively responded to volume-based procurement by increasing sales volume, enhancing market share, and optimizing operating expenses to offset the impact of price reductions on profit[38] - - Medical Device Products: Revenue increased by 0.4%, with growth in conventional consumables offsetting the decline in anti-epidemic material sales - - Pharmaceutical Packaging Business: Revenue increased by 0.5%, driven by strong demand for pre-filled syringes - - Orthopedic Business: Revenue decreased by 33.5%, but terminal surgical implant volume significantly increased, and sales model transformation progressed - - Interventional Business: Revenue increased by 18.9%, with Alang China maintaining rapid growth[38][39] Research and Development, Production, and Sales The Group increased R&D investment to RMB 295 million, representing 4.3% of revenue, while expanding production capacity and sales networks, adding over 600 domestic customers, and achieving 10.4% growth in overseas revenue, which now accounts for 23.4% of total revenue - Total R&D expenditure was approximately RMB 295 million, an 18.2% year-on-year increase, raising its proportion of revenue from 3.5% to 4.3%[40] - Domestic customers increased by 177 hospitals, 50 other medical institutions, and 400 distributors, while the total number of overseas customers reached 7,267[42] Revenue by Geographical Region (Unit: RMB Thousand) | Region | H1 2023 | % of Total Revenue | YoY Change | | :--- | :--- | :--- | :--- | | Domestic | 5,285,752 | 76.6% | -5.9% | | Overseas | 1,611,948 | 23.4% | +10.4% | | Total | 6,897,700 | 100.0% | -2.6% | Financial Review The Group maintained a healthy financial position with approximately RMB 6.56 billion in cash and bank balances and healthy operating cash flow at period-end; the gearing ratio decreased from 20.6% to 19.7%, and the Group realized an exchange gain of approximately RMB 14.97 million through foreign currency hedging tools - As of June 30, 2023, the Group's cash and bank balances were approximately RMB 6.56 billion, with net cash flow from operating activities of approximately RMB 1.12 billion[48] - The gearing ratio (total debt/equity attributable to owners) was 19.7%, a decrease from 20.6% at the end of 2022[49] - The Group utilized foreign exchange structured derivative financial contracts to hedge foreign exchange risks, realizing an exchange gain of RMB 14.971 million during the period[50] Significant Investments and Capital Commitments During the period, the Group invested approximately RMB 322 million in industrial park construction, planned RMB 770 million for the Songyuan Health Medical Industry Fund, and initiated new production line projects, while its subsidiary Weigao Orthopedic acquired Shandong Weigao Xinsheng Medical Devices Co., Ltd. for RMB 1.03 billion - - Industrial Park Construction: Approximately RMB 322 million invested in land acquisition, factory construction, and equipment - - Industry Fund: Planned investment of RMB 770 million in Songyuan Health Medical Industry Fund, with RMB 308 million already contributed - - Equity Acquisition: Weigao Orthopedic acquired 100% equity of Shandong Weigao Xinsheng Medical Devices Co., Ltd. for RMB 1.03 billion, focusing on tissue repair product lines[51] - As of June 30, 2023, the Group's contracted but unprovided capital commitments amounted to approximately RMB 1.199 billion[52] Review and Outlook First-half performance fluctuated due to orthopedic volume-based procurement, the exit of anti-epidemic products, and US dollar interest rate hikes; the company views medical reform policies as long-term opportunities despite short-term challenges, planning to advance digital clinical nursing, transform orthopedic sales models, and expand specialized product portfolios, while pursuing "platformization, internationalization, and digitalization" strategies for sustainable growth - First-half performance was impacted by three negative factors: 1) price fluctuations due to orthopedic volume-based procurement; 2) pricing and structural effects on revenue growth from general consumables and pharmaceutical packaging products; and 3) the rapid exit of anti-epidemic products from the market[53] - The company launched digital clinical nursing products with broad market prospects, expected to become a new performance growth driver[53] - The company proposed three major operational strategies: "Platformization," "Internationalization," and "Digitalization," along with two supporting strategies: "Talent" and "Innovation," to create long-term stable value[55] Other Information Dividends and General Meetings The Board recommended an interim dividend of RMB 0.0734 per share, subject to approval at the Extraordinary General Meeting on October 13, 2023, with detailed share transfer registration suspension dates provided for determining meeting attendance and dividend entitlement - The proposed interim dividend is RMB 0.0734 per share, subject to approval at the Extraordinary General Meeting[56] - - Date of Extraordinary General Meeting: October 13, 2023 - - Record Date for Dividend Entitlement: October 27, 2023 - - Interim Dividend Dispatch Date: On or before November 24, 2023[57][59] Corporate Governance The company is committed to maintaining high corporate governance standards, complying with all code provisions of Appendix 14 to the Listing Rules' Corporate Governance Code during the period, with the only deviation being the absence of specific terms for non-executive directors; the Board comprises nine directors, including three independent non-executive directors, and an Audit Committee has been established, with the company adopting standard securities dealing codes for directors and regularly reviewing internal control systems - The company has complied with all code provisions of the Corporate Governance Code, with the sole deviation being that independent non-executive directors do not have specific terms but are subject to retirement by rotation and re-election[68] - The Audit Committee, comprising three independent non-executive directors and one non-executive director, has reviewed the financial statements for the current period[73]