GARDEN BIO-CHEM(300401)2024-04-15 10:24Financial Performance - The company's revenue and gross margin decreased year-on-year due to a decline in sales prices of pharmaceutical products and Vitamin D3 products [4]. - Zhejiang Garden Biopharmaceutical Co., Ltd. reported a revenue of 1.2 billion RMB for the fiscal year 2023, representing a year-over-year increase of 15% [18]. - The company achieved a net profit of 300 million RMB in 2023, which is a 20% increase compared to the previous year [18]. - The company's operating revenue for 2023 was ¥1,094,651,559.54, a decrease of 22.78% compared to ¥1,417,511,816.01 in 2022 [23]. - Net profit attributable to shareholders was ¥192,348,873.69, down 49.87% from ¥383,722,581.79 in the previous year [23]. - The total revenue for 2023 was ¥1,094,651,559.54, a decrease of 22.78% compared to ¥1,417,511,816.01 in 2022 [62]. - The vitamin D3 market faced intense competition and price declines, with feed-grade vitamin D3 prices hitting historical lows during the reporting period [34]. - The demand for food-grade vitamin D3 decreased due to macroeconomic impacts and excess inventory, leading to declines in both price and sales volume [35]. - The company reported a significant drop in cash flow from operating activities, which was ¥159,984,577.98, down 57.57% from ¥377,039,761.35 in the previous year [23]. - The company achieved a net profit of approximately 147.77 million RMB from its subsidiary Zhejiang Huayuan Pharmaceutical Co., Ltd [96]. Research and Development - R&D expenses increased year-on-year as the company intensified investment in new product projects [4]. - The company is committed to increasing R&D investment to drive growth and innovation [4]. - Zhejiang Garden Biopharmaceutical is investing 200 million RMB in R&D for innovative drug development over the next two years [18]. - The number of R&D personnel increased by 36.48% from 159 in 2022 to 217 in 2023, with R&D personnel now constituting 29.85% of the total workforce [77]. - Research and development (R&D) expenses amounted to ¥101,008,263.18 in 2023, representing 9.23% of total revenue, an increase from 5.89% in 2022 [77]. - The R&D personnel with master's degrees increased by 50% from 26 in 2022 to 39 in 2023, indicating a focus on higher qualifications in the R&D team [77]. - The company has established three R&D centers in Dongyang, Jinhua, and Hangzhou, focusing on natural product biosynthesis, industrialization research, and cutting-edge drug trials, enhancing its core competitiveness [47]. Strategic Initiatives - The company plans to continue its "one vertical and one horizontal" development strategy, enhancing innovation capabilities and optimizing the business model [4]. - The company will maintain its established market strategy and promote multi-product collaborative development [4]. - The company is exploring market expansion opportunities in Southeast Asia, targeting a 10% market share by 2025 [18]. - A strategic acquisition of a local biotech firm is expected to enhance the company's product pipeline and increase market competitiveness [18]. - The company has established a bioengineering subsidiary to focus on biological synthesis projects, indicating a strategic shift towards innovation [102]. - The company is focused on expanding its product line, focusing on the development of new drugs and technologies to enhance market competitiveness [76]. Market and Competitive Landscape - The company acknowledges potential risks including cyclical fluctuations in the vitamin industry and price declines in pharmaceuticals [6]. - The company emphasizes that its core competitiveness and main business have not undergone significant changes despite the performance drop [4]. - The company is adapting to national procurement policies and market dynamics, positioning itself for sustainable growth in the pharmaceutical industry [40]. - The company has established a nationwide sales network, primarily targeting hospitals, using a "distribution + academic promotion" sales model [46]. - The company has seven main products, with six selected for national or local centralized procurement, indicating a strong market presence [37]. Governance and Compliance - The company has maintained an independent operational structure, ensuring no interference from the controlling shareholder in business activities [112]. - The company’s governance structure aligns with the requirements of the Company Law and the Securities Law, ensuring equal rights for all shareholders [111]. - The company has established a complete and independent financial management system, including independent accounting and tax obligations [116]. - The company has implemented a "Quality Return Double Improvement" action plan, although details on its execution were not disclosed [108]. - The company has committed to timely and accurate information disclosure, ensuring all investors have equal access to information [115]. Environmental Responsibility - The company has established a green development philosophy focusing on pollution reduction and resource recycling, recognized as a leading enterprise in environmental protection in Zhejiang Province [157]. - The company has a valid pollution discharge permit until December 31, 2025, ensuring compliance with environmental regulations [157]. - The company reported no exceedances in pollutant emissions, with specific metrics such as ammonia nitrogen at 1.229 mg/l against a standard of 35 mg/l [157]. - The company has implemented a comprehensive waste management strategy, ensuring all hazardous waste is disposed of by qualified entities [157]. - The company invested CNY 3.7871 million in environmental governance and protection during the reporting period, and paid an environmental protection tax of CNY 7,031.47 [161]. Employee and Shareholder Engagement - The company emphasizes employee rights and welfare, ensuring compliance with labor laws and providing training for skill development [165]. - The company has implemented a training system that includes new employee orientation, general skills training, management skills training, and professional skills training [141]. - The company’s cash dividend policy aligns with its articles of association and has been executed transparently, ensuring shareholder interests are protected [144]. - The company distributed a cash dividend of RMB 1.40 per 10 shares, totaling RMB 77,141,057.98, which represents 20.10% of the net profit for 2022 [143]. - The company has committed to distributing at least 30% of the distributable profits in cash if the diluted earnings per share fall below the previous year's level [174].