益佰制药(600594) - 2023 Q4 - 年度财报

Section II Company Profile and Key Financial Indicators This section provides an overview of the company's fundamental information and a summary of its key financial performance VII. Key Accounting Data and Financial Indicators for the Past Three Years In 2023, the company achieved operating revenue of 2.821 billion RMB, a 3.12% increase year-on-year; net profit attributable to shareholders turned profitable at 103.40 million RMB, primarily due to the absence of large goodwill impairment this period; net cash flow from operating activities was 377.61 million RMB, up 9.36%, indicating improved cash flow from core operations; basic earnings per share were 0.131 RMB, and return on net assets recovered to 3.34% Key Accounting Data | Key Accounting Data | 2023 (RMB) | 2022 (RMB) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 2,820,561,015.00 | 2,735,262,838.67 | 3.12 | | Net Profit Attributable to Listed Company Shareholders | 103,399,049.91 | -426,389,854.75 | N/A | | Net Profit Attributable to Listed Company Shareholders (Excluding Non-recurring Gains/Losses) | 67,454,913.97 | -467,779,870.38 | N/A | | Net Cash Flow from Operating Activities | 377,609,812.56 | 345,299,144.63 | 9.36 | | Total Assets | 4,780,353,916.87 | 4,870,129,502.37 | -1.84 | | Net Assets Attributable to Listed Company Shareholders | 3,067,544,538.30 | 3,044,489,112.71 | 0.76 | Key Financial Indicators | Key Financial Indicators | 2023 | 2022 | YoY Change (%) | | :--- | :--- | :--- | :--- | | Basic Earnings Per Share (RMB/share) | 0.131 | -0.538 | N/A | | Diluted Earnings Per Share (RMB/share) | 0.131 | -0.538 | N/A | | Weighted Average Return on Net Assets (%) | 3.340 | -12.960 | Increase by 16.300 percentage points | | Weighted Average Return on Net Assets (Excluding Non-recurring Gains/Losses) (%) | 2.179 | -14.218 | Increase by 16.397 percentage points | Quarterly Key Financial Data for 2023 | 2023 Quarterly Key Financial Data | Q1 | Q2 | Q3 | Q4 | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue (RMB) | 683,797,926.88 | 795,903,440.16 | 657,132,885.00 | 683,726,762.96 | | Net Profit Attributable to Listed Company Shareholders (RMB) | 43,999,942.75 | 83,906,106.54 | 41,963,911.92 | -66,470,911.30 | | Net Cash Flow from Operating Activities (RMB) | 58,794,664.69 | 143,508,355.90 | 140,852,272.26 | 34,454,519.71 | Section III Management Discussion and Analysis This section provides a comprehensive discussion and analysis of the company's operational performance, industry conditions, business model, core competencies, and future outlook I. Discussion and Analysis of Operations In 2023, facing a complex macroeconomic environment and deepening healthcare reforms, the company adhered to its 'One Ship, Two Wings' strategy, focusing on its core business, and made progress in R&D innovation, marketing upgrades, digital transformation, and lean production - The company adheres to the "One Ship, Two Wings" development strategy, which means focusing on pharmaceutical manufacturing (one ship) as its core business, while simultaneously developing healthcare services and traditional Chinese medicine (TCM) great health (two wings)[240][492] - The company continuously promotes R&D innovation, including new drug development (e.g., Zhenzhu Diwan), generic drug registration (e.g., Azacitidine), and secondary development and safety re-evaluation studies of already marketed products (e.g., Aidi Injection)[51] - The company's products, Compound Banmao Capsules and Ginkgo Damo Injection, successfully won bids in the national centralized procurement of traditional Chinese medicine, which helps expand market share and enhance brand influence[36] - The company actively promotes digital transformation, strengthening data center resources, security protection, and data backup, and has begun exploring the application of AIGC technology in office environments to improve efficiency[37][54][80] II. Industry Overview and Policy Analysis During the Reporting Period In 2023, China's pharmaceutical industry continued to transform under policies like medical insurance cost control, normalized centralized procurement, and innovation encouragement, with overall revenue and profit in pharmaceutical manufacturing declining, but sub-sectors like traditional Chinese medicine and healthcare services showing varied performance and new policy directions - In 2023, national pharmaceutical manufacturing operating revenue decreased by 3.7% year-on-year, and total profit decreased by 15.1% year-on-year, indicating industry growth pressure[85] - The traditional Chinese medicine industry received continuous policy support, with CDE-accepted IND applications for new traditional Chinese medicines increasing by 35.85% and NDA applications increasing by 118.18% in 2023, demonstrating high R&D innovation activity[87] - Demand for healthcare services continued to grow, with the total number of outpatient visits at national medical and health institutions increasing by 6.0% year-on-year in the first three quarters of 2023; private and grassroots medical institutions saw counter-trend growth in outpatient visits, reflecting the effectiveness of healthcare reforms[90] - The 2023 new National Medical Insurance Catalog added 126 drugs, with an average price reduction of 61.7%, further increasing support for innovative drugs and improving renewal rules, driving the industry towards value-oriented development[73] III. Company's Business Operations During the Reporting Period The company's business primarily comprises three segments: pharmaceutical manufacturing, healthcare services, and the great health industry, with pharmaceutical manufacturing as the core, covering R&D, production, and sales of various drug types, supported by a centralized procurement model, strict GMP compliance, and a self-operated sales network - The company's business covers three major segments: pharmaceutical manufacturing, healthcare services, and great health, forming a relatively complete industrial chain layout[78][102][122] - The pharmaceutical manufacturing segment is the main business, with products covering multiple therapeutic areas such as oncology, cardiovascular, gynecology, and pediatrics[78] - Procurement Model: Costs are reduced and quality is ensured through a group procurement platform and bidding[103] - Production Model: Production is organized strictly in accordance with GMP requirements, and an independent pharmacovigilance department is established[124] - Sales Model: Primarily a self-operated model, building a multi-level sales network around the "professional and focused" concept, strengthening terminal control[105] IV. Analysis of Core Competencies During the Reporting Period The company's core competitiveness is demonstrated through its product portfolio, unique Miao medicine R&D capabilities, extensive market reach, strong brand recognition, integrated full industry chain, and efficient centralized management enhanced by digital transformation - Product Portfolio Advantage: Possesses 151 varieties and 192 drug production approval numbers, of which 63 varieties are included in the National Medical Insurance Catalog, with core products like Aidi Injection being exclusive original research drugs[128] - Miao Medicine R&D Advantage: Relies on the National Miao Medicine Engineering Technology Research Center, the only national-level ethnic medicine engineering technology research center, possessing strong Miao medicine R&D capabilities[129] - Brand Advantage: Owns "Yibai" and "KEKE Keke" 2 well-known trademarks, and has been continuously selected for the "Top 100 Chinese Pharmaceutical Industrial Enterprises" list for 18 consecutive years[131][113] - Patent Situation: As of the end of the reporting period, the company and its subsidiaries held 234 authorized valid patents, including 153 invention patents[112] - Full Industry Chain Advantage: Possesses a complete industrial chain from traditional Chinese medicine cultivation and extraction to preparation production, as well as advanced production lines for chemical and biological drugs[135] V. Analysis of Key Operating Performance During the Reporting Period In 2023, the company achieved operating revenue of 2.821 billion RMB and net profit attributable to the parent company of 103.40 million RMB, with pharmaceutical industrial products as the main revenue driver, while anti-tumor drugs remained the highest revenue contributor despite a slight decline, and significant increases were observed in other drug categories and inventory impairment provisions Key Financial Item Changes | Key Financial Item Changes | Current Period (RMB) | Prior Period (RMB) | Change (%) | Primary Reason | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 2,820,561,015.00 | 2,735,262,838.67 | 3.12 | - | | Net Profit Attributable to Parent Company Owners | 103,399,049.91 | -426,389,854.75 | N/A | Primarily due to no goodwill impairment impact this period | | Financial Expenses | 15,604,812.82 | 33,314,298.67 | -53.16 | Primarily due to increased government subsidies received this period | | R&D Expenses | 112,147,338.00 | 126,933,083.42 | -11.65 | - | | Net Cash Flow from Operating Activities | 377,609,812.56 | 345,299,144.63 | 9.36 | - | Main Business by Industry Segment | Main Business by Industry Segment | Operating Revenue (RMB) | Operating Cost (RMB) | Gross Margin (%) | YoY Operating Revenue Change (%) | | :--- | :--- | :--- | :--- | :--- | | Pharmaceutical Industry | 2,350,047,573.99 | 506,606,053.60 | 78.44 | 3.41 | | Healthcare Services | 458,063,738.09 | 348,935,183.75 | 23.82 | 0.28 | Main Business by Product Category | Main Business by Product Category | Operating Revenue (RMB) | Operating Cost (RMB) | Gross Margin (%) | YoY Operating Revenue Change (%) | | :--- | :--- | :--- | :--- | :--- | | Anti-tumor | 1,231,944,248.38 | 128,117,018.97 | 89.60 | -3.20 | | Gynecology | 290,644,912.63 | 115,558,830.35 | 60.24 | 2.85 | | Cardiovascular and Cerebrovascular | 283,169,754.93 | 84,865,608.85 | 70.03 | -9.56 | | Other | 544,288,658.05 | 178,064,595.43 | 67.28 | 34.67 | | Healthcare Services | 458,063,738.09 | 348,935,183.75 | 23.82 | 0.28 | R&D Investment | R&D Investment | 2023 (RMB) | | :--- | :--- | | Expensed R&D Investment | 112,147,338.00 | | Capitalized R&D Investment | 0 | | Total R&D Investment | 112,147,338.00 | | R&D Investment as % of Operating Revenue | 3.98 | | Number of R&D Personnel (persons) | 772 | | R&D Personnel as % of Total Company Staff | 14.01 | VI. Discussion and Analysis of the Company's Future Development The company will continue its "One Ship, Two Wings" development strategy, focusing on advancing drug R&D, strengthening sales, enhancing production quality, deepening digital transformation, and improving profitability, while acknowledging significant risks including R&D failure, quality control, industry regulatory changes, macroeconomic fluctuations, environmental policies, and the adverse impact of the Aidi Injection production halt - 2024 Operating Plan: Continuously advance drug R&D, strengthen sales, enhance production quality, deepen digital construction, and improve profitability[258][282][261][263][264] - The company faces multiple risks, including R&D, quality control, industry regulation, market, macroeconomic, environmental policy, and specific product production halt risks[266][267][268][270][290][311] - Significant Risk Alert: Aidi Injection has ceased production due to non-compliance, and its future resumption is uncertain; this product accounted for 16.77% of the company's total revenue in 2023, and its production halt will have a significant adverse impact on the company's operating performance[290][1191] Section IV Corporate Governance This section details the company's corporate governance structure, its operational mechanisms, and the performance of its internal control system I. Explanation of Corporate Governance The company has established a standardized governance structure in strict accordance with relevant laws and regulations, maintaining independence from its controlling shareholder in all key aspects, with effective functioning of its governance bodies, transparent information disclosure, active investor relations, and continuous improvement of internal controls - The company's governance structure is well-established, strictly adhering to relevant laws and regulations, ensuring the standardized operation of the General Meeting of Shareholders, Board of Directors, and Supervisory Committee[273] - The company maintains complete separation and independent operation from its controlling shareholder in terms of assets, personnel, finance, organization, and business, with no instances of the controlling shareholder occupying company funds[273] - During the reporting period, the company issued a total of 38 interim announcements and 4 periodic reports, ensuring that information disclosure is true, accurate, timely, and complete[2] III. Overview of Shareholder Meetings During the reporting period, the company held 5 shareholder meetings, including 1 annual general meeting and 4 extraordinary general meetings, which reviewed and approved multiple important proposals covering corporate governance, financial reporting, and executive compensation - A total of 5 shareholder meetings were held in 2023, and the convening and holding procedures for all meetings complied with regulatory requirements[314][322] - Important proposals included: revising the "Articles of Association" and related rules of procedure, electing members of the Eighth Board of Directors and Supervisory Committee, reviewing the 2022 annual report and profit distribution plan, re-appointing the audit firm, adjusting independent director remuneration, and purchasing D&O liability insurance[4][301][302][323] IV. Information on Directors, Supervisors, and Senior Management During the reporting period, the company's directors, supervisors, and senior management totaled 21 individuals, with a combined annual remuneration of 17.66 million RMB, and experienced changes due to Board re-election, alongside regulatory warnings issued to key executives for untimely information disclosure Remuneration of Directors, Supervisors, and Senior Management | Name | Position | Total Pre-tax Remuneration from the Company During the Reporting Period (10,000 RMB) | | :--- | :--- | :--- | | Dou Qiling | Chairperson | 248.00 | | Dou Yaqi | Vice Chairperson, General Manager, Director | 226.65 | | Wang Zhiwei | Deputy General Manager | 226.65 | | Lang Hongping | Vice Chairperson (Resigned) | 168.08 | | Xu Miao | Deputy General Manager, Board Secretary (Resigned) | 164.88 | | Total | / | 1,765.93 | - During the reporting period, the company's Board of Directors underwent a re-election, leading to changes in some directors, supervisors, and senior executives[309][350] - Due to the failure to timely disclose information regarding the suspension of production of a major product that might impact operations, the company's then-Chairperson Dou Qiling, then-General Manager Dou Yaqi, and then-Board Secretary Xu Miao received warning letters from the Guizhou Securities Regulatory Bureau[309][945] XII. Internal Control System Construction and Implementation During the Reporting Period The company has established a scientific and standardized internal control and risk management system, but two material weaknesses in non-financial reporting internal controls were identified during the reporting period, leading to administrative penalties and regulatory warnings, for which the company has formulated rectification measures - Two material weaknesses in non-financial reporting internal controls were identified during the reporting period[415] - Weakness One: Multiple non-compliant operations were found in the pre-extraction process of Aidi Injection production, violating the Good Manufacturing Practices (GMP) for Pharmaceuticals, resulting in administrative penalties for the company and relevant responsible persons from the Guizhou Provincial Drug Administration[390][372][437] - Weakness Two: Failure to timely disclose relevant information regarding the suspension of production of a major product that might impact the company's operations, leading to the company and relevant senior executives receiving an administrative regulatory measure decision letter from the Guizhou Securities Regulatory Bureau[373][393] - The internal control audit report opinion type is an "unmodified opinion with an emphasis of matter paragraph"[377][438] Section V Environmental and Social Responsibility (ESG) This section outlines the company's commitment and actions in environmental protection and social responsibility, including compliance with environmental regulations, pollution control, and various social welfare initiatives (I) Environmental Protection Status of the Company and its Major Subsidiaries Designated as Key Polluters by Environmental Protection Authorities The company prioritizes environmental protection, investing 3.58 million RMB in 2023, with its headquarters and key subsidiaries designated as key polluters, all confirming compliant discharge of wastewater, exhaust gas, and solid waste, supported by emergency response plans and clean energy initiatives like "coal-to-gas" boiler conversions to reduce carbon emissions - During the reporting period, the company's total environmental protection investment amounted to 3.58 million RMB[398] - The company and its subsidiaries Yibai Pharmaceutical, Chang'an Pharmaceutical, and Nanzhao Pharmaceutical are designated as key polluters; during the reporting period, all pollutants met discharge standards, and no major environmental pollution incidents occurred[398][863][879] - The company has formulated detailed emergency response plans for environmental incidents, which have been filed with relevant environmental protection authorities[870][873][875] - To reduce carbon emissions, the company implemented "coal-to-gas" conversions for its boilers, using natural gas as a clean energy source, effectively reducing atmospheric pollutant emissions[902] (II) Specific Social Responsibility Initiatives The company actively fulfills its social responsibilities by protecting the rights of shareholders, creditors, employees, suppliers, and consumers, making external donations totaling 1.86 million RMB, and participating in rural revitalization through industrial and employment poverty alleviation, alongside various public welfare activities and Party building efforts - The company protects the legitimate rights and interests of various stakeholders, including shareholders, creditors, employees, suppliers, customers, and consumers[903][907][908] Public Welfare Projects | Public Welfare Projects | Total Investment (10,000 RMB) | Of which: Funds (10,000 RMB) | Value of Materials (10,000 RMB) | | :--- | :--- | :--- | :--- | | External Donations | 185.86 | 65.77 | 120.09 | Poverty Alleviation and Rural Revitalization Projects | Poverty Alleviation and Rural Revitalization Projects | Total Investment (10,000 RMB) | Assistance Form | | :--- | :--- | :--- | | Consolidating Poverty Alleviation Achievements | 94.16 | Industrial Poverty Alleviation, Employment Poverty Alleviation | - The company actively participates in social welfare activities, such as donating to the Guizhou Province Tongxin Guangcai Charity Foundation, donating books, and its subsidiaries conducting free clinics and blood donation drives[913] Section VI Important Matters This section details significant events concerning the company, including regulatory penalties and rectification efforts, as well as major contracts and commitments X. Alleged Violations, Penalties, and Rectification of Listed Company, its Directors, Supervisors, Senior Management, Controlling Shareholder, and Actual Controller During the reporting period, the company and its relevant personnel received regulatory penalties, including a 2 million RMB fine from the Guizhou Provincial Drug Administration for non-compliant Aidi Injection production and warning letters from the Guizhou Securities Regulatory Bureau for untimely disclosure of a major product's production halt, with the company actively implementing rectification measures - Due to certain procedures in the pre-extraction process of Aidi Injection not strictly adhering to process specifications, the company was fined 2,000,000.00 RMB by the Guizhou Provincial Drug Administration, and relevant responsible persons were also penalized[944] - Due to the failure to timely disclose relevant information regarding the suspension of production of a major product that might impact the company's operations, the company and its then-Chairperson Dou Qiling, then-General Manager Dou Yaqi, and then-Board Secretary Xu Miao received supervisory administrative measures in the form of warning letters from the Guizhou Securities Regulatory Bureau[945] XIII. Major Contracts and Their Performance The company's external guarantees are exclusively for its subsidiaries, totaling 600 million RMB, and a performance commitment for its subsidiary Yibai Formula Granules triggered an equity repurchase clause with an investor, while outstanding bank acceptance bills pose a recourse risk - As of the end of the reporting period, the company's total guarantee balance for its subsidiaries was 600 million RMB, accounting for 19.56% of the company's net assets[963] - The performance commitment of subsidiary Yibai Formula Granules was not met, triggering the equity repurchase clause of the investor (Guizhou Agricultural Development Fund), meaning the company may need to repurchase this portion of equity in the future[1145][1154] - As of the end of the reporting period, the amount of bank acceptance bills endorsed and transferred by the company but not yet due was 18,036,992.29 RMB, posing a certain recourse risk[1180] Section VII Share Changes and Shareholder Information This section provides details on the company's share capital structure, the number of shareholders, and information regarding its controlling shareholder and top ten shareholders III. Shareholder and Actual Controller Information As of the end of 2023, the company had 53,370 common shareholders, with controlling shareholder Ms. Dou Qiling holding 23.42% of shares, of which a significant portion is pledged, and the company had disclosed a share repurchase plan that remained unimplemented - As of the end of 2023, the company had a total of 53,370 shareholders[510] Top Ten Shareholders | Top Ten Shareholders | Shares Held at Period End (shares) | Percentage (%) | Pledged Shares (shares) | | :--- | :--- | :--- | :--- | | Dou Qiling (Controlling Shareholder) | 185,457,636 | 23.42 | 113,295,500 | | Lv Liangfeng | 20,754,473 | 2.62 | 0 | | Guangzhou Zhujiang Development Group Co., Ltd. | 8,685,953 | 1.10 | 0 | | Guangzhou Zhujiang Industrial Group Co., Ltd. | 8,262,700 | 1.04 | 0 | | Lang Hongping | 7,912,009 | 1.00 | 6,500,000 | - The company disclosed a share repurchase plan on November 30, 2023, intending to repurchase shares worth 20 million to 40 million RMB for employee stock ownership plans or equity incentives, but it had not been implemented by the end of the reporting period[546][1219] Section X Financial Report This section presents the company's audited financial statements, including the audit report, significant accounting policies, and detailed notes to the consolidated financial statement items I. Audit Report Zhongzheng TianTong Certified Public Accountants issued an unmodified audit opinion on the company's 2023 financial statements, with "Goodwill Impairment" and "Revenue Recognition" identified as key audit matters due to their materiality and inherent complexities - The audit firm issued an unmodified audit opinion on the financial statements[607][468] - Key Audit Matter One: Goodwill Impairment; as of the end of 2023, the original book value of goodwill was 2.170 billion RMB, impairment provision was 2.005 billion RMB, and book value was 164.04 million RMB; due to its significant amount and complex impairment testing, it was identified as a key audit matter, with no new impairment provision recognized this period[610] - Key Audit Matter Two: Revenue Recognition; operating revenue for 2023 was 2.821 billion RMB, with drug sales revenue accounting for 83.32%; due to its significant amount and status as a key performance indicator, it carries inherent risk and was identified as a key audit matter[653] V. Significant Accounting Policies and Estimates The company's financial statements are prepared on a going concern basis, adhering to enterprise accounting standards, with specific policies for revenue recognition and the capitalization or expensing of R&D expenditures, and retrospective adjustments made for the implementation of "Interpretation No. 16 of Accounting Standards for Business Enterprises" - The company implemented "Interpretation No. 16 of Accounting Standards for Business Enterprises" from January 1, 2023, and retrospectively adjusted its financial statements, impacting deferred income tax assets/liabilities, undistributed profits, and minority interests at the beginning of the period[838][939] - Revenue Recognition Timing: Revenue is recognized when the customer obtains control of the related goods or services; for drug sales, revenue is typically recognized when the significant risks and rewards of ownership, legal title, and physical possession of the goods are transferred and the customer accepts the goods[797][799] - R&D Expenditure Accounting Policy: Expenditures in the research phase are expensed in the current period; expenditures in the development phase are capitalized when conditions such as technical feasibility, clear intent, resource support, and reliable measurement of expenditures are met[731][732][733] VII. Notes to Consolidated Financial Statement Items As of the end of 2023, the company's total assets were 4.780 billion RMB and total liabilities were 1.579 billion RMB, with significant asset and liability balances including fixed assets, cash, inventories, and borrowings, and a notable increase in inventory impairment provisions Asset Items | Asset Items | Period-end Balance (RMB) | Beginning-of-period Balance (RMB) | | :--- | :--- | :--- | | Cash and Cash Equivalents | 699,468,723.75 | 592,355,390.28 | | Notes Receivable | 465,262,911.43 | 271,607,502.78 | | Accounts Receivable | 227,055,742.82 | 294,527,193.27 | | Inventories | 586,650,795.70 | 625,084,560.44 | | Fixed Assets | 1,705,684,684.34 | 1,639,762,295.13 | | Goodwill | 164,038,070.15 | 164,038,070.15 | Liability Items | Liability Items | Period-end Balance (RMB) | Beginning-of-period Balance (RMB) | | :--- | :--- | :--- | | Short-term Borrowings | 446,045,418.03 | 537,110,128.92 | | Accounts Payable | 135,057,579.64 | 149,427,750.33 | | Long-term Borrowings | 387,224,504.44 | 343,038,338.26 | | Lease Liabilities | 30,360,000.47 | 29,296,202.61 | - The period-end balance of inventory impairment provision was 125 million RMB, a significant increase from 60 million RMB at the beginning of the period, primarily due to increased provisions for raw materials, work-in-progress, and finished goods[1024][1027] - The company provided a total of 600 million RMB in guarantees for its subsidiary Hainan Chang'an International Pharmaceutical Co., Ltd[1082]