Financial Performance - For the fiscal year 2023, the company's revenue and net profit were approximately RMB 344.1 million and RMB 48.8 million, representing a decrease of 13.9% and 44.4% respectively compared to 2022[8]. - The company's revenue for the fiscal year 2023 was approximately RMB 344.1 million, a decrease of about RMB 55.6 million or 13.9% compared to 2022[23]. - The overall gross profit margin decreased from approximately 42.7% in 2022 to about 30.3% in 2023, primarily due to rising procurement costs[27]. - Operating profit before tax decreased by approximately 45.1% from RMB 124.3 million in 2022 to RMB 68.3 million in 2023, mainly due to changes in government policy and reduced orders from distributors[30]. - The net cash generated from operating activities for the year 2023 was approximately RMB 8.5 million, a significant decrease from RMB 125.8 million in 2022, mainly due to reduced operating profit and cash inflow from working capital[33]. - The capital expenditure for the year 2023 was approximately RMB 5.1 million, down from RMB 11.7 million in 2022, primarily related to the purchase of properties, plants, and machinery[41]. - The board of directors proposed not to declare a final dividend for the year 2023, consistent with the previous year[42]. - No final dividend has been proposed for the fiscal year 2023[131]. - The board has not set a predetermined dividend payout ratio, allowing for flexibility based on the company's financial condition[130]. Market and Product Overview - The company's main product sales in Northeast China for 2023 amounted to approximately RMB 188.2 million, a decrease of about 14.4%, accounting for over 54.7% of total revenue[9]. - The Chinese pharmaceutical market is expected to maintain a good development trend, with a projected market size of RMB 1,797.7 billion in 2023 and an anticipated increase to RMB 1,931.2 billion in 2024[10]. - The company currently has approximately 60 types of traditional Chinese medicine products, targeting various therapeutic effects including cardiovascular, digestive, and gynecological conditions[9]. - The top three best-selling products in 2023 contributed approximately 29.5%, 15.3%, and 10.1% to total revenue, respectively[23]. - Revenue contributions by region for 2023 were RMB 188.2 million (54.7%), RMB 29.4 million (8.5%), RMB 56.3 million (16.4%), RMB 57.2 million (16.6%), RMB 7.3 million (2.1%), and RMB 5.7 million (1.7%)[24]. Distribution and Marketing Strategy - The company has 88 distributors covering about 40 cities in China, with a strategic focus on the Northeast region[9]. - The company plans to implement both online and offline marketing strategies to create more value for shareholders[13]. - The company aims to expand its operations beyond Northeast and South China, leveraging its established distribution network[20]. - The company has established a distribution network with 88 distributors covering about 40 cities in China, supported by over 37 marketing personnel with relevant experience[20]. Leadership and Governance - The company has appointed new executives and board members in November 2023, indicating a shift in leadership[5]. - Zhang Hongli, the CEO, has over 32 years of experience in the pharmaceutical industry, overseeing overall business operations since her appointment in December 2019[50]. - The company has appointed Jia Yanru as an executive director on November 3, 2023, who has over 20 years of financial management experience in the pharmaceutical sector[53]. - The company has a structured board with independent directors overseeing key committees, including the remuneration and audit committees[56][65]. - The company emphasizes compliance and investor relations under the supervision of experienced executives like Jia Yanru[53]. - The leadership team is well-rounded with expertise in finance, management, and industry-specific knowledge, positioning the company for future growth[50][65]. - The company has adopted the corporate governance code as the basis for its governance practices, ensuring compliance with all applicable provisions except for a deviation noted in section C.2.1[70]. - The board of directors is responsible for the company's business development direction and control, establishing policies and strategies to create shareholder value[73]. - The company has implemented an independent board evaluation mechanism to enhance board effectiveness and ensure independent judgment in safeguarding shareholder interests[81]. - The chairman and CEO roles were separated as of November 3, 2023, ensuring compliance with corporate governance best practices[82]. Environmental, Social, and Governance (ESG) Initiatives - The ESG report covers the company's performance in environmental, social, and governance aspects for the period from January 1, 2023, to December 31, 2023[139]. - The company conducted a stakeholder engagement survey to identify key concerns and interests related to ESG matters[143]. - The company aims to enhance its sustainable business strategies based on stakeholder feedback and assessments[143]. - The company has maintained communication with external stakeholders, including government agencies and the public, to ensure compliance and corporate social responsibility[143]. - The board emphasizes the importance of sustainable development and is committed to regular monitoring and investment in sustainability initiatives[150]. - The company has implemented an environmental management system to identify, monitor, and reduce environmental risks[151]. - The company has complied with all relevant environmental laws and regulations during the reporting period[153]. - The company aims to peak carbon emissions by 2030 and achieve carbon neutrality by 2050[176]. - The company plans to reduce Scope 1 and Scope 2 greenhouse gas emissions by 20% by 2030 compared to 2023 levels[176]. Employee and Workplace Policies - The company employs 191 full-time employees in China, a slight decrease from 194 in 2022[180][181]. - The gender distribution among employees is 58 males and 133 females, with a focus on equal pay and opportunities[181][182]. - The company has established a health and safety framework to minimize the risk of infectious diseases and ensure a safe working environment[185]. - The company has not recorded any work-related fatalities or lost workdays due to injuries in the past three years[186]. - The company emphasizes mental health and work-life balance, providing counseling services and stress-relief activities for employees[186]. - The average training hours per employee in 2023 was approximately 32 hours, slightly down from 33 hours in 2022, with a 100% participation rate in training programs[189]. - The company adheres strictly to labor laws, with no incidents of child labor or forced labor reported during the reporting period[194]. Supply Chain Management - The supply chain management system is crucial for developing high-quality products, with a focus on balancing quality, environmental impact, reliability, and compliance[195]. - The company conducts annual supplier evaluations based on criteria including production licenses, quality standards, and compliance with environmental regulations[197]. - The company ensures that suppliers meet national environmental protection and occupational health safety laws during the production process[198]. - The company has implemented a transparent and fair supplier review process to maintain long-term relationships with suppliers[195]. - The group has a diversified supplier base with a total of 28 approved suppliers across various regions in China as of 2023[200]. - No product recalls or quality complaints were reported during the reporting period, indicating adherence to internal and national quality standards[199].
现代中药集团(01643) - 2023 - 年度财报