Huadong Medicine Co., Ltd.The First Quarterly Report 2020
April 2020
Section I Important Declaration
The Board of Directors, Board of Supervisors, directors, supervisors and seniormanagement of Huadong Medicine Co., Ltd. (hereinafter referred to as the“Company”) hereby guarantee that the information presented in this report isauthentic, accurate and complete and free of any false records, misleadingstatements or material omissions, and shall undertake individual and joint legalliabilities.All directors have attended the board of directors meeting to review thisquarterly report.Lyu Liang, the Company’s legal representative and the officer in charge ofaccounting, and Qiu Renbo, head of accounting department (accountingsupervisor) hereby declare and guarantee that the financial statements in thisquarterly report are authentic, accurate and complete.According to “Stock Listing Rules of the Shenzhen Stock Exchange”, if listedcompanies have both Chinese or other language version of public notice, theyshould ensure the content of both versions are the same. In the case ofdiscrepancy, the original version in Chinese shall prevail.
Section II Company ProfileI. Key Accounting Data and Financial IndicatorsWhether the Company needs to perform retroactive adjustment or restatement of previous accounting data
□ Yes √ No
| The current reporting period | Same period last year | Change of the current reporting period over the same period last year | |
| Operating revenue (yuan) | 8,598,069,911.29 | 9,705,148,188.21 | -11.41% |
| Net profit attributable to shareholders of listed companies (yuan) | 1,147,278,457.64 | 907,244,647.77 | 26.46% |
| Net profit attributable to shareholders of listed companies after deducting non-recurring gains/losses (yuan) | 856,930,262.10 | 856,031,343.59 | 0.11% |
| Net cash flow from operating activities (yuan) | 218,779,623.89 | -433,890,841.71 | 150.42% |
| Basic earnings per share (yuan/share) | 0.6557 | 0.5185 | 26.46% |
| Diluted earnings per share (yuan/share) | 0.6557 | 0.5185 | 26.46% |
| Weighted average return on equity (ROE) | 8.89% | 8.35% | 0.54% |
| End of the current reporting period | End of last year | Change of the end of the current reporting period over the end of last year | |
| Total assets (yuan) | 23,527,736,775.30 | 21,463,974,146.63 | 9.62% |
| Net assets attributable to shareholders of listed companies (yuan) | 13,482,042,877.17 | 12,309,477,308.00 | 9.53% |
Total share capital of the Company as of the trading day before disclosure:
| Total share capital of the Company as of the trading day before disclosure (share): | 1,749,809,548 |
Fully diluted earnings per share calculated using the latest share capital
| Dividends paid on preferred shares | 0.00 |
| Fully diluted earnings per share calculated using the latest share capital (yuan/share) | 0.6557 |
Items and amounts of non-recurring gains/losses
√ Applicable □ N/A
Unit: RMB yuan
| Item | Amount (from the beginning of the year to the end of the reporting period) | Note |
| Gains/losses on disposal of non-current assets (including the written-off part of the accrued assets impairment reserve) | 306,108,982.13 | Mainly due to the transfer of market distribution rights of related products in Western Europe by Sinclair, a wholly owned subsidiary of the Company in the UK |
| Government grants included in current gains/losses (excluding those closely related to operating activities, or regular government grants) | 20,044,478.23 | |
| Other non-operating income or expenditure | -5,345,565.75 | |
| Less: Amount affected by income | 31,742,841.97 | |
| Amount affected by minority interest (after tax) | -1,283,142.90 | |
| Total | 290,348,195.54 | -- |
If the Company recognizes an item as a non-recurring gain/loss based on the “Interpretation Announcement on InformationDisclosure Criteria for Public Companies No. 1 – Non-Recurring Profit/Loss” or recognizes an item satisfying the definition ofnon-recurring profit/loss in the announcement as a recurring profit/loss, reasons should be specified.
□ Applicable √ N/A
No such case during the reporting period.II. Total number of shareholders at the end of the reporting period and information of top 10shareholders
1. Total number of shareholders of common shares and number of shareholders of preferred shares withvoting rights restored, as well as information about top 10 shareholders
Unit: share
| Total number of shareholders of common shares at the end of the reporting period | 127,673 | Total number of shareholders of preferred shares whose voting rights have been restored at the end of the reporting period (if any) | 0 | |||
| Information about top 10 shareholders | ||||||
| Name | Nature | Shareholding ratio | Number of shares held | Number of shares held with sale restrictions | Pledged or frozen | |
| Status | Number | |||||
| 中国远大集团有 | Domestic | 41.77% | 730,938,157 | 0 | Pledged | 247,963,999 |
| 限责任公司( China Grand Enterprises, Inc. ) | non-state-owned legal person | |||||
| 杭州华东医药集团有限公司( Hangzhou Huadong Medicine Group Co., Ltd. ) | State-owned legal person | 16.46% | 288,000,000 | 0 | ||
| 香港中央结算有限公司 ( Hong Kong Securities Clearing Company Ltd. ) | Overseas legal person | 2.47% | 43,297,248 | 0 | ||
| 中国证券金融股份有限公司( China Securities Finance Co., Ltd. ) | Other | 1.27% | 22,186,818 | 0 | ||
| 全国社保基金一零六组合( National Social Security Fund Portfolio 106 ) | Other | 1.26% | 22,095,713 | 0 | ||
| 泰康资产管理有限责任公司－积极配置投资产品Taikang Asset Management Co., Ltd. – active allocation of investment products | Other | 0.93% | 16,298,609 | 0 | ||
| 泰康人寿保险有限责任公司－投连－积极成长( Taikang Life Insurance Co., Ltd. – Unit-linked – Proactive growth ) | Other | 0.63% | 11,108,211 | 0 | ||
| #易建东 ( #Yi Jiandong ) | Domestic natural person | 0.57% | 10,006,080 | 0 |
| 基本养老保险基金一五零四一组合 （ Basic Endowment Insurance Fund Portfolio 15041 ） | Other | 0.44% | 7,623,568 | 0 | ||
| 国泰君安证券资管-光大银行-国泰君安君得明混合型集合资产管理计划 （ Guotai Junan Securities Asset Management – China Everbright Bank – Guotai Junan Jundeming Hybrid Collective Assets Management Plan ） | Other | 0.41% | 7,200,000 | 0 | ||
| Shares held by the top 10 shareholders of Non- restricted shares | ||||||
| Name | Number of shares held without sale restrictions | Type of shares | ||||
| Type | Number | |||||
| China Grand Enterprises, Inc. | 730,938,157 | RMB common shares | 730,938,157 | |||
| Hangzhou Huadong Medicine Group Co., Ltd. | 288,000,000 | RMB common shares | 288,000,000 | |||
| Hong Kong Securities Clearing Company Ltd. | 43,297,248 | RMB common shares | 43,297,248 | |||
| China Securities Finance Co., Ltd. | 22,186,818 | RMB common shares | 22,186,818 | |||
| National Social Security Fund Portfolio 106 | 22,095,713 | RMB common shares | 22,095,713 | |||
| Taikang Asset Management Co., Ltd. – active allocation of investment products | 16,298,609 | RMB common shares | 16,298,609 | |||
| Taikang Life Insurance Co., Ltd. – Unit-linked – Proactive growth | 11,108,211 | RMB common shares | 11,108,211 | |||
| # Yi Jiandong | 10,006,080 | RMB common shares | 10,006,080 |
| Basic Endowment Insurance Fund Portfolio 15041 | 7,623,568 | RMB common shares | 7,623,568 |
| Guotai Junan Securities Asset Management – China Everbright Bank – Guotai Junan Jundeming Hybrid Collective Assets Management Plan | 7,200,000 | RMB common shares | 7,200,000 |
| Notes on relations and concerted actions among the shareholders mentioned above | The Company does not know whether the shareholders mentioned above are related parties with each other or whether they are acting-in-concert parties with each other. | ||
| Notes on financing and securities loan conducted by top 10 shareholders (if any) | At the end of the current reporting period, Yi Jiandong, the eighth shareholder of the Company, held 10,006,080 shares of the Company through financing and securities loan. | ||
Does any of the Company’s top 10 shareholders of common shares or top 10 shareholders without sale restrictions on common sharesconduct any agreed repurchase transaction during the reporting period?
□ Yes √ No
No such case during the reporting period.
2. Total number of shareholders of preferred shares and information about top 10 shareholders ofpreferred shares
□ Applicable √ N/A
Section III Substantial MattersI. Changes in key financial data and financial indicators during the reporting period and theircauses
√ Applicable □ N/A
Unit: RMB yuan
| Balance sheet item | End of the period | Beginning of the period | Change rate | Notes on cause of changes |
| Accounts receivable financing | 1,281,939,687.52 | 683,884,625.14 | 87.45% | Mainly due to the increase of notes collection in the current period |
| Long-term equity investments | 324,944,910.36 | 222,595,018.54 | 45.98% | Mainly due to 100 million yuan of additional fund to Peg-Bio Biopharm Co., Ltd (Chongqing) in the current period |
| Advance receipts | 41,219,252.83 | 254,888,911.30 | -83.83% | Mainly due to the decrease of advance receipts of medicine sales |
| Taxes and fees payable | 758,947,157.69 | 532,802,157.61 | 42.44% | Mainly due to the increase of value-added tax and income tax in the current period |
| Other payables | 2,042,401,059.01 | 1,365,152,290.99 | 49.61% | Mainly due to the increase in temporary receipts payable |
| Income statement item | Amount of the current period | Amount of the previous period | Change rate | Notes on cause of changes |
| R&D expenses | 263,330,349.34 | 157,466,270.46 | 67.23% | Mainly due to the increase of R&D investment in the current period |
| Financial expenses | 15,759,648.63 | 31,261,376.41 | -49.59% | Mainly due to the increase of deposit interest in the current period |
| Gains on assets disposal | 306,269,024.44 | 66,519,528.98 | 360.42% | Mainly due to the transfer of market distribution rights of related products in Western Europe by Sinclair, a wholly owned subsidiary of the Company in the UK |
| Other income | 20,044,478.23 | 3,421,536.71 | 485.83% | Mainly due to the year-on-year increase of government grants in the current period |
| Non-operating expenditure | 8,912,738.92 | 4,175,197.47 | 113.46% | Mainly due to the increase of donations |
| Non-controlling profit and loss | 6,147,332.28 | 30,575,585.30 | -79.89% | Mainly due to the decrease of net profits of non-wholly owned subsidiaries in the current period |
| Cash flow statement item | Amount of the current period | Amount of the previous period | Change rate | Notes on cause of changes |
| Net cash flows from operating activities | 218,779,623.89 | -433,890,841.71 | 150.42% | Mainly due to the increase of repayment and the decrease of purchase payment in the current period |
| Net cash flows from investing | -21,112,417.22 | -438,440,235.76 | 95.18% | Mainly due to the transfer of market distribution |
| activities | rights of related products in Western Europe by Sinclair, a wholly owned subsidiary of the Company in the UK | |||
| Net cash flows from financing activities | 110,977,513.38 | 244,161,977.11 | 54.55% | Mainly due to the year-on-year decrease of loans obtained in the current period |
II. Progress and influence of significant events, and explanatory notes of corresponding solutions
□ Applicable √ N/A
Implementation progress of share repurchase
□ Applicable √ N/A
Progress in the implementation of reducing repurchased shares by centralized price bidding
□ Applicable √ N/A
III. Unfulfilled and overdue commitments from the related committed parties such as theCompany’s actual controller, shareholders, related parties, acquirer(s), and the Companyduring the reporting period
□ Applicable √ N/A
No such case during the reporting period.IV. Securities investment
√ Applicable □ N/A
Unit: RMB yuan
| Type of stock | Stock code | Stock for short | Initial investment cost | Accounting measurement model | Book value at the beginning of the period | Profit and loss from fair value changes in the current period | Accumulative fair value changes included in equity | Purchase amount in the current period | Selling amount in the current period | Gain/loss during the reporting period | Book value at the end of the period | Accounting item | Capital source |
| Domestic and overseas stock | RAPT | RAPT | 20,207,400.00 | Fair value measurement | 42,009,254.79 | -1,372,747.73 | 20,429,107.06 | 0.00 | 0.00 | -1,372,747.73 | 40,636,507.06 | Other equity instruments investment | Own funds |
| Other securities investment held at the end of the | 0.00 | -- | -- | -- | |||||||||
| period | |||||||||||
| Total | 20,207,400.00 | -- | 42,009,254.79 | -1,372,747.73 | 20,429,107.06 | 0.00 | 0.00 | -1,372,747.73 | 40,636,507.06 | -- | -- |
| Date of announcement of the board of directors on securities investment approval | |||||||||||
| Date of announcement of the board of shareholders on securities investment approval (if any) | |||||||||||
Notes: Huadong Medicine Investment Holding (Hong Kong) Limited, a subsidiary of the Company, subscribed for the C-2 seriespreferred shares of FLX Bio (now RAPT Therapeutics, Inc.) for USD 3 million in 2019. FLX Bio was listed on the NASDAQ StockExchange (stock code: RAPT) in October 2019. Huadong Medicine Investment Holding (Hong Kong) Limited holds 218,102 shares,or 0.91% of its total shares.
V. Entrusted financial management
□ Applicable √ N/A
No such case during the reporting period.VI. Derivatives investment
□ Applicable √ N/A
No such case during the reporting period.VII. Registration form of receptions, including research, communication and interview,undertaken during the reporting period
√ Applicable □ N/A
| Date | Method | Type of caller | Index of basic information of the research |
| January 19, 2020 | Communication by phone | Institutional and individual investors | Please refer to the “000963 Huadong Medicine communication with investors Activity: January 20, 2020” presented on the websites of http://rs.p5w.net/ and cninfo.com.cn for details. |
VIII. Illegal provision of guarantees for external parties
□ Applicable √ N/A
No such case during the reporting period.
IX. The Company’s funds used by the controlling shareholder or its related parties fornon-operating purposes
□ Applicable √ N/A
No such case during the reporting period.X. Overview of the Company’s operations from January to March, 2020During the reporting period, the numbers of visits and prescriptions in domestic hospitals weregreatly reduced due to the COVID-19 outbreak; however, patients’ overall demand for the coreproducts of Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. (hereinafter referred to as“Zhongmei Huadong”), a wholly owned subsidiary of the Company, remained stable. ZhongmeiHuadong continued to develop well in the out-of-hospital, grass-roots and retail markets, and itsbusiness performance continued to grow, achieving operating income (consolidated) of 3.619billion yuan, with a year-on-year growth of 9.61%, and net profit of 854 million yuan, with ayear-on-year growth of 11.14%.During the COVID-19 outbreak in China, the amount of medicines, consumables and medicaldevices purchased by medical institutions dropped significantly, which had a significant impact onthe Company’s pharmaceutical commerce. In the reporting period, the growth rate of theCompany’s pharmaceutical commerce income has decreased by about 18% year on year. However,the Company made efforts to improve its operations through a variety of measures to keep itsoperating profit stable.The outbreak and spread of COVID-19 at home and abroad have had a significant impact on theoperation of aesthetic medicine institutions. In the reporting period, the Company’s domestic andoversea aesthetic medicine business income and net profit both decreased significantly comparedwith the same period last year due to the sharp decline in periodic demand, which has acorresponding impact on the Company’s overall net profit. The demand for aesthetic medicine isnot urgent, but it is rigid to some extent. At present, there is less domestic consumption of aestheticmedicine; the continuation of the outbreak and its subsequent impact on the Company’sinternational aesthetic medicine business remain to be seen. The Company expects consumerdemand for aesthetic medicine to recover after the outbreak ends.
Since the outbreak, the Company has actively carried out related work to fight against the virus. Asan emergency equipment reserve unit of Zhejiang Province and Hangzhou, the Company was incharge of laborious material distribution, efficiently implemented the allocation and distributiontask of Zhejiang Economy and Information Technology Department, worked day and night, sent theanti-epidemic medicine and equipment to the forefront, and provided reliable material support forepidemic prevention and control. The Company has taken the initiative to fulfill its socialresponsibility and donated drugs and related materials to the front-line medical personnel and thehealth commissions at all levels with a cumulative value of more than 20 million yuan. After the fullresumption of production and work, the Company actively endeavored to gradually restorenormalcy to all its work.During the reporting period, the Company continued to promote R&D in all aspects, and the R&Dexpenses of the pharmaceutical manufacturing amounted to 260.31 million yuan, with ayear-on-year growth of 69.04%. The application for registration of Zhongmei Huadong MetforminHydrochloride and Empagliflozin Tablets was submitted to and accepted by the National MedicalProducts Administration. The phase I clinical trial of Liraglutide Injection (indications for weightloss) has been completed and all preparations for the phase III trial have been completed. The phaseIII clinical trial is expected to begin in the second quarter of this year.During the reporting period, Zhongmei Huadong invested 150 million yuan to increase itsshareholding in Peg-Bio Biopharm Co., Ltd. (Chongqing) by acquiring minority shareholders’equity; the shareholding ratio was raised to 39.8%, and Zhongmei Huadong remained the secondlargest shareholder (as of the disclosure date of this reporting period, it has actually contributed 130million yuan). In the future, the Company will deepen cooperation with Peg-Bio Biopharm Co., Ltd.(Chongqing) in the R&D of biosimilars and innovative biopharmaceuticals, industrial layout andother aspects. With the help of PEGylation platform and high-efficiency polypeptide tandemexpression platform technology of Peg-Bio Biopharm Co., Ltd. (Chongqing) with proprietaryintellectual property rights, the Company will accelerate the technical improvement and projectreserve in biomedicine.During the reporting period, the Acarbose Tablets of Zhongmei Huadong failed to win the bid in the
second national centralized drug purchase due to the price, which brought new challenges to thefuture development of the Company’s acarbose products. The Company will comprehensivelyconduct market analysis and planning, and actively develop the sales of Acarbose Tablets in themarkets other than centralized purchase (including grass-roots and community markets, privatehospitals and OTC markets). Meanwhile, it will expand the promotion of Acarbose ChewableTablets in large and medium-sized hospitals in China through market differentiation.Sinclair, a wholly owned subsidiary of the Company in the UK, has actively enriched productchannels and optimized the structure: (1) During the reporting period, it reached an agreement withGalderma, a world-renowned Swiss dermatological pharmaceutical company, on the transfer ofmarket distribution rights for Sculptra (poly-L-lactic acid microsphere) products in Western Europeand has completed the transaction. According to the agreement, the specific information of thetransaction is regarded as trade secret, and the Company has the confidentiality obligation under thecondition of non-mandatory disclosure. The transaction brought Sinclair gains from assets disposalof approximately GBP 30.65 million (after tax), which had a positive impact on Sinclair’s net profit,balance sheet structure, cash flow and the Company’s net profit in consolidated statements in thereporting period; (2) During the reporting period, Sinclair and Kylane Laboratoires, a Swissprofessional R&D company in the field of aesthetic medicine, formally signed an agreement basedon the cooperation intention reached earlier; Sinclair obtained the exclusive global license forKylane Laboratoires’ MaiLi series new lidocaine hyaluronic acid fillers (hyaluronic acid). TheMaiLi series products are aimed at the high-end market. The lidocaine components in the MaiLiseries reduce the pain of injection and greatly improve the comfort of use. The MaiLi seriesproducts can be applied to different parts of the face with differentiated formulation, providingconsumers with an overall solution of cosmetic facial fillings, which can last for 12~18 months afterinjection. This series is expected to become the core products of the Company’s aesthetic medicinebusiness. The products are expected to obtain the CE certification in Europe and be successivelylaunched in every country this year.
Section IV Financial StatementsI. Financial Statements
1. Consolidated balance sheet
Prepared by Huadong Medicine Co., Ltd.
March 31, 2020
Unit: RMB yuan
| Item | March 31, 2020 | December 31, 2019 |
| Current assets: | ||
| Monetary funds | 2,705,353,661.31 | 2,402,730,395.39 |
| Settlement reserve | ||
| Lending to other banks and other financial institutions | ||
| Financial assets for trade | ||
| Derivative financial assets | ||
| Notes receivable | ||
| Accounts receivable | 7,096,262,043.82 | 6,092,305,184.47 |
| Accounts receivable financing | 1,281,939,687.52 | 683,884,625.14 |
| Advance payments | 332,283,548.35 | 363,246,612.94 |
| Premiums receivable | ||
| Reinsurance accounts receivable | ||
| Reinsurance contract reserve receivable | ||
| Other receivables | 75,749,112.24 | 92,201,271.22 |
| Including: Interests receivable | ||
| Dividends receivable | 815,965.44 | 815,965.44 |
| Financial assets purchased for resale | ||
| Inventories | 4,036,053,414.00 | 4,038,975,496.93 |
| Contract assets | ||
| Assets held for sale | ||
| Non-current assets due within one year |
| Other current assets | 71,686,499.81 | 62,526,471.96 |
| Total current assets | 15,599,327,967.05 | 13,735,870,058.05 |
| Non-current assets: | ||
| Loans and prepayments issuance | ||
| Debt investments | ||
| Other debt investments | ||
| Long-term receivables | ||
| Long-term equity investments | 324,944,910.36 | 222,595,018.54 |
| Other equity instrument investments | 240,302,964.32 | 241,675,712.05 |
| Other non-current financial assets | ||
| Real estate properties for investment | 21,470,209.97 | 21,701,908.75 |
| Fixed assets | 2,176,447,708.09 | 2,175,216,842.65 |
| Constructions in progress | 1,959,751,440.53 | 1,829,808,233.19 |
| Biological assets for production | ||
| Oil & gas assets | ||
| Right-of-use assets | ||
| Intangible assets | 1,371,393,017.31 | 1,454,900,160.45 |
| Development expenditures | ||
| Goodwill | 1,469,617,262.10 | 1,469,617,262.10 |
| Long-term unamortized expenses | 11,474,753.47 | 12,289,677.31 |
| Deferred income tax assets | 116,157,614.49 | 116,157,614.47 |
| Other non-current assets | 236,848,927.61 | 184,141,659.07 |
| Total non-current assets | 7,928,408,808.25 | 7,728,104,088.58 |
| Total assets | 23,527,736,775.30 | 21,463,974,146.63 |
| Current liabilities: | ||
| Short-term borrowing | 805,041,426.38 | 655,549,973.27 |
| Borrowing from the Central bank | ||
| Borrowing from other banks and other financial institutions | ||
| Financial liabilities for trade | ||
| Derivative financial liabilities | ||
| Notes payable | 680,294,256.61 | 613,374,356.61 |
| Accounts payable | 3,782,012,016.18 | 3,789,054,234.58 |
| Advance receipts | 41,219,252.83 | 254,888,911.30 |
| Contract liabilities | ||
| Financial assets sold for repurchase | ||
| Absorbing deposits and due from banks | ||
| Receipts for buying and selling securities as proxy | ||
| Receipts for underwriting securities as proxy | ||
| Employee benefits payable | 150,113,044.38 | 132,584,982.71 |
| Taxes and fees payable | 758,947,157.69 | 532,802,157.61 |
| Other payables | 2,042,401,058.99 | 1,365,152,290.99 |
| Including: Interests payable | ||
| Dividends payable | 224,219.60 | 224,219.60 |
| Handling fees and commissions payable | ||
| Reinsurance accounts payable | ||
| Liabilities held for sale | ||
| Non-current liabilities due within one year | 1,063,535,474.95 | 1,053,231,727.73 |
| Other current liabilities | ||
| Total current liabilities | 9,323,563,688.01 | 8,396,638,634.80 |
| Non-current liabilities: | ||
| Insurance contract reserve | ||
| Long-term borrowing | ||
| Bonds payable | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Lease liabilities | ||
| Long-term payables | 34,857,575.89 | 48,080,030.00 |
| Long-term employee benefits payable | ||
| Provision | 50,739,356.15 | 52,066,643.01 |
| Deferred gains | 61,826,236.03 | 60,960,255.68 |
| Deferred income tax liabilities | 38,231,709.58 | 39,604,343.27 |
| Other non-current liabilities | ||
| Total non-current liabilities | 185,654,877.65 | 200,711,271.96 |
| Total liabilities | 9,509,218,565.66 | 8,597,349,906.76 |
| Ownership interest: | ||
| Share capital | 1,749,809,548.00 | 1,749,809,548.00 |
| Other equity instruments | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Capital reserve | 2,157,862,037.14 | 2,158,080,661.07 |
| Less: Treasury shares | ||
| Other comprehensive income | 48,298,224.27 | 22,792,488.80 |
| Special reserve | ||
| Surplus reserve | 710,359,967.51 | 710,359,967.51 |
| General risk reserve | ||
| Undistributed profit | 8,815,713,100.25 | 7,668,434,642.62 |
| Total ownership interest attributable to the parent company | 13,482,042,877.17 | 12,309,477,308.00 |
| Minority interest | 536,475,332.47 | 557,146,931.87 |
| Total ownership interest | 14,018,518,209.64 | 12,866,624,239.87 |
| Total liabilities & ownership interest | 23,527,736,775.30 | 21,463,974,146.63 |
Legal representative: Lyu LiangOfficer in charge of accounting: Lyu LiangHead of accounting department : Qiu Renbo
2. Balance sheet of the parent company
Unit: RMB yuan
| Item | March 31, 2020 | December 31, 2019 |
| Current assets: | ||
| Monetary funds | 1,163,618,887.92 | 893,939,724.56 |
| Financial assets for trade | ||
| Derivative financial assets | ||
| Notes receivable | ||
| Accounts receivable | 3,896,212,553.19 | 3,601,796,850.84 |
| Accounts receivable financing | 414,618,169.64 | 102,285,661.94 |
| Advance payments | 90,938,710.63 | 183,776,687.98 |
| Other receivables | 1,158,557,203.10 | 857,127,207.17 |
| Including: Interests receivable | ||
| Dividends receivable | 400,000,000.00 | |
| Inventories | 1,780,183,507.56 | 1,726,815,773.41 |
| Contract assets | ||
| Assets held for sale | ||
| Non-current assets due within one year | ||
| Other current assets | 18,206,486.26 | 4,529,331.87 |
| Total current assets | 8,522,335,518.30 | 7,370,271,237.77 |
| Non-current assets: | ||
| Debt investments | ||
| Other debt investments | ||
| Long-term receivables | ||
| Long-term equity investments | 4,812,052,039.45 | 4,809,521,228.65 |
| Other equity instrument investments | 92,108,957.26 | 92,108,957.26 |
| Other non-current financial assets | ||
| Real estate properties for investment | 8,475,251.02 | 8,591,809.18 |
| Fixed assets | 146,014,043.26 | 144,102,366.02 |
| Constructions in progress | 15,970,543.05 | 15,728,406.26 |
| Biological assets for production | ||
| Oil & gas assets | ||
| Right-of-use assets | ||
| Intangible assets | 44,090,063.16 | 45,226,361.12 |
| Development expenditures | ||
| Goodwill | ||
| Long-term unamortized expenses | 893,242.36 | 975,689.14 |
| Deferred income tax assets | 48,849,165.52 | 48,849,165.52 |
| Other non-current assets | 8,076,419.28 | 8,076,419.28 |
| Total non-current assets | 5,176,529,724.36 | 5,173,180,402.43 |
| Total assets | 13,698,865,242.66 | 12,543,451,640.20 |
| Current liabilities: |
| Short-term borrowing | 250,182,163.24 | 55,000,000.80 |
| Financial liabilities for trade | ||
| Derivative financial liabilities | ||
| Notes payable | 251,797,671.37 | 81,036,745.94 |
| Accounts payable | 2,303,300,252.85 | 2,469,675,798.54 |
| Advance receipts | 44,293,704.23 | 52,914,932.34 |
| Contract liabilities | ||
| Employee benefits payable | 4,716,249.36 | 3,203,215.95 |
| Taxes and fees payable | 37,342,228.23 | 32,881,935.68 |
| Other payables | 409,339,976.29 | 638,551,969.04 |
| Including: Interests payable | ||
| Dividends payable | 224,219.60 | 224,219.60 |
| Liabilities held for sale | ||
| Non-current liabilities due within one year | 1,040,399,054.43 | 1,028,002,952.88 |
| Other current liabilities | ||
| Total current liabilities | 4,341,371,300.00 | 4,361,267,551.17 |
| Non-current liabilities: | ||
| Long-term borrowing | ||
| Bonds payable | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Lease liabilities | ||
| Long-term payables | ||
| Long-term employee compensation payable | ||
| Estimated liabilities | ||
| Deferred gains | 42,623,317.14 | 43,264,785.87 |
| Deferred income tax liabilities | ||
| Other non-current liabilities | ||
| Total non-current liabilities | 42,623,317.14 | 43,264,785.87 |
| Total liabilities | 4,383,994,617.14 | 4,404,532,337.04 |
| Ownership interest: | ||
| Share capital | 1,749,809,548.00 | 1,749,809,548.00 |
| Other equity instruments |
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Capital reserve | 2,168,451,528.01 | 2,168,451,528.01 |
| Less: Treasury shares | ||
| Other comprehensive income | 847,526.06 | 847,526.06 |
| Special reserve | ||
| Surplus reserve | 788,215,726.95 | 788,215,726.95 |
| Undistributed profit | 4,607,546,296.50 | 3,431,594,974.14 |
| Total ownership interest | 9,314,870,625.52 | 8,138,919,303.16 |
| Total liabilities & ownership interest | 13,698,865,242.66 | 12,543,451,640.20 |
3. Consolidated income statement
Unit: RMB yuan
| Item | Amount incurred during the current period | Amount incurred during the previous period |
| I. Total operating income | 8,598,069,911.29 | 9,705,148,188.21 |
| Including: Operating income | 8,598,069,911.29 | 9,705,148,188.21 |
| Interests received | ||
| Premiums earned | ||
| Handling fees and commissions received | ||
| II. Total operating cost | 7,564,443,071.57 | 8,644,836,746.18 |
| Including: Operating cost | 5,095,658,368.85 | 6,323,022,089.39 |
| Interests paid | ||
| Handling fees and commissions paid | ||
| Surrender value | ||
| Net payment of insurance claims | ||
| Net appropriation of policy reserve | ||
| Policy dividends paid | ||
| Reinsurance expenses | ||
| Taxes and surcharges | 56,323,252.14 | 67,692,820.71 |
| Selling expenses | 1,936,667,262.56 | 1,858,882,516.36 |
| Administrative expenses | 196,704,190.05 | 206,511,672.85 |
| R&D expenses | 263,330,349.34 | 157,466,270.46 |
| Financial expenses | 15,759,648.63 | 31,261,376.41 |
| Including: Interests paid | 26,067,525.96 | 29,093,368.24 |
| Interests received | 13,915,252.93 | 5,700,539.51 |
| Add: Other gains | 20,044,478.23 | 3,421,536.71 |
| Investment gains (Losses are indicated by “-”) | -1,256,335.99 | -3,643,248.51 |
| Including: Investment gains from associates and joint ventures | 2,349,891.83 | 1,200,000.00 |
| Gains from the derecognition of financial assets measured at amortized cost | ||
| Gains on exchange (Losses are indicated by “-”) | ||
| Gains on net exposure hedging (Losses are indicated by “-”) | ||
| Gains on changes in fair value (Losses are indicated by “-”) | ||
| Credit impairment loss (Losses are indicated by “-”) | ||
| Assets impairment loss (Losses are indicated by “-”) | ||
| Gains on assets disposal (Losses are indicated by “-”) | 306,269,024.44 | 66,519,528.98 |
| III. Operating profit (Losses are indicated by “-”) | 1,358,684,006.40 | 1,126,609,259.21 |
| Add: Non-operating income | 3,389,386.17 | 2,542,382.25 |
| Less: Non-operating expenditure | 8,912,738.92 | 4,175,197.47 |
| IV. Total profit (Total losses are indicated by “-”) | 1,353,160,653.65 | 1,124,976,443.99 |
| Less: Income tax expenses | 199,734,863.73 | 187,156,210.92 |
| V. Net profit (Net losses are indicated by “-”) | 1,153,425,789.92 | 937,820,233.07 |
| (I) Categorized by the continuity of operations | ||
| 1. Net profit from continued operations (Net deficit is indicated by “-”) | 1,153,425,789.92 | 937,820,233.07 |
| 2. Net profit from discontinued operations (Net deficit is indicated by “-”) | ||
| (II) Categorized by attribution of the ownership | ||
| 1. Net profit attributable to owners of the parent company | 1,147,278,457.64 | 907,244,647.77 |
| 2. Gains/losses of minority shareholders | 6,147,332.28 | 30,575,585.30 |
| VI. Net amount after tax of other comprehensive income | 25,505,735.47 | -32,032,857.46 |
| Net amount after tax of other comprehensive income attributable to owners of the parent company | 25,505,735.47 | -32,032,857.46 |
| (I) Other comprehensive income that cannot be reclassified into gains/losses | -1,372,747.73 | |
| 1. Changes in remeasurement on the defined benefit plan | ||
| 2. Other comprehensive income that cannot be reclassified into gains/losses under equity method | ||
| 3. Changes in fair value of other equity instrument investments | -1,372,747.73 | |
| 4. Changes in fair value of credit risk of the enterprise | ||
| 5. Others | ||
| (II) Other comprehensive income to be reclassified into gains/losses | 26,878,483.20 | -32,032,857.46 |
| 1. Other comprehensive income that can be reclassified into gains/losses under equity method | ||
| 2. Changes in fair value of other debt investments | ||
| 3. Amount of financial assets reclassified into other comprehensive income | ||
| 4. Credit impairment reserve of other debt investments |
| 5. Cash flow hedging reserve | ||
| 6. Exchange differences arise from translation of foreign currency financial statements | 26,878,483.20 | -32,032,857.46 |
| 7. Others | ||
| Net amount after tax of other comprehensive income attributable to minority shareholders | ||
| VII. Total comprehensive income | 1,178,931,525.39 | 905,787,375.61 |
| Total comprehensive income attributable to owners of the parent company | 1,172,784,193.11 | 875,211,790.31 |
| Total comprehensive income attributable to minority shareholders | 6,147,332.28 | 30,575,585.30 |
| VIII. Earnings per share (EPS): | ||
| (I) Basic EPS | 0.6557 | 0.5185 |
| (II) Diluted EPS | 0.6557 | 0.5185 |
As for enterprise merger under the same control in the current period, the net profit generated by the merged party before the mergeris 0 yuan, and that generated during the previous period is 0 yuan.
Legal representative: Lyu LiangOfficer in charge of accounting: Lyu LiangHead of accounting department : Qiu Renbo
4. Income statement of the parent company
Unit: RMB yuan
| Item | Amount incurred during the current period | Amount incurred during the previous period |
| I. Operating income | 3,694,664,751.43 | 4,750,751,718.90 |
| Less: Operating cost | 3,497,138,685.81 | 4,519,692,455.89 |
| Taxes and surcharges | 1,742,409.45 | 6,135,847.99 |
| Selling expenses | 91,950,292.45 | 109,542,301.79 |
| Administrative expenses | 34,825,269.77 | 27,006,339.53 |
| R&D expenses | ||
| Financial expenses | 14,360,429.84 | 20,870,555.66 |
| Including: Interests paid | 21,895,125.22 | 21,396,244.01 |
| Interests received | 5,644,762.49 | 1,609,862.67 |
| Add: Other gains | 5,462,052.44 | 1,910,068.73 |
| Investment gains (Losses are indicated by “-”) | 1,132,672,992.82 | 857,083,782.05 |
| Including: Investment gains from associates and joint ventures | ||
| Income from the derecognition of financial assets measured at amortized cost (Losses are indicated by “-”) | ||
| Gains on net exposure hedging (Losses are indicated by “-”) | ||
| Gains on changes in fair value (Losses are indicated by “-”) | ||
| Credit impairment loss (Losses are indicated by “-”) | ||
| Assets impairment loss (Losses are indicated by “-”) | ||
| Gains on assets disposal (Losses are indicated by “-”) | -7,754.30 | 66,516,649.00 |
| II. Operating profit (Losses are indicated by “-”) | 1,192,774,955.04 | 993,014,717.82 |
| Add: Non-operating income | 2,525,818.53 | 2,316,802.22 |
| Less: Non-operating expenditure | 2,532,343.76 | 3,052,321.97 |
| III. Total profit (Total losses are indicated by “-”) | 1,192,768,429.81 | 992,279,198.07 |
| Less: Income tax expenses | 16,817,107.45 | 35,560,862.02 |
| IV. Net profit (Net losses are indicated by “-”) | 1,175,951,322.36 | 956,718,336.05 |
| (I) Net profit from continued operations (Net losses are indicated by “-”) | 1,175,951,322.36 | 956,718,336.05 |
| (II) Net profit from discontinued operations (Net deficit is indicated by “-”) | ||
| V. Net amount after tax of other comprehensive income | ||
| (I) Other comprehensive income that cannot be reclassified into gains/losses | ||
| 1. Changes in remeasurement on the defined benefit |
| plan | ||
| 2. Other comprehensive income that cannot be reclassified into gains/losses under equity method | ||
| 3. Changes in fair value of other equity instrument investments | ||
| 4. Changes in fair value of credit risk of the enterprise | ||
| 5. Others | ||
| (II) Other comprehensive income to be reclassified into gains/losses | ||
| 1. Other comprehensive income that can be reclassified into gains/losses under equity method | ||
| 2. Changes in fair value of other debt investments | ||
| 3. Amount of financial assets reclassified into other comprehensive income | ||
| 4. Credit impairment reserve of other debt investments | ||
| 5. Cash flow hedging reserve | ||
| 6. Exchange differences arise from translation of foreign currency financial statements | ||
| 7. Others | ||
| VI. Total comprehensive income | 1,175,951,322.36 | 956,718,336.05 |
| VII. Earnings per share (EPS): | ||
| (I) Basic EPS | ||
| (II) Diluted EPS |
5. Consolidated cash flow statement
Unit: RMB yuan
| Item | Amount incurred during the current period | Amount incurred during the previous period |
| I. Cash flows from operating activities: |
| Cash from the sale of goods and provision of services | 7,665,300,254.21 | 8,187,663,071.84 |
| Net increase in customer deposits and due from banks | ||
| Net increase in borrowing from the central bank | ||
| Net increase in borrowing from other financial institutions | ||
| Cash from the premium of the original insurance policy | ||
| Net cash from reinsurance | ||
| Net increase in deposits and investment of the insured | ||
| Cash from interests, handling fees and commissions | ||
| Net increase in borrowing from other banks and other financial institutions | ||
| Net increase in funds for repurchase | ||
| Net cash received for buying and selling securities as proxy | ||
| Tax refund received | 1,138,819.80 | |
| Other cash receipts in relation to operating activities | 362,756,808.71 | 154,228,462.86 |
| Total cash inflows from operating activities | 8,029,195,882.72 | 8,341,891,534.70 |
| Cash payments for goods and services | 5,172,908,493.72 | 6,321,052,081.64 |
| Net increase in customer loans and prepayments | ||
| Net increase in deposits of central bank and due from banks | ||
| Cash for payment of original insurance claims | ||
| Net increase in lending to other banks and other financial institutions | ||
| Cash for payment of interests, |
| handling fees and commissions | ||
| Cash for payment of policy dividends | ||
| Cash payments to and for employees | 579,438,808.77 | 435,270,367.30 |
| Payment of taxes and fees | 453,422,088.98 | 501,157,690.76 |
| Other cash payments in relation to operating activities | 1,604,646,867.36 | 1,518,302,236.71 |
| Total cash outflows for operating activities | 7,810,416,258.83 | 8,775,782,376.41 |
| Net cash flows from operating activities | 218,779,623.89 | -433,890,841.71 |
| II. Cash flows from investing activities | ||
| Cash from recovery of investments | ||
| Cash from investment gains | ||
| Net cash from disposal of fixed assets, intangible assets and other long-term assets | 345,902,424.29 | 49,385.41 |
| Net cash from disposal of subsidiaries and other business units | ||
| Other cash receipts in relation to investing activities | 30,000,000.00 | |
| Total cash inflows from investing activities | 345,902,424.29 | 30,049,385.41 |
| Cash payments for purchase and construction of fixed assets, intangible assets and other long-term assets | 267,014,841.51 | 311,215,321.17 |
| Cash payments for investment | 100,000,000.00 | 30,150,000.00 |
| Net increase in pledge loans | ||
| Net cash paid for acquisition of subsidiaries and other business units | 7,000,000.00 | |
| Other cash payments in relation to investing activities | 120,124,300.00 | |
| Total cash outflows for investing activities | 367,014,841.51 | 468,489,621.17 |
| Net cash flows from investing activities | -21,112,417.22 | -438,440,235.76 |
| III. Cash flows from financing activities: | ||
| Cash from absorbing investments | 9,800,000.00 |
| Including: Cash from absorption of minority shareholders’ investments by subsidiaries | ||
| Cash from borrowing | 684,996,551.61 | 813,097,755.69 |
| Other cash receipts in relation to financing activities | 4,000,000.00 | |
| Total cash inflows from financing activities | 684,996,551.61 | 826,897,755.69 |
| Cash for repayment of debt | 536,798,734.58 | 540,192,394.20 |
| Cash payments for dividends, profits or interests | 34,425,592.85 | 42,543,384.38 |
| Including: Payment of dividends and profits by subsidiaries to minority shareholders | 24,500,000.00 | 14,112,000.00 |
| Other cash payments in relation to financing activities | 2,794,710.80 | |
| Total cash outflows for financing activities | 574,019,038.23 | 582,735,778.58 |
| Net cash flows from financing activities | 110,977,513.38 | 244,161,977.11 |
| IV. Influence of exchange rate fluctuations on cash and cash equivalents | 7,174,858.69 | -33,095,996.77 |
| V. Net increase in cash and cash equivalents | 315,819,578.74 | -661,265,097.13 |
| Add: Balance of cash and cash equivalents at the beginning of the period | 2,231,771,546.50 | 2,398,709,506.06 |
| VI. Balance of cash and cash equivalents at the end of the period | 2,547,591,125.24 | 1,737,444,408.93 |
6. Cash flow statement of the parent company
Unit: RMB yuan
| Item | Amount incurred during the current period | Amount incurred during the previous period |
| I. Cash flow from operating activities: | ||
| Cash from the sale of goods and provision of services | 3,511,097,388.40 | 3,725,034,236.17 |
| Tax refunds received | ||
| Other cash receipts in relation to operating activities | 222,397,124.86 | 75,012,263.27 |
| Total cash inflows from operating activities | 3,733,494,513.26 | 3,800,046,499.44 |
| Cash payments for goods and services | 3,830,179,895.19 | 4,874,314,937.78 |
| Cash payments to and for employees | 74,881,392.11 | 59,381,893.15 |
| Payment of taxes and fees | 31,131,815.13 | 59,734,079.75 |
| Other cash payments in relation to operating activities | 99,668,377.06 | 5,520,387.64 |
| Total cash outflow under operating activities | 4,035,861,479.49 | 4,998,951,298.32 |
| Net cash flow from operating activities | -302,366,966.23 | -1,198,904,798.88 |
| II. Cash flows from investing activities: | ||
| Cash from recovery of investments | ||
| Cash from investment gains | 175,500,000.00 | 250,000,000.00 |
| Net cash from disposal of fixed assets, intangible assets and other long-term assets | 35,000.00 | 12,525.00 |
| Net cash from disposal of subsidiaries and other business units | ||
| Other cash receipts in relation to investing activities | 217,902,741.44 | 40,000,000.00 |
| Total cash inflows from investing activities | 393,437,741.44 | 290,012,525.00 |
| Cash payments for purchase and construction of fixed assets, intangible assets and other long-term assets | 3,423,339.18 | 22,140,302.23 |
| Cash payments for investment | 2,530,810.80 | 204,814,300.00 |
| Net cash paid for acquisition of subsidiaries and other business units | 7,000,000.00 | |
| Other cash payments in relation to investing activities | 160,000,000.00 | 142,900,000.00 |
| Total cash outflows for investing activities | 165,954,149.98 | 376,854,602.23 |
| Net cash flows from investing activities | 227,483,591.46 | -86,842,077.23 |
| III. Cash flows from financing activities: | ||
| Cash from absorbing investments | ||
| Cash from borrowing | 310,202,546.78 | 630,487,956.25 |
| Other cash receipts in relation to financing activities | 218,391,068.03 | 45,000,000.00 |
| Total cash inflows from financing activities | 528,593,614.81 | 675,487,956.25 |
| Cash for repayment of debt | 115,202,547.58 | 339,022,441.10 |
| Cash payments for dividends, profits or interest | 3,495,155.18 | 11,409,844.26 |
| Other cash payments in relation to financing activities | 67,321,291.66 | |
| Total cash outflows for financing activities | 186,018,994.42 | 350,432,285.36 |
| Net cash flows from financing activities | 342,574,620.39 | 325,055,670.89 |
| IV. Influence of exchange rate fluctuations on cash and cash equivalents | 1,987,917.74 | -858,503.05 |
| V. Net increase in cash and cash equivalents | 269,679,163.36 | -961,549,708.27 |
| Add: Balance of cash and cash equivalents at the beginning of the period | 893,929,724.56 | 1,384,560,116.18 |
| VI. Balance of cash and cash equivalents at the end of the period | 1,163,608,887.92 | 423,010,407.91 |
II. Notes on adjustments of financial statements
1. Adjustments of financial statements for the first time at the beginning of the year due to adoption of newincome standards or new lease standards since 2020
□ Applicable √ N/A
2. Notes on retrospective adjustments on comparative data in the previous period due to adoption of newincome standards and new lease standards since 2020
□ Applicable √ N/A
III. Audit report
Has the first quarterly report been audited?
□ Yes √ No
The first quarterly report has not been audited.
Huadong Medicine Co., Ltd.Chairman of the Board: Lyu Liang
April 30, 2020