Huadong Medicine Co., Ltd.
The Half Year Report 2021
August 2021
Section I. Important Declaration, Contents and DefinitionsThe Board of Directors, Board of Supervisors, directors, supervisors andsenior management of Huadong Medicine Co., Ltd. (hereinafter referred to asthe “Company”) hereby guarantee that the information presented in this halfyear report is authentic, accurate and complete and free of any false records,misleading statements or material omissions, and shall undertake individual andjoint legal liabilities.
Lv 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 thishalf year report are authentic, accurate and complete.
All directors have attended the Board of Directors meeting to review thishalf year report.
The future plans, development strategies and other forward-lookingstatements in this half year report shall not be considered as substantialcommitment of the Company to investor. Investors and related parties shouldmaintain sufficient risk awareness, and should understand the differencebetween plans, forecasts and promises. Investors are kindly reminded to payattention to possible investment risks.
The Company faced various risks in its operations, involving industry
policies, markets, R&D of new drugs, product price reduction, etc. For details,refer to “X. Risks and Countermeasures” in “Section III. Discussion andAnalysis of the Management”. We thank all investors for paying attention to theCompany’s operations, and we hope that you can be aware of investment risks.
The company does not plan to distribute cash dividends, no bonus sharewill be issued; and no capital reserve will be converted to increase the sharecapital.
According to “Stock Listing Rules of the Shenzhen Stock Exchange”, iflisted companies have both Chinese or other language version of public notice,they should ensure the content of both versions are the same. In the case ofdiscrepancy, the original version in Chinese shall prevail.
Contents
Section I. Important Declaration, Contents and Definitions ......................................... 2
Section II. Company Profile and Key Financial Indicators .......................................... 8
Section III. Discussion and Analysis of the Management........................................... 11
Section IV. Corporate Governance .............................................................................. 45
Section V. Environmental and Social Responsibility .................................................. 46
Section VI. Important Matters ..................................................................................... 59
Section VII. Share Change and Shareholders ............................................................. 84
Section VIII. Preferred Shares ..................................................................................... 89
Section IX. Information about Bonds ......................................................................... 90
Section X. Financial Report ........................................................................................ 91
Documents Available for Reference
I. Financial Statements carrying the signatures and stamps of the CompanyPrincipal, the Chief Financial Officer and the person in charge of accounting firm;II. Original copies of all documents and the announcements thereof disclosed inthe reporting period on the designated newspaper.
Definitions
| Term | refers to | Definition |
| CSRC | refers to | China Securities Regulatory Commission |
| SSE | refers to | Shenzhen Stock Exchange |
| Huadong Medicine/the Company/our Company | refers to | Huadong Medicine Co., Ltd. |
| CGE | refers to | China Grand Enterprises, Inc. |
| Huadong Medicine Group | refers to | Hangzhou Huadong Medicine Group Co., Ltd. |
| Zhongmei Huadong | refers to | Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. |
| Jiangdong Company | refers to | Hangzhou Zhongmei Huadong Pharmaceutical Jiangdong Co., Ltd. |
| Jiuyang Bio | refers to | Jiangsu Jiuyang Biopharm Co., Ltd. |
| Xi’an Bohua | refers to | Huadong Medicine (Xi’an) Bohua Pharmaceutical Co., Ltd. |
| Jiuyuan Gene | refers to | Hangzhou Jiuyuan Gene Engineering Co., Ltd. |
| Doer Biologics | refers to | Zhejiang Doer Biologics Corporation |
| Huadong Ningbo Company | refers to | Huadong Ningbo Medicine Co., Ltd. |
| Chongqing Peg-Bio | refers to | Chongqing Peg-Bio Biopharm Co., Ltd. |
| Qyuns Therapeutics | refers to | Qyuns Therapeutics Co., Ltd. |
| Nuoling Biomedical | refers to | Nuoling Biomedical Technology (Beijing) Co., Ltd. |
| Yuanda Investment Management | refers to | Shanghai Yuanda Investment Management Co., Ltd. |
| Fuguang Chengdu | refers to | Fuguang Chengdu Equity Investment Management Co., Ltd. |
| Hangzhou High-Tech | refers to | Hangzhou High-Tech Venture Capital Management Co., Ltd. |
| Yuanda Huachuang | refers to | Beijing Yuanda Huachuang Investment Co., Ltd. |
| Hangzhou Heda | refers to | Hangzhou Heda Industrial Fund Investment Co., Ltd. |
| Pharmaceutical Industry Fund/Fuguang Hongxin | refers to | Hangzhou Fuguang Hongxin Equity Investment Partnership (L.P.) |
| Sinclair | refers to | Sinclair Pharma Limited |
| vTv Company | refers to | vTv Therapeutics LLC |
| R2 | refers to | R2 Technologies,Inc. |
| MediBeacon | refers to | MediBeacon Inc. |
| ImmunoGen | refers to | ImmunoGen, Inc. |
| Provention Bio | refers to | Provention Bio, Inc. |
| RAPT | refers to | RAPT Therapeutics,Inc. |
| Kylane | refers to | Kylane Laboratoires SA |
| High Tech | refers to | High Technology Products, S.L.U. |
| LG | refers to | LG Chem Ltd |
| Jetema | refers to | Jetema. Co,.ltd |
| Exscientia | refers to | Exscientia Ltd. |
| GMP | refers to | Good Manufacturing Practice |
| CGMP | refers to | Current Good Manufacture Practices |
| GSP | refers to | Good Supply Practice |
| BE | refers to | Bioequivalence |
| CDE | refers to | Center for Drug Evaluation (of National Medical Products Administration) |
| MAH | refers to | Marketing Authorization Holder |
| FDA | refers to | (U.S.) Food and Drug Administration |
| NMPA | refers to | National Medical Products Administration |
| NDA | refers to | New Drug Application |
| ANDA | refers to | Abbreviated New Drug Application |
| ICH | refers to | International Council for Harmonisation (of Technical Requirements for Pharmaceuticals for Human Use) |
| IND | refers to | Investigational New Drug |
| PK/PD | refers to | pharmacokinetics/pharmacodynamics |
| CMC | refers to | Chemistry, Manufacturing and Control |
| CMO | refers to | Contract Manufacturing Organization |
| CDMO | refers to | Contract Development and Manufacturing Organization |
| PMA | refers to | Premarket Application |
| QA | refers to | Quality Assurance (department) |
| Catalogue of Drugs for Insurance（2020） | refers to | Catalogue of Drugs for Basic National Medical Insurance/Employment Injury Insurance/Birth Insurance（2020） |
| ADC | refers to | Antibody-Drug Conjugate |
| EHS | refers to | Environment、Health、Safety |
| Prescription Drugs | refers to | Drugs that can only be purchased and used according to prescriptions issued by physicians |
| OTC | refers to | Over The Counter |
| MRCT | refers to | International Multi-center Clinical Trial |
| RWS/RWR | refers to | Real World Study/Real World Research |
Section II. Company Profile and Key Financial IndicatorsI. Company information
| Stock name (abbreviation) | Huadong Medicine | Stock code | 000963 |
| Stock listed on | Shenzhen Stock Exchange | ||
| Company name in Chinese | 华东医药股份有限公司 | ||
| Company name in Chinese (abbreviation, if any) | 华东医药 | ||
| Company name in English (if any) | HUADONG MEDICINE CO., LTD | ||
| Company name in English (abbreviation, if any) | HUADONG MEDICINE | ||
| Legal representative | Lv Liang | ||
II. Contact persons and contact information
| Secretary of the Board of Directors | Securities Affairs Representative | |
| Name | Chen Bo | / |
| Contact address | 866 Moganshan Road, Hangzhou | / |
| Tel. | 0571-89903300 | / |
| Fax | 0571-89903300 | / |
| Email address | hz000963@126.com | / |
III. Other information
1. Company’s contact information
Whether there is any change in the Company’s registered address, office address, zip code, company website or company emailaddress during the reporting period.
□ Applicable √ N/A
There is no change in the Company’s registered address, office address, zip code, company website or company email address duringthe reporting period. For details, please refer to 2020 Annual Report.
2. Information disclosure and place of the report
Whether there is alteration in information disclosure and place of the report during the reporting period.
□ Applicable √ N/A
The media selected by the Company for information disclosure, the website designated by CSRC for publication of the half yearreport, and the location of preparation of the Company’s half year report have not changed during the reporting period. For details,please refer to the 2020 Annual Report.IV. Key accounting data and financial indicatorsWhether the Company needs to perform a retroactive adjustment or restatement of previous accounting data
□Yes √No
| Current reporting period | Same period last year | Change of the current reporting period over the same period last year(%) | |
| Operating revenue (yuan) | 17,179,437,902.61 | 16,660,934,157.64 | 3.11% |
| Net profit attributable to shareholders of listed companies (yuan) | 1,300,346,324.85 | 1,731,184,721.25 | -24.89% |
| Net profit attributable to shareholders of listed companies after deducting non-recurring gains/losses (yuan) | 1,193,980,887.18 | 1,406,723,973.10 | -15.12% |
| Net cash flow from operating activities (yuan) | 1,738,512,372.11 | 1,255,542,667.29 | 38.47% |
| Basic earnings per share (yuan/share) | 0.7431 | 0.9894 | -24.89% |
| Diluted earnings per share (yuan/share) | 0.7431 | 0.9894 | -24.89% |
| Weighted average return on equity (ROE) | 8.54% | 13.12% | -4.58% |
| 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) | 26,108,178,089.87 | 24,201,348,154.75 | 7.88% |
| Net assets attributable to shareholders of listed companies (yuan) | 15,567,274,148.76 | 14,619,821,308.60 | 6.48% |
Share capital of the Company as of the trading day before disclosure
| Share capital of the Company as of the trading day before disclosure (share) | 1,749,809,548 |
Fully diluted earnings per share calculated on the basis of the latest Share capital
| Dividends paid on preferred shares | 0.00 |
| Perpetual bond interest paid (yuan) | 0.00 |
| Fully diluted earnings per share calculated on the basis of the latest Share capital (yuan/share) | 0.7431 |
V. Differences in accounting data under domestic and overseas accounting standards
1. Differences in net profit and net assets disclosed in financial statements under international and Chineseaccounting standards
□ Applicable √ N/A
There are no differences in net profit and net assets disclosed in financial statements under international and Chinese accountingstandards.
2. Differences in net profit and net assets disclosed in financial statements under overseas and Chineseaccounting standards
□ Applicable √ N/A
There are no differences in net profit and net assets disclosed in financial statements under overseas and Chinese accountingstandards.
VI. Items and amounts of non-recurring gains/losses
√ Applicable □ N/A
Unit: RMB yuan
| Item | Amount | Note |
| Gains/losses on disposal of non-current assets (including the written-off part of the accrued assets impairment reserve) | -110,119.08 | |
| Government grants included in current gains/losses (excluding those closely related to operating activities and measured according to unified national standards) | 138,308,095.20 | Mainly due to the confirmation of government grants by subsidiaries in the current period. |
| Receivables subject to separate impairment test and reversal of reserve for impairment of contract assets | 5,388,185.00 | |
| Other non-operating revenue or expenditure expect above-mentioned items | -4,916,566.97 | |
| Minus: Amount affected by income tax | 22,095,294.54 | |
| Amount affected by rights and interests of minority stakeholders (after tax) | 10,208,861.94 | |
| Total | 106,365,437.67 | -- |
If the Company recognizes an item as a non-recurring gain/loss based on the “Interpretative Announcement No. 1 on InformationDisclosure Criteria for Public Companies – Non-Recurring Profit/Loss” or recognizes an item satisfying the definition ofnon-recurring gain/loss in the announcement as a recurring gain/loss, reasons should be specified.
□ Applicable √ N/A
No such case during the reporting period.
Section III. Discussion and Analysis of the Management
I. Main business of the company during the reporting period
1. Main business of the company
Huadong Medicine Co., Ltd. (stock code: 000963), founded in 1993 and headquartered inHangzhou, Zhejiang Province, was listed on Shenzhen Stock Exchange in December 1999. Aftermore than 20 years of development, its business covers the whole pharmaceutical industrial chain.With the pharmaceutical industry as its core, the Company expands its medicine business andaesthetic medicine industry. It has developed into a large comprehensive listed pharmaceuticalcompany integrating R&D, production and sales of medicine.
The pharmaceutical industry of the Company focuses on R&D, production and sales ofspecialist medication, chronic disease medication and medication for special purposes. The Companyhas formed core product pipelines in such fields as chronic kidney diseases, transplantation immunity,internal secretion and gastrointestinal system, and owns a number of first-line clinical medicationswith market advantages in China. Meanwhile, through independent development, externalintroduction and project cooperation, the Company focuses on the R&D layout of innovative drugsand generic drugs with high technical barriers in the three core fields of anti-tumor, internal secretionand autoimmunity. The Company continues to carry out international product registration,international certification, consistency evaluation, etc., and continues to achieve results, forming aninternational pharmaceutical industry system.
The Company has four business segments, including Traditional Chinese Medicine (TCM) andWestern Medicine, medical devices, ginseng, antler and other herbs, and health industry, coveringpharmaceutical wholesale, pharmaceutical retail, third-party pharmaceutical logistics characterizedby cold chain, pharmaceutical e-commerce, hospital value-added service, and featured mega healthindustry, providing customers with integrated solutions.
Committed to the R&D, production and sales of a series of advanced international aestheticbrands and high-end aesthetic medicine products, the Company’s aesthetic medicine businesstargets the global high-end aesthetic medicine market and focuses on the R&D, production andsales of the latest products and devices in facial micro-plastic surgery and skin management.Sinclair, a wholly-owned subsidiary of the Company that is headquartered in the United Kingdom,has production bases in France and the Netherlands, and promotes and sells long-effect microspherefillers for injection, hyaluronic acid, as well as face thread lift products in the global market.
Sinclair is the global operation platform of the Company for aesthetic medicine business. Theaesthetic medicine sector also includes High Tech (Spain), an overseas wholly-owned subsidiary,R2 (USA) and Kylane (Switzerland), two partially-owned subsidiaries, and Huadong NingboMedicine Co., Ltd., a domestic holding subsidiary.
2. Overview of the Company’s operations during the reporting period2021 is not only the first year of China’s “14th Five-Year Plan” period, but also a year oftransition, in which China’s pharmaceutical industry has entered a new stage of development and themarket pattern has changed dramatically. In the post-pandemic period, China’s economy maintainsits recovery momentum and is driving the unleashing of the potential of domestic demand. However,as the COVID-19 pandemic breaks out repeatedly, the global economic situation is complex andsevere, and the international situation is still subject to many unstable and uncertain factors.2021 is still an extraordinary year for the Company, with overflowing huge difficulties andpressure. With the gradual national and local normalization of volume-based procurement of drugs,the quantity and category of drugs have been gradually expanded and are being advanced in depth.The backward forcing effect of medical insurance policies has become increasingly pronounced, andthe reform of the medical insurance payment mechanism has been accelerating. In the context ofmedical insurance cost control and clinical value first, DRG/DIP has been extensively piloted at thesame time, and the assessment of rational drug use by medical institutions has been put on the agenda.Therefore, hospitals’ sales model of drugs and competitive landscape will also undergo majorchanges. The pharmaceutical market and pharmaceutical enterprises are still facing a huge policyshock. In July 2021, the Center for Drug Evaluation of National Medical Products Administrationissued the draft for comments of the Guidelines for Clinical Value-based Clinical Research andDevelopment of Anti-tumor Drugs, which caused widespread concern in the industry. The concept of“Clinical value-based” will become a significant factor in innovative drug R&D strategies in thefuture.
In the first half of 2021, despite the dual challenges of industry policy and market competition,the Company continued to follow the trend, actively pursued changes, and focused on innovation. Itimplemented its strategic planning around its annual business objectives, and made great efforts toovercome the staged impact of the price reduction of some products, maintaining the stabledevelopment of overall operations. Furthermore, it achieved new breakthroughs in the three majorsectors of the pharmaceutical industry, pharmaceutical commerce, and aesthetic medicine business,laying a solid foundation for the realization of the annual business objectives.
During the reporting period, the Company achieved an operating income of RMB17.179billion, up 3.11% year on year; the net profit attributable to the shareholders of the listed company
was RMB1.3 billion, down 24.89% year on year, and the net profit attributable to the shareholdersof the listed company after deducting non-recurring gains/losses was RMB1.194 billion, down
15.12% year on year. During the reporting period, Hangzhou Zhongmei Huadong PharmaceuticalCo., Ltd., the core subsidiary of the Company achieved an operating income of RMB5.424 billion,down 10.85% year on year, and its net profit was RMB1.192 billion, down 13.49% year on year; inthe second quarter, due to the impact of product price reduction, the operating income of ZhongmeiHuadong decreased by 5.35% year on year (the first quarter down 14.58% year on year), its netprofit decreased by 11.67% year on year (the first quarter down 14.6% year on year), and thedecline narrowed significantly compared with the first quarter. In the first half of this year, the salesvolume and market share of Acarbose products of Zhongmei Huadong kept rising year on year, andits transplantation immunity and cardiovascular products maintained rapid growth. In the secondhalf of the year, the Company will deepen its implementation of innovation and transformation, andstrive to achieve the business indicators of the pharmaceutical industry in 2021 to meet and exceedthe goals of last year. During the reporting period, Huadong Pharmaceutical Distribution Companycontinued to show a gradual recovery in its overall business; the growth in the first quarter wasrelatively rapid due to the low year-on-year base, and the growth in the second quarter stabilized.During the reporting period, the operating income was RMB11.765 billion, up 9.34% year on year;In the aesthetic medicine business, the Company continued to maintain recovery, with anoverall operating income of RMB565 million during the reporting period, up 46.25% year on year.The overseas aesthetic medicine business maintained rapid growth despite the repeated outbreak ofthe COVID-19 pandemic. During the reporting period, Sinclair (the UK) showed a clear recovery inits overall business. As orders from the international market increased significantly, and the sales ofhigh-end hyaluronic acid filler MaiLi
?series newly launched in the European market and KoreanLanluma
?(poly-L-lactic acid (PLLA) collagen stimulant) on commission were better than expected,Sinclair achieved a year-on-year growth of 111.28% in its operation income (including the newlyacquired Spanish company High Tech), in which Sinclair’s own income rose by 74%. It is expectedto maintain the current operating trend in the second half of the year. In the second half of the year,the Company will continue to accelerate the progress of clinical registration of other core aestheticmedicine products at home and abroad. In addition, following the official launching ofpolycaprolactone microsphere facial filler Ellansé
?for injection, the Company’s core aestheticmedicine product, in the Chinese mainland market in August, Glacial Spa? (F0), a cold-touchcosmetic instrument from R2 Company (the USA), is expected to officially enter the Chinesemainland market in the third quarter, which is expected to drive new performance growth in theCompany’s aesthetic medicine business.
The main reasons for the year-on-year decrease in the Company’s net profit during the reportingperiod were as follows: (1) The income and gross profit of some products of Zhongmei Huadongslightly decreased year on year due to the price reduction after the implementation of the nationalcentralized procurement and National Drug Reimbursement List (NDRL) price negotiations; (2) TheCompany’s non-recurring gains and losses in the first quarter of 2020 were RMB290 million,including a net income of GBP30.65 million from the transfer of regional product distribution rightsby Sinclair to Galderma, which greatly increased the Company’s overall income in the first quarter of2020. No such matters occurred during the reporting period, and other non-recurring gains and lossestotaled RMB106 million, resulting in a further decrease in the net profit attributable to shareholders ofthe listed company year on year.
(1) Pharmaceutical industry
During the reporting period, under the continuous influence of the normalization of centralizeddrug procurement and the increasing fluctuation of demand caused by market competition, theCompany practiced the value-oriented lean manufacturing concept and adhered to technologicalinnovation and the agile production mode to cope with market competition and changes. In terms ofproduction, the Company explored its potential internally, and made multi-dimensional andmulti-level efforts to promote lean management from aspects of process optimization, technologyimprovement, process innovation, flexible employment, supplier development, and bidding andpurchasing negotiations, effectively improving product quality and labor efficiency per capita andreducing production costs. Externally, it continued to promote product transfer and outsourcing, andexpanded production capacity. With the capacity release in the new workshop of international R&Dand manufacturing center for preparations, the production capacity has been further guaranteed andexpanded, which also laid the foundation for the international development of preparation products.
In the first half of 2021, for the core purposes of changing the concept and realizing thetransformation from cost center to profit center, the Company launched the reform of productionsystem and CMC system. It mobilized various departments by formulating targeted incentiveprograms. Taking the acceleration of the development of industrial microbiology-based strategicplanning as a breakthrough, the Company made progress in project commercialization, and madegreat breakthroughs in the export of high-end bulk drugs CMO and CDMO. On this basis, it furtherincreased investment, in hope of quickly building industrial chain in the field of industrialmicrobiology, occupying the high ground in the industry, and achieving industrialization. Theproject of Huadong Medicine Biomedical Science and Technology Park has officially commenced,and the construction is pushed forward as planned. In terms of EHS tasks, the Companyimplemented the whole staff EHS responsibility system and the concept of process risk control
around R&D, production and industrial park construction, and improved its EHS management andcontrol capabilities through the building of both tiered risk management and control system andhidden risk screening and management system.During the reporting period, Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd.continued to take effective countermeasures regarding national centralized drug procurementprojects, centralized procurement by inter-provincial alliances, provincial- and city-level centralizedprocurement, GPO projects, etc. On the premise of actively anticipating policy, it fully analyzed itsown capabilities and advantages, and set up the concept of development based on strategy,improving its all-round marketing capabilities. It continued to adhere to the marketing strategy of“equal attention to out-of-hospital market and in-hospital market, and equal attention to the medicalinsurance market and the self-paying market, equal attention to online and offline markets, andvigorous expansion of the county-level and primary-level markets”, attached great importance topatient education, kept reforming and adjusting the marketing structure, accelerated the formationof the full-time sales force, increased the coverage of the primary-level and blank markets, andexpanded the out-of-hospital promotion teams. The Company accelerated the hospital developmentand sales volume increase of the varieties that were newly approved for launching. It continued toboost the development and coverage of Acarbose Tablets in the out-of-hospital market and AcarboseChewable Tablets in the in-hospital market, maintain the stock market, strive for the margin market,and cover the blank market. Although the impact of price reduction of such products as BailingCapsule and Pantoprazole continued, bringing phased pressure to the Company’s revenue growth,the situation has stabilized. It is expected that the impact of product price reduction on the Companyin the second half of the year will fade away, and the overall revenue of the pharmaceutical industryis expected to stabilize and recover. The Company will deepen its implementation of innovation andtransformation, make great efforts to mitigate the impact of lower product prices, and strive toachieve the business indicators of the pharmaceutical industry in 2021 to meet and even exceed thegoals set last year.
During the reporting period, the Company continuously improved its product pipelines, keptup with the forefront of global R&D, spared no effort to deploy global innovative drugs withforesight based on clinical value, differentiation and technology, rapidly supplemented theinnovative product pipelines, and consolidated the generic drug product pipeline in the chronicdisease field that has formed a competitive advantage in the market, rapidly establishing andenriching product clusters and echelons. The Company made great progress in the quantity andquality of its own R&D projects and introduced projects: (1) The Company invested RMB487.5million to acquire 75% of Hangzhou Doer Biologics’ shares and became its controlling shareholder.
Doer Biologics, an R&D enterprise with multiple independent intellectual property rights and aunique protein engineering technology platform, specializes in the development of innovativebiological drugs. It focuses on the development of multi-domain-based multi-specific innovativefusion proteins, antibody drugs and peptide drugs to meet unmet clinical needs in the fields ofoncology, metabolism, ophthalmology, etc. It has an excellent R&D team of 50 professionals. (2) Inthe field of autoimmunity, in February 2021, the Company introduced HDM3002 (PRV-3279), aproduct under development by Provention Bio (USA), which is used to treat systemic lupuserythematosus (SLE) and bispecific antibody that prevents or reduces the immunogenicity of genetherapy. The phase II international multi-center clinical research for the product is being carried out.At present, pre-IND materials have been submitted in China. (3) In the field of diabetes, in June2021, the Company introduced the product SCO-094 of SCOHIA PHARMA, Inc. (Japan) under thedevelopment in clinical phase I, which is a global innovative dual agonist of GLP-1R and GIPRtargets for the treatment of such diseases as type 2 diabetes, obesity and non-alcoholicsteatohepatitis (NASH). Through the investment layout in the above fields, the Company haspreliminarily formed its R&D ecosystem. While optimizing the innovation system, the Companystrengthened the introduction of advanced clinical medicine talents and the development oforganizational structure, accelerated the progress of clinical projects and implementation. All thoseefforts made achievements.
(For details of the R&D pipelines and related work, refer to the R&D related content in thischapter.)During the reporting period, Pantoprazole Injection (trade name: Pan Li Su) from thewholly-owned subsidiary of the Company, Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd.,won the bid in the fourth batch of national drug centralized procurement, and Decitabine forinjection (trade name: Xiang Ke) won the bid in the fifth batch of national drug centralizedprocurement, which will help consolidate and expand the market share, establish the Company’shigh-quality brand, enhance market reputation and influence, and has a positive impact on theCompany’s market expansion for follow-up products in the digestion and anti-tumor fields.
(2) Pharmaceutical commerce
During the reporting period, the Company’s pharmaceutical commerce accelerated theinnovation-driven corporate development, adhered to the concept of “good products always standfor the first productivity”, consolidated the traditional pharmaceutical commerce, reshaped its corecompetitiveness, surpassed its peers with innovation, and continued to build itself into a leadingservice provider in the pharmaceutical industry in Zhejiang Province.
It properly carried out the introduction of new products and cooperation with suppliers, and
made great efforts to build a province-wide market expansion network, form a promotion team forthe in-hospital and private hospital markets, enrich product lines, and foster new profit models. Interms of innovation drive, the Company sought breakthroughs from four directions: marketexpansion, e-commerce business, cold chain logistics and characteristic mega health industry. Itchanged the operational thinking, optimized the in-hospital market, and made arrangements for theout-of-hospital market. At the same time, the Company properly carried out access services,expanded the provincial market of high-value products such as narcotic and psychotropic drugs,medical devices, ginseng, antler and other medicinal materials. All subsidiaries set up specializedsales teams, giving play to the synergy between the headquarter and subsidiaries, and conductedtwo-way assessments. The Company laid out the out-of-hospital market, focusing on the expansionof OTC business, including pharmacies near hospitals, social pharmacies, Internet medicalcooperation, online order delivery, etc. It actively participated in the digital reform of medical andhealth services in Zhejiang Province, provided support to open up the full channel of “Internet +diagnosis and treatment”, and took the lead in completing the first medicine delivery services of“Internet + Medical Service” for many provincial hospitals. It continued to undertake medicinedelivery services for chronic illness long-term prescriptions from dozens of community servicecenters in Hangzhou; the Internet out-of-hospital delivery business in Shaoxing, Huzhou, Jiaxing,Wenzhou, Ningbo, Jinhua, Lishui and other regions was also rapidly expanding.It also accelerated the development of e-commerce business, upgraded its own platform, andpromoted B2C/B2B/O2O/H2C and other modes of business through third-party channels. Relyingon its independent B2B e-commerce platform and supported by modern pharmaceutical logisticsand distribution system, the Company provided distribution services of drugs, medical devices andother products for the second and third terminals in Zhejiang Province and even the whole country.It entered the 2021-2022 list of key cultivating e-commerce platforms in Zhejiang Province. Duringthe reporting period, Huadong Medicine Supply Chain Management (Hangzhou) Co., Ltd., awholly-owned subsidiary, was awarded the first express business license of a pharmaceutical coldchain enterprise in Zhejiang Province issued by Zhejiang Provincial Postal Administration, setting abenchmark for enterprises in the field; it also obtained the qualification of third-party vaccinestorage and transportation service from Zhejiang Provincial Center for Disease Control andPrevention, becoming the exclusive service provider in the province to provide safe and specializedstorage and distribution guarantee for the vaccination in the whole province against COVID-19. Inaddition, it has completed the planned tasks for the first half of the year in an efficient and timelymanner, boosting the universal vaccination to combat the COVID-19 pandemic.In March 2021, the wholly-owned subsidiary of the Company located in Chengdu officially
obtained the Internet hospital license — Practice License for Medical Institutions, and officiallycommenced the construction of the “Internet platform” of Huadong Medicine.
(3) Aesthetic medicine business
The aesthetic product portfolio of Huadong Medicine’s aesthetic medicine business covers themainstream non-surgical aesthetic medicine fields such as facial fillers, body shaping, catgutembedding and energy source devices. The Company has formed a comprehensive product clusterintegrating full product portfolios of differentiated sodium hyaluronate, collagen stimulator,botulinum toxin type A, catgut embedding and implanting, and energy source devices, achieving acomprehensive layout of the “non-invasive + minimally invasive” aesthetic medicine industrialchain. Huadong Medicine’s aesthetic medicine business focuses on the breakthrough and innovationin the field of aesthetics, and is committed to providing comprehensive and scientific aestheticproducts. The sector is equipped with independent R&D departments, including four global R&Dcenters, namely, wholly-owned subsidiaries Sinclair (UK) and High Tech (Spain), andpartially-owned companies R2 (USA) and Kylane (Switzerland), and five production bases in theNetherlands, France, the United States, Switzerland and Bulgaria, with the core products launchedin more than 60 countries and regions.During the reporting period, Sinclair (UK), a wholly-owned subsidiary of the Company,acquired 100% equity in High Tech, a Spanish company engaged in energy source aestheticmedicine devices. Since then, the latter officially became a major part of the Company’s landscapeof global aesthetic medicine business and is included in the consolidated statements of Sinclair andthe Company. Sinclair and High Tech have started to work together on market and businesscollaboration and integration; the Company is formulating the launching plans for High Tech’s fiveproducts on sale overseas and four innovative products under R&D, and plans to start theregistration of core products in China in 2021.During the reporting period, Ellansé
?, a polycaprolactone microsphere facial filler for injection,the core product of Sinclair, obtained the Medical Device Registration Certificate issued by theNational Medical Products Administration (NMPA) in April 2021, and will be officially marketed inChinese mainland in August. The Company established a wholly-owned subsidiary, SinclairAesthetics (Shanghai) Medical Technology Co., Ltd., to undertake the sales and promotion ofEllansé
?
. At present, the latter has assigned a full-time brand manager and set up an independentdirect selling team for the product Ellansé
?. Meanwhile, the preparations for brand and marketingcommunication, the training and education of the first aesthetic medicine institutions and physiciansare being carried out as planned. After launching, 100 hospitals will be the first to use the product,and it is expected to gradually expand to 300-500 domestic hospitals next year. The Company hopes
to lead the Chinese aesthetic medicine industry into the era of regeneration by virtue of the natural,safe and lasting effect of Ellansé
?
. It will also make efforts in the domestic terminal market ofaesthetic medicine, and carry out both online and offline marketing to diversify the marketingmatrix, so that the sales volume can be rapidly expanded after being launched in China.
Moreover, the Company introduced a cold-touch cosmetic instrument from R2 Company,Glacial
?
SpaTM(F0, life cosmetology version of a frozen freckle-removing medical device), hasobtained a marketing approval in Korea and Taiwan of China, and the Management Certification forNon-medical Devices from NMPA. The product is mainly designed to solve skin tone problems,including uneven skin tone, dark yellow and darkened skin, dull skin, sensitive and reddish skin,severe local pigmentation, etc. The Company is sparing no effort to prepare for the launch of theproduct in China, and it is expected to be officially marketed in China in the third quarter of 2021.Cooperation intentions have been reached with some beauty institutions.
During the reporting period, the Company continued to accelerate the progress of clinicalregistration of other core aesthetic medicine products at home and abroad, and made positiveprogress. Silhouette
?Instalift?, a catgut embedding product of Sinclair, was successfully filed withChina Human Genetic Resources Administration Office, Ministry of Science and Technology of thePeople’s Republic of China, and officially entered into a registered clinical research, with thesubjects being enrolled smoothly. Sinclair’s Perfectha
?
series product containing lidocaine and HighTech’s Cooltech Define obtained the CE Certification from EU, respectively. Glacial Rx (F1), afrozen freckle-removing medical device developed by R2 (USA) was classified as a Class IIMedical Device by Zhejiang Medical Products Administration on July 5, and its registration inChina is promoted in an orderly manner. The product was approved for import by Hainan Provinceand will soon be launched in the hospitals in the Hainan Boao Lecheng International MedicalTourism Pilot Area. The product has successively obtained marketing licenses in Korea andSingapore in the Asia-Pacific region, and applied for marking in Indonesia and Malaysia.
In addition to actively promoting the clinical registration of domestic aesthetic medicineproducts, the Company is actively following up the latest policies issued by the NationalDevelopment and Reform Commission on supporting the development of high-end aestheticmedicine industry in Hainan, and a number of aesthetic medicine products of its aesthetic medicinesubsidiaries that have been registered, certified and launched in the mainstream markets or regionssuch as the United States and the EU conform to the standards of the policy. The Company ispreparing for the registration and launch of those products in Hainan, including Ellansé
?type M,cryolipolysis energy source product, a new high-end lidocaine-containing hyaluronic acid fillerMaiLi
?series product, etc. It will accelerate the approval and launch of those products in China by
conducting real-world research.
| Market Classification | Main Products | Intended Use | Registration and Launch |
| Minimally Invasive | YVOIRE hyaluronic acid | Facial filler | Launched in China |
| Ellansé? | Used for subcutaneous implantation to correct moderate to severe nasolabial folds | Launched in the Chinese mainland in August 2021 Obtained registration certification or marketing access in more than 60 countries or regions | |
| Catgut-embedding Silhouette?Instalift? | Designed for mid-face tissue lifting surgery, temporarily fixing and lifting the dermis under the cheeks | Certified by FDA, the USA Obtained registration certification or marketing access in more than 60 countries or regions | |
| MaiLi? series | Facial filler | CE certification of EU, launched in Europe | |
| Perfectha? series | Facial filler | Obtained registration certification or marketing access in more than 60 countries or regions Perfectha? series product containing lidocaine obtained the CE certification from the EU | |
| Kylane’s two key R&D products | Facial and body filler | Under R&D | |
| Botulinum Toxin (kreotoxin type A) | Wrinkle removal | In the process of registration and launch in China | |
| Lanluma? (PLLA collagen stimulant） | Facial and body filler | CE certification of EU, launched in Europe | |
| Noninvasive | F1 (Glacial RxTM) | To eliminate benign pigmented lesions of the skin, and relieve pain, swelling, inflammation and hematoma through low temperature | USA FDA 510(k) In the process of registration and launch in China |
| F2 | Whole body whitening | Under R&D | |
| Glacial SpaTM (F0) | Skin whitening and brightening | Approved for launch in the United States and Korea Filed for launch in Taiwan, China To be launched in the Chinese market in the third quarter of 2021 | |
| Cooltech | Body shaping and fat reduction | CE certification from EU | |
| Cooltech Define | Body shaping and fat reduction | CE certification from EU, and TGA certification from Australia | |
| Crystile | Body shaping and fat reduction | Launched overseas | |
| Primelase | Hair removal | Obtained registration certification or marketing |
| access in more than 11 countries or regions | ||
| Primelase Pro | Hair removal | In the process of global registration and launch |
| Elysion | Hair removal | Obtained registration certification or marketing access in more than 7 countries or regions |
| Define 2.0 | Skin tightening and shaping | Under R&D overseas |
| Define 3.0 | Skin tightening and shaping | Under R&D overseas |
| Titania | Skin tightening and shaping | Under R&D overseas |
Fig. Launch and R&D of the Company’s Main Aesthetic Medicine Products
(4) Other matters
In January 2021, the Company entered into an agreement with Shanghai Yuanda InvestmentManagement Co., Ltd. and Hangzhou High-tech Venture Capital Management Co., Ltd. and jointlyset up Hangzhou Fuguang Hongxin Equity Investment Partnership (L.P.) (referred to as “FuguangHongxin Pharmaceutical Industry Fund”). The Pharmaceutical Industry Fund was established with atotal scale of RMB200 million, of which RMB98 million is contributed by the Company with itsown funds and the Company is a limited partner of the Pharmaceutical Industry Fund. ThePharmaceutical Industry Fund mainly invests in startup and early projects in the fields of aestheticmedicine, endocrinology, anti-rejection regarding organ transplantation, alimentary canal, tumor,nephrology, immunology, etc. As of the disclosure date of this report, the Pharmaceutical IndustryFund had completed the initial fund raising, finished the industrial and commercial registrationprocedures, and completed the filing with AMAC on April 2, 2021. After its establishment,Fuguang Hongxin Pharmaceutical Industry Fund jointly invested in Nuoling BiomedicalTechnology (Beijing) Co., Ltd., an innovative enterprise focusing on the R&D of a new generationof polymer ADC drugs, with Zhongmei Huadong in April 2021, holding 5.97% and 4.48% of theshares of Nuoling Biomedical, respectively.
Also in April 2021, Zhongmei Huadong, a wholly-owned subsidiary of the Company, reacheda cooperation agreement with Zhejiang Provincial Natural Science Foundation Committee (referredto as “Foundation Committee”) and jointly set up the Joint Innovation and Development Fund ofZhejiang Provincial Natural Science Foundation and Huadong Medicine. It became the firstenterprise in Zhejiang Province to cooperate with the Foundation Committee. Projects funded bythe Joint Innovation and Development Fund fall into three categories: major projects, key projectsand exploratory projects. The major projects focus on three core fields, namely, metabolic disease,tumor and immunity, which are highly compatible with the key fields of the Company’s R&Dlayout. The establishment of the Joint Innovation and Development Fund is conducive to attractingand gathering superior scientific research forces inside and outside the province, carry out basic
research and applied basic research, create an open and cooperative development model, and speedup innovation and research process of the Company.During the reporting period, the Company had been listed on the Fortune China 500 selectedby FortuneChina.com for the 10th consecutive year and Top 100 Pharma Companies in China in2020, reelected one of Top 10 Industrial Enterprises in Chemical-Pharmaceutical Industry in 2020,and was granted many honors and awards, including the “Best Board of Directors”, “Best InvestorRelations” and “Best Board Secretary” of the 12th China Listed Company Investor RelationsTianma Award, China’s Top 10 Enterprises for Biomedical Business Development in 2020, etc.,which fully shows the market recognition and affirmation of Huadong Medicine’s comprehensivecompetitive strength, efficient operation, corporate governance level and ability to create value.In the first half of 2021, despite many obstacles and challenges, the Company unswervinglypromoted the development goal of innovation and transformation, and maintained a stable andpositive development trend, fully demonstrating its strong development resilience. Looking forwardto the second half of 2021, the external situation facing the Company is still grim, the COVID-19pandemic is still fraught with repetitiveness and uncertainty, and the competition and policychallenges in the pharmaceutical industry are becoming more prominent, resulting in the continuousgreat development pressure on the Company’s three major business sectors. The road ofdevelopment is full of hardships, so we must cheer up and strive to be strong. Since the heavyresponsibility lies on our shoulders, we must be bold in moving forward. In the second half of 2021,the Company will continue to promote innovation and reform, formulate the development goals ofthe seventh Three-Year Plan, make great efforts to build its R&D ecosystem, continue to intensifyefforts to carry out innovation and R&D, continuously enhance the international capability of thepharmaceutical industry system, improve the efficiency of new drug R&D, and promote the globalstrategic layout of the aesthetic medicine business. At the same time, all cadres and employees shallwork hard for the second half of 2021, show courage to face difficulties in R&D and production,marketing, talent introduction, quality management and other aspects, uphold a pioneering spirit,and make unremitting efforts toward the annual business goals, to achieve the Company’s annualhigh-quality development.II. Analysis of core competitiveness
1. Open innovative drug R&D System and continuous improvement of innovationcapability
After years of development, the Company has established its independent R&D system, a global
new drug R&D center as well as a global R&D strategic collaboration ecosystem centered onHangzhou Zhongmei Huadong Pharmaceutical Co., Ltd., and cooperated with world-renownedcolleges at home and abroad, research institutes, innovative R&D companies, professionaltechnology platforms and so on in new drug R&D projects. The Company continuously has increasedR&D investment, made an overall planning for the global innovative products in the three core areasof anti-tumor, internal secretion and autoimmunity, and carried out cooperation with the world’sleading AI drug discovery company Exscientia and XtalPi in anti-tumor drug R&D. Throughindependent R&D, external cooperation and product license-in, the Company has continuouslyenriched the product pipelines in core areas, formed a good development trend of continuous clinicalpromotion and marketing of innovative products, and provided new momentum for medium- andlong-term growth.
2. Comprehensive capability in international business developmentThe Company actively promotes global expansion. Through the acquisition of the equity of UKSinclair and Spanish High Teach engaged in aesthetic medicine, the Company has realized the globallayout of aesthetic medicine sales network. Through strategic and equity collaboration with R2 (US),Medibeacon (US), ImmunoGen (US), Provention Bio (US), Kylane (Switzerland), LG (South Korea),Jetema (South Korea) and so on, the Company supplemented and enriched the commercialdevelopment rights of innovative drugs and high-end aesthetic medicine products at home and abroad.The Company also accelerated the international registration of products. Its online chemical rawmedicines have been certified by the Food and Drug Administration (FDA) or EU and otherauthoritative authentication in markets; its Pantoprazole Sodium Lyophilized Powder for Injectionhas been temporarily approved by the FDA; and its Acarbose Tablets gained market access to theUnited States and the European Union Austria. The Company is the first Chinese medicine enterpriseto achieve these results. In addition, the Company actively develops international logistics andpurchasing suppliers to realize the internationalization of purchasing ability. It has promoted theinternationalization level of CMO/CDMO business and integrate it into the global innovative drugR&D industry chain.
3. Abundant product pipelines for specialized departments and chronic diseases andoverall competitive advantage in the field of diabetes medicationOver the years, the Company has been deeply engaged in medication for specializeddepartments, chronic diseases and special drugs, and has built a good brand effect and solid marketfoundation in such fields as chronic kidney diseases, transplantation immunity, internal secretion,and digestive system, and has maintained a leading market share of similar products in China. The
Company has formed a comprehensive pipeline of innovative drugs and differentiated generic drugsin the diabetes clinical mainstream therapeutic target. In the field of organ transplantation, it alsorealized full coverage of clinical first-line immunosuppressive drugs. The Company has establisheda global first-in-class distribution of new drugs in the three core areas of anti-tumor, internalsecretion and autoimmunity, forming a differentiated advantage. At present, 24 core marketedproducts of the Company have been included in the 2020 Catalog of Medicines Covered by theNational Medical Insurance System.
4. Leading professional pharmaceutical care team and extensive market network inChinaThe pharmaceutical industry of the Company has a professional pharmaceutical care team of6,000 people, takes the promotion of clinical value and academic results as the core, and promotes amulti-channel marketing model that combines general hospitals, primary medical institutions, retailand third terminals, and Internet online. It has gradually formed effective coverage through multiplechannels and has a good competitive advantage.The business of the Company has been deeply rooted in the market of Zhejiang Province formany years, with complete commercial formats and rich distribution varieties, and hascomprehensive competitive advantages in policy affairs, market access and network coverage. It hasfully covered the customers from public medical institutions, key private medical institutions andretail pharmacies in Zhejiang Province, and maintained the leading order satisfaction rate. TheCompany has established business cooperation with 90% of the mainstream pharmaceutical
enterprises at home and abroad. The Company has a complete cold chain logistics distributionservice system and professional capabilities, and its cold chain logistics distribution business is inthe lead in China. The Company has obtained the first express business license of pharmaceuticalcold chain enterprise in Zhejiang Province, and got the exclusive qualification of third-party storingand transporting vaccine from Zhejiang Provincial Center for Disease Control and Prevention.
5. High end international aesthetic medicine product pipeline covering mainstreamnon-surgical fieldsIn 2018, through the successful acquisition of Sinclair in UK, the Company strategicallyentered the aesthetic medicine industry, effectively completed the integration of products andbusinesses in less than three years, and realized the full layout of the non-invasive and minimallyinvasive aesthetic medicine industry chain. In the fields of facial fillers, body shaping, catgutembedding, energy source devices and so on, we have a number of patented products with globalrights and also have an international aesthetic medicine operation and BD team. Focusing on theglobal high-end aesthetic medicine market, further integrating R&D resources and capabilities, andrelying on the four global R&D centers of Sinclair in the UK, High Tech in Spain, R2 in the UnitedStates and Kylane in Switzerland, and five global production bases in the Netherlands, France, theUnited States, Switzerland and Bulgaria, the Company has formed its international aestheticmedicine business integrating R&D, production, and marketing, and set up a global aestheticmedicine marketing network, which has covered more than 60 countries and regions in the world.
6. Prudent and pragmatic operation style and shareholder return
The Company values management innovation, and strives to meet the demand of marketcompetition by improving its quality of operation. High quality products, excellentcommercialization ability, compliant and efficient marketing services, differentiated marketpositioning, innovative R&D layout and completed talent planning all boost the long-term andstable development of the Company. Since its listing, the Company has maintained steady growth inperformance for 21 years. Since 2007, the Company has kept the return on equity (ROE) above20% for 14 years consecutively, leading A-share listed companies and the medicine industry. Sinceits listing 21 years ago, the Company has paid dividends for 18 times, with a total value ofRMB4.577 billion, far exceeding the RMB250 million raised in its IPO. The Company has broughtcontinuous and stable returns of investment to shareholders.
III. Analysis of main businessPlease refer to the relevant content of "I. Main business of the company during the reporting period".Year-on-year changes in major financial data
Unit: RMB yuan
| Current reporting period | Same period last year | Year-on-year percentage increase/decrease | Cause of changes | |
| Operating revenue | 17,179,437,902.61 | 16,660,934,157.64 | 3.11% | |
| Operating cost | 11,589,419,896.59 | 10,681,089,643.50 | 8.50% | |
| Selling expenses | 2,978,753,751.45 | 3,109,911,383.02 | -4.22% | |
| Administrative expenses | 534,683,411.33 | 506,362,613.35 | 5.59% | |
| Financial expenses | 9,789,580.87 | 17,531,072.80 | -44.16% | Mainly due to the increase of interest income and the year-on-year decrease of financing cost |
| Income tax expenses | 240,728,486.55 | 334,125,800.82 | -27.95% | |
| R&D investment | 437,556,684.96 | 479,685,981.21 | -8.78% | |
| Net cash flows from operating activities | 1,738,512,372.11 | 1,255,542,667.29 | 38.47% | Mainly due to the increase of capital return and the decrease of operating expenses in the current period |
| Net cash flows from investing activities | -1,297,044,289.24 | -374,008,436.39 | 252.78% | Mainly due to the increase of equity investment and construction assets in the current period |
| Net cash flows from financing activities | -366,906,114.30 | -743,357,031.90 | 50.55% | Mainly due to the increase of loans in the current period |
| Net increase in cash and cash equivalents | 74,138,062.91 | 179,100,260.58 | -58.61% | Mainly due to the increase of the amount of cash flow paid for investing activities in the current period |
| Accounts receivable financing | 530,122,144.99 | 828,659,217.25 | -36.03% | Mainly due to the increase of banker’s acceptance discount in the current period |
| Other receivables | 114,697,517.74 | 87,269,489.82 | 31.43% | Mainly due to the increase of suspense accounts receivable |
| Other current assets | 44,928,681.66 | 85,654,691.58 | -47.55% | Mainly due to the decrease of pending input tax in the current period |
| Goodwill | 2,100,106,651.09 | 1,469,617,262.10 | 42.90% | Mainly due to the acquisition of Doer Biologics and High Tech in the current period |
| Notes payable | 979,859,751.59 | 554,336,058.71 | 76.76% | Mainly due to the increase of bill payments in the current period |
| Contract liabilities | 53,923,017.30 | 94,384,629.77 | -42.87% | Mainly due to the decrease of advance drug payments in the current period |
| Non-current liabilities due within one year | 43,273,480.68 | 67,813,886.68 | -36.19% | Mainly due to the decrease of long-term payables due within one year |
| Long-term borrowing | 477,876,860.08 | 151,611,367.86 | 215.20% | Mainly due to the increase of subsidiaries’ long-term borrowing |
| Long-term payables | 157,449,847.67 | 26,812,354.90 | 487.23% | Mainly due to the increase in contingent and deferred consideration resulting from the acquisition of external companies by the subsidiaries |
Significant changes in the company's profit composition or source of profit during the reporting period
□ Applicable √ N/A
There was no major change in the company's profit composition or source of profit during the reporting period.Composition of operating revenue
Unit: RMB yuan
| The current reporting period | Same period last year | Year-on-year percentage increase/decrease | |||
| Amount | Proportion in operating revenue | Amount | Proportion in operating revenue | ||
| Total operating | 17,179,437,902.61 | 100% | 16,660,934,157.64 | 100% | 3.11% |
| revenue | |||||
| By sector | |||||
| Business | 11,765,327,916.99 | 68.48% | 10,760,596,159.30 | 64.59% | 9.34% |
| Manufacturing | 5,599,557,312.42 | 32.59% | 6,238,364,356.65 | 37.44% | -10.24% |
| aesthetic medicine [Note] | 565,046,106.58 | 3.29% | 386,369,300.00 | 2.25% | 46.25% |
| International aesthetic medicine | 276,081,206.58 | 1.61% | 130,673,336.90 | 0.78% | 111.28% |
| Offset (inter-sectoral offset) | -461,528,533.38 | -468,699,695.21 | |||
| By product | |||||
| By region | |||||
| Domestic sales | 16,879,853,037.00 | 98.26% | 16,505,022,711.72 | 99.06% | 2.27% |
| Overseas sales | 299,584,865.61 | 1.74% | 155,911,445.92 | 0.94% | 92.15% |
[Note] The aesthetic medicine business of the Company includes both the domestic and the international aesthetic medicine business.There is a little overlap between the income statistics of the domestic aesthetic medicine business and that of the pharmaceuticalcommerce and the pharmaceutical manufacturing industry. In order to truly reflect the Company’s business reality, the data is countedseparately.Sectors, products or regions that account for more than 10% of the Company’s operating revenue or operating profit
√ Applicable □ N/A
Unit: RMB yuan
| Operating revenue | Operating cost | Gross profit rate | Year-on-year percentage increase/decrease in operating revenue | Year-on-year percentage increase/decrease in operating cost | Year-on-year percentage increase/decrease in gross profit rate | |
| By sector | ||||||
| Business | 11,765,327,916.99 | 10,897,355,721.16 | 7.38% | 9.34% | 9.57% | -0.20% |
| Manufacturing | 5,599,557,312.42 | 1,069,513,577.27 | 80.90% | -10.24% | -2.69% | -1.48% |
| International aesthetic medicine | 276,081,206.58 | 88,544,271.23 | 67.93% | 111.28% | 82.21% | 5.12% |
| Offset (inter-sectoral offset) | -461,528,533.38 | -465,993,673.07 | ||||
| By region | ||||||
| Domestic sales | 16,879,853,037.00 | 11,485,297,284.73 | 31.96% | 2.27% | 8.76% | -4.06% |
| Overseas sales | 299,584,865.61 | 104,122,611.86 | 65.24% | 92.15% | 66.59% | 5.33% |
If the statistical specifications of the Company’s main business data have been adjusted during the reporting period, the Company’smain business data of the most recent period should be adjusted according to the specifications at the end of the reporting period.
□ Applicable √ N/A
Explanation of the reason why the relevant data has changed by more than 30% year-on-year.
□ Applicable √ N/A
IV. Analysis of non-main business
√ Applicable □ N/A
Unit: RMB yuan
| Amount | Proportion in total profit | Note on reasons | Sustainable or not | |
| Investment income | -54,458,950.28 | -3.44% | Mainly due to the increase of bill discount interest and losses of partially-owned enterprises in the current period | No |
| Other income | 137,364,653.52 | 8.68% | Mainly due to the government subsidies recognized in the current period | No |
V. Analysis of assets and liabilities
1. Major changes in asset composition
Unit: RMB yuan
| End of the current reporting period | End of last year | Change of proportion | Note on major changes | |||
| Amount | Proportion in total assets | Amount | Proportion in total assets | |||
| Monetary funds | 3,269,314,047.58 | 12.52% | 3,198,080,997.82 | 13.21% | -0.69% | |
| Accounts receivable | 6,871,300,450.79 | 26.32% | 6,137,675,568.82 | 25.36% | 0.96% | |
| Contract assets | 0.00% | 0.00% | 0.00% | |||
| Inventories | 4,130,364,327.93 | 15.82% | 4,067,635,254.80 | 16.81% | -0.99% | |
| Real estate properties for investment | 17,191,977.46 | 0.07% | 17,792,735.95 | 0.07% | 0.00% | |
| Long-term equity investments | 947,007,338.50 | 3.63% | 850,072,053.02 | 3.51% | 0.12% | |
| Fixed assets | 2,668,749,549.01 | 10.22% | 2,420,366,582.92 | 10.00% | 0.22% | |
| Constructions in progress | 2,000,163,547.28 | 7.66% | 2,240,201,926.65 | 9.26% | -1.60% | Mainly due to the transfer of part of products under construction to fixed assets |
| Right-of-use assets | 128,934,858.91 | 0.49% | 0.00% | 0.49% | ||
| Short-term borrowing | 1,386,401,620.12 | 5.31% | 1,416,932,884.87 | 5.85% | -0.54% | |
| Contract liabilities | 53,923,017.30 | 0.21% | 94,384,629.77 | 0.39% | -0.18% | |
| Long-term borrowing | 477,876,860.08 | 1.83% | 151,611,367.86 | 0.63% | 1.20% | Mainly due to the increase of Sinclair’s long-term borrowing |
| Lease liability | 82,245,770.91 | 0.32% | 0.32% |
2. Major overseas assets
√ Applicable □ N/A
| Specific content of assets | Reason for formation | Assets size (Ten thousand yuan) | Location | Operating mode | Control measures to ensure assets safety | Profit or loss | Proportion of overseas assets in the Company’s net assets | Whether there are any significant impairment risks |
| Sinclair Pharma Limited | Acquisition of equity | 15925.85 | UK | Independent accounting | Control of the Board of Directors and examination & approval of major decisions; daily supervision of financial matters; entrusting external intermediaries to conduct audits | Loss during the period | 9.83% | No |
Note: In April 2019, the Company entered into strategic cooperation with R2 Dermatology, a US company specializing in medical
devices and technology development related to dark spot removal and skin whitening using freezing technology in the field ofaesthetic medicine, and invested 30 million US dollars for equity investment in R2 and became its shareholder. As of the date of thisdisclosure, the company's wholly-owned subsidiary Hangzhou Huasheng Investment Management Co., Ltd. has completed allpayment for equity investment, with a shareholding ratio of 27.75%. In July 2019, the Company entered into strategic cooperationwith MediBeacon, a US company dedicated to the development of contrast agents and equipment in such medical fields as renalfunction and gastrointestinal function assessment, and invested 30 million US dollars for equity investment. As of the date of thisreport, the company's wholly-owned subsidiary Hangzhou Huasheng Investment Management Co., Ltd. has contributed 15 millionUS dollars, or 4.3% of its shares.
3. Assets and liabilities measured at fair value
√ Applicable □ N/A
Unit: RMB yuan
| Item | Opening balance | Change in fair value for the current period | Cumulative changes in fair value included in equity | Impairment accrued during the current period | Amount purchased in this period | Amount sold in this period | Other Changes | Closing balance |
| Financial Assets | ||||||||
| Including: Investment in other equity instruments | 225,453,120.05 | 15,091,655.18 | 7,534,147.03 | 1,668,836.76 | 3,119,799.71 | 235,756,138.76 | ||
| Total of the above | 225,453,120.05 | 15,091,655.18 | 7,534,147.03 | 1,668,836.76 | 3,119,799.71 | 235,756,138.76 | ||
| Financial Liabilities | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | |||
Other changesDuring the reporting period, whether the company’s main asset measurement attributes have changed significantly
□ Yes √ No
4. Limitation of asset rights at the end of the reporting period
| Item | Book value at the end of the period | Reason for limitation |
| Cash and bank balance | 37,768,911.41 | Cash deposit |
| Fixed assets | 23,619,173.02 | Mortgage guarantee for borrowing |
| Total | 61,388,084.43 |
VI. Investment
1. Overview
√ Applicable □ N/A
| Investment amount in the reporting period (yuan) | Investment amount in the same period of last year (yuan) | Percentage change |
| 1,485,053,641.17 | 722,699,019.70 | 105.48% |
2. Significant equity investments acquired during the reporting period
√ Applicable □ N/A
Unit: RMB yuan
| Name of investee | Main business | Way of investment | Investment amount | Shareholding ratio | Capital source | Partner(s) | Term of investment | Product type | Progress as of the balance sheet date | Projected income | Profit or loss of investment in the current period | Involved in litigation or not | Disclosure date (if any) | Disclosure index (if any) |
| Hangzhou Fuguang Hongxin Equity Investment Partnership (L.P.) | Equity investment; venture capital investment | Newly established | 98,000,000.00 | 49.00% | Own funds | Fuguang Chengdu Equity Investment Management Co., Ltd., Hangzhou High-Tech Venture Capital Management Co., Ltd., Hangzhou | Long-term | Equity | The Pharmaceutical Industry Fund had completed the initial fund raising, finished the industrial and commercial registration procedures, and | 0.00 | -996,329.16 | No | January 08, 2021 | http://www.cninfo.com.cn |
| Heda Industrial Fund Investment Co., Ltd., and Shanghai Yuanda Investment Management Co., Ltd. | completed the filing with AMAC on April 2, 2021. | |||||||||||||
| Zhejiang Doer Biologics Corporation | pharmaceutical R&D | Acquisition | 487,500,000.00 | 75.00% | Own funds | / | Long-term | Equity | Completed equity investment | 0.00 | -3,566,178.14 | No | April 28, 2021 | http://www.cninfo.com.cn |
| High Technology Products, S.L.U. | R&D, production and sales of non-invasive EBD (energy source type) medical aesthetic devices | Acquisition | 499,603,000.00[Note] | 100.00% | Own funds/external financing | / | Long-term | Equity | Equity delivery has been completed | 0.00 | 10,954,259.92 | No | February 18, 2021 | http://www.cninfo.com.cn |
| Total | -- | -- | 1,085,103,000.00 | -- | -- | -- | -- | -- | -- | 0.00 | 6,391,752.62 | -- | -- | -- |
Note: Conversion is based on the central parity of the Euro to RMB exchange rate on June 30, 2021, which is 7.6862.
3. Significant non-equity investments in progress during the reporting period
√Applicable □N/A
Unit: RMB yuan
| Project name | Way of investment | Investment in fixed assets or not | Industry involved in the investment project | Investment amount during the reporting period | Cumulative actual investment amount by the end of the reporting period | Capital source | Project progress | Projected income | Cumulative income realized by the end of the reporting period | Reasons for not meeting the planned schedule and projected income | Disclosure date (if any) | Disclosure index (if any) |
| Huadong Medicine Biomedical Science and Technology Park Project Phase II | Self-built project | Yes | Pharmaceutical manufacturing | 25,972,920.50 | 1,742,304,827.30 | Own funds | 95.00% | / | / | N/A | March 9, 2017 | http://www.cninfo.com.cn |
| Huadong Medicine Life Science Industrial Park | Self-built project | Yes | Pharmaceutical R&D | 17,735,278.06 | 18,871,441.26 | Own funds | 24.00% | / | / | N/A | April 21, 2021 | http://www.cninfo.com.cn |
| Total | -- | -- | -- | 43,708,198.56 | 1,761,176,268.56 | -- | -- | -- | -- | -- | -- | -- |
4. Investment in financial assets
(1) Securities Investment
√ Applicable □ N/A
| Type of stock | Stock code | Stock abbreviation | Initial investment cost | Accounting measurement model | Book value at the beginning of the period | Gain/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 | 23,582,877.56 | 15,091,655.18 | 7,534,147.03 | 0.00 | 4,788,636.47 | 0.00 | 33,885,896.27 | Other equity instrument investment | Own funds |
| Total | 20,207,400.00 | -- | 23,582,877.56 | 15,091,655.18 | 7,534,147.03 | 0.00 | 4,788,636.47 | 0.00 | 33,885,896.27 | -- | -- | ||
| Date of announcement of the Board of Directors on securities investment approval | N/A | ||||||||||||
| Date of announcement of the Board of Shareholders on securities investment approval (if any) | N/A | ||||||||||||
Note: In 2018, Huadong Medicine Investment Holding (Hong Kong) Co., Ltd., a subsidiary of the Company, invested USD 3 millionto purchase 218,102 preferred shares of RAPT Therapeutics, Inc. in C-2 series. RAPT Therapeutics, Inc. (stock code: RAPT) waslisted on the NASDAQ Stock Exchange on October 30, 2019. Up to now, Huadong Medicine Investment Holding (Hong Kong) Co.,Ltd. holds 165,002 RAPT shares after reducing some of its shares, accounting for 0.575% of the total shares of RAPT Therapeutics,Inc.
(2) Derivatives investment
□ Applicable √ N/A
No such case during the reporting period.
VII. Major assets and equity sales
1. Major assets sales
□ Applicable √ N/A
No such case during the reporting period.
2. Major equity sales
□ Applicable √ N/A
VIII. Analysis of wholly-partially owned and shareholding companies
√ Applicable □ N/A
Main subsidiaries and the shareholding companies that have an impact on the Company’s net profit of more than 10%
Unit: RMB yuan
| Company name | Company type | Main business | Registered capital | Total assets | Net assets | Operating revenue | Operating profit | Net profit |
| Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. | Subsidiary | Production and management of Traditional Chinese and Western raw medicines and preparations, and health care products | 872,308,130 | 10,842,477,302.54 | 7,154,596,771.52 | 5,424,176,089.31 | 1,351,726,436.61 | 1,192,375,260.78 |
| Huadong Ningbo Medicine Co., Ltd. | Subsidiary | Sales of biological products as proxy | 5,000,000 | 1,002,680,433.29 | 614,591,609.26 | 569,093,932.01 | 68,384,569.49 | 50,333,683.31 |
| Huadong Medicine Wenzhou Co., Ltd. | Subsidiary | Wholesale of TCM materials, TCM decoction pieces, chemical preparations, etc. | 61,300,000 | 1,297,079,120.10 | 255,691,676.70 | 1,294,102,662.82 | 34,340,365.65 | 24,584,261.31 |
| Huadong Medicine Supply Chain Management (Hangzhou) Co., Ltd. | Subsidiary | Warehousing and storage services | 50,729,863 | 283,569,835.84 | 135,556,348.55 | 84,045,782.21 | 10,619,118.24 | 6,166,445.05 |
| Sinclair Pharma Limited | Sub-subsidiary | R&D, production and sales of aesthetic medicine products | 219,962,963.92 | 1,592,584,834.52 | 474,560,100.47 | 276,081,206.58 | -47,618,961.79 | -52,918,540.05 |
Acquisition and disposal of subsidiaries during the reporting period
√ Applicable □ N/A
| Name of company | Methods of acquisition and disposal of subsidiaries during the reporting period | Impact on the overall production, operation and performance |
| Zhejiang Doer Biologics Corporation | Acquisition | Polyclonal antibody technology platform |
| High Technology Products, S.L.U. | Acquisition | International business expansion for the Company’s energy source aesthetic medicine products |
IX. Structured entities controlled by the Company
□ Applicable √ N/A
X. Research and development (R&D)
(1) Overall situation of R&D
With “scientific research-based, patient-centered” as the corporate philosophy, the Companycontinued to increase investment in R&D, and continuously enriched its arrangements in the R&Dof innovative drug pipelines. During the reporting period, the Company invested RMB536 millionin the R&D of the pharmaceutical industry, an increase of 6.38% year on year. The R&D of theCompany mainly involved the following aspects:
1) Continued to practice the new drug R&D model which combines independent R&D +cooperative development + product license-in, tracked the latest international drug actionmechanism and target as well as advances in clinical application research, and accelerated thedevelopment of innovative drugs and the cooperation on and introduction of innovative drugprojects at home and abroad.
Completed the pipeline layout of innovative products in the fields like endocrine/metabolism,tumor, and autoimmune and obtained the approval regarding a number of innovative drug projectswith independent intellectual property rights; covered three major drug molecular entities from allaspects: NCE small molecules, biological macromolecules and peptides;
2) Focused on varieties with superior clinical effect and pharmacy for special population,accelerated the R&D of generic drugs with high technical barrier and improved new drugs (505b
(2)), and initiated key projects centering on autoimmunity, endocrine and anti-tumor fields duringthe reporting period;
3) Continued to improve the process and quality level of bulk drugs and preparations, reducedthe cost, actively developed dosage forms of on-line products, and strengthened the marketcompetitiveness; and
4) Strengthened the evaluation on the comprehensive dynamic of varieties under research, andensured the R&D progress of key varieties under research to the greatest extent through the priorityranking of ongoing projects and the rational allocation of R&D resources.
(2) R&D of projects regarding major innovative drugs and biosimilars
The Company has drawn up a strategic plan for the development of innovative drugs for thenext five years, clearly defined the key direction and number of innovation projects for each yearduring the planning period centering on the existing therapeutic fields, and proposed that no lessthan 15 innovative varieties (including original new drugs, improved new drugs, innovative medicaldevices and high-end aesthetic medicine products) should be established and reserved annuallyduring the planning period. During the reporting period, the Company actively boosted the clinicalresearch on innovative drugs under research and key biosimilars. In addition, the Company activelyexplored and learned from the international advanced innovative drug R&D system building,continuously optimized and adjusted its overall R&D system structure, and improved the functionalmodules on the R&D of innovative projects through the introduction of high-end R&D personnel,to achieve the objectives on the strategic planning of the Company’s innovative projects.
(3) Progress on the clinical research of key innovative drugs, innovative medical devicesand biosimilars
From 2020, the Company began to streamline the R&D pipeline of the innovative drug sector,adjust the organizational structure of innovative drug R&D, and introduce high-level external R&Dpersonnel. The Company introduced first-in-class or best-in-class drugs at home and abroad in thethree core areas of anti-tumor, endocrine and autoimmunity. At present, the Company hasinnovative drugs and key biosimilars in those three areas.
Diabetes
1) TTP273: The world’s first oral GLP-1 receptor agonist small-molecule innovative drug, iscurrently undergoing multi-regional phase II clinical trials in the Chinese mainland and Taiwanregion. It is expected that the phase II clinical work will be completed by the end of 2021 and thephase III trial will start in 2022;
2) Semaglutide injection: GLP-1 receptor agonist, a product jointly developed by the Companyand its partially-owned company, Peg-Bio Biopharm Co., Ltd. (Chongqing), which is undergoingexperiments on animals. It is planned that the investigational new drug (IND) domestic clinical trialapplication will be launched in 2021;
3) Liraglutide injection: GLP-1 receptor agonist, is undergoing phase III clinical research forindications for diabetes and weight loss in China. The phase III clinical trial on the indications fordiabetes has basically been completed, and it is expected that the application for registration will besubmitted in the third quarter of 2021. The registration regarding the indications for weight loss willbe submitted before the end of 2021; and
4) The Company has paid attention to the latest R&D progress in the field of diabetes, and
actively planned the global distribution of innovative drugs. It introduced the product SCO-094 ofSCOHIA PHARMA, Inc. (Japan) under the development in phase I clinical trial, which is a dualagonist of GLP-1R and GIPR targets used for the treatment of such diseases as type 2 diabetes,obesity and non-alcoholic steatohepatitis.Tumor
1) HDM2002 (IMGN853): The world’s first ADC drug under research for FRα-positiveovarian cancer. The clinical trials of HDM2002 (including MRCT phase III clinical and PKbridging trials) have received approval in China, and various pre-clinical preparations are currentlybeing promoted as planned. The trials are expected to begin in the second half of 2021. Anotherapplication for the single-arm clinical trial of the drug in China was approved in July 2021 and isexpected to begin in early 2022; and
2) Mefatinib: Mefatinib for the treatment of advanced non-small cell lung cancer is underphase III clinical trial and the enrollment of the subjects for the phase III clinical trial has beencompleted. It is expected that the phase III clinical trial will end and that the application forregistration will be submitted before the end of 2021.
Autoimmunity
1) HDM3002 (PRV-3279): A product under research of Provention Bio (USA). The Companyintroduced it for the treatment of systemic lupus erythematosus (SLE) and for preventing orreducing the immunogenicity of gene therapy. The phase II international multi-center clinicalresearch of this product is underway. At present, pre-IND materials have been submitted in China;and
2) HDM3001 (QX001S): A biosimilar of the original drug ustekinumab (Stelara?) jointlydeveloped by the Company and its partially-owned company Qyuns Therapeutics, used to treatmoderate-to-severe psoriasis of adults. The phase III clinical trial of the drug is underway.
Other innovative drugs and major biosimilars
1) HD-NP-102 (MB102, dynamic TGFR monitoring system): The renal function is evaluatedthrough real-time monitoring of glomerular filtration rate. With its accurate diagnosis and riskassessment of early renal injury, the product is of ground-breaking clinical significance. Theapplication for carrying out the international multi-center phase III clinical trial of MB102 injection(fluorescent tracer), class 1 new drug used in the monitoring system, has been approved by NMPA.The drug will officially enter the clinical stage in the second half of 2021;
2) Other varieties of biosimilars: Clinical trials of ranibizumab injection were approved inApril 2021. Insulin degludec injection and insulin aspart injection are under preclinical study; and
3) Arrangement of R&D of early innovative drugs: Drug screening and activitycharacterization regarding oral GLP-1 innovative drugs for the treatment of type 2 diabetes,anti-tumor projects including CDK targeted drugs and innovative drugs such as PROTAC and ADCare underway as planned.
(4) Progress of R&D of major generic drugs
During the reporting period, the Company conducted earnest dynamic evaluation and combingof the existing generic drug varieties under research, and further clarified the varieties to be focusedand prioritized. The progress regarding the key varieties is as follows:
1) Diabetes: The production of Metformin Hydrochloride and Empagliflozin Tablets (5/500mg)was approved in June 2021. Sitagliptin Phosphate/Metformin Hydrochloride Tablets (50/850mg)and Canagliflozin Tablets (specifications: 0.1g, 0.3g) have been declared for production.Pioglitazone Hydrochloride and Metformin Hydrochloride Tablets (15/850mg) is under pilot scaleproduction;
2) Immunity: Tacrolimus extended-release capsules, tablets, granules and ointment are underpilot scale production. The supplement materials of the ANDA for Tacrolimus have been submitted,and FDA priority review has been accepted;
3) Anti-tumor: The production of letrozole tablets was approved in May 2021. Ibrutinibcapsule is under laboratory research. Olaparib tablet is under the pilot scale production. The on-siteinspection regarding sorafenib tosylate tablets (0.2g) is pending;
4) Antibiotics: The production of Micafungin Sodium for Injection (50mg) was approved inJune 2021.The project of BHFXG-06 was initiated. The information for ANDA application forCaspofungin Acetate for Injection (50mg/vial) is in preparation. The ANDA regarding CaspofunginAcetate for Injection (70mg/vial) is under process validation. The amendment of preparation andAPI regarding the ANDA for Daptomycin for Injection (500mg/vial) have been completed;
5) Digestion: The production of Omeprazole and Sodium Bicarbonate Capsule (20/1100mg)was approved in June 2021; and
6) Cardiovascular: The materials regarding the ANDA application for Fondaparinux Sodiumfor Injection are in preparation; Macitentan Tablet (10mg) has been filed for production, and theon-site inspection is in the preparatory stage.
(5) Progress of patent
The Company has attached great importance to the protection of its intellectual property rightsand application of results in recent years, and the number of patent applications and grants issteadily increasing. The Company has applied for more than 600 patents at home and abroad overthe years, of which more than 280 were granted. Hangzhou Zhongmei Huadong Pharmaceutical Co.,
Ltd., a wholly-owned subsidiary of the Company, is a national IP demonstration enterprise. InNovember 2014, the Company passed the external audit of Zhongzhi (Beijing) Certification Co.,Ltd., becoming one of the 147 enterprises who have firstly passed the standard implementationcertification. In 2020, the Company successfully passed the examination review on supervising thestandard implementation of corporates’ intellectual property.
During the reporting period, the Company’s patent application and maintenance proceededsmoothly. Zhongmei Huadong, a wholly-owned subsidiary of the Company, applied and submittedmore than 40 patents, among which more than 30 were utility patents, and 9 were authorized inChina. In May 2021, the utility patent “Enzyme for synthesizing and metabolizing inosinemonophosphate of Cordyceps sinensis (Berk.) Sacc. Hirsutella sinensis and application thereof” ofZhongmei Huadong was awarded China Patent Excellence Award, with the patent number:
ZL201110267161.3.
(6) Building of a R&D ecosystem
The Company has invested, held shares in and incubated a number of domestic biotechnologycompanies with leading technology. For example, it invested in Peg-Bio Biopharm featuring apeptide technology platform, Qyuns Therapeutics, an antibody company focusing on immunediseases, and Nuoling Biomedical Technology featuring ADC linker and coupling technology; itincubated Huida Biotech which has a full line of toxin ingredients used to develop ADC drugs; andit holds stakes in Doer Biologics which focuses on the development of a Polyclonal antibodyplatform. Through a series of investments and acquisitions, the Company has gradually formed itsown medical R&D ecosystem. Relying on Huida Biotech’s antibody-conjugated drug toxin libraryconstruction technology, Qyuns Therapeutics’ monoclonal antibody R&D and productive capacity,and Nuoling Biomedical Technology’s polymer linker coupling technology, the Company has theability to carry out the R&D of all ADC components. Regarding R&D arrangements, the Companyfollows the principle of “division of labor and cooperation, collaboration and win-win”. That is,through cooperation, all enterprises can interact on their technologies and help each other achievedevelopment and innovation, further allowing the rapid improvement of the Company’s overallR&D capability.
XI. Risks and Countermeasures
1. Industry policies and market risks
At present, China has continuously deepened reform in the field of medicine and health, andvarious policies have been introduced intensively. Policies such as national centralized purchasing,generic drug consistency evaluation, two-vote system, new drug approval, control of the proportionof hospital drugs, secondary price negotiation in hospitals, and close medical association will have asignificant impact on the R&D, production, and circulation of drugs. At the same time, with theimplementation of medical insurance fee control, the reform of payment methods, and the furtherimplementation of the generic drug centralized purchasing policy, some drugs will face the risk offurther price reduction.
Countermeasures: The Company will pay close attention to, analyze and grasp major nationalmedicine policies and industry development trends, strengthen the layout of innovative varieties andR&D investment through endogenous development and outward extension, reduce production andoperation risks through lean production, fully implement the international development strategy andimprove the technological quality advantages of products with international standards. It will
continue to tap the advantageous products and subdivisions of aesthetic medicine to create newprofit points. It will vigorously expand grassroots communities and OTC markets, and increase thecoverage of primary and retail terminal markets to maintain stable growth in operations.
2. New drug R&D risk
New drug R&D involves a long cycle, large investment and many uncertainties. In the R&Dprocess, there are also risks such as shortage of high-level talents, failure to obtain registration andapproval for new drug R&D due to curative effect or safety reasons. After new drugs hit the market,there are also risks such as market demand test, purchasing by bidding, medical insurance paymentaccess, and market competition for similar products. In addition, the investment in R&D will alsobring certain pressure to the realization of the Company’s current operating objectives.Countermeasures: The Company will continue to increase investment in new drug R&D,optimize the innovation mechanism, improve the scientific new drug research evaluation anddecision-making system, and establish close ties with well-known R&D institutions at home andabroad, focus on the core treatment fields, continue to enrich and optimize the product pipelinesthrough independent project establishment and external introduction, vigorously develop innovativedrugs and generic drugs with high technical barriers, and gradually eliminate the backward varietiesthat are not competitive in the market, increase the introduction of high-level research personnel,build a research team that covers the entire development cycle of new drugs, and strengthen thetraining and encouragement of core technical personnel, and accelerate the construction ofhigh-standard medicine R&D centers and pilot test bases.
3. Price reduction risk
With the intensified competition in the medicine market and the further promotion of thenational centralized purchasing policy, domestic medicine enterprises will face the pressure ofpolicy-based price reduction for a long time. There will be more competitive manufacturers ofsimilar products, leading to the risk of failure in bidding.
Countermeasures: Focusing on scientific R&D and technological innovation, the Companywill improve the technological quality advantages of its products with international standards,strengthen internal management and technological upgrading, strengthen cost competitiveadvantages, carry out marketing assessment and incentives and channel sinking, continue to expandthe professional promotion team of county-level markets, vigorously expand primary communities
and OTC markets, and increase the coverage of primary and retail terminal markets to maintain stablemarket growth.
Section IV. Corporate Governance
I. Annual General Meeting and Extraordinary General Meetings convened during thereporting period
1. Annual General Meeting convened during the current reporting period
| Meeting | Nature | Proportion of participating investors | Convened Date | Disclosure Date | Disclosure Index |
| 2020 Annual General Meeting of Shareholders | Annual General Meeting of Shareholders | 59.20% | May 21, 2021 | May 21, 2021 | No. 2021-045; www.cninfo.com.cn |
2. Extraordinary general meetings convened at the request of preferred shareholders with resumed votingrights
□ Applicable √ N/A
II. Change of directors, supervisors and senior managers
□ Applicable √ N/A
There are no changes of directors, supervisors and senior management personnel during the reporting period (referring to 2020annual report).
III. Profit distribution and capitalization of capital reserves plan or proposal for the currentreporting period
□ Applicable √ N/A
The Company did not plan to distribute cash dividends, send bonus shares, or convert capital reserve into share capital during thefirst half of the year.IV. The implementation of Equity Incentive Plan, Employee Stock Incentive Plan, or otherincentive plans
□ Applicable √ N/A
No such case during the reporting period.
Section V. Environmental and Social ResponsibilityI. Significant environmental problems
Whether the Company and its subsidiaries are the key pollutant discharging units announced by the environmental protectionauthorities
√ Yes □No
| Name of the company or subsidiary | Name of major pollutants | Discharge type | Number of discharge outlets | Distribution of discharge outlets | Concentration of discharge | Discharge standard of pollutants | Total discharge | Approved total discharge | Excessive discharge |
| Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. | Water pollutant: PH value | Intermittent discharge | 1 | Front gate, 866 Moganshan Road | 7.56 | 6-9 | / | / | None |
| Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. | Water pollutant:: COD | Intermittent discharge | 1 | Front gate, 866 Moganshan Road | 79.6mg/l | 500mg/l | 25.3 tons | 475.5 tons/year | None |
| Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. | Water pollutant: ammonia nitrogen | Intermittent discharge | 1 | Front gate, 866 Moganshan Road | 0.998mg/l | 35mg/l | 0.317 tons | / | None |
| Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. | Solid pollutant: hazardous solid waste | Legal disposal by entrusted qualified units | 2 | In the factory at 866 Moganshan Road | / | / | 1885.19 tons | / | None |
| Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. | Solid pollutant: general solid waste | Legal disposal by entrusted qualified units | 2 | In the factory at 866 Moganshan Road | / | / | 1306.6 tons | / | None |
| Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. | Air pollutant: nitrogen oxide | Organized emission | 1 | Roof of the boiler room in Building No. 25 | 26.5mg/ m? | 60mg/ m? | 1.27 tons | 17.7 tons/year | None |
| Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. | Air pollutant: sulfur dioxide | Organized emission | 1 | Roof of the boiler room in Building No. 25 | 3 mg/ m? | 50mg/ m? | 0.144 tons | / | None |
| Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. | Air pollutant: dust and fume | Organized emission | 1 | Roof of the boiler room in Building No. 25 | 4.6mg/ m? | 20mg/ m? | 0.221 tons | / | None |
| Huadong Medicine (Xi’an) Bohua Pharmaceutical Co., Ltd. | Water pollutant: PH value | Intermittent discharge | 1 | Along National Highway 310, Liuye River, Huayin City | 8.2 | 6-9 | / | / | None |
| Huadong Medicine (Xi’an) Bohua Pharmaceutical Co., Ltd. | Water pollutant: COD | Intermittent discharge | 1 | Along National Highway 310, Liuye River, Huayin City | 11.22mg/l | 50mg/l | 0.1 tons | 3 tons | None |
| Huadong Medicine (Xi’an) Bohua Pharmaceutical Co., Ltd. | Water pollutant: ammonia nitrogen | Intermittent discharge | 1 | Along National Highway 310, Liuye River, Huayin City | 0.37mg/l | 8mg/l | 0.004 tons | 0.48 tons | None |
| Huadong Medicine (Xi’an) Bohua Pharmaceutical Co., Ltd. | Water pollutant: total nitrogen | Intermittent discharge | 1 | Along National Highway 310, Liuye River, Huayin City | 6.26mg/l | 15mg/l | 0.06 tons | / | None |
| Huadong Medicine (Xi’an) Bohua Pharmaceutical Co., Ltd. | Solid pollutant: hazardous waste | Compliant disposal by entrusted qualified units | 3 | In the company | / | / | 172.06 tons | / | None |
| Huadong Medicine | Air pollutant: | Organized emission | 1 | Raw medicine | / | 60mg/ m? | / | / | None |
| (Xi’an) Bohua Pharmaceutical Co., Ltd. | volatile organic compound | No.1 workshop | |||||||
| Huadong Medicine (Xi’an) Bohua Pharmaceutical Co., Ltd. | Air pollutant: hydrogen chloride | Organized emission | 1 | Raw medicine No.1 workshop | / | 30mg/ m? | / | / | None |
| Huadong Medicine (Xi’an) Bohua Pharmaceutical Co., Ltd. | Air pollutant: hydrogen chloride | Organized emission | 1 | Raw medicine No.2 workshop | / | 20mg/ m? | / | / | None |
| Huadong Medicine (Xi’an) Bohua Pharmaceutical Co., Ltd. | Air pollutant: particulate matter | Organized emission | 1 | Raw medicine No.2 workshop | / | 20mg/ m? | / | / | None |
| Huadong Medicine (Xi’an) Bohua Pharmaceutical Co., Ltd. | Air pollutant: sulfuric acid mist | Organized emission | 1 | Raw medicine No.2 workshop | / | 45mg/ m? | / | / | None |
| Jiangsu Joyang Laboratories Co., Ltd. | Water pollutant: PH value | Intermittent discharge | 1 | 9 Haidubei Road | 7.95 | 6-9 | / | / | None |
| Jiangsu Joyang Laboratories Co., Ltd. | Water pollutant: COD | Intermittent discharge | 1 | 9 Haidubei Road | 250mg/l | 500mg/l | 5.83 tons | 51.4173 tons/year | None |
| Jiangsu Joyang Laboratories Co., Ltd. | Water pollutant: ammonia nitrogen | Intermittent discharge | 1 | 9 Haidubei Road | 1.41mg/l | 35mg/l | 0.0329 tons | 3.6819 tons/year | None |
| Jiangsu Joyang | Water pollutant: | Intermittent discharge | 1 | 9 Haidubei Road | 104mg/l | 120mg/l | 2.424 tons | 24.968 tons/year | None |
| Laboratories Co., Ltd. | SS | ||||||||
| Jiangsu Joyang Laboratories Co., Ltd. | Solid pollutant: hazardous solid waste | Legal disposal by entrusted qualified units | / | In the factory at 9 Haidubei Road | / | / | 728.111 tons | 3148.7 tons/year | None |
| Jiangsu Joyang Laboratories Co., Ltd. | Air pollutant: particulate matter | Organized emission | 5 | Dosing section of workshop 101, fermentation section of workshop 101, dosing section of workshop 104 (shared by 107 and 108), fermentation section of workshop 104 (shared by 107 and 108), and drying section of workshop 104 (shared by 107 and 108) | 6.2mg/m? | 10mg/m? | 0.416 tons/year | 0.797 tons/year | None |
| Jiangsu Joyang Laboratories Co., Ltd. | Air pollutant: ethyl acetate | Organized emission | 3 | Extraction of workshop 101, Extraction of workshop 104, and workshop 303 | 0.048mg/m? | 50mg/m? | 0.007 tons/year | 1.074 tons/year | None |
Construction and operation of pollution prevention and control facilities
1. Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd.
(1) Waste water
| Name of pollution prevention and control facilities | Treatment process | Processing capacity | Time of operation | Status of operation |
| Waste water treatment system of the old sewage station | Facultative + fluidized bed | Original 600 tons/day; 800 tons/day after technical transformation | November 1993; technical transformation in 2007 | Normal |
| Waste water treatment system of the new sewage station | Anaerobic (IC tower)+ facultative +CASS+ air flotation | 2,200 tons/day | December 2001; technical transformation in 2014 (IC and air flotation added) | Normal |
(2) Waste gas
| Name of pollution prevention and control facilities | Treatment process | Processing capacity CMH | Time of operation | Status of operation |
| DA010（35#-1） | Level 2 water spraying + surface cooling + activated carbon adsorption/desorption | 15000 | 2017 | Normal |
| DA011（35#-2） | Level 2 water spraying | 22000 | 2013 | Normal |
| DA012（40#-2） | Activated carbon + horizontal spraying | 6000 | 2019 | Stopped |
| DA013（32#-1） | Level 2 alkali liquor spraying | 22000 | 2013 | Stopped |
| DA014（36#-1) | Level 2 water spraying + surface cooling + low-temperature plasma + Level 1 water spraying | 27000 | 2017 | Normal |
| DA015（40#-1） | Level 2 water spraying | 24200 | / | Normal |
| DA016（18#-1） | Two levels of alkali liquor spraying + all-in-one (photocatalytic oxidation + plasma + activated carbon) + inorganic nano catalytic deodorization equipment + Level 1 water spraying | 16000 | 2019 | Normal |
| DA017（19#-1） | Combustion tower | / | 2018 | Stopped |
| DA018（19#-2） | Combustion tower | / | 2018 | Stopped |
| DA019（3#-1） | Level 1 water spraying + photocatalytic oxidation | 20000+52000 | 2019 | Normal |
| DA020（36#-2） | Two levels of water spraying + condensation+ photocatalytic oxidation + activated carbon + inorganic nano-catalysis + water spraying | 10000 | 2019 | Normal |
| DA021（16#-1） | Level 1 water spraying + Level 1 alkali liquor spraying | 12000 | 2012 | Stopped |
| DA022（16#-2） | Level 1 water spraying + Level 1 plant oil and water spraying | 30000 | 2014 | Stopped |
| DA023（27#-1） | Condensation + Level 1 alkali liquor spraying + all-in-one + Level 1 alkali liquor spraying | 15000 | 2009 | Normal |
| DA024（33#-1） | Level 2 alkali liquor spray + condensate tank + common Level 1 alkali liquor spraying | 48000 | 2019 | Stopped |
| DA025（32#-2） | Dust removal with cloth bag + high-efficiency filter | / | 2017 | Stopped |
| DA026（34#-1） | Level 2 alkali liquor spraying | 54000 | 2008 | Stopped |
| DA027（7#-1） | Level 2 alkali liquor spraying | 26000 | 2015 | Normal |
| DA028（6#-1） | Level 1 water spraying | 12200 | 2016 | Normal |
| DA029（18#-2） | Level 2 alkali liquor spraying + photocatalytic oxidation + activated carbon + Level 1 alkali liquor spraying | 16000 | 2018 | Normal |
| DA030（18#-3） | Level 1 water spraying + Level 1 alkali liquor spraying | 5000 | 2017 | Normal |
| DA031（25#-2） | Low-nitrogen combustion + high-altitude emission | 8000 | 2009 (The low nitrogen transformation completed in December 2019.) | Normal |
| DA032（25#-1） | Low-nitrogen combustion + high-altitude emission | 8000 | 2009 (The low nitrogen transformation completed in December 2019.) | Normal |
| DA033（1#-1） | Oil fume purifier | / | / | Normal |
| DA034（27#-2） | Two levels of water spraying + activated carbon adsorption/desorption | 15000 | 2011 | Normal |
| DA035（27#-3） | Photocatalytic oxidation + Level 1 alkali liquor spraying | 22300 | 2016 | Normal |
| DA036（8#-1） | Level 2 water spraying | 25000 | 2017 | Normal |
| DA037（13#-1） | Level 2 water spraying + surface cooling + activated carbon adsorption/desorption | 25000 | 2017 | Normal |
| DA038（28#-1） | Level 1 water spraying + photocatalytic oxidation | 22000 | 2011 | Normal |
| DA039（28#-2） | Level 2 water spraying + common photocatalytic oxidation | 48000 | 2011 | Normal |
| DA040（29#-1） | Level 1 water spraying + Level 1 alkali liquor spraying | 22000 | 2011 | Normal |
| DA041（33#-2） | Level 1 water spraying | 18600 | 2012 | Stopped |
| DA042（10#-1） | Level 1 water spraying | 20000 | 2016 | Normal |
| DA043（15#-1） | Level 1 alkali liquor spraying + photocatalytic oxidation | 25000 | 2018 | Normal |
| DA044（43#-1） | Level 1 alkali liquor spraying + Level 1 water spraying | 45000 | 2014 | Normal |
| DA045（46#-1） | Level 1 water spraying | 3000 | 2015 | Normal |
| DA046（46#-2） | Level 1 water spraying | 25000 | 2015 | Normal |
| DA047（46#-3） | Level 1 water spraying | 30000 | 2015 | Normal |
| DA048（23#-1） | Two levels of water spraying | 7000 | 2019 | Stopped |
Note: Waste gas treatment process of 107 fermentation section: when the fermentation tank is not disinfected, the waste gas isdischarged at high altitude after level 3 alkali spray; when the fermentation tank is disinfected, the waste gas is first condensed andthen treated with level 1 alkali spray, and then discharged at high altitude.
(3) Solid waste
| Name of pollution prevention and control facilities | Treatment process | Processing capacity | Time of operation | Status of operation |
| Hazardous waste warehouse | Standardized storage | 160 tons | March 2012 | Standardized storage; legal disposal by qualified units |
| Standardized storage | 240 tons | March 2010 | ||
| General solid waste yard | Standardized storage | 7 tons | March 2010 | Standardized storage; legal disposal by qualified units |
| Standardized storage | 30 tons | June 2004 |
2. Huadong Medicine (Xi’an) Bohua Pharmaceutical Co., Ltd.
(1) Waste water
| Name of pollution prevention and control facilities | Treatment process | Processing capacity | Time of operation | Status of operation |
| Waste water treatment system of the sewage station | Ozone oxidation + facultative + aerobic + MBR | 250 tons/day | July 2012 | Normal |
(2) Waste gas
| Name of pollution prevention and control facilities | Treatment process | Time of operation | Status of operation |
| Waste gas treatment unit of raw medicine No. 1 workshop | Alkali spray + dry filter (filter cotton) +UV photolysis + activated carbon adsorption | October 2020 | Normal |
| Waste gas treatment unit of raw medicine No. 2 workshop | Two alkali spray + dry filter +UV photolysis + activated carbon | November 2019 | Normal |
(3) Solid waste
| Name of pollution prevention and control facilities | Treatment process | Storage capacity | Time of operation | Status of operation |
| Hazardous waste warehouse | Standardized storage | 60 tons | January 2012 | Standardize storage; legal disposal by entrusted qualified units |
3. Jiangsu Jiuyang Biopharm Co., Ltd.
(1) Waste water
| Name of pollution prevention and control facilities | Treatment process | Processing capacity | Time of operation | Status of operation |
| Waste water treatment system of the sewage station | Air floatation tank + hydrolysis acidification + IC tower + UASB pool + A/O pool + O pool + secondary sedimentation tank | 300 tons/day | December 2014 | Normal |
(2) Waste gas
| Name of pollution prevention and control facilities | Treatment process | Processing capacity | Name of pollution prevention and control facilities | Treatment process |
| Waste gas treatment unit of the extraction section of workshop 101 | Level 1 water spray + moisture separator + photocatalytic oxidation + level 2 activated carbon adsorption + high-altitude discharge via 25m exhaust pipe | 10000 | 2014 | Normal |
| Waste gas treatment unit of the fermentation section of workshop 101 | Level 1 water spray + moisture separator + level 2 activated | 20000 | 2019 | Normal |
| carbon adsorption + high-altitude discharge via 25m exhaust pipe | ||||
| Waste gas treatment unit of the drying section of workshop 101 | Level 1 water spray + moisture separator + level 2 activated carbon adsorption + high-altitude discharge via 25m exhaust pipe | 22000 | 2017 | Normal |
| Waste gas treatment unit of the dosing section of workshop 101 | Cyclone separator + level 1 water spray + high-altitude discharge via 15m exhaust pipe | 5000 | 2014 | Normal |
| Waste gas treatment unit of the fermentation section of workshop 104/107/108 | Level 1 water spray + moisture separator + level 2 activated carbon adsorption + high-altitude discharge via 25m exhaust pipe | 75000 | 2021 | Normal |
| Waste gas treatment unit of the extraction section of workshop 104 | Level 1 water spray + moisture separator + photocatalytic oxidation + level 2 activated carbon adsorption + high-altitude discharge via 25m exhaust pipe | 10000 | 2015 | Normal |
| Waste gas treatment unit of the dosing section of workshop 104/107/108 | Cyclone separator + level 1 water spray + high-altitude discharge via 15m exhaust pipe | 5000 | 2015 | Normal |
| Waste gas treatment unit of the drying section of workshop 104/107/108 | Level 1 water spray + moisture separator + level 2 activated carbon adsorption | 20000 | 2015 | Normal |
| Waste gas treatment unit of the pretreatment pool and hazardous waste warehouse of workshop 103, 303 | Level 1 water spray + moisture separator + photocatalytic oxidation + level 2 activated carbon adsorption + high-altitude discharge via 25m exhaust pipe | 40000 | 2019 | Normal |
| Waste gas treatment unit of workshop 106 | Level 1 water spray + moisture separator + photocatalytic oxidation + level 2 activated carbon adsorption + high-altitude discharge via 25m exhaust pipe | 10000 | 2015 | Normal |
| Waste gas treatment unit of the extraction section of workshop 107 | Level 1 water spray + moisture separator + photocatalytic oxidation + level 2 activated carbon adsorption + high-altitude discharge via 25m exhaust pipe | 20000 | 2019 | Normal |
| Waste gas treatment unit of the extraction section of workshop 108 | Level 1 water spray + moisture separator + photocatalytic oxidation + level 2 activated carbon adsorption + high-altitude discharge via 25m exhaust pipe | 40000 | 2019 | Normal |
| Waste gas treatment unit of workshop 109 | Level 1 water spray + high-altitude discharge via 25m exhaust pipe | 20000 | 2019 | Normal |
| Waste gas treatment unit of sewage station 303 | Level 1 water spray + moisture separator + photocatalysis + high-altitude discharge via 25m exhaust pipe | 15000 | 2021 | Normal |
(3) Solid waste
| Name of pollution prevention and control facilities | Treatment process | Processing capacity | Time of operation | Status of operation |
| Hazardous waste warehouse | Standardized storage | 300 tons | December 2020 | Standardized storage; legal disposal by entrusted qualified units |
| Domestic waste yard | Standardized storage | 3 tons | March 2015 | Chengdong Garbage Disposal Station |
Environmental impact assessment of construction projects and other administrative permits forenvironmental protection
1. Zhongmei Huadong completed the independent inspection and acceptance for the environmentalprotection upon completion of the technical transformation project of the macromolecular medicine R&Dlaboratory (pilot test), and disclosed the acceptance information in the National Environmental Protection FinalInspection Information System for Construction Projects.
2. All construction projects of Huadong Medicine (Xi’an) Bohua Pharmaceutical Co., Ltd. have beendeclared, constructed and accepted in strict accordance with the requirements of “three simultaneous items” forenvironmental protection, all of which have obtained the official approval of environmental assessment,conforming to the requirements of environmental impact assessment of construction projects.
On June 13, 2019, Huadong Medicine (Xi’an) Bohua Pharmaceutical Co., Ltd. obtained the approval(W.H.P.F [2019] No.49) from Weinan Environmental Protection Bureau for the environmental impact assessmentreport on domperidone, seflurane and topiramate pilot test reform projects.
In November 2019, Huadong Medicine (Xi’an) Bohua Pharmaceutical Co., Ltd. completed theenvironmental impact post assessment report and submitted it to Weinan Ecological Environment Bureau forfiling, with the filing number: W.H.P.B (2020) No.3.
3. All construction projects of Jiangsu Jiuyang Biopharmaceutical Co., Ltd. have been declared, constructedand accepted in strict accordance with the requirements of “three simultaneous items” for environmentalprotection, all of which have obtained the official approval of environmental assessment, conforming to therequirements of environmental impact assessment of construction projects. Jiangsu Jiuyang BiopharmaceuticalCo., Ltd. has obtained the sewage discharge permit and the discharge permit of urban sewage into the drainagepipe network in accordance with the environmental protection requirements.
Emergency plan for sudden environmental incidents
1. Zhongmei Huadong completed the filing with Gongshu Branch of Hangzhou Ecological EnvironmentBureau on February 2, 2021.
2. Huadong Medicine (Xi’an) Bohua Pharmaceutical Co., Ltd. prepared an Emergency Plan for SuddenEnvironmental Incidents, with the filing No.61050020183022.
3. Jiangsu Jiuyang Biopharmaceutical Co., Ltd. formulated its Emergency Plan for Sudden EnvironmentalIncidents which was first prepared in October 2017. The 2021 plan has been renewed and reviewed, and is beingfiled.
The Emergency Plan for Sudden Environmental Incidents of Jiangsu Jiuyang Bio-pharmaceutical Co., Ltd.can improve the company’s ability to cope with and prevent environmental emergencies. In May 2021, thecompany organized a drill for its comprehensive emergency plan for safety and environmental protection,standardized the emergency handling of sudden environmental incidents, minimized the hazards to human healthand the environment caused by the leakage of environmental risk substances into the air, water or soil due to fire,explosion, leakage or other unexpected emergencies, and enhanced the emergency response capability forenvironmental pollution incidents.
Environmental self-monitoring scheme
1. On December 25, 2020, Zhongmei Huadong completed the change and continuation of the pollutantdischarge permit, as well as and the revision of the self-monitoring scheme.
2. Huadong Medicine (Xi’an) Bohua Pharmaceutical Co., Ltd. prepared the “Self-monitoring Scheme forPollution Sources” which was put on record in the environmental protection authorities, and all the monitoringdata was reported according to the regulations.
3. Jiangsu Jiuyang Biopharmaceutical Co., Ltd. prepared the “Self-monitoring Scheme for Pollution Sources”which was put on record in the environmental protection authorities.
The scheme was prepared in accordance with the relevant national requirements for environmental protection,and the company reported all the monitoring data every day according to the regulations.
Administrative penalties imposed for environmental issues during the reporting period
| Name of company or subsidiary | Reason for penalty | Violation | Result of penalty | Impact on the production and operation of listed | Corrective measures of the company |
| company | |||||
| Jiangsu Jiuyang Biopharmaceutical Co., Ltd. | Discharged industrial wastewater that failed to meet the process requirements to the centralized sewage treatment facilities | The concentration of ammonia nitrogen in the wastewater from the general discharge outlet failed to meet the treatment process requirements of Sheyang County Wastewater Treatment Co., Ltd. | A fine of 100,000 yuan | Did not constitute a significant impact | The company immediately stopped discharging sewage and re-processed the unqualified sewage. After the sewage reached the standard, the environmental protection authority sampled and tested it. After passing the test, the sewage was discharged according to regulations. |
Other environmental information that should be made public/
Other information related to environmental protectionZhongmei Huadong completes the carbon emission verification report during the period from July to Augustevery year according to the requirements of the superior environmental protection authorities, and reports it to thecarbon emission system of the ecological environment authority for filing.
II. Social responsibilitiesThe Company actively performed corporate social responsibilities, took the initiative toparticipate in social public welfare activities, and made a contribution to society with actions.In July 2021, many areas in Henan Province suffered from extremely heavy rainfall, whichcaused severe floods and heavy casualties and property losses. Zhongmei Huadong, the Company’swholly-owned subsidiary, immediately donated RMB2 million in cash to the Henan Red CrossSociety to support the flood relief and the construction of the post-disaster public health servicesystem in the province.In July 2021, Zhongmei Huadong, the Company’s wholly-owned subsidiary, donated RMB1million in cash to Zhejiang Shulan Charity Foundation to help poor patients with major diseases,especially those who need organ transplants or have other major diseases.
The Company actively responded to the “Connecting the Villages” activity organized by thegovernment, and launched targeted support projects. It formed a pair with Linqi Town, Chun’an
County, Hangzhou, and provided support to boost the economic and social development of LinqiTown through targeted poverty alleviation. From 2017 to 2020, the Company donated a total ofRMB1.2 million to the “Connecting the Villages” poverty alleviation project, and it is expected todonate another RMB300,000 in 2021.
Section VI. Important MattersI. Fulfilled and Unfulfilled commitments from the related committed parties such as theCompany’s actual controller, shareholders, related parties, acquirer(s), and the Companyduring the current reporting period
□ Applicable √ N/A
No such case during the reporting period.II. Controlling shareholder’s and related parties’ occupation of non-operating funds of thelisted companies
□ Applicable √ N/A
No such case during the reporting period.III. External guarantees in violation of provisions
□ Applicable √ N/A
No such case during the reporting period.IV. Employment and dismissal of accounting firmsWhether the half year report was audited
□ Yes √ No
The Company’s half year report was not audited.V. Explanation given by the Board of directors and the Board of Supervisors regarding the“non-standard auditor’s report” issued by the accounting firm for the current reportingperiod
□ Applicable √ N/A
VI. Explanation given by the Board of Directors regarding the “non-standard auditor’sreport” for the prior year
□ Applicable √ N/A
VII. Bankruptcy reorganization
□ Applicable √ N/A
No such case during the reporting period.
VIII. Litigations
Major litigation and arbitration
□ Applicable √ N/A
No such case during the reporting period.
Other litigations
√ Applicable □N/A
| Basic litigation (arbitration) information | Amount involved (unit: RMB10,000) | Whether estimated liabilities are formed as a result | Progress of litigation (arbitration) | Litigation (arbitration) result and impact | Litigation (arbitration) judgment execution | Disclosure date | Disclosure index |
| Summary of matters that do not meet the disclosure standards for major litigation (arbitration) (domestic) | 783.33 | No | Some cases are being filed, some are under trial, and some have taken effect | The summary of litigation matters has no material impact on the Company | Some judgments have taken effect and are under execution, some have not yet taken effect, some are pending, and some are in progress | Not meet the disclosure standards for major litigation | / |
| Summary of matters that do not meet the disclosure standards for major litigation (arbitration) (overseas) | 117.6 | No | In trial | The summary of litigation matters has no material impact on the Company | In trial, with no decision made | Not meet the disclosure standards for major litigation | / |
IX. Punishment and rectification
□ Applicable √ N/A
No such case during the reporting period.
X. Integrity of the Company and its controlling shareholder and actual controller
□ Applicable √ N/A
XI. Major related transactions
1. Transactions related to daily operations
√Applicable □N/A
| Related party | Relationship | Type of related transaction | Content of related transaction | Pricing principles for related transaction | Price of related transaction | Related transaction amount (ten thousand yuan) | Proportion in the amount of similar transactions | Approved transaction amount (ten thousand yuan) | Whether it exceeds the approved amount | Settlement method of related transaction | Available market prices of similar transactions | Date of disclosure | Disclosure index |
| Grandpharma (China) Co., Ltd. | Subsidiary of the Company’s controlling shareholder | Drug purchase | Drug purchase | Market price determined by the Company’s related transaction decision-making process | Market price | 3,831.33 | 0.33% | 7,500 | No | Cash, banker’s acceptance bill | Market price | April 21, 2021 | http://www.cninfo.com.cn |
| Hangzhou Jiuyuan Gene Engineering Co., Ltd. | Joint venture of the Company | Drug purchase | Drug purchase | Market price determined by the Company’s related transaction decision-making process | Market price | 3,006.94 | 0.26% | 4,500 | No | Cash, banker’s acceptance bill | Market price | April 21, 2021 | http://www.cninfo.com.cn |
| Sichuan Yuanda Shuyang Pharmac | Subsidiary of the Company’s | Drug purchase | Drug purchase | Market price determined by | Market price | 2,468.59 | 0.21% | 6,500 | No | Cash, banker’s acceptance bill | Market price | April 21, 2021 | http://www.cninfo.com.cn |
| eutical Co., Ltd. | controlling shareholder | the Company’s related transaction decision-making process | |||||||||||
| Beijing Grand Johamu Pharmaceutical Co., Ltd. | Subsidiary of the Company’s controlling shareholder | Drug purchase | Drug purchase | Market price determined by the Company’s related transaction decision-making process | Market price | 1,110.83 | 0.10% | 4,000 | No | Cash, banker’s acceptance bill | Market price | April 21, 2021 | http://www.cninfo.com.cn |
| Wuhan Grand Pharmaceutical Group Sales Co., Ltd. | Subsidiary of the Company’s controlling shareholder | Drug purchase | Drug purchase | Market price determined by the Company’s related transaction decision-making process | Market price | 1,037.95 | 0.09% | 2,000 | No | Cash, banker’s acceptance bill | Market price | April 21, 2021 | http://www.cninfo.com.cn |
| Hangzhou Grand Biologic Pharmaceutical Inc | Subsidiary of the Company’s controlling shareholder | Drug purchase | Drug purchase | Market price determined by the Company’s related | Market price | 920.86 | 0.08% | 2,000 | No | Cash, banker’s acceptance bill | Market price | April 21, 2021 | http://www.cninfo.com.cn |
| transaction decision-making process | |||||||||||||
| Penglai Nuokang Pharmaceutical Co. Ltd. | Subsidiary of the Company’s controlling shareholder | Drug purchase | Drug purchase | Market price determined by the Company’s related transaction decision-making process | Market price | 880.23 | 0.08% | 3,000 | No | Cash, banker’s acceptance bill | Market price | April 21, 2021 | http://www.cninfo.com.cn |
| Yunnan Leiyunshang Lixiang Pharmaceutical Co., Ltd. | Subsidiary of the Company’s controlling shareholder | Drug purchase | Drug purchase | Market price determined by the Company’s related transaction decision-making process | Market price | 850.27 | 0.07% | 2,000 | No | Cash, banker’s acceptance bill | Market price | April 21, 2021 | http://www.cninfo.com.cn |
| Shanghai Xudong Haipu Pharmaceutical Co., Ltd | Subsidiary of the Company’s controlling shareholder | Drug purchase | Drug purchase | Market price determined by the Company’s related transaction decision-making | Market price | 240.72 | 0.02% | 500 | No | Cash, banker’s acceptance bill | Market price | April 21, 2021 | http://www.cninfo.com.cn |
| process | |||||||||||||
| Leiyunshang Pharmaceutical Group Co. Ltd. | Subsidiary of the Company’s controlling shareholder | Drug purchase | Drug purchase | Market price determined by the Company’s related transaction decision-making process | Market price | 230.9 | 0.02% | 500 | No | Cash, banker’s acceptance bill | Market price | April 21, 2021 | http://www.cninfo.com.cn |
| Shenyang Yaoda Leiyunshang Pharmaceutical Co., Ltd. | Subsidiary of the Company’s controlling shareholder | Drug purchase | Drug purchase | Market price determined by the Company’s related transaction decision-making process | Market price | 221.82 | 0.02% | 700 | No | Cash, banker’s acceptance bill | Market price | April 21, 2021 | http://www.cninfo.com.cn |
| Guangdong Leiyunshang Pharmaceutical Co., Ltd. | Subsidiary of the Company’s controlling shareholder | Drug purchase | Drug purchase | Market price determined by the Company’s related transaction decision-making process | Market price | 206.18 | 0.02% | 350 | No | Cash, banker’s acceptance bill | Market price | April 21, 2021 | http://www.cninfo.com.cn |
| Xi'an Yuanda new | Subsidiary of the Compan | Drug purchase | Drug purchase | Market price determi | Market price | 104.13 | 0.01% | 300 | No | Cash, banker’s acceptan | Market price | April 21, 2021 | http://www.cninfo.c |
| Beilin Pharmaceutical Co., Ltd | y’s controlling shareholder | ned by the Company’s related transaction decision-making process | ce bill | om.cn | |||||||||
| Changshu Leiyunshang Pharmaceutical Co., Ltd. | Subsidiary of the Company’s controlling shareholder | Drug purchase | Drug purchase | Market price determined by the Company’s related transaction decision-making process | Market price | 70.47 | 0.01% | 200 | No | Cash, banker’s acceptance bill | Market price | April 21, 2021 | http://www.cninfo.com.cn |
| Changchun Leiyunshang Pharmaceutical Co., Ltd. | Subsidiary of the Company’s controlling shareholder | Drug purchase | Drug purchase | Market price determined by the Company’s related transaction decision-making process | Market price | 68.51 | 0.01% | 150 | No | Cash, banker’s acceptance bill | Market price | April 21, 2021 | http://www.cninfo.com.cn |
| Beijing Huajin Pharmaceutical Co., Ltd | Subsidiary of the Company’s controlling sharehol | Drug purchase | Drug purchase | Market price determined by the Company’s | Market price | 28.1 | 0.00% | 100 | No | Cash, banker’s acceptance bill | Market price | April 21, 2021 | http://www.cninfo.com.cn |
| der | related transaction decision-making process | ||||||||||||
| Hangzhou Huadong Medicine Group Guizhou TCM Development Co., Ltd. | Subsidiary of the Company’s second largest shareholder | Drug purchase | Drug purchase | Market price determined by the Company’s related transaction decision-making process | Market price | 24.82 | 0.00% | 150 | No | Cash, banker’s acceptance bill | Market price | April 21, 2021 | http://www.cninfo.com.cn |
| Xi'an Yuanda Detian Pharmaceutical Co., Ltd | Subsidiary of the Company’s controlling shareholder | Drug purchase | Drug purchase | Market price determined by the Company’s related transaction decision-making process | Market price | 5.41 | 0.00% | Yes | Cash, banker’s acceptance bill | Market price | April 21, 2021 | http://www.cninfo.com.cn | |
| Grandpharma Huangshi Feiyun Pharmaceutical Co., Ltd. | Subsidiary of the Company’s controlling shareholder | Drug sales | Drug sales | Market price determined by the Company’s related transaction decision | Market price | 3.29 | 0.00% | Yes | Cash, banker’s acceptance bill | Market price | April 21, 2021 | http://www.cninfo.com.cn |
| -making process | |||||||||||||
| Hangzhou Junlan Pharmaceutical Trading Co. Ltd. | Shareholding enterprise | Drug sales | Drug sales | Market price determined by the Company’s related transaction decision-making process | Market price | 4,526.18 | 0.26% | 14,000 | No | Cash, banker’s acceptance bill | Market price | April 21, 2021 | http://www.cninfo.com.cn |
| Leiyunshang Pharmaceutical Group Co. Ltd. | Subsidiary of the Company’s controlling shareholder | Drug sales | Drug sales | Market price determined by the Company’s related transaction decision-making process | Market price | 251.55 | 0.01% | 450 | No | Cash, banker’s acceptance bill | Market price | April 21, 2021 | http://www.cninfo.com.cn |
| Guangdong Leiyunshang Pharmaceutical Co., Ltd. | Subsidiary of the Company’s controlling shareholder | Drug sales | Drug sales | Market price determined by the Company’s related transaction decision-making process | Market price | 36.34 | 0.00% | 400 | No | Cash, banker’s acceptance bill | Market price | April 21, 2021 | http://www.cninfo.com.cn |
| Yunnan Leiyuns | Subsidiary of the | Drug sales | Drug sales | Market price | Market price | 66.06 | 0.00% | 250 | No | Cash, banker’s | Market price | April 21, 2021 | http://www.c |
| hang Lixiang Pharmaceutical Co., Ltd. | Company’s controlling shareholder | determined by the Company’s related transaction decision-making process | acceptance bill | ninfo.com.cn | |||||||||
| Changchun Leiyunshang Pharmaceutical Co., Ltd. | Subsidiary of the Company’s controlling shareholder | Drug sales | Drug sales | Market price determined by the Company’s related transaction decision-making process | Market price | 5.69 | 0.00% | Yes | Cash, banker’s acceptance bill | Market price | April 21, 2021 | http://www.cninfo.com.cn | |
| Changshu Leiyunshang Pharmaceutical Co., Ltd. | Subsidiary of the Company’s controlling shareholder | Drug sales | Drug sales | Market price determined by the Company’s related transaction decision-making process | Market price | 8.58 | 0.00% | Yes | Cash, banker’s acceptance bill | Market price | April 21, 2021 | http://www.cninfo.com.cn | |
| Hangzhou Jiuyuan Gene Engineering | Joint venture of the Company | Drug sales | Drug sales | Market price determined by the Compan | Market price | 0.66 | 0.00% | 600 | No | Cash, banker’s acceptance bill | Market price | April 21, 2021 | http://www.cninfo.com.cn |
| Co., Ltd. | y’s related transaction decision-making process | ||||||||||||
| Hangzhou Tangyangyuan Pharmaceutical Co., Ltd. | Joint venture of the Company | Drug sales | Drug sales | Market price determined by the Company’s related transaction decision-making process | Market price | 462.48 | 0.03% | 1,200 | No | Cash, banker’s acceptance bill | Market price | April 21, 2021 | http://www.cninfo.com.cn |
| Hangzhou Grand Biologic Pharmaceutical Inc. | Subsidiary of the Company’s controlling shareholder | Drug sales | Drug sales | Market price determined by the Company’s related transaction decision-making process | Market price | 74.1 | 0.00% | 150 | No | Cash, banker’s acceptance bill | Market price | April 21, 2021 | http://www.cninfo.com.cn |
| Grand Resources Group Co., Ltd. | Subsidiary of the Company’s controlling shareholder | Drug sales | Drug sales | Market price determined by the Company’s related transaction | Market price | 5.65 | 0.00% | Yes | Cash, banker’s acceptance bill | Market price | April 21, 2021 | http://www.cninfo.com.cn |
| decision-making process | |||||||||||||
| Hangzhou Jiuyuan Gene Engineering Co., Ltd. | Joint venture of the Company | House rental | House rental | Market price determined by the Company’s related transaction decision-making process | Market price | 6.42 | 0.00% | 5 | Yes | Cash, banker’s acceptance bill | Market price | April 21, 2021 | http://www.cninfo.com.cn |
| Beijing Yanhuang Real Estate Co., Ltd. | Subsidiary of the Company’s controlling shareholder | House leasing | House leasing | Market price determined by the Company’s related transaction decision-making process | Market price | 43.09 | 0.00% | Yes | Cash, banker’s acceptance bill | Market price | April 21, 2021 | http://www.cninfo.com.cn | |
| Hangzhou Huadong Medicine Group Co., Ltd. | The Company’s second largest shareholder | House leasing | House leasing | Market price determined by the Company’s related transaction decision-making process | Market price | 10.86 | 0.00% | 25 | No | Cash, banker’s acceptance bill | Market price | April 21, 2021 | http://www.cninfo.com.cn |
| Hangzh | Subsidia | Technol | Technol | Market | Market | 8.08 | 0.00% | Yes | Cash, | Market | April | http:// |
| ou Grand Biologic Pharmaceutical Inc. | ry of the Company’s controlling shareholder | ogy Development Service | ogy Development Service | price determined by the Company’s related transaction decision-making process | price | banker’s acceptance bill | price | 21, 2021 | www.cninfo.com.cn | ||||
| Penglai Nuokang Pharmaceutical Co. Ltd. | Subsidiary of the Company’s controlling shareholder | Agency Service | Agency Service | Market price determined by the Company’s related transaction decision-making process | Market price | 794.75 | 0.07% | Yes | Cash, banker’s acceptance bill | Market price | April 21, 2021 | http://www.cninfo.com.cn | |
| Sichuan Yuanda Shuyang Pharmaceutical Co., Ltd. | Subsidiary of the Company’s controlling shareholder | Transport warehousing service | Transport warehousing service | Market price determined by the Company’s related transaction decision-making process | Market price | 18.5 | 0.00% | Yes | Cash, banker’s acceptance bill | Market price | April 21, 2021 | http://www.cninfo.com.cn | |
| Beijing Yuanda Chuangxin Property | Subsidiary of the Company’s controlli | Property management fee | Property management fee | Market price determined by the | Market price | 9.64 | 0.00% | Yes | Cash, banker’s acceptance bill | Market price | April 21, 2021 | http://www.cninfo.com.cn |
| Management Co., Ltd. | ng shareholder | Company’s related transaction decision-making process | |||||||||||
| Beijing Haiwan Banshan Hotel Management Co., Ltd. | Subsidiary of the Company’s controlling shareholder | conference fee | conference fee | Market price determined by the Company’s related transaction decision-making process | Market price | 9.08 | 0.00% | Yes | Cash, banker’s acceptance bill | Market price | April 21, 2021 | http://www.cninfo.com.cn | |
| Total | -- | -- | 21,649.06 | -- | 51,530 | -- | -- | -- | -- | -- | |||
| Details of bulk sales returns | N/A | ||||||||||||
| Actual performance during the reporting period where the total amount of daily related transactions is estimated by category for the current period (if any) | N/A | ||||||||||||
| Reasons for the large difference between the transaction price and the market reference price (if applicable) | N/A | ||||||||||||
2. Related transactions involving the acquisition or sale of assets and shares
□ Applicable √ N/A
No such case during the reporting period.
3. Related transactions of joint external investment
√ Applicable □N/A
| Joint | Related | Name of investee | Main business | Registered | Total assets | Net assets of | Net profits of |
| investors | relations | of investee | capital of investee | of investee (unit: RMB10,000) | investee (unit: RMB10,000) | investee (unit: RMB10,000) | |
| Shanghai Yuanda Investment Management Co., Ltd., Fuguang Chengdu Equity Investment Management Co., Ltd., Hangzhou High-Tech Venture Capital Management Co., Ltd., and Hangzhou Heda Industrial Fund Investment Co., Ltd. | Yuanda Investment Management and Fuguang Chengdu are subsidiaries of Beijing Yuanda Huachuang Investment Co., Ltd., the controlling shareholder of China Grand Enterprises, Inc. (the controlling shareholder of the Company). According to the provisions of Rules Governing the Listing of Shares on Shenzhen Stock Exchange and other relevant laws and regulations, Yuanda Investment Management, Fuguang Chengdu and the Company constitute related | Hangzhou Fuguang Hongxin Equity Investment Partnership (L.P.) | General projects: Equity investment; venture capital investment (investment in unlisted companies only) | 200 million yuan | 7,900.37 | 7,900.37 | -99.63 |
| parties. | |||||||
| Hangzhou Fuguang Hongxin Equity Investment Partnership (L.P.) | Since Fuguang Chengdu, the managing partner and fund manager of Fuguang Hongxin, and Yuanda Investment Management, one of Fuguang Hongxin’s limited partner, are subsidiaries of Yuanda Huachuang, the controlling shareholder of China Grand Enterprises, Inc. (the controlling shareholder of the Company), and the Company is a limited partner of Fuguang Hongxin, Fuguang Hongxin and the Company constitute related parties in accordance with the | Nuoling Biomedical Technology (Beijing) Co., Ltd. | Development, transfer, consulting and services regarding biological and medical technologies | 4.981729 million yuan | 7,537.97 | 7,443.61 | -534.41 |
| provisions of Rules Governing the Listing of Shares on Shenzhen Stock Exchange and other relevant laws and regulations. | ||
| Progress of major ongoing projects (if any) of the investee | 1. In order to further increase the integration of industry and finance and industrial innovation, build an incubation and introduction platform for diversified high-quality R&D and innovation projects, and quickly enrich the Company’s core product pipelines, the Company signed the Partnership Agreement of Hangzhou Fuguang Hongxin Equity Investment Partnership (L.P.) with Shanghai Yuanda Investment Management Co., Ltd., Fuguang Chengdu Equity Investment Management Co., Ltd., Hangzhou High-Tech Venture Capital Management Co., Ltd., and Hangzhou Heda Industrial Fund Investment Co., Ltd., jointly establishing “Hangzhou Fuguang Hongxin Equity Investment Partnership (L.P.)” on January 7, 2021. The Pharmaceutical Industry Fund was established with a total scale of RMB200 million, of which RMB98 million is contributed by the Company with its own funds and the Company is a limited partner of the Pharmaceutical Industry Fund. For details, please refer to No. 2021-002 Announcement on Participation in Investment in the Establishment of Pharmaceutical Industry Investment Fund and Related Party Transactions issued by the Company on January 7, 2021. 2. As of April 6, 2021, the Pharmaceutical Industry Fund completed the initial fund raising, finished the industrial and commercial registration procedures, and it was successfully filed with AMAC on April 2, 2021. For details, please refer to No. 2021-016 Announcement on the Progress of Participation in Investment in the Establishment of Pharmaceutical Industry Investment Fund issued by the Company on April 6, 2021. 3. Zhongmei Huadong, a wholly-owned subsidiary of the Company, and Hangzhou Fuguang Hongxin Equity Investment Partnership (L.P.) jointly contributed a total of RMB35 million to increase the capital of Nuoling Biomedical Technology (Beijing) Co., Ltd. and subscribed for the newly increased registered capital of RMB520,479 of Nuoling Biomedical Technology, which corresponds to 10.4478% of its equity after the completion of the financing. Specifically, Zhongmei Huadong invested RMB15 million and subscribed for Nuoling Biomedical Technology’s newly registered capital of RMB223,062, while Fuguang Hongxin invested RMB20 million and subscribed for RMB297,417. Upon completion of the transaction, Zhongmei Huadong held 4.4776% of the equity of Nuoling Biomedical Technology, while Fuguang Hongxin held 5.9702%. On April 19, 2021, all existing shareholders of Nuoling Biomedical Technology signed a Capital Increase Agreement and a Shareholders Agreement with Zhongmei Huadong and Fuguang Hongxin. For details, please refer to No. 2021-020 Announcement on Joint External Investment and Related Party Transactions with the Pharmaceutical Industry Investment Fund issued by the Company on April 19, 2021. Note 1 | |
Note 1: Related inquiries on the disclosure website of interim reports on major related party transactions
| Title of provisional announcement | Disclosure date of provisional | Disclosure website of provisional |
| announcement | announcement | |
| Announcement on Participation in Investment in the Establishment of Pharmaceutical Industry Investment Fund and Related Party Transactions | January 08, 2021 | http://www.cninfo.com.cn |
| Announcement on the Progress of Participation in Investment in the Establishment of Pharmaceutical Industry Investment Fund | April 07, 2021 | http://www.cninfo.com.cn |
| Announcement on Joint External Investment and Related Party Transactions with the Pharmaceutical Industry Investment Fund | April 20, 2021 | http://www.cninfo.com.cn |
4. Associated claim and debt transactions
□ Applicable √N/A
No such case during the reporting period.
5. Deals with related financial companies and financial companies controlled by the company
□ Applicable √N/A
There are no deposits, loans, credits, or other financial services between the company and the financial company that has an affiliatedrelationship, and the financial company controlled by the company and the affiliated party.
6. Other major related transactions
□ Applicable √N/A
No such case during the reporting period.XII. Major contracts and their fulfilment
1. Entrustment, contracting and leasing
(1) Entrustment
□ Applicable √N/A
No such case during the reporting period.
(2) Contracting
□ Applicable √N/A
No such case during the reporting period.
(3) Leasing
□ Applicable √N/A
No such case during the reporting period.
2. Important guarantees
√ Applicable □ N/A
Unit: RMB ten thousand yuan
| External guarantees of the Company and its subsidiaries (excluding guarantees for subsidiaries) | ||||||||||
| guaranteed party | Disclosure date of the announcement related to the guarantee Cap | Guarantee Cap | Actual date of occurrence | Actual guaranteed amount | Type of guarantee | Collateral (if any) | Counter-guarantee situation (if any) | Period of guarantee | Fulfilled or not | Guarantee for a related party or not |
| / | / | / | / | / | / | / | / | / | / | / |
| Total amount of external guarantees approved during the reporting period (A1) | / | Total actual amount of external guarantees during the reporting period (A2) | / | |||||||
| Total amount of approved external guarantees at the end of the reporting period (A3) | / | Total actual balance of external guarantees at the end of the reporting period (A4) | / | |||||||
| The Company’s guarantees for its subsidiaries | ||||||||||
| guaranteed party | Disclosure date of the announcement related to the guarantee Cap | Guarantee Cap | Actual date of occurrence | Actual guaranteed amount | Type of guarantee | Collateral (if any) | Counter-guarantee situation (if any) | Period of guarantee | Fulfilled or not | Guarantee for a related party or not |
| Hangzhou Zhongmei Huadong Pharmaceutical Co., | April 21, 2021 | 80,000 | June 01, 2021 | 27,652 | Joint liability guarantee | One year | No | No | ||
| Ltd. | ||||||||||
| Huadong Ningbo Medicine Co., Ltd. | April 21, 2021 | 50,000 | June 01, 2021 | 533 | Joint liability guarantee | Yes | One year | No | No | |
| Huadong Ningbo Medicine Co., Ltd. | April 28, 2020 | 50,000 | December 18, 2020 | 2,009 | Joint liability guarantee | Yes | One year | No | No | |
| Huadong Ningbo Medicine Co., Ltd. | April 28, 2020 | 50,000 | November 20, 2020 | 1,591 | Joint liability guarantee | Yes | One year | No | No | |
| Huadong Ningbo Medicine Co., Ltd. | April 28, 2020 | 50,000 | October 23, 2020 | 1,030 | Joint liability guarantee | Yes | One year | No | No | |
| Huadong Ningbo Medicine Co., Ltd. | April 28, 2020 | 50,000 | October 28, 2020 | 375 | Joint liability guarantee | Yes | One year | No | No | |
| Huadong Ningbo Medicine Co., Ltd. | April 28, 2020 | 50,000 | October 21, 2020 | 995 | Joint liability guarantee | Yes | One year | No | No | |
| Huadong Ningbo Medicine Co., Ltd. | April 28, 2020 | 50,000 | October 14, 2020 | 995 | Joint liability guarantee | Yes | One year | No | No | |
| Huadong Ningbo Medicine Co., Ltd. | April 28, 2020 | 50,000 | September 23, 2020 | 255 | Joint liability guarantee | Yes | One year | No | No | |
| Huadong Ningbo Medicine Co., Ltd. | April 28, 2020 | 50,000 | September 04, 2020 | 675 | Joint liability guarantee | Yes | One year | No | No | |
| Huadong Ningbo Medicine Co., Ltd. | April 28, 2020 | 50,000 | September 25, 2020 | 855 | Joint liability guarantee | Yes | One year | No | No |
| Huadong Ningbo Medicine Co., Ltd. | April 28, 2020 | 50,000 | February 03, 2021 | 1,702 | Joint liability guarantee | Yes | One year | No | No | |
| Huadong Ningbo Medicine Co., Ltd. | April 28, 2020 | 50,000 | June 28, 2020 | 1,200 | Joint liability guarantee | Yes | One year | No | No | |
| Huadong Ningbo Medicine Co., Ltd. | April 28, 2020 | 50,000 | June 28, 2020 | 800 | Joint liability guarantee | Yes | One year | No | No | |
| Huadong Ningbo Medicine Co., Ltd. | April 28, 2020 | 50,000 | July 02, 2020 | 1,000 | Joint liability guarantee | Yes | One year | No | No | |
| Huadong Ningbo Medicine Co., Ltd. | April 28, 2020 | 50,000 | July 02, 2020 | 1,000 | Joint liability guarantee | Yes | One year | No | No | |
| Huadong Medicine Wenzhou Co., Ltd. | April 21, 2021 | 24,000 | 0 | Joint liability guarantee | One year | No | No | |||
| Hangzhou Huadong Pharmacy Chain Co., Ltd. | April 21, 2021 | 5,000 | May 31, 2021 | 2,300 | Joint liability guarantee | One year | No | No | ||
| Huadong Medicine (Xi’an) Bohua Pharmaceutical Co., Ltd. | April 21, 2021 | 5,000 | 0 | Joint liability guarantee | One year | No | No | |||
| Jiangsu Jiuyang Biopharm Co., Ltd. | April 21, 2021 | 7,000 | 0 | Joint liability guarantee | One year | No | No | |||
| Huadong | April 21, | 15,000 | Joint | One year | No | No |
| Medicine Ningbo Sales Co., Ltd. | 2021 | liability guarantee | ||||||||
| Huadong Medicine Huzhou Co., Ltd. | April 21, 2021 | 19,000 | 0 | Joint liability guarantee | One year | No | No | |||
| Huadong Medicine Shaoxing Co., Ltd. | April 21, 2021 | 18,000 | 12 | Joint liability guarantee | One year | No | No | |||
| Huadong Medicine Supply Chain Management (Hangzhou) Co., Ltd. | April 21, 2021 | 6,000 | 0 | Joint liability guarantee | One year | No | No | |||
| Huadong Medicine Supply Chain Management (JinHua) Co., Ltd. | April 19, 2019 | 20,000 | 0 | Joint liability guarantee | Ten years | No | No | |||
| Huadong Medicine Lishui Co., Ltd. | April 21, 2021 | 15,000 | May 31, 2021 | 6,000 | Joint liability guarantee | One year | No | No | ||
| Huadong Medicine Lishui Co., Ltd. | April 21, 2021 | 15,000 | May 11, 2021 | 2,900 | Joint liability guarantee | One year | No | No | ||
| Huadong Medicine (Hangzhou) Biological Products Co., Ltd. | April 21, 2021 | 3,200 | 0 | Joint liability guarantee | One year | No | No | |||
| Hangzhou | April 21, | 70,000 | June 01, | 25,162 | Joint | One year | No | No |
| Zhongmei Huadong Pharmaceutical Jiangdong Co., Ltd. | 2021 | 2021 | liability guarantee | |||||||
| Huadong Medicine Jinhua Co., Ltd. | April 21, 2021 | 12,000 | Joint liability guarantee | One year | No | No | ||||
| Huadong Medicine Cunde (Zhoushan) Co., Ltd. | April 21, 2021 | 12,000 | 0 | Joint liability guarantee | One year | No | No | |||
| Huadong Medicine Daishan Co., Ltd. | April 21, 2021 | 5,500 | 0 | Joint liability guarantee | One year | No | No | |||
| Sinclair Pharma Limited | September 15, 2020 | 15,000 | April 01, 2021 | 9,586 | Joint liability guarantee | three years | No | No | ||
| Sinclair Pharma Limited | November 23, 2018 | 40,000 | May 01, 2020 | 17,429 | Joint liability guarantee | three years | No | No | ||
| Sinclair Pharma Limited | March 16, 2021 | 50,050 | April 01, 2021 | 35,824 | Joint liability guarantee | three years | No | No | ||
| Total guarantee cap for subsidiaries approved during the reporting period (B1) | 396,750 | Total actual guarantee amount for subsidiaries during the reporting period (B2) | 111,659 | |||||||
| Total approved guarantee cap for subsidiaries at the end of the reporting period (B3) | 471,750 | Total actual guarantee balance for subsidiaries at the end of the reporting period (B4) | 141,880 | |||||||
| Subsidiariesguarantee for subsidiaries | ||||||||||
| guaranteed party | Disclosure date of the announcement related | Guarantee Cap | Actual date of occurrence | Actual guaranteed amount | Type of guarantee | Collateral (if any) | Counter-guarantee situatio | Period of guarantee | Fulfilled or not | Guarantee for a related party or |
| to the guarantee Cap | n (if any) | not | |||||||||
| Hangzhou Zhongmei Huadong Pharmaceutical Jiangdong Co., Ltd. | April 21, 2021 | 20,000 | Joint liability guarantee | One year | No | No | |||||
| Total guarantee cap for subsidiaries approved during the reporting period (C1) | 20,000 | Total actual guarantee amount for subsidiaries during the reporting period (C2) | 0 | ||||||||
| Total approved guarantee cap for subsidiaries at the end of the reporting period (C3) | 20,000 | Total actual guarantee balance for subsidiaries at the end of the reporting period (C4) | 0 | ||||||||
| Total amount of the Company’s guarantees (i.e. the sum of the above-mentioned 3 kinds of guarantees) | |||||||||||
| Total guarantees cap approved during the reporting period (A1+B1+C1) | 416,750 | Total actual guarantee amount during the reporting period (A2+B2+C2) | 111,659 | ||||||||
| Total approved guarantee cap at the end of the reporting period (A3+B3+C3) | 491,750 | Total actual guarantee balance at the end of the reporting period (A4+B4+C4) | 141,880 | ||||||||
| Proportion of the actual guarantee amount (i.e. A4+B4+C4) in the Company’s net assets | 9.11% | ||||||||||
| Including: | |||||||||||
| Balance of guarantees for shareholders, actual controllers and their related parties (D) | / | ||||||||||
| Amount of debt guarantees provided directly or indirectly for the entities with a liability-to asset ratio over 70% (E) | 112,000 | ||||||||||
| The total amount of guarantees exceeds 50% of the net assets (F) | / | ||||||||||
| Total guarantee amount of the above-mentioned three kineds of guarantees (D+E+F) | 112,000 | ||||||||||
| For the unexpired guarantee, a guarantee liability | / | ||||||||||
| has occurred or there may be a joint liability for satisfaction during the reporting period (if any) | |
| Note of external guarantees in violation of prescribed procedures (if any) | / |
3. Entrusted finances
□ Applicable √N/A
No such case during the reporting period.
4. Daily significant contracts
□ Applicable √N/A
5. Other significant contracts
□ Applicable √N/A
No such case during the reporting period.XIII. Other major events
□ Applicable √N/A
During the reporting period, the company did not have other major matters that need to be explained.XIV. Major events of subsidiaries
□ Applicable √N/A
Section VII. Share Change and Shareholders
I. Changes in Share Capital
1. Table of Changes in share capital
Unit: share
| Before the change | Change in the period (+/-) | After the change | |||||||
| Number of shares | Proportion | New shares | Bonus share | Capital reserve conversion | Other | Subtotal | Number of shares | Proportion | |
| I. Shares subject to conditional restriction | 47,745 | 0.00% | 0 | 0 | 0 | 0 | 0 | 47,745 | 0.00% |
| 1. Shares held by the state | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 2. Shares held by state-owned corporations | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 3. Shares held by other domestic investors | 47,745 | 0.00% | 0 | 0 | 0 | 0 | 0 | 47,745 | 0.00% |
| Including: held by domestic corporations | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| held by domestic natural persons | 47,745 | 0.00% | 0 | 0 | 0 | 0 | 0 | 47,745 | 0.00% |
| 4. Shares held by overseas investors | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| Including: held by overseas corporations | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| held by overseas natural persons | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| II. Shares without restriction | 1,749,761,803 | 100.00% | 0 | 0 | 0 | 0 | 0 | 1,749,761,803 | 100.00% |
| 1. RMB ordinary shares | 1,749,761,803 | 100.00% | 0 | 0 | 0 | 0 | 0 | 1,749,761,803 | 100.00% |
| 2. Domestically listed foreign shares | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 3. Foreign shares listed overseas | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 4. Others | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| III. Total number of shares | 1,749,809,548 | 100.00% | 0 | 0 | 0 | 0 | 0 | 1,749,809,548 | 100.00% |
Reasons for the changes in share capital
□ Applicable √N/A
Approval for changes in share capital
□ Applicable √N/A
Transfer of shares
□ Applicable √N/A
Progress of share repurchase
□ Applicable √N/A
Progress of reducing repurchased shares through centralized bidding
□ Applicable √N/A
Effects of changes in share capital on the basic earnings per share, diluted earnings per share for the most recent year and the mostrecent period, the net assets per share attributable to the Company’s shareholders of common shares and other financial indicators
□ Applicable √N/A
Other disclosures the Company deems necessary or required by securities regulatory authorities
□ Applicable √N/A
2. Changes in restricted shares
□ Applicable √N/A
II. Issuance and listing of securities
□ Applicable √N/A
III. Total number of shareholders and their shareholdings
Unit: share
| Total number of common shareholderss at the end of the reporting period | 194,208 | Total number of preference shareholders with restoration of the voting rights at the end of the reporting period (if any) (see Note 8) | 0 | |||||||
| Particulars about shareholders with a shareholding ratio over 5% or the Top 10 shareholders | ||||||||||
| Name of shareholder | Nature of shareholder | Share- holding ratio | Total common shares held at the end of the | Changes in the reporting period | The number of common shares held with | The number of common shares held without trading | Pledged, marked or frozen | |||
| Status | Amount | |||||||||
| reporting period | trading restrictions | restriction | ||||||
| China Grand Enterprises, Inc. | Domestic non-state-owned corporation | 41.77% | 730,938,157 | 0 | 0 | 730,938,157 | Pledged | 220,450,000 |
| Hangzhou Huadong Medicine Group Co., Ltd. | State-owned corporation | 16.23% | 284,000,000 | 5,380,000 | 0 | 284,000,000 | ||
| Hong Kong Securities Clearing Company Ltd. | Overseas corporation | 2.10% | 36,743,863 | -1,555,752 | 0 | 36,743,863 | ||
| China Securities Finance Co., Ltd. | Domestic non-state-owned corporation | 1.27% | 22,186,818 | 0 | 0 | 22,186,818 | ||
| National Social Security Fund Portfolio 602 | Others | 0.45% | 7,926,311 | 0 | 0 | 7,926,311 | ||
| # Yang Yushan | domestic natural persons | 0.29% | 5,000,000 | 5,000,000 | 0 | 5,000,000 | ||
| Industrial and Commercial Bank of China — CUAM 3-year Closed Operation Strategy Placement Flexible Allocation Mixed Securities Investment Fund (LOF) | Others | 0.28% | 4,835,665 | 4,835,665 | 0 | 4,835,665 | ||
| Hua Life Insurance Co., Ltd. — own funds | Others | 0.22% | 3,780,104 | 3,780,104 | 0 | 3,780,104 | ||
| #Chen | domestic natural | 0.21% | 3,744,388 | -20,000 | 0 | 3,744,388 |
| Shaoming | persons | |||||||||
| National Social Security Fund Portfolio 503 | Others | 0.17% | 3,000,000 | -3,999,773 | 0 | 3,000,000 | ||||
| Strategic investors or general corporations become the top 10 shareholders due to the placement of new shares (if any) (see Note 3) | N/A | |||||||||
| Explanation on associated relationships or concerted actions among the above-mentioned shareholders | The Company does not know whether the above-mentioned shareholders are related parties or whether they are acting-in-concert parties with one another. | |||||||||
| Description about above-mentioned shareholders’ entrusting/being entrusted with and waiving voting rights | N/A | |||||||||
| Special instructions for the existence of special repurchase accounts among the top 10 shareholders (if any) (see Note 11) | N/A | |||||||||
| Shareholding of the top 10 shareholders without trading restriction conditions | ||||||||||
| Name of shareholder | Number of the trading unrestricted stocks held at the end of the Report Period | Type of stocks | ||||||||
| Type of stocks | Amount | |||||||||
| China Grand Enterprises, Inc. | 730,938,157 | RMB ordinary stocks | 730,938,157 | |||||||
| Hangzhou Huadong Medicine Group Co., Ltd. | 284,000,000 | RMB ordinary stocks | 284,000,000 | |||||||
| Hong Kong Securities Clearing Company Ltd. | 36,743,863 | RMB ordinary stocks | 36,743,863 | |||||||
| China Securities Finance Co., Ltd. | 22,186,818 | RMB ordinary stocks | 22,186,818 | |||||||
| National Social Security Fund Portfolio 602 | 7,926,311 | RMB ordinary stocks | 7,926,311 | |||||||
| # Yang Yushan | 5,000,000 | RMB ordinary stocks | 5,000,000 | |||||||
| Industrial and Commercial Bank of China — CUAM 3-year Closed Operation Strategy Placement Flexible Allocation Mixed Securities Investment Fund (LOF) | 4,835,665 | RMB ordinary stocks | 4,835,665 | |||||||
| Hua Life Insurance Co., Ltd. — own funds | 3,780,104 | RMB ordinary stocks | 3,780,104 |
| #Chen Shaoming | 3,744,388 | RMB ordinary stocks | 3,744,388 |
| National Social Security Fund Portfolio 503 | 3,000,000 | RMB ordinary stocks | 3,000,000 |
| Description of the related relationship or concerted action between the top 10 common shareholders of unrestricted shares, and between the top 10 common shareholders of unrestricted shares and the top 10 common shareholders | The Company does not know whether the above-mentioned shareholders are related parties or whether they are acting-in-concert parties with one another. | ||
| Description of the participation in margin trading business of the top 10 common shareholders (if any) (see Note 4) | The second major shareholder of the Company, Hangzhou Huadong Medicine Group Co., Ltd., holds 288,000,000 shares of the Company, accounting for 16.46% of the Company’s total capitalization. As of the end of the reporting period, 4,000,000 shares thereof were subject to refinancing securities lending transactions in China Securities Finance Corporation Limited. As of the end of the reporting period, Yang Yushan, the sixth shareholder among the Company’s Top 10 common shareholders, held 5,000,000 shares of the Company through securities margin accounts, and Chen Shaoming, the ninth shareholder, held 3,651,388 shares of the Company in the same manner. | ||
Whether the Company’s Top 10 common shareholders or the Top 10 common shareholders without trading restriction have carriedout any agreement to repurchase transaction during the reporting period
□ Yes √ No
No such case during the reporting period.
IV. Changes in shareholding of directors, supervisors and senior managers
□ Applicable √N/A
No such case during the reporting period. For details, please refer to the 2020 Annual Report.
V. Changes in controlling shareholders or actual controllersChange of controlling shareholder during the reporting period
□ Applicable √N/A
No such case during the reporting period.Change of actual controller during the reporting period
□ Applicable √N/A
No such case during the reporting period.
Section VIII. Preferred Shares
□ Applicable √N/A
No such case during the reporting period.
Section IX. Information about Bonds
□ Applicable √N/A
Section X. Financial ReportI. Audit reportWhether the half year report was audited
□ Yes √ No
The Company’s half year report was not audited.II. Financial statementsThe currency unit of statements in the financial notes is: RMB yuan.
1. Consolidated balance sheet
Prepared by: Huadong Medicine Co., Ltd.
June 30, 2021
Unit: RMB yuan
| Item | June 30, 2021 | December 31, 2020 |
| Current assets: | ||
| Cahs and bank balances | 3,269,314,047.58 | 3,198,080,997.82 |
| Settlement reserve | ||
| Lending to other banks and other financial institutions | ||
| Financial assets for trade | ||
| Derivative financial assets | ||
| Notes receivable | ||
| Accounts receivable | 6,871,300,450.79 | 6,137,675,568.82 |
| Accounts receivable for financing | 530,122,144.99 | 828,659,217.25 |
| Prepayments | 213,421,350.99 | 250,916,482.07 |
| Premiums receivable | ||
| Reinsurance accounts receivable | ||
| Reinsurance contract reserve receivable | ||
| Other receivables | 114,697,517.74 | 87,269,489.82 |
| Including: Interests receivable | 6,326,425.78 | |
| Dividends receivable | 832,286.37 | 4,195,666.37 |
| Financial assets purchased for resale | ||
| Inventories | 4,130,364,327.93 | 4,067,635,254.80 |
| Contract assets | ||
| Assets held for sale | ||
| Non-current assets due within one year | ||
| Other current assets | 44,928,681.66 | 85,654,691.58 |
| Total current assets | 15,174,148,521.68 | 14,655,891,702.16 |
| Non-current assets: | ||
| Loans and prepayments issuance | ||
| Debt investments | ||
| Other debt investments | ||
| Long-term receivables | ||
| Long-term equity investments | 947,007,338.50 | 850,072,053.02 |
| Other equity instrument investments | 235,756,138.76 | 225,453,120.05 |
| Other non-current financial assets | ||
| Real estate properties for investment | 17,191,977.46 | 17,792,735.95 |
| Fixed assets | 2,668,749,549.01 | 2,420,366,582.92 |
| Constructions in progress | 2,000,163,547.28 | 2,240,201,926.65 |
| Biological assets for production | ||
| Oil & gas assets | ||
| Right-of-use assets | 128,934,858.91 | |
| Intangible assets | 1,645,727,476.51 | 1,463,242,463.99 |
| Development expenditures | ||
| Goodwill | 2,100,106,651.09 | 1,469,617,262.10 |
| Long-term unamortized expenses | 11,043,633.03 | 8,811,339.43 |
| Deferred tax assets | 151,508,607.37 | 137,829,774.40 |
| Other non-current assets | 1,027,839,790.27 | 712,069,194.08 |
| Total non-current assets | 10,934,029,568.19 | 9,545,456,452.59 |
| Total assets | 26,108,178,089.87 | 24,201,348,154.75 |
| Current liabilities: | ||
| Short-term borrowing | 1,386,401,620.12 | 1,416,932,884.87 |
| Borrowing from the central bank | ||
| Borrowing from other banks and other financial institutions | ||
| Financial liabilities for trade | ||
| Derivative financial liabilities | ||
| Notes payable | 979,859,751.59 | 554,336,058.71 |
| Accounts payable | 4,018,087,903.17 | 3,947,044,331.68 |
| Receipts in Advance | 2,002,944.53 | 951,926.56 |
| Contract liabilities | 53,923,017.30 | 94,384,629.77 |
| 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 | ||
| Payroll payable | 116,950,830.93 | 152,106,819.91 |
| Taxes payable | 623,460,837.87 | 571,792,475.80 |
| Other payables | 1,764,290,228.84 | 1,817,529,820.99 |
| 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 | 43,273,480.68 | 67,813,886.68 |
| Other current liabilities | 6,752,043.58 | 10,786,034.37 |
| Total current liabilities | 8,995,002,658.61 | 8,633,678,869.34 |
| Non-current liabilities: | ||
| Insurance policy reserve | ||
| Long-term borrowing | 477,876,860.08 | 151,611,367.86 |
| Bonds payable | ||
| Including: Preferred shares | ||
| Perpetual bonds |
| Lease liabilities | 82,245,770.91 | |
| Long-term payables | 157,449,847.67 | 26,812,354.90 |
| Long-term employee benefits payable | ||
| Provisions | 38,277,744.27 | 39,467,829.23 |
| Deferred income | 86,144,877.82 | 81,628,032.54 |
| Deferred tax liabilities | 83,108,397.29 | 88,738,187.41 |
| Other non-current liabilities | ||
| Total non-current liabilities | 925,103,498.04 | 388,257,771.94 |
| Total liabilities | 9,920,106,156.65 | 9,021,936,641.28 |
| Owners’ Equity: | ||
| Share capital | 1,749,809,548.00 | 1,749,809,548.00 |
| Other equity instruments | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Capital reserves | 2,158,080,661.07 | 2,158,080,661.07 |
| Less: Treasury shares | ||
| Other comprehensive income | 44,251,842.19 | -2,191,069.45 |
| Special reserve | ||
| Surplus reserves | 861,680,578.42 | 861,680,578.42 |
| General risk reserve | ||
| Retained earnings | 10,753,451,519.08 | 9,852,441,590.56 |
| Total owners’ equity attributable to owner of the Company | 15,567,274,148.76 | 14,619,821,308.60 |
| Minority interest | 620,797,784.46 | 559,590,204.87 |
| Total owners’ equity | 16,188,071,933.22 | 15,179,411,513.47 |
| Total liabilities & owners’ equity | 26,108,178,089.87 | 24,201,348,154.75 |
Legal representative: Lv LiangPerson in charge of accounting work: Lv LiangPerson in charge of the Accounting Department: Qiu Renbo
2. Balance sheet of the parent company
Unit: RMB yuan
| Item | June 30, 2021 | December 31, 2020 |
| Current assets: | ||
| Cash and bank balances | 1,500,810,612.41 | 1,889,264,142.30 |
| Financial assets for trade | ||
| Derivative financial assets | ||
| Notes receivable | ||
| Accounts receivable | 3,572,579,601.70 | 3,287,882,027.51 |
| Accounts receivable for financing | 231,103,545.66 | 214,871,707.01 |
| Prepayments | 54,030,047.36 | 121,268,106.62 |
| Other receivables | 863,943,656.30 | 798,152,353.96 |
| Including: Interests receivable | 3,810,555.56 | |
| Dividends receivable | 3,363,380.00 | |
| Inventories | 1,875,097,391.72 | 1,845,977,070.46 |
| Contract assets | ||
| Assets held for sale | ||
| Non-current assets due within one year | ||
| Other current assets | 14,830.80 | |
| Total current assets | 8,097,579,685.95 | 8,157,415,407.86 |
| Non-current assets: | ||
| Debt investments | ||
| Other debt investments | ||
| Long-term receivables | ||
| Long-term equity investments | 4,925,884,087.36 | 4,847,172,288.65 |
| Other equity instrument investments | 94,312,742.49 | 94,312,742.49 |
| Other non-current financial assets | ||
| Real estate properties for investment | 7,892,460.22 | 8,125,576.54 |
| Fixed assets | 156,295,538.13 | 159,486,234.04 |
| Constructions in progress | 2,016,101.54 | 342,161.41 |
| Biological assets for production | ||
| Oil & gas assets | ||
| Right-of-use assets | 11,446,169.18 | |
| Intangible assets | 52,496,891.26 | 56,448,575.54 |
| Development expenditures | ||
| Goodwill | ||
| Long-term unamortized expenses | 486,793.30 | 645,902.07 |
| Deferred tax assets | 50,432,935.67 | 45,918,388.57 |
| Other non-current assets | 137,966,017.50 | 96,882,664.08 |
| Total non-current assets | 5,439,229,736.65 | 5,309,334,533.39 |
| Total assets | 13,536,809,422.60 | 13,466,749,941.25 |
| Current liabilities: | ||
| Short-term borrowing | 610,340,666.97 | 930,813,369.36 |
| Financial liabilities for trade | ||
| Derivative financial liabilities | ||
| Notes payable | 201,919,106.24 | 180,042,270.63 |
| Accounts payable | 2,476,104,386.33 | 2,421,476,904.57 |
| Receipts in advance | ||
| Contract liabilities | 19,475,506.65 | 32,577,236.92 |
| Payroll payable | 2,907,977.80 | 8,530,961.48 |
| Taxes payable | 73,709,247.43 | 154,676,067.87 |
| Other payables | 200,923,749.27 | 518,390,330.44 |
| Including: Interests payable | ||
| Dividends payable | 224,219.60 | 224,219.60 |
| Liabilities held for sale | ||
| Non-current liabilities due within one year | ||
| Other current liabilities | 2,484,687.36 | 4,273,258.99 |
| Total current liabilities | 3,587,865,328.05 | 4,250,780,400.26 |
| Non-current liabilities: | ||
| Long-term borrowing | ||
| Bonds payable | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Lease liabilities | 9,417,965.84 | |
| Long-term payables | ||
| Long-term employee benefits payable | ||
| Provision |
| Deferred income | 39,415,973.49 | 40,698,910.95 |
| Deferred tax liabilities | 10,888,106.00 | 10,888,106.00 |
| Other non-current liabilities | ||
| Total non-current liabilities | 59,722,045.33 | 51,587,016.95 |
| Total liabilities | 3,647,587,373.38 | 4,302,367,417.21 |
| Owners’ Equity: | ||
| Share capital | 1,749,809,548.00 | 1,749,809,548.00 |
| Other equity instruments | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Capital reserves | 2,168,451,528.01 | 2,168,451,528.01 |
| Less: Treasury shares | ||
| Other comprehensive income | 3,051,311.29 | 3,051,311.29 |
| Special reserve | ||
| Surplus reserves | 939,536,337.86 | 939,536,337.86 |
| Retained earnings | 5,028,373,324.06 | 4,303,533,798.88 |
| Total owners’ equity | 9,889,222,049.22 | 9,164,382,524.04 |
| Total liabilities & owners’ equity | 13,536,809,422.60 | 13,466,749,941.25 |
3. Consolidated income statement
Unit: RMB yuan
| Item | Current period in 2021 | Previous period in 2020 |
| I. Total operating income | 17,179,437,902.61 | 16,660,934,157.64 |
| Including: Operating revenue | 17,179,437,902.61 | 16,660,934,157.64 |
| Interests received | ||
| Premiums earned | ||
| Handling fees and commissions received | ||
| II. Total operating cost | 15,638,788,710.40 | 14,896,020,510.59 |
| Including: Operating cost | 11,589,419,896.59 | 10,681,089,643.50 |
| Interests paid | ||
| Handling fees and commissions paid | ||
| Surrender value |
| Net payment of insurance claims | ||
| Net appropriation of policy reserve | ||
| Policy dividends paid | ||
| Reinsurance expenses | ||
| Business taxes and surcharges | 88,585,385.20 | 101,439,816.68 |
| Selling expenses | 2,978,753,751.45 | 3,109,911,383.02 |
| Administrative expenses | 534,683,411.33 | 506,362,613.35 |
| Research and Development(R&D) expenses | 437,556,684.96 | 479,685,981.21 |
| Financial expenses | 9,789,580.87 | 17,531,072.80 |
| Including: Interests expenses | 37,214,555.56 | 47,068,116.52 |
| Interests income | 38,453,252.17 | 30,675,897.56 |
| Add: Other income | 137,364,653.52 | 93,032,855.48 |
| Investment income (Losses are indicated by “-”) | -54,458,950.28 | -10,002,163.90 |
| Including: Investment gains (losses) in associated enterprise and joint-venture enterprise | -22,852,478.03 | -3,173,963.23 |
| Gains on 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 losses (Losses are indicated by “-”) | -38,263,673.24 | -29,841,283.63 |
| Impairment losses of assets (Losses are indicated by “-”) | 3,054,806.20 | |
| Gains on assets disposal (Losses are indicated by “-”) | 182,307.80 | 301,166,257.18 |
| III. Operating profit (Losses are indicated | 1,588,528,336.21 | 2,119,269,312.18 |
| by “-”) | ||
| Add: Non-operating income | 834,874.23 | 10,190,295.80 |
| Less: Non-operating expenses | 6,126,908.04 | 20,122,066.85 |
| IV. Total profit (Total losses are indicated by “-”) | 1,583,236,302.40 | 2,109,337,541.13 |
| Less: Income tax expenses | 240,728,486.55 | 334,125,800.82 |
| V. Net profit (Net losses are indicated by “-”) | 1,342,507,815.85 | 1,775,211,740.31 |
| (I) Classification by continuous operations | ||
| 1. Net profit from continued operations (Net losses are indicated by “-”) | 1,342,507,815.85 | 1,775,211,740.31 |
| 2. Net profit from terminational operations (Net losses are indicated by “-”) | ||
| (II) Classification by attribution of ownership | ||
| 1. Net profit attributable to owners of the parent company | 1,300,346,324.85 | 1,731,184,721.25 |
| 2. Profit or loss attributable to minority shareholders | 42,161,491.00 | 44,027,019.06 |
| VI. Other comprehensive income, net of income tax | 49,562,711.35 | 38,749,338.23 |
| Other comprehensive income attributable to owners of the parent company, net of tax | 49,562,711.35 | 38,749,338.23 |
| (I) Other comprehensive income that cannot be reclassified into gains/losses | 15,091,655.18 | 217,909.39 |
| 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 | 15,091,655.18 | 217,909.39 |
| 4. Changes in fair value of credit risk of the enterprise | ||
| 5. Others |
| (II) Other comprehensive income to be reclassified into gains/losses | 34,471,056.17 | 38,531,428.84 |
| 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 arising on conversion of financial statements denominated in foreign currencies | 34,471,056.17 | 38,531,428.84 |
| 7. Others | ||
| Net amount after tax of other comprehensive income attributable to minority shareholders | ||
| VII. Total comprehensive income | 1,392,070,527.20 | 1,813,961,078.54 |
| Total comprehensive income attributable to owners of the parent company | 1,349,909,036.20 | 1,769,934,059.48 |
| Total comprehensive income attributable to minority shareholders | 42,161,491.00 | 44,027,019.06 |
| VIII. Earnings per share (EPS): | ||
| (I) Basic EPS | 0.7431 | 0.9894 |
| (II) Diluted EPS | 0.7431 | 0.9894 |
As for enterprise merger under the same control in the current period, the net profit generated by the merged party before the mergeris 0.00 yuan, and that generated during the previous period is 0.00 yuan.Legal representative: Lv LiangPerson in charge of accounting work: Lv LiangPerson in charge of the Accounting Department: Qiu Renbo
4. Income statement of the parent company
Unit: RMB yuan
| Item | Current period in 2021 | Previous period in 2020 |
| I. Total operating income | 8,825,456,287.77 | 7,916,714,385.48 |
| Less: Total operating cost | 8,358,026,557.10 | 7,486,315,469.35 |
| Business taxes and surcharges | 8,620,356.90 | 12,247,764.43 |
| Selling expenses | 183,609,392.52 | 156,652,760.76 |
| Administrative expenses | 84,417,643.06 | 69,866,518.00 |
| Research and Development (R&D) expenses | ||
| Financial expenses | 3,945,113.42 | 17,433,290.41 |
| Including: Interests expenses | 28,654,116.50 | 37,898,542.00 |
| Interests income | 25,469,215.21 | 19,437,282.41 |
| Add: Other income | 3,491,044.84 | 10,042,695.77 |
| Investment income (Losses are indicated by “-”) | 1,013,064,044.10 | 1,167,513,101.57 |
| Including: Investment gains (losses) in associated enterprise and joint-venture enterprise | -488,201.29 | |
| Gains on the derecognition of financial assets measured at amortized cost (Losses are indicated by “-”) | ||
| Gains on net exposure hedging (Losses are indicated by “-”) | ||
| Gains from changes in fair values (Losses are indicated by “-”) | ||
| Credit impairment losses (Losses are indicated by “-”) | -37,061,514.45 | 25,531,116.40 |
| Impairment gains (losses) of assets (Losses are indicated by “-”) | ||
| Asset disposal income (Losses are indicated by “-”) | -24,172.29 | -6,556.33 |
| II. Operating profit (Losses are indicated by “-”) | 1,166,306,626.97 | 1,377,278,939.94 |
| Add: Non-operating income | 3,934.06 | 4,902,319.33 |
| Less: Non-operating expenses | 232,283.92 | 6,681,349.13 |
| III. Total profit (Total losses are indicated by “-”) | 1,166,078,277.11 | 1,375,499,910.14 |
| Less: Income tax expenses | 38,782,555.89 | 53,781,016.19 |
| IV. Net profit (Net losses are indicated by “-”) | 1,127,295,721.22 | 1,321,718,893.95 |
| (I) Net profit from continuous operations (Net losses are indicated by “-”) | 1,127,295,721.22 | 1,321,718,893.95 |
| (II) Net profit from discontinued operations (Net losses are indicated by “-”) | ||
| V. Other comprehensive income, net of income tax | ||
| (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 from translation of foreign currency financial statements | ||
| 7. Others | ||
| VI. Total comprehensive income | 1,127,295,721.22 | 1,321,718,893.95 |
| VII. Earnings per share (EPS): | ||
| (I) Basic EPS | ||
| (II) Diluted EPS |
5. Consolidated cash flow statement
Unit: RMB yuan
| Item | Current period in 2021 | Previous period in 2020 |
| I. Cash flows from operating activities： | ||
| Cash received from sale of goods or rendering of services | 19,260,978,489.19 | 17,305,533,832.79 |
| 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 | ||
| Receipts of tax refunds | 1,862,175.25 | 15,546,329.17 |
| Other cash receipts to operating activities | 320,057,319.74 | 510,015,283.23 |
| Sub-total of Cash inflows from operating activities | 19,582,897,984.18 | 17,831,095,445.19 |
| Cash payments for goods purchased and services received | 12,667,873,491.42 | 11,048,841,667.18 |
| Net increase in customer loans and prepayments | ||
| Net increase in deposits of central bank and due from banks | ||
| Cash payments for original insurance claims | ||
| Net increase in lending to other banks and other financial institutions | ||
| Cash payments for interests, handling fees and commissions | ||
| Cash payments for policy dividends | ||
| Cash payments to and on behalf of employees | 1,324,178,305.24 | 1,139,977,576.42 |
| Payments of various types of taxes | 1,022,924,459.48 | 1,417,914,481.02 |
| Other cash payments in relation to operating activities | 2,829,409,355.93 | 2,968,819,053.28 |
| Sub-total of cash outflows for operating activities | 17,844,385,612.07 | 16,575,552,777.90 |
| Net cash flow from operating activities | 1,738,512,372.11 | 1,255,542,667.29 |
| II. Cash flows from investing activities | ||
| Cash receipts from recovery of investments | ||
| Cash receipts from investment income | 4,281,616.49 | 900,000.00 |
| Net cash from disposal of fixed assets, intangible assets and other long-term assets | 407,737.22 | 347,790,583.31 |
| Net cash from disposal of subsidiaries and other business units |
| Other cash receipts in relation to investing activities | 4,788,636.47 | |
| Sub-total of cash inflows from investing activities | 9,477,990.18 | 348,690,583.31 |
| Cash payments for purchase and construction of fixed assets, intangible assets and other long-term assets | 403,137,637.26 | 522,164,019.70 |
| Cash payments for investment | 120,706,000.00 | 70,535,000.00 |
| Net increase in pledge loans | ||
| Net cash paid for acquisition of subsidiaries and other business units | 756,550,801.75 | 130,000,000.00 |
| Other cash payments in relation to investing activities | 26,127,840.41 | |
| Sub-total of cash outflows for investing activities | 1,306,522,279.42 | 722,699,019.70 |
| Net cash flow from investing activities | -1,297,044,289.24 | -374,008,436.39 |
| III. Cash flows from financing activities: | ||
| Cash receipts from capital contributions | ||
| Including: Cash receipts from capital contributions from minority owners of subsidiaries | ||
| Cash from borrowing | 1,421,047,085.43 | 1,681,800,534.35 |
| Other cash receipts in relation to financing activities | 340,000,000.00 | |
| Sub-total of cash inflows from financing activities | 1,421,047,085.43 | 2,021,800,534.35 |
| Cash repayment of borrowings | 1,309,701,912.43 | 1,851,002,797.43 |
| Cash payments for distribution of dividends or profits or settlement of interest expenses | 472,827,211.26 | 605,214,724.28 |
| Including: Dividends and profits paid by subsidiaries to minority shareholders | 49,000,000.00 | |
| Other cash payments in relation to financing activities | 5,424,076.04 | 308,940,044.54 |
| Sub-total of cash outflows from | 1,787,953,199.73 | 2,765,157,566.25 |
| financing activities | ||
| Net cash flows from financing activities | -366,906,114.30 | -743,357,031.90 |
| IV. Effect of foreign exchange rate changes on Cash and Cash Equivalents | -423,905.66 | 40,923,061.58 |
| V. Net increase in cash and cash equivalents | 74,138,062.91 | 179,100,260.58 |
| Add: Opening balance of cash and cash equivalents | 3,157,407,073.26 | 2,231,771,546.50 |
| VI. Closing balance of cash and cash equivalents | 3,231,545,136.17 | 2,410,871,807.08 |
6. Cash flow statement of the parent company
Unit: RMB yuan
| Item | Current period in 2021 | Previous period in 2020 |
| I. Cash flows from operating activities： | ||
| Cash receipts from the sale of goods and the rendering of services | 9,547,450,716.13 | 8,598,969,576.40 |
| Receipts of tax refund | ||
| Other cash receipts in relation to operating activities | 257,412,395.37 | 325,891,677.56 |
| Sub-total of cash inflows from operating activities | 9,804,863,111.50 | 8,924,861,253.96 |
| Cash payments for goods acquired and services received | 9,463,890,457.11 | 8,095,291,298.89 |
| Cash payments to and on behalf of employees | 131,308,524.66 | 123,512,245.38 |
| Payments of various types of taxes | 199,085,236.17 | 120,889,907.22 |
| Other cash payments in relation to operating activities | 440,569,707.04 | 375,568,357.02 |
| Sub-total of cash outflows for operating activities | 10,234,853,924.98 | 8,715,261,808.51 |
| Net cash flow from operating activities | -429,990,813.48 | 209,599,445.45 |
| II. Cash flows from investing activities | ||
| Cash receipts from recovery of investments | ||
| Cash receipts from investment | 1,003,363,380.00 | 601,000,000.00 |
| income | ||
| Net cash receipts from disposal of fixed assets, intangible assets and other long-term assets | 237,307.57 | 45,538.08 |
| Net cash from disposal of subsidiaries and other business units | ||
| Other cash receipts in relation to investing activities | 289,814,850.52 | 691,791,772.13 |
| Sub-total of cash inflows from investing activities | 1,293,415,538.09 | 1,292,837,310.21 |
| Cash payments for purchase and construction of fixed assets, intangible assets and other long-term assets | 23,188,911.97 | 13,910,582.10 |
| Cash payments for investment | 79,200,000.00 | 74,281,870.80 |
| Net cash paid for acquisition of subsidiaries and other business units | ||
| Other cash payments in relation to investing activities | 360,086,340.00 | 549,000,000.00 |
| Sub-total of cash outflows for investing activities | 462,475,251.97 | 637,192,452.90 |
| Net cash flows from investing activities | 830,940,286.12 | 655,644,857.31 |
| III. Cash flows from financing activities: | ||
| Cash receipts from absorbing investments | ||
| Cash receipts from borrowing | 559,345,278.50 | 1,040,651,082.42 |
| Other cash receipts in relation to financing activities | 1,012,500,000.00 | 673,000,000.00 |
| Sub-total of cash inflows from financing activities | 1,571,845,278.50 | 1,713,651,082.42 |
| Cash repayments of borrowings | 879,341,384.32 | 1,165,656,610.43 |
| Cash payments for distribution of dividends or profits or settlement of interest expenses | 456,826,281.28 | 545,718,585.88 |
| Other cash payments in relation to financing activities | 1,025,043,198.88 | 434,406,787.51 |
| Sub-total of cash outflows fromfinancing activities | 2,361,210,864.48 | 2,145,781,983.82 |
| Net cash flow from financing activities | -789,365,585.98 | -432,130,901.40 |
| IV. Effect of foreign exchange rate changes on Cahs and Cash Equivalents | -37,416.55 | 1,987,917.74 |
| V. Net increase in cash and cash equivalents | -388,453,529.89 | 435,101,319.10 |
| Add: Opening balance of cash and cash equivalents | 1,889,254,142.30 | 893,929,724.56 |
| VI. Closing balance of cash and cash equivalents | 1,500,800,612.41 | 1,329,031,043.66 |
7. Consolidated statement of changes in owners’ Equity
Amount in the current period
Unit: RMB yuan
| Item | Amount for the first half of 2021 | ||||||||||||||
| Ownership interest attributable to the parent company | Minority interest | Total ownership interest | |||||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | General risk reserve | Undistributed profit | Others | Total | |||||
| Preferred shares | Perpetual bonds | Others | |||||||||||||
| I. Balance at the end of the period of the prior year | 1,749,809,548.00 | 2,158,080,661.07 | -2,191,069.45 | 861,680,578.42 | 9,852,441,590.56 | 14,619,821,308.60 | 559,590,204.87 | 15,179,411,513.47 | |||||||
| Add: changes in accounting policies | |||||||||||||||
| Error correction in the prior periods | |||||||||||||||
| Merger of enterprises under the same control | |||||||||||||||
| Others | |||||||||||||||
| II. Balance at the beginning of the period of the current year | 1,749,809,548.00 | 2,158,080,661.07 | -2,191,069.45 | 861,680,578.42 | 9,852,441,590.56 | 14,619,821,308.60 | 559,590,204.87 | 15,179,411,513.47 | |||||||
| III. Amount of change in the current period (Decreases are indicated by “-”) | 46,442,911.64 | 901,009,928.52 | 947,452,840.16 | 61,207,579.59 | 1,008,660,419.75 | ||||||||||
| (I) Total comprehensive income | 49,562,711.35 | 1,300,346,324.85 | 1,349,909,036.20 | 42,161,491.00 | 1,392,070,527.20 | ||||||||||
| (II) Capital contributed by owners and capital decreases | 19,046,088.59 | 19,046,088.59 | |||||||||||||
| 1. Common shares invested by owners | |||||||||||||||
| 2. Capital invested by holders of other equity instruments | |||||||||||||||
| 3. Amount of share-based payment included in ownership interest | |||||||||||||||
| 4. Others | 19,046,088.59 | 19,046,088.59 | |||||||||||||
| (III) Profit distribution | -402,456,196.04 | -402,456,196.04 | -402,456,196.04 | ||||||||||||
| 1. Withdrawal of surplus reserve |
| 2. Withdrawal of general risk reserve | |||||||||||||||
| 3. Distribution to owners (or shareholders) | -402,456,196.04 | -402,456,196.04 | -402,456,196.04 | ||||||||||||
| 4. Others | |||||||||||||||
| (IV) Internal conversion of ownership interest | -3,119,799.71 | 3,119,799.71 | |||||||||||||
| 1. Capital (or share capital) increase from capital reserve conversion | |||||||||||||||
| 2. Capital (or share capital) increase from surplus reserve conversion | |||||||||||||||
| 3. Recovery of losses by surplus reserve | |||||||||||||||
| 4. Retained earnings from transfer of changes in the defined benefit plan | |||||||||||||||
| 5. Retained earnings from transfer of other comprehensive income | -3,119,799.71 | 3,119,799.71 | |||||||||||||
| 6. Others | |||||||||||||||
| (V) Special reserve | |||||||||||||||
| 1. Withdrawal in the current period |
| 2. Use in the current period | |||||||||||||||
| (VI) Others | |||||||||||||||
| IV. Balance at the end of the current period | 1,749,809,548.00 | 2,158,080,661.07 | 44,251,842.19 | 861,680,578.42 | 10,753,451,519.08 | 15,567,274,148.76 | 620,797,784.46 | 16,188,071,933.22 |
Amount in the previous period
Unit: RMB yuan
| Item | Amount for the first half of 2020 | ||||||||||||||
| Ownership interest attributable to the parent company | Minority interest | Total ownership interest | |||||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | General risk reserve | Undistributed profit | Others | Total | |||||
| Preferred shares | Perpetual bonds | Others | |||||||||||||
| I. Balance at the end of the period of the prior year | 1,749,809,548.00 | 2,158,080,661.07 | 22,792,488.80 | 710,359,967.51 | 7,668,434,642.62 | 12,309,477,308.00 | 557,146,931.87 | 12,866,624,239.87 | |||||||
| Add: Changes in accounting policies | |||||||||||||||
| Error correction in the prior periods | |||||||||||||||
| Merger of enterprises under the same control | |||||||||||||||
| Others | |||||||||||||||
| II. Balance at the beginning of the period of the current year | 1,749,809,548.00 | 2,158,080,661.07 | 22,792,488.80 | 710,359,967.51 | 7,668,434,642.62 | 12,309,477,308.00 | 557,146,931.87 | 12,866,624,239.87 | |||||||
| III. Amount of change in the current period (Decreases are indicated by “-”) | -218,623.93 | 38,749,338.23 | 1,241,238,047.81 | 1,279,768,762.11 | -7,285,167.82 | 1,272,483,594.29 | |||||||||
| (I) Total comprehensive income | 38,749,338.23 | 1,731,184,721.25 | 1,769,934,059.48 | 44,027,019.06 | 1,813,961,078.54 | ||||||||||
| (II) Capital contributed by owners and capital decreases | |||||||||||||||
| 1. Common shares invested by owners | |||||||||||||||
| 2. Capital invested by holders of other equity instruments | |||||||||||||||
| 3. Amount of share-based payment included in ownership interest | |||||||||||||||
| 4. Others | |||||||||||||||
| (III) Profit distribution | -489,946,673.44 | -489,946,673.44 | -49,000,000.00 | -538,946,673.44 | |||||||||||
| 1. Withdrawal of surplus reserve | |||||||||||||||
| 2. Withdrawal of general risk reserve | |||||||||||||||
| 3. Distribution to owners (or shareholders) | -489,946,673.44 | -489,946,673.44 | -49,000,000.00 | -538,946,673.44 |
| 4. Others | |||||||||||||||
| (IV) Internal conversion of ownership interest | |||||||||||||||
| 1. Capital (or share capital) increase from capital reserve conversion | |||||||||||||||
| 2. Capital (or share capital) increase from surplus reserve conversion | |||||||||||||||
| 3. Recovery of losses by surplus reserve | |||||||||||||||
| 4. Retained earnings from transfer of changes in the defined benefit plan | |||||||||||||||
| 5. Retained earnings from transfer of other comprehensive income | |||||||||||||||
| 6. Others | |||||||||||||||
| (V) Special reserve | |||||||||||||||
| 1. Withdrawal in the current period | |||||||||||||||
| 2. Use in the current period | |||||||||||||||
| (VI) Others | -218,623.93 | -218,623.93 | -2,312,186.88 | -2,530,810.81 |
| IV. Balance at the end of the current period | 1,749,809,548.00 | 2,157,862,037.14 | 61,541,827.03 | 710,359,967.51 | 8,909,672,690.43 | 13,589,246,070.11 | 549,861,764.05 | 14,139,107,834.16 |
8. Statement of changes in ownership interest of the parent company
Amount in the current period
Unit: RMB yuan
| Item | Amount for the first half of 2021 | |||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | Undistributed profit | Others | Total ownership interest | |||
| Preferred shares | Perpetual bonds | Others | ||||||||||
| I. Balance at the end of the period of the prior year | 1,749,809,548.00 | 2,168,451,528.01 | 3,051,311.29 | 939,536,337.86 | 4,303,533,798.88 | 9,164,382,524.04 | ||||||
| Add: Changes in accounting policies | ||||||||||||
| Error correction in the prior periods | ||||||||||||
| Others | ||||||||||||
| II. Balance at the beginning of the period of the current year | 1,749,809,548.00 | 2,168,451,528.01 | 3,051,311.29 | 939,536,337.86 | 4,303,533,798.88 | 9,164,382,524.04 | ||||||
| III. Amount of change in the current period (Decreases are indicated by “-”) | 724,839,525.18 | 724,839,525.18 | ||||||||||
| (I) Total comprehensive income | 1,127,295,721.22 | 1,127,295,721.22 | ||||||||||
| (II) Capital contributed by owners and | ||||||||||||
| capital decreases | ||||||||||||
| 1. Common shares invested by owners | ||||||||||||
| 2. Capital invested by holders of other equity instruments | ||||||||||||
| 3. Amount of share-based payment included in ownership interest | ||||||||||||
| 4. Others | ||||||||||||
| (III) Profit distribution | -402,456,196.04 | -402,456,196.04 | ||||||||||
| 1. Withdrawal of surplus reserve | ||||||||||||
| 2. Distribution to owners (or shareholders) | -402,456,196.04 | -402,456,196.04 | ||||||||||
| 3. Others | ||||||||||||
| (IV) Internal conversion of ownership interest | ||||||||||||
| 1. Capital (or share capital) increase from capital reserve conversion | ||||||||||||
| 2. Capital (or share capital) increase from surplus reserve conversion | ||||||||||||
| 3. Recovery of losses by surplus |
| reserve | ||||||||||||
| 4. Retained earnings from transfer of changes in the defined benefit plan | ||||||||||||
| 5. Retained earnings from transfer of other comprehensive income | ||||||||||||
| 6. Others | ||||||||||||
| (V) Special reserve | ||||||||||||
| 1. Withdrawal in the current period | ||||||||||||
| 2. Use in the current period | ||||||||||||
| (VI) Others | ||||||||||||
| IV. Balance at the end of the current period | 1,749,809,548.00 | 2,168,451,528.01 | 3,051,311.29 | 939,536,337.86 | 5,028,373,324.06 | 9,889,222,049.22 |
Amount in the previous period
Unit: RMB yuan
| Item | Amount for the first half of 2020 | |||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserve | Surplus reserve | Undistributed profit | Others | Total ownership interest | |||
| Preferred shares | Perpetual bonds | Others | ||||||||||
| I. Balance at the end of the period of the prior year | 1,749,809,548.00 | 2,168,451,528.01 | 847,526.06 | 788,215,726.95 | 3,431,594,974.14 | 8,138,919,303.16 | ||||||
| Add: Changes in accounting policies | ||||||||||||
| Error correction in the prior periods | ||||||||||||
| Others | ||||||||||||
| II. Balance at the beginning of the period of the current year | 1,749,809,548.00 | 2,168,451,528.01 | 847,526.06 | 788,215,726.95 | 3,431,594,974.14 | 8,138,919,303.16 | ||||||
| III. Amount of change in the current period (Decreases are indicated by “-”) | 831,772,220.51 | 831,772,220.51 | ||||||||||
| (I) Total comprehensive income | 1,321,718,893.95 | 1,321,718,893.95 | ||||||||||
| (II) Capital contributed by owners and capital decreases | ||||||||||||
| 1. Common shares invested by owners | ||||||||||||
| 2. Capital invested by holders of other equity instruments | ||||||||||||
| 3. Amount of share-based payment included in ownership interest | ||||||||||||
| 4. Others | ||||||||||||
| (III) Profit distribution | -489,946,673.44 | -489,946,673.44 |
| 1. Withdrawal of surplus reserve | ||||||||||||
| 2. Distribution to owners (or shareholders) | -489,946,673.44 | -489,946,673.44 | ||||||||||
| 3. Others | ||||||||||||
| (IV) Internal conversion of ownership interest | ||||||||||||
| 1. Capital (or share capital) increase from capital reserve conversion | ||||||||||||
| 2. Capital (or share capital) increase from surplus reserve conversion | ||||||||||||
| 3. Recovery of losses by surplus reserve | ||||||||||||
| 4. Retained earnings from transfer of changes in the defined benefit plan | ||||||||||||
| 5. Retained earnings from transfer of other comprehensive income | ||||||||||||
| 6. Others | ||||||||||||
| (V) Special reserve | ||||||||||||
| 1. Withdrawal in the current period |
| 2. Use in the current period | ||||||||||||
| (VI) Others | ||||||||||||
| IV. Balance at the end of the current period | 1,749,809,548.00 | 2,168,451,528.01 | 847,526.06 | 788,215,726.95 | 4,263,367,194.65 | 8,970,691,523.67 |
Huadong Medicine Co., Ltd.Chairman of the Board: Lv Liang
August 10, 2021