Stock code：600380 Stock abbreviation：健康元
Joincare Pharmaceutical Group Industry Co., Ltd.
2021 Third Quarterly Report
IMPORTANT NOTICE:
? The Board, the Supervisory Committee and the directors, supervisors and senior management of theCompany hereby warrant the truthfulness, accuracy and completeness of the contents of the Report,and that there are no false representations, misleading statements or material omissions contained inthe Report, and severally and jointly accept responsibility.
? The person-in-charge of the Company, the person-in-charge of the Company's accounting work and
the person-in-charge of the accounting department (the head of the accounting department) herebywarrant the truthfulness, accuracy and completeness of the financial statements contained in theReport.
? Whether the third quarterly financial statements are audited
□Applicable √N/A
? The Report is prepared in both Chinese and English. In case of any ambiguity in the understanding
of the Chinese and English texts, the Chinese version shall prevail.
I Principal Financial Data
(I) Principal accounting data and financial indicators
Unit: Yuan Currency: RMB
| Item | The Reporting Period (July-September 2021) | Year-on-Year Change (%) | From the beginning of the year to the end of the Reporting Period (January – September 2021) | Year-on-Year Change (%) |
| Revenues | 4,098,276,714.19 | 12.98 | 11,933,648,988.85 | 18.12 |
| Net profit attributable to Shareholders of the listed company | 321,327,690.20 | 27.91 | 1,008,675,184.73 | 8.76 |
| Net profit attributable to Shareholders of the listed company after deducting the extraordinary gain or loss | 321,676,905.90 | 52.36 | 919,569,233.33 | 14.45 |
| Net cash flow from operating activities | N/A | N/A | 1,621,169,704.58 | -18.31 |
| Basic earnings per share (RMB/share) | 0.1640 | 25.67 | 0.5154 | 7.64 |
| Diluted earnings per share (RMB/share) | 0.1638 | 26.49 | 0.5142 | 7.96 |
| Weighted average return on net assets (%) | 2.85 | Increased by 0.47 percentage point | 8.89 | Increased by 0.17 percentage point |
| End of the Reporting Period | End of the Previous Year | Change (%) | ||
| Total assets | 29,154,637,491.82 | 28,156,977,599.07 | 3.54 | |
| Owners’ equity attributable to Shareholders of the listed company | 11,314,080,616.51 | 11,096,125,890.51 | 1.96 | |
Note: 1. “Reporting Period” refers to the 3rd Quarter of 2021, from July 1, 2021 to September 30, 2021.
2. From January to September 2021, the Company recorded operating revenues of RMB 11,934million, representing an increase of 18.12% year-on-year; the main driver of the growth is significantincreasing sales volume of main product categories in key specialist arenas of the Chemical drugpreparation segment. Revenues from chemical drug preparation products amounted to RMB 6,907million, representing an increase of 40.96% year-on-year, of which, revenues from Inhalation productsamounted to 274 million, representing an increase of 957.88% year-on-year; Revenues fromanti-infective drugs amounted to RMB1,053 million, representing a decrease of 0.19% year-on-year;Revenues from gastroenterology products amounted to RMB 2,993 million, representing an increase of
68.66% year-on-year; Revenues from gonadotropic hormones products amounted to RMB 1,978 million,representing an increase of 37.75% year-on-year; Revenues from psychiatric products amounted toRMB 306 million, representing an increase of 49.77% year-on-year. Revenues from APIs andintermediates amounted to RMB 3,441 million, representing an increase of 17.51% year-on-year.Revenues from traditional Chinese drug preparation products amounted to RMB 853 million,representing a decrease of 10.53% year-on-year. Revenues from diagnostic reagents and equipmentproducts amounted to RMB552 million, representing a decrease of 52.64% year-on-year. Revenues fromhealth care products amounted to RMB 86 million, representing a decrease of 20.28% year-on-year.
(Ⅱ) Items and amounts of extraordinary gains and losses
Unit: Yuan Currency: RMB
| Item | Amounts for the Reporting Period | Amount from the beginning of the year to the end of the Reporting Period (January – September 2021) | Description |
| Gains and losses on disposal of non-current assets (Including the write-off part of the provision for impairment of assets） | 528,115.38 | 20,878,916.52 | Proceeds from disposal of fixed assets |
| Government grants included in profit and loss for the Period (except for government grants closely associated with normal corporate businesses, entitled at fixed amount or fixed level according to national policies and national unified standards) | 45,995,421.31 | 175,456,418.58 | Government grants included in profit and loss for the Period |
| Gains and losses on fair value changes of financial assets held for trading, derivative financial assets, financial liabilities held for trading, derivative financial liabilities, and investment income generated on disposal of financial assets held for trading, derivative financial assets, financial liabilities held for trading, derivative financial liabilities and other debt investments, except for effective hedging activities related to the ordinary operating business of the Company | -48,806,320.50 | 6,742,628.05 | Gains or losses arising from changes in fair value of financial assets/liabilities held for trading, and investment gains from holding and disposal of financial assets/liabilities held for trading |
| Other non-operating revenues and non-operating expenditures apart from the above items | -12,046,187.71 | -13,444,794.44 | Other non-operating Revenues and non-operating expenditures apart from the above items |
| Less: Effect on income tax | 3,376,118.90 | 29,574,335.32 | Effect of the above items on income tax |
| Effect on minority interests after tax | -17,355,874.72 | 70,952,881.99 | The portion of the above items to which minority shareholders are entitled |
| Total | -349,215.70 | 89,105,951.40 |
The explanation on the recognitions of the items of extraordinary gains and losses as set out in the“Interpretative Announcement for Information Disclosure of Companies that Issue Securities to thePublic No. 1 – Extraordinary Gains or Losses” as items of recurring gains and losses
□Applicable √N/A
(Ⅲ) Changes and the reasons for changes in principal accounting data and financial indicators
√Applicable □N/A
| Name of item | Change in proportion（%） (2021Q3 compared with 2020 Q3) | Explanation |
| Net profit attributable to Shareholders of the listed company after deducting the extraordinary gain or loss (2021 Q3 ) | 52.36 | Mainly due to the significant growth of the sales revenues from the chemical drugs, which is the main driver of the growth of the net incomes. |
(IV) Substantial changes of other items in the Financial Statements and financial indicators andreasons thereof
Unit Yuan Currency：RMB
| Balance Sheet | 2021/09/30 | 2020/12/31 | Change in proportion （%） | Main Reason |
| Financial assets held for trading | 189,909,950.41 | 28,328,748.72 | 570.38 | Mainly due to the fact that the subsidiary Livzon Group was allocated the shares of Beam Therapeutics Inc. (NASDAQ: BEAM) originally held by SCC VENTURE VII 2018-C, L.P. pursuant to the investment agreement, as a result of the proposed deregistration of SCC VENTURE VII 2018-C, L.P. in which Livzon Group made investment. |
| Prepayments | 522,396,275.49 | 209,926,040.57 | 148.85 | Mainly due to the increase in procurement amounts and costs prepaid for materials. |
| Non-current assets due within one year | 8,634,022.41 | 19,934,376.07 | -56.69 | Mainly due to the receipt of consideration for the transfer of some equity interest in a controlling subsidiary of the subsidiary Livzon Group. |
| Long-term equity investments | 1,418,022,709.96 | 628,279,599.73 | 125.70 | Mainly due to the subsidiary Livzon Group’s acquisition of 40% equity interest in Tianjin Tongrentang Group Co., Ltd. (天津同仁堂集团股份有限公司). |
| Other non-current assets | 608,764,830.86 | 373,557,910.72 | 62.96 | Mainly due to the increase in prepayment for engineering equipment. |
| Financial liabilities held for trading | 39,018.28 | 212.07 | 18298.77 | Mainly due to the increased losses from foreign exchange forward contracts owned by Livzon Group |
| Employee benefits payables | 280,937,529.46 | 476,521,798.51 | -41.04 | Mainly due to the payment for the special funds of the “Medium to Long-term Business Partner Share Ownership Scheme”. |
| Other current liabilities | 3,343,666.92 | 6,267,034.79 | -46.65 | Mainly due to some contract amounts received in advance were transferred to revenue upon fulfilling the conditions for revenue recognition, and the decrease in tax for items pending for settlement. |
| Long-term loans | 688,100,000.00 | 360,324,027.48 | 90.97 | Mainly due to the new bank borrowings of the subsidiary Livzon Group. |
| Leasing liabilities | 6,042,261.51 | 9,817,780.04 | -38.46 | Mainly due to the subsidiary Livzon Group’s reclassification of leasing liabilities due within one year to non-current liabilities due within one year caused by the change in credit period. |
| Other comprehensive income | 25,758,615.13 | 116,300,559.28 | -77.85 | Mainly due to Livzon Group’s transfer of other comprehensive income recognized in the previous period into retained earnings after the disposal of investment in other equity instruments. |
| Income Statement | 2021 Jan-Sep | 2020 Jan-Sep | Change in proportion （%） | Main Reason |
| Selling expenses | 3,820,420,328.92 | 2,933,764,220.56 | 30.22 | Mainly due to the increase in selling expenses in line with a prominent growth in the sales revenue of drug preparation products during the Period, as a result of the Company’s increased marketing efforts for |
| Inhalation, gastroenterology and psychiatry products during the Period. | ||||
| Research and Development(“R&D”) expenses | 959,056,925.14 | 695,722,058.28 | 37.85 | Mainly due to an increase in R&D investment, as a result of actively advancing the R&D progress of project of innovative drug “Recombinant SARS-CoV-2 Fusion Protein Vaccine” and the expansion of the scientific research team during the Period. |
| Finance expenses | -43,302,001.92 | -92,039,637.31 | N/A | Mainly due to an increase in interest expenses as a result of an increase in loans during the Period and lower interest income than the previous period as a result of a decrease in deposit interest rate and no interest settled for some unexpired deposits. |
| Investment income | 69,260,277.50 | 140,803,971.20 | -50.81 | Mainly due to the the subsidiary Livzon Group’s income from the disposal of the equity interest in Jiangsu Ni Ke Medical Device Co., Ltd. (江苏尼科医疗器械有限公司) in the previous period. |
| Gains from changes in fair value | -18,014,545.96 | 6,163,867.32 | -392.26 | Mainly due to fluctuations in the market value of investment in securities held by the subsidiary Livzon Group. |
| Credit impairment loss | -10,549,870.63 | -3,974,299.64 | 165.45 | Mainly due to the increase in the expected credit loss of receivables. |
| Asset impairment loss | -35,798,711.62 | -26,883,492.66 | 33.16 | Mainly due to the increase in the provision for inventory depreciation. |
| Gains from disposal of assets | 18,357,859.21 | -43,950.50 | N/A | Mainly due to the gains from the external disposal of Land use rights during the Period. |
| Cash Flow Statement | 2021 Jan-Sep | 2020 Jan-Sep | Change in proportion （%） | Main Reason |
| Subtotal of cash outflow from investing activities | 1,739,746,862.49 | 618,514,702.58 | 181.28 | Mainly due to the subsidiary Livzon Group’s payment of consideration for the Livzon’s acquisition of 40% equity interest in Tianjin Tongrentang Group Co., Ltd. (天津同仁堂集团股份有限公司). |
| Net cash flow from investing activities | -1,509,334,937.50 | -402,448,366.98 | N/A | Mainly due to the subsidiary Livzon Group’s payment of consideration for the acquisition of 40% equity interest in Tianjin Tongrentang Group Co., Ltd. (天津同仁堂集团股份有限公司). |
| Effect of changes in foreign exchange rates on cash and cash equivalents | -20,822,588.77 | -36,878,975.00 | N/A | Mainly due to the decrease of the subsidiary Livzon Group’s exchange losses on cash held in foreign currencies, as a result of the changes in exchange rates. |
| Net increase in cash and cash equivalents | -1,692,759,711.75 | -655,783,619.10 | N/A | Mainly due to the subsidiary Livzon Group’s payment of consideration for the acquisition of 40% equity interest in Tianjin Tongrentang Group Co., Ltd. (天津同仁堂集团股份有限公司). |
II Shareholders' Information
(I) Table of the total number of ordinary shareholders, the number of preferred shareholders withresumed voting rights and shareholdings of the top 10 shareholders
Unit: Shares
| Total number of ordinary shareholders at the end of the Reporting Period | 111,259 | Total number of preferred shareholders with resumed voting rights at the end of the Reporting Period (if any) | 0 | |||
| Shareholdings of the top 10 shareholders | ||||||
| Name of shareholders | Nature of shareholders | Number of shares | Percentage (%) | Number of shares held | Pledge, mark or lock-up | |
| with selling restrictions | Share status | Number | |||||
| Shenzhen Baiyeyuan Investment Co., Ltd.*(深圳市百业源投资有限公司) | Domestic non-state-owned legal person | 895,653,653 | 47.01 | 0 | Pledge | 95,679,725 | |
| Hong Kong Securities Clearing Company Limited | Unknown | 88,941,864 | 4.67 | 0 | Unknown | ||
| Might Seasons Limited (鸿信行有限公司) | Overseas legal person | 71,859,334 | 3.77 | 0 | Unknown | ||
| 108 portfolio of national social security fund | Unknown | 12,461,721 | 0.65 | 0 | Unknown | ||
| 16011 portfolio of basic endowment insurance fund | Unknown | 12,119,743 | 0.64 | 0 | Unknown | ||
| Abu Dhabi Investment Authority | Overseas legal person | 12,018,189 | 0.63 | 0 | Unknown | ||
| Hua Life Insurance Co., Ltd. - proprietary investment account | Unknown | 9,112,618 | 0.48 | 0 | Unknown | ||
| Bosera Funds Management Co., Ltd. - 419 portfolio of social security funds | Unknown | 8,732,946 | 0.46 | 0 | Unknown | ||
| He Zhong | Domestic natural person | 7,650,024 | 0.40 | 0 | Unknown | ||
| Agricultural Bank of China Limited - China 500 Exchange Traded Open-End Index Securities Investment Fund (ETF) | Unknown | 6,295,902 | 0.33 | 0 | Unknown | ||
| Shareholdings of the top 10 shareholders without selling restrictions | |||||||
| Name of shareholders | Number of tradable shares held without selling restrictions | Class and number of shares | |||||
| Class | Number | ||||||
| Shenzhen Baiyeyuan Investment Co., Ltd.*(深圳市百业源投资有限公司) | 895,653,653 | Ordinary shares denominated in Renminbi | 895,653,653 | ||||
| Hong Kong Securities Clearing Company Limited | 88,941,864 | Ordinary shares denominated in Renminbi | 88,941,864 | ||||
| Might Seasons Limited (鸿信行有限公司) | 71,859,334 | Ordinary shares denominated in Renminbi | 71,859,334 | ||||
| 108 portfolio of national social security fund | 12,461,721 | Ordinary shares denominated in Renminbi | 12,461,721 | ||||
| 16011 portfolio of basic endowment insurance fund | 12,119,743 | Ordinary shares denominated in Renminbi | 12,119,743 | ||||
| Abu Dhabi Investment Authority | 12,018,189 | Ordinary shares denominated in Renminbi | 12,018,189 | ||||
| Hua Life Insurance Co., Ltd. - proprietary investment account | 9,112,618 | Ordinary shares denominated in Renminbi | 9,112,618 | ||||
| Bosera Funds Management Co., Ltd. - 419 portfolio of social security funds | 8,732,946 | Ordinary shares denominated in Renminbi | 8,732,946 | ||||
| He Zhong | 7,650,024 | Ordinary shares denominated in Renminbi | 7,650,024 | ||||
| Agricultural Bank of China Limited - China 500 Exchange Traded Open-End Index Securities Investment Fund (ETF) | 6,295,902 | Ordinary shares denominated in Renminbi | 6,295,902 | ||||
| Description of connection or acting-in-concert relationship of the above shareholders | There was no connection or acting-in-concert relationship between Shenzhen Baiyeyuan Investment Co., Ltd., the controlling shareholder of the Company, and other shareholders; whether there is connection or acting-in-concert relationship among other shareholders is unknown. | ||||||
| Description of the participation of the top 10 shareholders and the top 10 shareholders without selling restriction in securities margin trading and securities financing (if any) | Shareholder He Zhong held 850,000 shares through an ordinary securities account and 6,800,024 shares through a customer's margin account, namely 7,650,024 shares in total. | ||||||
| Notes on the special repurchase account among the top 10 shareholders | As at the end of the Reporting Period, the special repurchase account of the Company (special securities repurchase account of Joincare Pharmaceutical Group Industry Co., Ltd.) owned 17,459,813 shares in total, accounting for 0.92% of total share capital of the Company. | ||||||
III Other InformationOther key information on the operations of the Company during the Reporting Period to which investorsshould be reminded to pay attention
√Applicable □N/A
1. Use of Proceeds
According to the Reply to the Approval of Share Allotment of Joincare Pharmaceutical GroupIndustry Co., Ltd. issued by China Securities Regulatory Commission (Zheng Jian Xu Ke [2018] No.1284), the Company allotted 365,105,066 new shares to the original shareholders. The total amount ofactual proceeds from the allotment was RMB 1,715,993,810.20; the deducted distribution expenses wereRMB 46,253,565.29; the net amount of proceeds was RMB 1,669,740,244.91. As at October 16, 2018,the said proceeds were in place, which was validated by the Capital Verification Report of JoincarePharmaceutical Group Industry Co., Ltd. issued by Ruihua Certified Public Accountants (Rui Hua YanZi [2018] No. 40060006).As at September 30, 2021, the use of proceeds was as follows:
Unit: RMB 10,000
| Project name | Total amount of investment | Total amount of proceeds invested | Use of proceeds as at September 30, 2021 | Balance of proceeds as at September 30, 2021 |
| Zhuhai Health Industry Base Construction Project | 98,066.84 | 76,974.02 | 3,386.29 | 73,587.73 |
| Haibin Pharma Pingshan Pharmaceutical Industrialization Base Project | 125,471.35 | 90,000.00 | 63,350.74 | 26,649.26 |
| Total | 223,538.19 | 166,974.02 | 66,737.03 | 100,236.99 |
Pursuant to the Resolution on the Temporary Replenishment of Working Capital with Idle Proceedsconsidered and approved at the 37th Meeting of the 7th Session of the Board of the Company on 30December 2020, it was agreed that the Company temporarily replenished the working capital with nomore than RMB 900 million of idle proceeds from January 1, 2021 to December 31, 2021, so as toimprove the use efficiency of proceeds and reduce financial expenses of the Company. Pursuant to theResolution on Cash Management with Idle Proceeds considered and approved, it was agreed that theCompany carried out cash management with no more than RMB 250 million of idle proceeds andpurchased principal-guaranteed bank cash management products with high security and good liquidity ordeposit products with high investment incomes, without prejudice to the implementation of projectsinvested with proceeds and the use of proceeds. Duration of the said cash management was from January1, 2021 to December 31, 2021; the funds may be used on revolving basis within the approved limit.
As at the date of disclosure of the Report, the balance for temporary replenishment of workingcapital was RMB 860 million. The outstanding balance for cash management with idle proceeds wasRMB 130 million.
2. Matters About Equity Incentives
Pursuant to the Resolution relating to Cancellation of Certain Share Options under the 2018 ShareOption Incentive Plan considered and approved at the 52nd Meeting of the 7th Session of the Board andthe 38th Meeting of the 7th Session of the Supervisor Committee of the Company on August 10, 2021,share options under the first grant and reserved grant that have been granted but not yet exercised due toresignation of some Incentive Participants or other reasons were canceled. The number of IncentiveParticipants for the first grant was adjusted from 233 to 211, while the number of unexercised shareoptions under the first grant was adjusted from 9,505,859 to 8,827,859, with 678,000 share optionscanceled; the number of Incentive Participants for the reserved grant was adjusted from150 to 142, andthe number of unexercised share options under the reserved grant was adjusted from 3,370,472 to3,210,472, with 160,000 share options canceled. See the Announcement on the Cancellation of CertainShare Options of Joincare Pharmaceutical Group Industry Co., Ltd. Granted but Not Yet Exercised underthe 2018 Share Option Incentive Plan (Lin 2021-098) disclosed by the Company on August 11, 2021 fordetails. The Company completed the above stock option cancellation on August 17, 2021; thecancellation was validated and confirmed by Shanghai Branch of China Securities Depository andClearing Corporation Limited.
The Resolution on Fulfillment of Exercise Conditions for the Second Exercise Period of theReserved Grant under the 2018 Share Options Incentive Scheme was considered and approved at the53rd Meeting of the 7th Session of the Board and the 40th Meeting of the 7th Session of the SupervisoryCommittee of the Company on August 25, 2021. The independent directors of the Company voicedindependent opinions on the resolution and the supervisors voiced opinions on approval of the resolution.The number of exercisable options during the second exercise period of the reserved grant under the2018 Share Options Incentive Scheme of the Company was 2,935,000 and the exercise period was fromSeptember 23, 2021 to September 22, 2022. The share options may be exercised on a voluntary basis.See the Announcement on Fulfillment of Exercise Conditions for the Second Exercise Period of theReserved Grant under the 2018 Share Options Incentive Scheme of Joincare Pharmaceutical Group
Industry Co., Ltd. (Lin 2021-107) disclosed by the Company on August 26, 2021 for details.As at the end of the Reporting Period, the number of options cumulatively exercised andcompleting share transfer registration under the first grant and reserved grant of the 2018 Share OptionsIncentive Scheme of the Company was 22,459,801. In 2021 Q3, the paid-in capital for exercise wasRMB 16,219,524.94, among which, the newly registered capital was RMB 1,899,922, and RMB14,319,602.94 was recognized as capital reserve (additional paid in capital). The exercise this time didnot impose a heavy impact on the financial status and operating results of the Company. See theAnnouncement on 2021 Q3 Voluntary Exercise Results of the 2018 Share Options Incentive Scheme ofJoincare Pharmaceutical Group Industry Co., Ltd. & Changes in Shares (Lin 2021-124) disclosed by theCompany on October 9, 2021 for details.
3. Matters About Share Repurchase
Pursuant to the Resolution on Share Repurchase Scheme by Way of Centralized Price Bidding andother resolutions considered and approved at the 41st Meeting of the 7th Session of the Board and the2021 First Extraordinary General Meeting of the Company on February 9, 2021 and February 25, 2021,respectively, it was approved that the Company repurchased company shares by way of centralized pricebidding with its own funds or self-raised funds; the total amount of repurchase funds should be no lessthan RMB 350 million (inclusive) and no more than RMB 700 million (inclusive); the repurchase priceshould be no more than RMB 20/share (inclusive); the repurchase term should be no more than 12months from the date when the repurchase scheme was approved by the General Meeting of theCompany. See the Announcement of Joincare Pharmaceutical Group Industry Co., Ltd. on the ShareRepurchase Scheme by Way of Centralized Price Bidding (Lin 2021-016) and the Announcement on theResolution of the 2021 First Extraordinary General Meeting of Joincare Pharmaceutical Group IndustryCo., Ltd. (Lin 2021-025) disclosed by the Company on February 10, 2021 and February 26, 2021 fordetails. The Repurchase Report of Joincare Pharmaceutical Group Industry Co., Ltd. on ShareRepurchase by Way of Centralized Price Bidding (Lin 2021-027) was disclosed by the Company onMarch 5, 2021.As at September 14, 2021, the Company cumulatively repurchased 55,135,296 shares by way ofcentralized price bidding, representing 2.81% of total share capital of the Company (1,959,977,436shares); the maximum repurchase price was RMB 16.92/share; the minimum repurchase price was RMB
10.80/share; the average repurchase price was RMB 12.69/share; and the total amount paid was RMB699,900,526.87 (including commissions). The Company completed the cancellation of repurchasedshares with the Shanghai Branch of China Securities Depository and Clearing Corporation Limited onSeptember 16, 2021. See the Announcement of Joincare Pharmaceutical Group Industry Co., Ltd. on theResults of Share Repurchase & Changes in Shares (Lin 2021-122) disclosed by the Company onSeptember 16, 2021 for details.
4. Medium to Long-term Business Partner Share Ownership Scheme
Pursuant to the Resolution on the First Phase Ownership Scheme under Medium to Long-termBusiness Partner Share Ownership Scheme of the Company and its Summary considered and approvedat the 48th Meeting of the 7th Session of the Board on June 10, 2021 and the 2021 Second ExtraordinaryGeneral Meeting on June 29, 2021, the Company compiled the First Phase Ownership Scheme underMedium to Long-term Business Partner Share Ownership Scheme of Joincare Pharmaceutical GroupIndustry Co., Ltd. (hereinafter referred to as this "Scheme") and its Summary to guide theimplementation of this Scheme. The participants of this Scheme include senior management of theCompany and core R&D, production, sales and management personnel who have made outstandingcontribution to the Company during the performance appraisal period or have a significant impact on thefuture performance of the Company. The total number of participants in the phase shall not exceed 41,and the final participants shall be determined according to the actual subscription. The source of fundsshall be the special fund for the Scheme as withdrawn by the Company, in amount totaling RMB31,038,241.According to the "Confirmation Letter on Securities Transfer and Registration" received fromChina Securities Depository and Clearing Corporation Limited on August 5, 2021, 2,430,800 shares heldin the Company's special security repurchase account had been transferred to the Company's first phaseshare ownership scheme account by way of non-trade transfer on August 4, 2021 at a price of RMB
12.75/share, representing 0.12% of the total share capital of the Company (1,959,507,007 shares). Theshares acquired by employees under the Scheme will be locked up for 36 months, from August 4, 2021to August 3, 2024. See the Announcement of Joincare Pharmaceutical Group Industry Co., Ltd. onCompletion of the Non-Trade Transfer of Shares under the First Phase Ownership Scheme underMedium to Long-term Business Partner Share Ownership Scheme (Lin 2021-091) disclosed by the
Company on August 6, 2021 for details.
The 1st meeting of participants of the First Phase Share Ownership Scheme under Medium toLong-term Business Partner Share Ownership Scheme (hereinafter referred to as the "First Phase ShareOwnership Scheme") was held on August 10, 2021, at which, the management committee for the FirstPhase Share Ownership Scheme was established and three members were elected. The managementcommittee was authorized to handle matters related to the Scheme. See the Announcement of JoincarePharmaceutical Group Industry Co., Ltd. on Resolution of the 1st Meeting of Participants of the FirstPhase Share Ownership Scheme under Medium to Long-term Business Partner Share OwnershipScheme (Lin 2021-092) disclosed by the Company on August 11, 2021 for details.
IV Quarterly Financial Statements
(I) Audit Opinion
□Applicable √N/A
(II) Financial statements
Consolidated Balance SheetAt 30 September 2021
Prepared by: Joincare Pharmaceutical Group Industry Co., Ltd.
Unit：Yuan Currency：RMB Unaudited
| Item | 30 September 2021 | 31 December 2020 |
| Current assets: | ||
| Monetary fund | 10,550,971,638.68 | 12,289,098,613.19 |
| Financial assets held for trading | 189,909,950.41 | 28,328,748.72 |
| Bills receivables | 1,733,017,107.76 | 1,343,013,818.54 |
| Accounts receivables | 3,018,237,975.29 | 2,447,406,222.52 |
| Receivables financing | ||
| Prepayments | 522,396,275.49 | 209,926,040.57 |
| Other receivables | 213,796,272.84 | 177,240,162.81 |
| Of which: Interest receivable | ||
| Dividends receivable | ||
| Inventories | 1,855,536,544.45 | 1,831,509,012.27 |
| Contract assets | ||
| Held-for-sale assets | ||
| Non-current assets due within one year | 8,634,022.41 | 19,934,376.07 |
| Other current assets | 69,332,467.13 | 58,098,049.20 |
| Total current assets | 18,161,832,254.46 | 18,404,555,043.89 |
| Non-current assets: | ||
| Debt investments | ||
| Other debt investments | ||
| Long-term receivables | 584,284.36 | 584,284.36 |
| Long-term equity investments | 1,418,022,709.96 | 628,279,599.73 |
| Other equity instrument investments | 1,405,665,198.19 | 1,576,391,663.13 |
| Other non-current financial assets | ||
| Investment properties | 6,191,475.43 | 6,191,475.43 |
| Fixed assets | 4,531,137,755.33 | 4,380,285,156.93 |
| Construction in progress | 811,363,845.40 | 648,478,042.42 |
| Productive biological assets | ||
| Oil and gas assets | ||
| Right-of-use assets | 15,403,116.86 | 18,030,132.69 |
| Intangible assets | 468,512,047.53 | 468,087,916.05 |
| Development expenditure | 467,080,044.56 | 399,119,603.78 |
| Goodwill | 614,468,698.73 | 614,468,698.73 |
| Long-term deferred expenses | 196,581,636.02 | 170,049,601.98 |
| Deferred income tax assets | 449,029,594.13 | 468,898,469.23 |
| Other non-current assets | 608,764,830.86 | 373,557,910.72 |
| Total non-current assets | 10,992,805,237.36 | 9,752,422,555.18 |
| Total assets | 29,154,637,491.82 | 28,156,977,599.07 |
| Current liabilities: | ||
| Short-term loans | 1,854,753,015.63 | 2,110,942,804.06 |
| Financial liabilities held for trading | 39,018.28 | 212.07 |
| Bills payables | 1,411,712,620.87 | 1,087,759,353.31 |
| Accounts payables | 868,649,376.95 | 832,632,206.53 |
| Receipts in advance | ||
| Contract liabilities | 96,384,826.19 | 133,422,354.03 |
| Employee benefits payables | 280,937,529.46 | 476,521,798.51 |
| Tax and surcharge payables | 276,034,461.08 | 298,342,182.44 |
| Other payables | 3,272,120,955.95 | 2,847,688,065.59 |
| Of which: Interest payable | ||
| Dividends payable | 40,826,174.22 | 8,418,590.50 |
| Held-for-sale liabilities | ||
| Non-current liabilities due within one year | 9,821,001.35 | 8,539,077.05 |
| Other current liabilities | 3,343,666.92 | 6,267,034.79 |
| Total current liabilities | 8,073,796,472.68 | 7,802,115,088.38 |
| Non-current liabilities: | ||
| Long-term loans | 688,100,000.00 | 360,324,027.48 |
| Notes payables | ||
| Leasing liabilities | 6,042,261.51 | 9,817,780.04 |
| Long-term payables | ||
| Long-term employee benefits payables | ||
| Provisions | ||
| Deferred gains | 454,618,399.79 | 467,562,770.49 |
| Deferred income tax liabilities | 188,101,595.20 | 202,259,855.68 |
| Other non-current liabilities | 78,000,000.00 | 78,000,000.00 |
| Total non-current liabilities | 1,414,862,256.50 | 1,117,964,433.69 |
| Total liabilities | 9,488,658,729.18 | 8,920,079,522.07 |
| Owners’ (or shareholders’) equity | ||
| Paid-in capital (or share capital) | 1,905,357,843.00 | 1,952,780,764.00 |
| Other equity instruments | ||
| Of which: Preferred shares | ||
| Perpetual bonds | ||
| Capital reserve | 2,061,174,342.81 | 2,533,288,674.28 |
| Less: Treasury shares | 222,644,454.50 | 253,637,154.50 |
| Other consolidated earnings | 25,758,615.13 | 116,300,559.28 |
| Special reserve | ||
| Surplus reserve | 515,941,465.20 | 515,941,465.19 |
| Undistributed profits | 7,028,492,804.87 | 6,231,451,582.26 |
| Total owners’ equity (or shareholders’ equity) attributable to equity holders of the parent company | 11,314,080,616.51 | 11,096,125,890.51 |
| Minority interests | 8,351,898,146.13 | 8,140,772,186.49 |
| Total owners’ (or shareholders’) equity | 19,665,978,762.64 | 19,236,898,077.00 |
| Total liabilities and owners’ (or shareholders’) equity | 29,154,637,491.82 | 28,156,977,599.07 |
Person-in-charge of theCompany: Zhu Baoguo
Person-in-charge of theCompany’s accounting work:
Qiu Qingfeng
Person-in-charge of theaccounting department:
Qiu Qingfeng
Consolidated Income StatementJanuary to September, 2021
Prepared by: Joincare Pharmaceutical Group Industry Co., Ltd.
Unit：Yuan Currency：RMB Unaudited
| Item | First three quarters of 2021 （January to September） | First three quarters of 2020 （January to September） |
| I. Total revenues | 11,933,648,988.85 | 10,103,029,326.93 |
| Of which: operating revenues | 11,933,648,988.85 | 10,103,029,326.93 |
| II. Total operating costs | 9,728,395,382.69 | 7,866,803,182.98 |
| Of which: Operating costs | 4,202,628,262.24 | 3,580,932,722.96 |
| Tax and surcharge | 138,588,360.34 | 117,469,489.45 |
| Selling expenses | 3,820,420,328.92 | 2,933,764,220.56 |
| Administrative expenses | 651,003,507.97 | 630,954,329.04 |
| R&D expenses | 959,056,925.14 | 695,722,058.28 |
| Finance expenses | -43,302,001.92 | -92,039,637.31 |
| Of which: Interest expenses | 73,581,421.29 | 22,518,905.86 |
| Interest income | 111,786,015.39 | 139,660,448.43 |
| Add: Other income | 177,015,688.29 | 202,763,992.92 |
| Investment income (“-” represents losses) | 69,260,277.50 | 140,803,971.20 |
| Of which: Income from investments in associates and joint ventures | 11,789,322.81 | 7,593,871.51 |
| Gains from terminated recognition of financial assets measured at amortized cost (“-” represents losses) | ||
| Gains from hedging net exposure (“-” represents losses) | ||
| Gains from changes in fair value (“-” represents losses) | -18,014,545.96 | 6,163,867.32 |
| Credit impairment loss (“-” represents losses) | -10,549,870.63 | -3,974,299.64 |
| Asset impairment loss (“-” represents losses) | -35,798,711.62 | -26,883,492.66 |
| Gains from disposal of assets (“-” represents losses) | 18,357,859.21 | -43,950.50 |
| III. Operating profit (“-” represents losses) | 2,405,524,302.95 | 2,555,056,232.59 |
| Add: non-operating income | 5,662,349.74 | 5,112,433.42 |
| Less: non-operating expenditure | 19,120,502.95 | 25,809,994.34 |
| IV. Total profit (“-” represents net losses) | 2,392,066,149.74 | 2,534,358,671.67 |
| Less: income tax expenses | 316,486,740.44 | 354,387,233.65 |
| V. Net profit (“-” represents net losses) | 2,075,579,409.30 | 2,179,971,438.02 |
| (I) Classified by continuing operations: | ||
| 1.Net profit from continuing operations (“-” represents net losses) | 2,075,579,409.30 | 2,179,971,438.02 |
| 2.Net profit from discontinued operations (“-” represents net losses) | ||
| (II) Classified by attribution to ownership: | ||
| 1. Net profit attributable to shareholders of the parent company (“-” represents net losses) | 1,008,675,184.73 | 927,470,889.00 |
| 2. Profit and loss attributable to minority interests (“-” represents net losses) | 1,066,904,224.57 | 1,252,500,549.02 |
| Ⅵ. Other comprehensive net income after taxation | -177,089,388.22 | -31,992,939.62 |
| （I）Other comprehensive net income after taxation attributable to shareholders of the parent company | -90,541,944.15 | -28,845,456.03 |
| 1. Other comprehensive income not to be reclassified into profit or loss | -55,197,967.72 | -9,381,197.73 |
| （1）Changes in re-measurement of defined benefit plans | ||
| （2）Other comprehensive income not to be reclassified into profit or loss under equity method | -3,992,639.64 | |
| （3）Changes in fair value of other equity instruments | -51,205,328.08 | -9,381,197.73 |
| （4）Changes in fair value of enterprise’s own credit risk | ||
| 2. Other comprehensive income to be reclassified as profit or loss | -35,343,976.43 | -19,464,258.30 |
| （1）Other comprehensive income to be reclassified into profit or loss under equity method | ||
| （2）Changes in fair value of other debt investments | ||
| （3）Financial assets reclassified into other comprehensive income | ||
| （4）Credit impairment provision for other debt investments | ||
| （5）Reserve for cash flow hedging | ||
| （6）Translation difference of financial statements denominated in foreign currency | -35,343,976.43 | -19,464,258.30 |
| （7）Others | ||
| （II）Other comprehensive net income after taxation attributable to minority interests | -86,547,444.07 | -3,147,483.59 |
| Ⅶ. Total comprehensive income | 1,898,490,021.08 | 2,147,978,498.40 |
| （I）Total comprehensive income attributable to shareholders of the parent company | 918,133,240.58 | 898,625,432.97 |
| （II）Total comprehensive income attributable to minority interests | 980,356,780.50 | 1,249,353,065.43 |
| Ⅷ. Earnings per share: | ||
| （I）Basic earnings per share | 0.5154 | 0.4788 |
| （II）Diluted earnings per share | 0.5142 | 0.4763 |
Person-in-charge of theCompany: Zhu Baoguo
Person-in-charge of theCompany’s accounting work:
Qiu Qingfeng
Person-in-charge of theaccounting department:
Qiu Qingfeng
Consolidated Cash Flow Statement
January to September, 2021
Prepared by: Joincare Pharmaceutical Group Industry Co., Ltd.
Unit：Yuan Currency：RMB Unaudited
| Item | First three quarters of 2021 （January to September） | First three quarters of 2020 （January to September） |
| I、Cash flow from operating activities: | ||
| Cash received from sale of goods and services rendered | 11,899,181,183.24 | 9,671,345,406.05 |
| Refund of taxes and levies | 117,304,422.29 | 99,308,914.72 |
| Cash received relating to other operating activities | 357,722,261.48 | 510,886,420.13 |
| Subtotal of cash inflow from operating activities | 12,374,207,867.01 | 10,281,540,740.90 |
| Cash paid for purchase of goods and services rendered | 3,161,363,236.72 | 2,588,418,331.36 |
| Cash paid to and on behalf of employees | 1,546,737,299.97 | 1,126,745,210.15 |
| Payments for various taxes and levies | 1,263,867,720.70 | 1,008,790,561.58 |
| Cash paid relating to other operating activities | 4,781,069,905.04 | 3,573,070,935.44 |
| Subtotal of cash outflow from operating activities | 10,753,038,162.43 | 8,297,025,038.53 |
| Net cash flow from operating activities | 1,621,169,704.58 | 1,984,515,702.37 |
| II、Cash flow from investing activities: | ||
| Cash received from disposal of investments | 110,302,936.39 | 157,344,429.75 |
| Cash received on investment income | 93,348,249.99 | 30,382,854.27 |
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 8,684,509.74 | 1,630,636.20 |
| Net cash received from disposal of subsidiaries and other operating units | 3,311,220.53 | 5,339,063.95 |
| Cash received relating to other investing activities | 14,765,008.34 | 21,369,351.43 |
| Sub-total of cash inflow from investing activities | 230,411,924.99 | 216,066,335.60 |
| Cash payments for acquisition of fixed assets, intangible assets and other long-term assets | 960,679,392.16 | 516,342,226.37 |
| Cash payments for investments | 774,000,000.00 | 94,514,395.92 |
| Net cash paid for acquisition of subsidiaries and other operating units | ||
| Cash paid relating to other investing activities | 5,067,470.33 | 7,658,080.29 |
| Sub-total of cash outflow from investing activities | 1,739,746,862.49 | 618,514,702.58 |
| Net cash flow from investing activities | -1,509,334,937.50 | -402,448,366.98 |
| III. Cash flow from financing activities: | ||
| Cash received from absorption of investments | 521,836,124.79 | 397,884,596.14 |
| Of which: Cash received by subsidiaries from investments of minority interests | 324,225,000.00 | 8,000,000.00 |
| Cash received from borrowings | 2,354,753,015.63 | 1,853,579,914.03 |
| Cash received relating to other financing activities | 34,430,100.74 | 5,582,663.82 |
| Sub-total of cash inflow from financing activities | 2,911,019,241.16 | 2,257,047,173.99 |
| Cash paid on repayment of debts | 2,282,684,146.53 | 2,929,711,030.60 |
| Cash paid for distribution of dividends and profit or interest payments | 1,211,553,686.47 | 1,031,200,679.92 |
| Of which: Dividends and profits paid to minority | 846,741,767.14 | 673,935,179.07 |
| interests by subsidiaries | ||
| Cash paid relating to other financing activities | 1,200,553,298.22 | 497,107,442.96 |
| Sub-total of cash outflow from financing activities | 4,694,791,131.22 | 4,458,019,153.48 |
| Net cash flow from financing activities | -1,783,771,890.06 | -2,200,971,979.49 |
| IV. Effect of changes in foreign exchange rates on cash and cash equivalents | -20,822,588.77 | -36,878,975.00 |
| V. Net increase in cash and cash equivalents | -1,692,759,711.75 | -655,783,619.10 |
| Add: Balance of cash and cash equivalents at the beginning of the period | 12,122,781,311.49 | 10,940,305,225.81 |
| VI. Cash and cash equivalents at the end of the period | 10,430,021,599.74 | 10,284,521,606.71 |
Person-in-charge of theCompany: Zhu Baoguo
Person-in-charge of theCompany’s accounting work:
Qiu Qingfeng
Person-in-charge of theaccounting department:
Qiu Qingfeng
Joincare Pharmaceutical Group Industry Co., Ltd. 2021 Third Quarterly Report
(III) Information on adjustment to relevant items in the financial statements at the beginning of theyear of first implementation in respect of the new leasing standards adopted for the first time startingfrom 2021
□Applicable √N/A
Notice is hereby given.
Joincare Pharmaceutical Group Industry Co., Ltd.
October 26, 2021