Huadong Medicine Co., Ltd.
Semi-Annual Report 2023
August 16, 2023
Section I. Important Declaration, Contents and DefinitionsThe Board of Directors, Board of Supervisors, directors, supervisors andsenior managers of Huadong Medicine Co., Ltd. (hereinafter referred to as the“Company”) hereby guarantee that the information presented in this semi-annual report is authentic, accurate and complete and free of any false records,misleading statements or material omissions, and shall undertake individualand joint legal liabilities.
Lv Liang, the Company’s legal representative and the officer in charge ofaccounting, and Qiu Renbo, head of the Accounting Department (accountingsupervisor) hereby declare and guarantee that the financial statements in thissemi-annual report are authentic, accurate and complete.
All directors have attended the board meeting to review this semi-annualreport.
The future plans, development strategies and other forward-lookingstatements in this semi-annual report shall not be considered as substantialcommitment of the Company to investors. Investors and related parties shouldbe fully aware of the risks, and understand the differences between plans,forecasts and commitments.
The risks the Company faces in operation include industry policy andproduct price reduction risk, new drug R&D risk, investment and M&A risk,and exchange rate fluctuation risk. For details, please refer to “X. Potentialrisks and responses” in “Section III. Management Discussion and Analysis”.Therefore, investors are kindly reminded to pay attention to possible
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 ................................................................................. 9
Section III Discussion and Analysis of the Management ...... 13
Section IV. Corporate Governance ....................................................................................................................... 60
Section V Environmental and Social Responsibilities ...... 63
Section VI. Important Matters ............................................................................................................................. 78
Section VII. Share Change and Shareholders ..................................................................................................... 98
Section VIII. Information on Preferred Shares ................................................................................................ 104
Section IX. Information on Bonds ...................................................................................................................... 105
Section X. Financial Report ................................................................................................................................ 106
Contents of Reference FileI. Financial statements signed and stamped by the legal representative, the personin charge of accounting work, and the head of accounting institution (accountingmanager).II. The original of all Company’s documents publicly disclosed in the pressdesignated by CSRC during the reporting period and the original of announcements.
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. |
| Jiangsu Joyang Laboratories | refers to | Jiangsu Joyang Laboratories |
| 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 Co., Ltd. |
| 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 Bio | refers to | Nuoling Biomedical technology (Beijing) Co., Ltd. |
| Grand Chanrong | refers to | Shanghai Grand Industrial and Financial Investment Management Co., Ltd. |
| Hangzhou Gaotou | refers to | Hangzhou Hi-Tech Venture Capital Management Co., Ltd. |
| Grand Huachuang | refers to | Beijing Grand 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 (Limited Partnership) |
| Meihua Hi-Tech | refers to | Anhui Meihua Hi-Tech Pharmaceutical Co., Ltd. |
| Wuhu Huaren | refers to | Wuhu Huaren Science and Technology Co., Ltd. |
| Meiqi Health | refers to | Hubei Meiqi Health Technology Co., Ltd. |
| Angel Group | refers to | Hubei Angel Biological Group Co., Ltd. |
| CARsgen Therapeutics | refers to | CARsgen Therapeutics Holdings Limited |
| NAU Animal Pharmaceutical | refers to | Jiangsu NAU Animal Pharmaceutical Co., Ltd. |
| Takeda | refers to | Takeda Pharmaceuticals Company Ltd. |
| Sinclair | refers to | Sinclair Pharma Limited |
| vTv | 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. |
| Exscientia | refers to | Exscientia Ltd. |
| Heidelberg Pharma | refers to | Heidelberg Pharma AG |
| Kiniksa | refers to | Kiniksa Pharmaceuticals (UK), Ltd. |
| KiOmed | refers to | KiOmed Pharma SA |
| Daewon | refers to | Daewon Pharmaceutical Co., Ltd. |
| AKSO | refers to | AKSO Biopharmaceutical, Inc. |
| Ashvattha | refers to | Ashvattha Therapeutic, Inc. |
| SCOHIA | refers to | SCOHIA PHARMA, Inc. |
| EMA Aesthetics | refers to | EMA Aesthetics Limited |
| Julphar | refers to | Gulf Pharmaceutical Industries PJSC(JULPHAR) |
| Arcutis | refers to | Arcutis Biotherapeutics, Inc. |
| GMP | refers to | Good Manufacturing Practice |
| cGMP | refers to | Current Good Manufacturing 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 |
| NHSA | refers to | National Healthcare Security Administration |
| NDA | refers to | New Drug Application |
| ANDA | refers to | Abbreviated New Drug Application (or Generic 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, mainly such pharmaceutical researches as manufacturing technology, impurity research, quality research, and stability research during drug research and development. |
| CMO | refers to | Contract Manufacturing Organization, i.e. Providing such services as customized manufacturing of medical intermediates, APIs and pharmaceutical preparations entrusted by pharmaceutical |
| companies. | ||
| CDMO | refers to | Contract Development and Manufacturing Organization, mainly including providing customized R&D and production services for multinational pharmaceutical companies and biotechnology companies, such as process R&D and preparation, process optimization, scale-up manufacturing, registration and verification batches manufacturing, and commercial manufacturing of medicines, especially innovative medicines. |
| QA | refers to | Quality Assurance (department) |
| ADC | refers to | Antibody-Drug Conjugates |
| EBD | refers to | Energy Based Devices |
| license-in | refers to | Product license introduction |
| license-out | refers to | Product External License Authorization |
| BD | refers to | Business Development |
| EBITDA | refers to | Earnings Before Interest, Taxes, Depreciation and Amortization |
| EHS | refers to | Environment, Health and Safety Management Systems |
| MRCT | refers to | International Multi-center Clinical Trial |
| OTC | refers to | Over The Counter, i.e. medicines published by the medical products administration under the State Council and purchased and used by consumers at their discretion without the prescription of practicing doctors or assistant practicing doctors. |
| PFS | refers to | Progression-free survival |
| Prescription Drugs | refers to | Drugs that require medical prescriptions issued by physicians to be bought and used |
| Real World Research/Study, RWR/RWS | refers to | Real World Research/Study, RWR/RWS, refers to collect data related to patients in the real world environment (Real World Data), through analysis, acquiring the use value of medical products and clinical evidence of potential benefits or risks (Real World Evidence). |
| 2022 Drug Catalog | refers to | Catalogue of Drugs for Basic National Medical Insurance/Employment Injury Insurance/Birth Insurance (2022) |
| Reporting Period | refers to | From January 1, 2023 to June 30, 2023 |
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 | Hu Shufen |
| Contact address | No. 866 Moganshan Road, Hangzhou | No. 866 Moganshan Road, Hangzhou |
| Tel. | 0571~89903300 | 0571~89903300 |
| Fax | 0571~89903300 | 0571~89903300 |
| Email address | hz000963@126.com | 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
| Registered address of the Company | In June 2023, the registered address of the Company was altered from “Floor 9/10, Gate No. 9, 1, Building No. 1, No. 468 Yan’an Road, Hangzhou, Zhejiang Province” to “Floor 4/7, No. 439, Zhongshan North Road, Gongshu District, Hangzhou, Zhejiang Province”. The Company completed the industrial and commercial change registration, filing of articles of association and other formalities, and got the Business License issued by Market Supervision and Management Bureau of Zhejiang Province. |
| Zip code of the registered address of the Company | 310006 |
| Office address of the Company | No. 866 Moganshan Road, Hangzhou, Zhejiang Province |
| Zip code of the office address of the Company | 310011 |
| Official website | www.eastchinapharm.com |
| Email address of the Company | hz000963@126.com |
| Designated website inquiry date disclosed in the temporary announcement (if any) | June 10, 2023 |
| Designated website inquiry index disclosed in the temporary announcement (if any) | http://www.cninfo.com.cn/ |
2. Channels of disclosure and location of preparation
Whether there is alteration in channels of disclosure and location of preparation
□ Applicable ? N/A
The website of the stock exchange, media and website for disclosing the semi-annual report, and the location of preparation of theCompany’s semi-annual report have not changed during the reporting period. For details, please refer to the 2022 Annual Report.
3. Other information
Changes of other related materials
□ Applicable ? N/A
IV. Key accounting data and financial indicators
Whether 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) | 20,385,344,288.81 | 18,197,963,991.01 | 12.02% |
| Net profit attributable to shareholders of listed companies (yuan) | 1,433,824,629.56 | 1,340,570,484.98 | 6.96% |
| Net profit attributable to shareholders of listed companies after deducting non-recurring gains/losses (yuan) | 1,427,487,870.97 | 1,271,839,179.63 | 12.24% |
| Net cash flow from operating activities (yuan) | 2,021,743,748.65 | 284,234,410.27 | 611.29% |
| Basic earnings per share (yuan/share) | 0.8194 | 0.7661 | 6.96% |
| Diluted earnings per share (yuan/share) | 0.8190 | 0.7661 | 6.91% |
| Weighted average return on equity (ROE) | 7.43% | 7.79% | -0.36% |
| End of the current reporting | End of last year | Change of the end of the current reporting period over the end of last year (%) | |
| Total assets (yuan) | 32,956,000,216.06 | 31,192,203,406.84 | 5.65% |
| Net assets attributable to shareholders of listed companies (yuan) | 19,532,395,598.16 | 18,577,919,237.39 | 5.14% |
The Company’s total share capital as of the trading day prior to disclosure:
| The Company’s total share capital as of the trading day prior to disclosure (share) | 1,753,995,348.00 |
Fully diluted earnings per share based on the latest share capital:
| Paid preference dividends | 0.00 |
| Paid perpetual bond interest (yuan) | 0.00 |
| Fully diluted earnings per share based on the latest share capital (yuan/share) | 0.8175 |
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 andChinese accounting standards
□ Applicable ? N/A
There are no differences in net profit and net assets disclosed in financial statements under international and Chinese accountingstandards during the reporting period.
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 during the reporting period.VI. Items and amounts of non-recurring gains/losses? Applicable □ N/A
Unit: yuan
| Item | Amount | Explanation |
| Gains/losses on disposal of non-current assets (including the written-off part of the accrued assets impairment reserve) | -1,403,178.70 | |
| Government grants included in current gains/losses (excluding those closely related to daily business operation and distributed constantly in accordance with certain standard quota or quantity in line with national policies and regulations) | 32,245,085.57 | Mainly due to the confirmation of government grants for subsidiaries in the current period |
| Gains/losses caused by fair value changes for holding financial assets for trading and financial liabilities for trading, and investment income for handling financial assets for trading, financial liabilities for trading and AFS securities, excluding hedging business related to operating activities | -5,100,698.38 | |
| Other non-operating income and | -8,253,167.53 |
| expenditures except the aforesaid items | ||
| Other profit and loss items that satisfy the definition of non-recurring profit and loss | -7,873,330.91 | |
| Minus: Amount affected by income tax | 3,070,663.74 | |
| Impact on minority interests (post-tax) | 207,287.72 | |
| Total | 6,336,758.59 |
Details of other items of gains/losses meet the definition of non-recurring gains/losses:
□ Applicable ? N/A
Details of other items of gains/losses meet the definition of non-recurring gains/losses.Explanation for recognizing an item listed as a non-recurring gain/loss in the Interpretative Announcement No. 1 on InformationDisclosure Criteria for Public Companies — Non-Recurring Profit/Loss as a recurring gain/loss
□ Applicable ? N/A
Explanation for recognizing an item listed as a non-recurring gain/loss in the Interpretative Announcement No. 1 on InformationDisclosure Criteria for Public Companies - Non-Recurring Profit/Loss as a recurring gain/loss.
Section III Discussion and Analysis of the Management
I. Main business of the company during the reporting period
(1) Main businesses
Founded in 1993 and headquartered in Hangzhou, Zhejiang Province, Huadong Medicine Co.,Ltd. (stock code: 000963) was listed on Shenzhen Stock Exchange in December 1999. With itsbusinesses covering the entire pharmaceutical industry chain thanks to over 30 years of vigorousdevelopment, the Company has now fostered four major business segments of pharmaceuticalindustry, pharmaceutical business, aesthetic medicine and industrial microbiology, and has been alarge comprehensive listed pharmaceutical enterprise specialized in pharmaceutical R&D,production and marketing.
Specialized in the R&D, production and marketing of specialized and chronic diseases, as wellas special medicines for years, the Company has established complete pharmaceutical productionand quality research systems, and fostered core product lines focusing on chronic nephrosis,transplantation immunity, internal secretion, digestive system and other fields. With multiple first-line clinical medicines with market advantages in China, the Company has made layout in R&D ofinnovative and high technology barrier generic medicines in three core therapeutic fields ofoncology, endocrinology and autoimmunity through independent development, externalintroduction, project cooperation and by other means. The Company has continued to engage ininternational registration, international certification, consistency evaluation, etc. of products, withsuccessive results achieved. Moreover, the Company has fostered the internationally-orientedpharmaceutical industry system, established and maintained R&D and project cooperation withmultiple international innovative R&D enterprises.
With regard to the pharmaceutical business, the Company has vigorously consolidated itsfoundation in Zhejiang Province and has been ranked among top 10 pharmaceutical businessenterprises in China for consecutive years. To date, the Company has established 11 regionalsubsidiaries in Zhejiang Province, with its customers distributed in 11 cities and 90 districts,counties and county-level cities throughout Zhejiang Province. The Company has four businesssegments of Chinese & western medicine, medical apparatus, medicine materials and ginseng &antler, and health industry that cover the pharmaceutical wholesale & retailing, third-party medicallogistics featuring cold chain, medical e-commerce, hospital value-added services and featuredmassive health industry. Further expanding the product agency and market development, the
Company has formed the whole industry chain from planting in bases to processing of preparedpieces, automatic decoction, own-brand functional products for its traditional Chinese medicineindustry. As the leader of pharmaceutical business in Zhejiang Province, the Company has alwaysfocused on strengthening the policy affairs, reserve, distribution and marketing ability, establishedservice platforms, and fostered the competitive advantages of regional enterprises to offercustomers comprehensive solutions.In terms of aesthetic medicine, the Company has created a comprehensive and differentiatedproduct matrix by following the strategy of “global operation layout and dual-circulation operation& development” with an international vision through forward-looking layout, and now ranks in theforefront of the industry in terms of product quantity and coverage. Specifically, over 20 productshave been launched in China and abroad, and more than a dozen innovative global products are indevelopment. Now, the Company is committed to becoming a global leading aesthetic medicinecomprehensive solution provider by offering patients with more professional, efficient,comprehensive and safer integrated solutions through diversified combined therapy techniques thatcombine “noninvasive and micro-invasive”, “facial and body filling”, “products + technologies”,and “injection + energy source equipment”. Headquartered in UK, the Company’s wholly-ownedsubsidiary Sinclair is its global aesthetic medicine operation platform that has R&D centers in UK,the Netherlands, France, Switzerland, Spain and Israel, and production bases in the Netherlands,France, the U.S., Switzerland, Bulgaria and Israel. Promoting and marketing sustained-releasemicrospheres for injection, hyaluronic acid, facial thread lifting and other products in globalmarkets, Sinclair researches, develops and expands its energy-source aesthetic medicine apparatusbusinesses through its wholly-owned subsidiaries High Tech and Viora. As for the aestheticmedicine segment, the Company also has Sinclair (Shanghai), a wholly-owned subsidiary and itsmarket operation platform in China, as well as R2 in the U.S. and Kylane in Switzerland, twooverseas technical development type joint-stock subsidiaries.With profound industrial base and powerful industrial transformation ability thanks to over 40years of development in the industrial microbiology sector, the Company has successfullydeveloped and manufactured multiple types of microbiological medicines, and established the keytechnology system for R&D and production of microbiological products, ranking in the forefront ofthe industry in terms of scale and technological level of microbiological fermented products. Beingmarket demand-oriented, R&D technology-driven and industrial resource-coordinative in theindustrial microbiology segment, the Company has placed its focus on two business scenarios ofapplication of synthetic biology technology system and innovative development of bio-pharmaceuticals, and has fostered differentiated product lines and business solutions in four major
fields of xRNA, featured APIs, massive health &biomaterials and animal health. The Company hasalso established the R&D clusters with Industrial Microbiology of Zhongmei Huadong, HITInstitute of Synthetic Biology, Huida Biotech, Hizyme Biotech and Perfect mRNA as the core, andseven industrial bases in Hangzhou Xiangfuqiao, Qiantang New Area, Jiangsu Joyang Laboratories,Magic Health, Twisun Hi-tech, Wuhu Huaren, and NAU Animal Pharmaceutical. Moreover, theCompany has set up the largest fermentation monomer plants in Zhejiang, formed the industry-leading microbiological medicine production ability and high-level R&D capacity that covers allstages of microbiological engineering technologies from strain construction, metabolic regulation,enzymatic catalysis, synthetic modification to separation and purification, and built a completemanufacturing system for R&D, pilot test, commercial production, engineering and public systemguarantee of microbiological projects. To date, the Company has a total of over 230 R&D programsin the industrial microbiology sector.
(2) Overview of the Company’s operations during the reporting periodThe global economic recovery faces continuous challenges due to accelerated changinginternational order in turmoil, dramatically adjusted geopolitical pattern, continuously accumulatedrisks in global financial sectors, multiple downside risks, and rising inflationary pressure since 2023.The year 2023 is the first year to practice the guiding principles of the 20th CPC NationalCongress, and also a critical year to implement the “Fourteenth Five-year Plan”. In the face of toughexternal environment, China has resumed normalized operation in economy and society in fullswing since the first half of 2023, witnessing upturn of national economy thanks to the efficientmacro policies. The reform of the pharmaceutical industry in China has also been deepened, withdiverse reform policies launched and implemented. The pharmaceutical industry still faces changesand challenges in diverse aspects such as policy regulation, structural reform, technologicalinnovation, and intensified market competition, while it is continuously transformed driven byinnovation. In the meantime, new bio-pharmaceutical technologies, continuously advancement oftechnological innovation, as well as rapid application of AI, big data and other new technologies inthe pharmaceutical sector bring new opportunities for the transformation and development of thepharmaceutical industry.During the reporting period, the Company has steadily facilitated the innovativetransformation and international development strategy, made concerted efforts to tide over diversedifficulties, and solidly promoted the innovation in scientific research, production and operation to anew level revolving around its annual operation plan and the seventh third-year plan. In the firsthalf of 2023, the Company achieved the operating revenue of 20.385 billion yuan, up 12.02% yearon year (up 13.23% year on year in the first quarter), and the net profit attributable to shareholders
of listed companies after deducting non-recurring gains/losses of 1.427 billion yuan, up 12.24%year on year (up 8.45% year on year in the first quarter). During the reporting period, afterdeducting the equity incentive expenses and the profits and losses of participating and holding R&Dinstitutions, the Company achieved the net profit attributable to shareholders of listed companiesafter deducting non-recurring gains/losses of 1.656 billion yuan, up 20.61% year on year. TheCompany achieved the double-digit growth in both operating revenue and net profits for the firsttime since 2020 and witnessed favorable upturn of the overall operation, laying a solid foundationfor fully attaining its annual work goals.During the reporting period, four major business segments of the Company, i.e. pharmaceuticalindustry, pharmaceutical business, aesthetic medicine and industrial microbiology, all achievedpositive growth in business indicators, accelerating the release of the Company’s momentum inoverall growth. As its operating revenue in the first quarter exceeded 10 billion yuan for the firsttime, the Company achieved a total operating revenue of 10.271 billion yuan in the second quarter,up 10.85% year on year. The net profit attributable to shareholders of listed companies afterdeducting non-recurring gains/losses was 670 million yuan, up 16.85% year on year.Specific operation of each business segment during the reporting period:
1. The production and operation of the pharmaceutical industry saw and kept positivetrendDuring the reporting period, the Company’s core subsidiary Zhongmei Huadong witnessedpositive growth as a whole and achieved the operating revenue (including CSO business) of 6.054billion yuan, up 10.04% year on year, and the consolidated net profit after deducting net profitsattributable to the parent company of 1.226 billion yuan, up 15.11% year on year. The net return onequity was 12.38%.
During the reporting period, the Company has further consolidated its three core therapeuticfields of oncology, endocrinology and autoimmunity. In the first half of 2023, the Company’s keyvarieties of products maintained steady and rapid growth, and core products subject to nationalcentralized procurement and medical insurance negotiations still maintained stable market share. Inthe meantime, the Company kept enriching its product lines through independent R&D andintroduction of external products, and formed differentiated and innovative product lines that covermultiple indications and feature reasonable product echelon layout, becoming a leading enterprisein the field of endocrinology and autoimmunity in China. In the field of oncology, the Companykept enriching its pipelines around the key layout of ADC products and continued to maintain itsdominant position in the field of ADC in China. During the reporting period, the Company’s
innovative R&D kept advancing in an orderly manner, with positive results achieved. Please refer to“(III) R&D situation” below in this section for details.
During the reporting period, Hangzhou Zhongmei Huadong Pharmaceutical ServiceCorporation continued to build its multi-dimensional market access and professional promotioncapabilities, strengthen the academic driving, stabilize the hospital markets, expand the out-of-hospital markets, strengthen the online markets, promote and optimize the construction of theregional marketing department and KA system, enhance the market coverage of grassrootsterminals, and continuously promote the digital transformation of pharmaceutical services by takingthe opportunity of its product strategic cooperation with RLD multinational pharmaceuticalcompanies.During the reporting period, the Company’s production systems kept making innovative inproduction and operation modes and deepening the integrated management of production systemswith “high quality and high efficiency” as its goal. While ensuring the market supply, the Companycontinued to promote the standardization construction of workshops and consolidate the basicmanagement. In the meantime, it further deepened the implementation of lean production andactively promoted the reduction of production costs, witnessing continuous improvement in skilllevel and per capita labor efficiency of employees. Moreover, the quality compliance and GMPnormalization management were further strengthened, and international registration andcertification of products were advanced. During the reporting period, the Tacrolimus Capsules ofZhongmei Huadong was approved for marketing by the FDA, becoming another product of theCompany that is approved following Pantoprazole Sodium for Injection, Acarbose Tablets andDaptomycin for Injection, China’s first Tacrolimus Preparation approved for marketing in the U.S.and an important achievement of the international strategy of the Company’s preparation products.
2. The industrial microbiology achieved good results in four fields
The Company kept practicing the industrial microbiology development strategy, clarifying itsstrategic layout focusing on four major fields of xRNA, featured APIs & intermediates, massivehealth & biomaterials and animal health. In the meantime, the Company continuously enriched theproduct lines in four major strategic segments of high innovation, high technology barrier and highadded-values and optimized its product structures through R&D. During the reporting period, theoverall sales revenue of the Company’s industrial microbiology segment deducting that of specificcommercial products businesses achieved a year-on-year increase of 27.47%.
During the reporting period, the field of xRNA expanded the application market in China withlow-cost and high-quality products, developed international businesses and created an efficientmarket service system. The field of featured APIs & intermediates gave full play to the advantages
of three technical platforms of synthetic biology, fermentation and enzyme engineering andmaximized the production and manufacturing resources, making the Company an international,distinctive and differentiated API enterprise featuring highly active APIs. Focusing on suchindustrial orientations as bone health, brain health, antioxidation, personal care and aestheticmedicine, high barriers, and import substitution of injectable medicinal materials, the field ofmassive health & biomaterials created the automatic and standard industrial manufacturing systemand stepped out of C-end product markets with the technical support from the HIT Institute ofSynthetic Biology. In the field of animal health, the Company focused on three orientations of pettreatment, pet nutrition, and water nutrition and water environment, and endeavored to become aleader in China’s pet and aquatic animal health industry driven by R&D, led by markets andguaranteed by production.xRNA: In January 2023, the Company established Hangzhou Perfect mRNA BiotechnologyCo., Ltd. (hereinafter referred to as “Perfect mRNA”), which is mainly engaged in the developmentof raw materials of mRNA enzyme and molecular diagnostic enzyme, as well as mRNA CDMOservices, together with the upstream enzyme raw materials and downstream preparation services.Perfect mRNA comprised industrial collaboration with Anhui Meihua and Wuhu Huaren in the fieldof xRNA, further optimizing the whole-industrial chain layout of xRNA.Featured APIs & intermediates: The Company’s core subsidiaries Huida Biotech, HizymeBiotech and Jiangsu Joyang Laboratories vigorously expanded international key customers,established the key customer service system, cultivated multiple new product lines, endeavored todevelop ADC drug toxin raw materials and services, senior intermediates and other businesses, andgave full play to the advantages of industrial technologies of industrial microbiology, successfullybuilding a favorable reputation of “high technology, high quality and high efficiency” in this field.Massive health & biomaterials: The Company’s core subsidiary Meiqi Health furtherstrengthened its sales manpower in overseas markets, built the core dealers network, and put inplace its channel layout in Asia Pacific, Europe, America, and China. It also set up the applicationservice system to create market opportunities for the differentiation of application services.Animal health: Being optimistic about the development of animal health industry, theCompany acquired Jiangsu NAU Animal Pharmaceutical Co., Ltd. (herein after referred to as“NAU Animal Pharmaceutical”) in April 2023, quickly setting foot in pet and aquatic animal healthsegments. In the field of animal health, the Company has reserved more than 10 varieties of high-end raw materials for pet health care, application and development of a variety of massive healthraw materials in the field of animal health, and more than 10 potential opportunities for people-to-animal medicines, with a potential to realize integrated development of raw materials and
preparations in the future. NAU Animal Pharmaceutical will become an important developmentplatform for the Company’s animal health businesses in the field of industrial microbiology. TheCompany’s existing industrial ecological chain, R&D resources and financial guarantee will keepempowering and promoting the rapid development of NAU Animal Pharmaceutical in the field ofanimal health.At present, the Company’s industrial microbiology field has set up an international marketingteam with about 50 staff, forming a business structure featuring sales and market managementsystem of the industrial microbiology headquarters + professional sales team of subsidiaries, furtherestablishing an overseas localized marketing team and enhancing the ability to serve overseascustomers. In the future, the industrial microbiology field will further increase the proportion ofinternational business, with R&D, quality, service and regulatory registration as its maincompetitiveness, thus forming a competitive advantage in international businesses.
3. The pharmaceutical business kept a stable growth trend as a whole and continued todevelop innovative businesses.During the reporting period, the Company’s pharmaceutical business segment keptconsolidating its hospital markets and expanding out-of-hospital markets, and actively advanced itsinnovative businesses. The Company’s pharmaceutical business segment achieved the operatingrevenue of 13.631 billion yuan, up 11.19% year on year, and the net profit of 216 million yuan, up
9.14% year on year.
Adhering to the development principle of “High Quality + High Efficiency”, the Company’spharmaceutical business segment actively endeavored to build itself into an enterprise with leadingposition in scale, network and services for the high-quality development, with the core placed on“profits increase and costs reduction” for high-efficient development. In terms of traditionalbusinesses, the Company continuously consolidated its presence in Zhejiang Province andendeavored to improve the quality and efficiency for high growth rate. For innovative businesses,the focus was placed on product agency, third-party logistics, pharmaceutical e-commerce, featuredmassive health and other fields. Focusing on its comprehensive abilities in policy affairs, marketing,distribution and reserve, the Company set up the service platform to provide upstream anddownstream customers with personalized solutions, fostered the comprehensive competitiveadvantages as a regional enterprise, and formed its full-channel promotion ability.
With regard to the traditional businesses, the Company always insisted on the servicephilosophy of “High Quality + Fast Speed”, cared about policies with significant impacts on theindustry, made scientific prediction and optimized the layout, witnessing stable increase of thehospital market share and fast growth trend in out-of-hospital markets, and maintaining its leading
position in Zhejiang Province. As for the hospital market, the Company placed its focus on such keyindicators as introduction of new products, hospital shares and order satisfaction rate, and convertedvalue-added services like police affairs and pharmacy administration into productivity, occupying aleading position in the industry. In the field of medicinal materials, ginseng and antler, the Companyfurther improved its sales networks throughout Zhejiang Province, assigned more personnel to thegrassroots and expanded businesses in sub-markets by leveraging channels of its subsidiaries.Moreover, the Company further expanded its decoction businesses throughout Zhejiang andprepared for the expansion of Phase II of the Decoction Center relying on the advantages inautomation. The out-of-hospital markets were further expanded, with more private hospitals, clinicsand retail pharmacies covered. In the meantime, the Company continuously improved theprofitability of its self-retail businesses, created a new retail mode in East China, expanded itsservice scope, imported more varieties, and made good preparations for introduction ofprescriptions relying on its advantages of “platform + products + network”.Innovative businesses were further advanced and more efforts were made in innovativeproducts, innovative logistics, innovative services, etc. to facilitate multi-warehouse linkage,integrate internal and external resources, and improve the overall efficiency of innovativebusinesses. The Company continued to expand its agency businesses, focus on specialized medicaldevices and enrich varieties of agent products. Moreover, the Company spared no effort to developthe tripartite businesses of the supply chain. To date, the operation level of Jinhua Warehouse hasgradually approached that of Hangzhou Warehouse. The distribution tasks in areas not covered byHangzhou Warehouse will be transferred to Jinhua Warehouse. Hangzhou Warehouse launches theexpansion of its cold storage warehouse to fully develop the tripartite logistics of cold chain, furtherconsolidate its trump card of “medicine cold chain” and strive for licenses for more products.Attaching equal importance to both “B2B+B2C”, the Company continued to upgrade the “HuadongMedicine Business Network” and actively operated self-operated flagship stores of major e-commerce platforms for better online sales. The Company launched and promoted the “Xuguanghe”series online, constantly enriching its massive health product matrix.
During the reporting period, the Company’s pharmaceutical business segment actively fulfilledits social responsibilities, quickly responded to special situations, and established a complete set ofemergency call plans. With the upstream and downstream pharmaceutical supply chain partnersgathered, the segment actively practiced the idea of “seizing time is to save lives” to foster its ownbrands with social benefits, create economic benefits with brands, and promote the high-quality andhigh-efficiency development of the Company through innovation.
4. Overseas aesthetic medicine witnessed increased profits and aesthetic medicine inChina saw rapid growth.During the reporting period, the Company’s aesthetic medicine segment witnessed rapidgrowth as a whole and achieved the total operating revenue of 1.224 billion yuan (excludinginternal offsetting factors), up 36.40% year on year.Its wholly-owned subsidiary Sinclair actively overcame the negative impact of the slowingglobal economic growth and kept expanding the global aesthetic medicine market. During thereporting period, Sinclair achieved the sales revenue of 76.29 million pounds (about 669 millionyuan), up 26.07% year on year, and the EBITDA of 12.6 million pounds, attaining the operatingprofit. In the second half of 2023, it is expected that Sinclair will maintain its growth trend as awhole and may see better performance as the global market is further expanded.As the aesthetic medicine market in China rebounded during the reporting period, Sinclair(Shanghai), the Company’s wholly-owned subsidiary in China, kept expanding and maintained itsleading position in the regenerative aesthetic medicine market in compliance with relevantrequirements according to the concept of “medicine first” with experience as the core. In the firsthalf of 2023, Sinclair (Shanghai) achieved the cumulative operating revenue of 516 million yuan,up 90.66% year on year and marking the continuous improvement of its profitability. TheCompany’s aesthetic medicine business in China will maintain the favorable growth trend in thesecond half as the consumption market in China keeps rebounding.
During the reporting period, the Company actively practiced the long-term vision ofcultivating and building the world’s leading innovative aesthetic medicine enterprise, continued tosteadily promote the strategy of dual-circulation development in and out of China, focused on theglobal high-end aesthetic medicine market, strengthened its brand building, and accelerated theintegration of internal resources. To date, the Company has launched 36 high-end products in thefield of “non-invasive + micro-invasive” aesthetic medicine worldwide, of which 24 have beenmarketed. The product portfolio covers non-surgical mainstream aesthetic medicine fields such asfacial and whole-body filling, energy source skin management, and body shaping. In the meantime,the Company has formed integrated product clusters and ranks in forefront of the industry in termsof quantity of products and number of fields covered, with continuously improved internationalinfluence. With a professional marketing and promotion team comprised of about 300 talents, theCompany’s aesthetic medicine segment has built its global aesthetic medicine marketing networkwith over 80 countries and regions covered.
During the reporting period, the Company actively advanced the global registration of itsaesthetic medicine products and simultaneously facilitated the registration and launching of
overseas products in China. Actively facilitating the registration for marketing in over 40 countries,Sinclair has had obtained marketing authorizations for 11 products in 19 countries during thereporting period. The Company also introduced and arranged multiple international innovativeaesthetic medicine products for different body parts. KiOmed Skinbooster, a global innovativechitosan aesthetic medicine introduced by Sinclair from a Belgian company KiOmed Pharma SA(hereinafter referred to as “KiOmed”) is now under clinical trial and its overseas registrationapplication is expected to be submitted in Q4 2023. Moreover, KiOmed is now developing multipletypes of global innovative products for facial (KiOmed Moderate lines, KiOmed Volumizer) and lip(KiOmed Lips) filling. Sinclair actively promoted the registration and marketing of its coreproducts in global key markets, and has now started relevant clinical work necessary for marketingEllansé
?and MaiLi in the U.S.During the reporting period, the Company kept advancing the registration and launching of itscore products in China. The Company’s V version and X version of poly-L-lactic acid (PLLA)collagen stimulant Lanluma
?obtained the approval from Hainan Medical Products Administrationthat Lanluma
?can be used in Bo’ao Lecheng International Medical Tourism Pilot Zone as an urgentimported medical device for clinical purpose. In February 2023, China’s first case of treatment withLanluma
? was completed in ARSMO. In April 2023, Lanluma
?, a PLLA product of Sinclair, wasawarded “The Best Injectable Body Filler” by the 2023 AMWC, which vividly showcases theauthoritative recognition of Lanluma
?products and technologies by the international aestheticmedicine industry, as well as the great affirmation of Sinclair’s achievements in the high-endaesthetic medicine field. In addition, the Company is advancing the application for franchise rightsof Silhouette and Ellansé
?series products in Bo’ao Lecheng International Medical Tourism PilotZone. Please see “(8) Progress of registration and marketing of aesthetic medicine products” in “(III)R&D situation” below in this section for the progress of registration of the Company’s other keyaesthetic medicine products in China.
Figure: Key Aesthetic Medicine Products of Huadong Medicine
During the reporting period, Sinclair attended the IMCAS Conference in Paris, the world’sleading conference on dermatology and plastic surgery, attracting extensive attention for its productlines and new products launched. The on-site presentation of MaiLi products, the high-end HCseries of Sinclair, attracted over 2,000 physicians in the main venue. Sinclair also devoted itself tooffering high-quality training and education, kept enhancing its brand building, and continuouslyimproved the industry influence and competitiveness through practical training and sharing ofinsights on industry leaders with Sinclair College, its education and training platform, as the carrier.In March 2023, Sinclair held a half-year “Focus on Excellence World Tour” through its affiliatedSinclair College. The “Focus on Excellence World Tour” will bring the best practice lectures, livedemonstrations, insights of experts from global aesthetic medicine industry, and interactive Q&Aexchanges for audiences eight international cities including Milan, Barcelona, S?o Paulo and Dubai,as well as Chinese cities like Beijing, Shanghai, Hangzhou, Shenzhen and Chengdu. Sinclair(Shanghai), the Company’s wholly-owned subsidiary and its aesthetic medicine business operatingcenter in Chinese market, kept developing the high-end markets for aesthetic medicine injections.By the end of June 2023, Sinclair (Shanghai) has signed cooperation contracts with over 600hospitals and trained over 1,100 certified physicians. Sinclair (Shanghai) also gives full play to theadvantages of global experts’ medical resources through its official learning platform “SinclairEducation Vision” and keeps providing more rich, high-quality and innovative medical courses forChinese physicians, thus making sure to provide patients with professional and efficient services.In the future, the Company’s aesthetic medicine segment will continue to focus on the high-end market of global aesthetic medicine to form an international aesthetic medicine businessintegrating R&D, manufacturing and marketing by upholding the strategy of “global operationlayout and dual-circulation operation & development”. With its core subsidiary Sinclair as theglobal operation platform and integrating global technological and innovative resources, theCompany has achieved the global operation layout for its aesthetic medicine segment andsuccessively introduces “aesthetic medicine + biomedicine” products with great scientificconnotation and huge market potential into China. Internationally, the Company empowers the rapidlaunching and commercialization of its superior international products relying on its greatregistration and marketing abilities in China and steadily expands its presence in China, thusfostering a new pattern features dual-circulation coordinated development and mutual promotion ofdomestic and international businesses.
4. BD cooperation
In January 2023, the Company’s wholly-owned subsidiary Huadong Medicine (Hangzhou) Co.,Ltd., signed an exclusive commercialization cooperation agreement with Kaixing Life Science and
Technology (Shanghai) Co., Ltd., a wholly-owned subsidiary of CARsgen Therapeutics HoldingsLimited. Under the agreement, Huadong Medicine (Hangzhou) obtained the exclusivecommercialization rights of Zevorcabtagene Autoleucel Injection (R&D code: CT053), a candidateproduct of fully human anti-autologous BCMA (B cell mature antigen) CAR-T used by Kaixing forthe treatment of relapsed/refractory multiple myeloma. With great potential, ZevorcabtageneAutoleucel Injection will further enrich the Company’s product lines in the field of blood diseases,and will also share the expert network, research and clinical resources with existing key varieties ofthe Company in the field in terms of marketing, thus achieving mutual complementary, mutualdevelopment and effective collaboration. The Company will form multi-dimensional product linesof chemotherapy medicines, ADC products and CAR-T products in the field of neoplastichematologic treatment after this transaction. Please refer to the Announcement on Signing anExclusive Commercialization Cooperation Agreement for Products by a Wholly-owned Subsidiary(Announcement No.: 2023-004) disclosed by the Company on Cninfo (http://www.Cninfo.com.cn)for details.
In March 2023, the Company intended to sign the Partnership Agreement of Hangzhou CapitalBiomedical Achievements Transformation Fund (hereinafter referred to as the “PartnershipAgreement”) with Hangzhou Jianheng Enterprise Management Co., Ltd., Hangzhou IndustrialInvestment Co., Ltd., Hangzhou Taikun Equity Investment Fund Partnership (Limited Partnership),Betta Pharmaceuticals Co., Ltd. and Hangzhou West Lake Industrial Fund Co., Ltd. to jointly investin the establishment of Guoshun Jianheng Venture Capital Partnership (Limited Partnership) with atotal subscribed capital of 210 million yuan, in a bid to further enrich the Company’s industrialinvestment ecosystem relying on the industrial management experience of business managers andresource advantages of other contributors by organically integrating government’s guidance fundand excellent pharmaceutical capitals. By contributing 40 million yuan (or a contribution ratio of
19.05%), the Company will be the limited partner (LP) of the Partnership. Please refer to theAnnouncement on Joint Investment with Professional Investment Institutions (Announcement No.:
2023-008) disclosed by the Company on Cninfo (http://www.Cninfo.com.cn) for details.
In April 2023, the Company’s wholly-owned subsidiary Hangzhou Zhongmei HuadongPharmaceutical Co., Ltd. signed the Agreement on Equity Transfer and Capital Increase of JiangsuNAU Animal Pharmaceutical Co., Ltd. (hereinafter referred to as “NAU Animal Pharmaceutical”),with NAU Animal Pharmaceutical, natural person Zhai Zhongshu and Nanjing JiuhengPharmaceutical LP (Limited Partnership). Zhongmei Huadong will invest no more than265,333,300 yuan in total and acquire 70% of the equity in NAU Animal Pharmaceutical in theform of equity transfer and capital increase, becoming a controlling shareholder of the latter. This
acquisition of NAU Animal Pharmaceutical further improved the industrial layout of the Companyin industrial microbiology. NAU Animal Pharmaceutical is at a stage of rapid growth. The averageannual growth rate of sales revenue in the past three years has exceeded 50% and the preliminaryconstruction has laid a solid foundation for its rapid development. After this transaction, NAUAnimal Pharmaceutical will become an important platform for Huadong Medicine to develop itsanimal health business in industrial microbiology sector, while making full use of HuadongMedicine’s advantages in industrial ecological chain and financial support capabilities to achievecoordinated development in R&D, manufacturing, marketing, selling and other dimensions. Pleaserefer to the Announcement on Acquisition of 70% Equity of Jiangsu NAU Animal PharmaceuticalCo., Ltd. via Equity Transfer and Capital Increase (Announcement No.: 2023-024) disclosed by theCompany on Cninfo (http://www.Cninfo.com.cn) for details.
In August 2023, the Company’s wholly-owned subsidiary Zhongmei Huadong signed theExclusive Product License Agreement with the American listed company Arcutis Biotherapeutics,Inc. (hereinafter referred to as “Arcutis”). According to the agreement, Zhongmei Huadongobtained the exclusive license of the globally innovative Roflumilast external preparations(including Roflumilast Cream ZORYVE
?and Roflumilast Foam ARQ-154) of Arcutis in GreaterChina (including Chinese mainland, Hong Kong, Macau and Taiwan Province) and Southeast Asia(Indonesia, Singapore, Philippines, Thailand, Myanmar, Brunei, Cambodia, Laos, Malaysia andVietnam), including rights for development, registration, production and commercialization.Zhongmei Huadong will pay Arcutis a down payment of 30 million US dollars, a milestonepayment of development, registration and sales with a maximum of 64.25 million US dollars, and agraded double-digit net sales commission. The introduction of ZORYVE
?
cream and ARQ-154 willfurther supplement the Company’s product lines in the field of autoimmune and inflammatory skindiseases, and consolidate the its core competitiveness in the field of autoimmunity. Please refer tothe Announcement on Signing an Exclusive Licensing Agreement for Products by a Wholly-ownedSubsidiary (Announcement No.: 2023-061) disclosed by the Company on Cninfo(http://www.Cninfo.com.cn) for details.
5. ESG of the Company during the reporting period
With regard to ESG, the Company has always adhered to the concept of sustainabledevelopment. Setting up a special ESG Committee to coordinate the Company’s ESG work, theCompany integrates the core theory of ESG with the enterprise development strategy and dailyoperation management, guides and makes innovation in various work with a scientific concept ofsocial responsibility, upholds the idea of green production, actively responds to the “carbonneutrality and carbon peaking” goals, operates with integrity in strict accordance with laws, and
actively fulfills its social responsibilities. By virtue of its excellent ESG governance ability, theCompany won the AA rating for ESG by CNI Index of Shenzhen Stock Exchange and the A ratingfor ESG of WIND, and was awarded the 16th Top 100 Chinese Listed Companies in ESG bySecurities Times, Panorama Network Excellent Social Responsibility Award, etc.
6. Awards during the reporting period
During the reporting period, as the Company’s comprehensive competitive strength, efficientoperation and governance, and value creation ability were recognized by the market, it won anumber of awards and honors: The Company was included in Fortune China 500 for the 14th timeand ranked 358th. It was selected in the list of “2022 Top 100 Pharmaceutical Industries in China”of MENET, reelected top 10 among “2022 Top 100 Pharmaceutical Enterprises in China”, andincluded in “2023 Top 100 Chinese Enterprises in Overall Strength of Pharmaceutical Research andDevelopment”, “2023 Top 100 Chinese Enterprises in Chemical Drugs Research and Development”and “2023 Top 50 Chinese Enterprises in Biomedicine Research and Development” by YaoZH. Interms of investor relations management, the Company won numerous awards, including the GoldAward for Panoramic Investor Relations - “Outstanding IR Company”, “Outstanding IR Team”,“Best Corporate Communication Award”, “Best New Media Operation Award”, and the 14thTianma Awards for Investor Relations of Chinese Listed Companies - “New Media Award”, etc.(III) R&D situation
(1) Overall R&D situation
During the reporting period, being “Scientific Research-based and Patient-centered”, theCompany further devoted itself to the field of cancer and chronic disease treatment, continuouslyincreased the R&D input, kept enriching the layout of innovative medicine R&D, enhanced theconstruction of innovative R&D ecology and technological platform, and actively advanced theprogress of clinical trials, with multiple major staged achievements made. As of the date of theReport, the Company has a total of 82 pharmaceutical projects under development, including 51innovative and biosimilar medicine projects. During the reporting period, the Company input
1.057 billion yuan in R&D in the pharmaceutical industry segment. Among them, 668 millionyuan were used as direct R&D expenditures, up 15.91% year on year. R&D tasks mainly includethe following:
1) The Company continued to practice the new medicine R&D mode combining independentR&D + cooperative entrusted development + product License-in, track the latest internationalmechanism of medicine action and target, as well as the progress of clinical application research,
speed up the layout of innovative medicines and introduction of innovative medicine projects athome and abroad, clarify innovative, differentiated and iterative standards for initiation ofprojects, and strengthen the capabilities of independent innovation and R&D;
2) With “clinical value, pharmaco-economic value and commercial value” as the startingpoint, the Company laid out multiple categories of innovative products in fields of endocrinology,autoimmunity and oncology;
3) Focusing on clinical superior varieties and specialized medicines, the Companyaccelerated the R&D layout of high-tech barrier generic medicines and modified new medicines;
4) The Company established and fostered the industrial chain advantages of “APIs +preparations” for generic medicines, developed technical improvement and innovation of externalpreparations, and strengthened its market competitiveness;
5) The Company strengthened the comprehensive dynamic evaluation of varieties underdevelopment, strengthened the management of imported projects, especially clinical projects,accelerated the speed and quality of development of clinical projects, especially those under phaseIII clinical trials, and sped up the launching of innovative medicines;
6) The Company built its ADC global R&D ecology for win-win cooperation by fosteringthe Polypeptide differentiation innovative technology platform, immune disease antibodytechnology platform, microbiology fermentation cytotoxin technology platform, and innovativelinker and coupling technology platform.
(2) Innovative R&D strategy
As for innovative medicines, the Company insisted on its differentiated R&D strategy withthe focus placed on unsatisfied clinical needs of global patients, and gave priority to the layout ofthree key fields of fields of endocrinology, autoimmunity and oncology to become a leader inthese fields. To date, the Company has formed 46 innovative product lines, with half of theseproducts researched and developed independently. As its product lines are continuously enriched,the Company has constantly expanded its innovative medicine field to the R&D of multiple typesof medicines including micromolecule medicines, polypeptides, ADCs, bispecific or multi-specific antibody medicines, as well as the exploration towards innovative therapies for diseasesin the fields of endocrinology, autoimmunity and oncology.
(3) Progress of R&D of innovative medicines, innovative medical apparatuses andbiosimilar medicinesOncologyThe Company endeavored to build the world’s leading platform for R&D of innovativecancer medicines and established more than 30 innovative antineoplastic medicines coveringtargeted micromolecule medicines, ADCs, antibodies, PROTAC, etc. through discovery, screeningand verification of new targets in preliminary R&D of medicines.The world’s first-in-class ADC drug, ELAHERE
?, mirvetuximab soravtansine-gynx (R&Dcode: IMGN853, HDM2002), introduced by the Company from ImmunoGen in the U.S. hasachieved the preset main end point for phase III single-arm clinical trial in China, with its pre-BLA submitted in March 2023. It is planned to submit the BLA in China in Q3 2023. It wasincluded in the priority review by CDE in July 2023. In the meantime, ELAHERE
?was approvedto be introduced in Hainan thanks to the “Pioneering in Pilot Zone” licensed medical apparatusespolicies in Hainan Bo’ao Lecheng International Medical Tourism Pilot Zone, which is expected tohelp Chinese PROC patients with platinum-resistant ovarian epithelial cancer, fallopian tubecancer or primary peritoneal cancer who are folate receptor α (FRα) positive in time. In the future,the Company plans to participate in the international multi-center PSOC clinical research toadvance its application in front-line treatment of ovarian cancer and support to use ELAHERE?as the preferred medicine combination for treatment of ovarian cancer.
Mefatinib Tablet, the Company’s first-class new medicine, was included as the variety forbreakthrough treatment in May, which is used for treating advanced non-small cell lung cancerwith rare EGFR mutations. Another ongoing phase III clinical trial for advanced non-squamousnon-small cell lung cancer with EGFR-sensitive mutations has completed the phase III study ofPFS events in July 2023. It is planned to submit an application for launching within 2023.
HDM2005, an ADC product independently developed by the Company, has completed PCCconfirmation in Q1 2023 and IND development is now in progress. It is planned to apply forclinical trial in within 2024.
In the second half of 2023, two types of independent innovative products for tumors willreceive PCC confirmation and enter the IND development.
EndocrinologyThe Company has created the world leading innovative medicine R&D developmentplatform for diabetes with GLP-1 target as the core. To date, the Company has established eightproducts of GLP-1 and related targets that cover oral medicines, injections and other dosageforms, including long-acting and multi-target global innovative and biosimilar medicines. TheCompany will keep exploring innovative projects related to GLP-1 targets, expanding itscoverage to such indications as weight loss, lipid reduction and NASH, and constantly developinnovative medicines with higher bioavailability and more clinical advantages.HDM1002 (micromolecule GLP-1 receptor stimulant), an innovative medicine for diabeticmellitus that is developed by the Company independently, has obtained approvals in the U.S. andChina, with the administration of the first subject in the first in human (FIH) achieved in thebeginning of June 2023. The IND application for obesity in China was submitted in June 2023. Todate, there is no oral micromolecule GLP-1 receptor stimulant in the world. HDM1002 willfurther enrich the Company’s product lines in the field of endocrine therapy, accelerate theCompany’s integration into the global innovative pharmaceutical industry, and further enhance itscomprehensive competitiveness.HDM1005, a GLP-1R and GIPR long-acting polypeptide dual-target agonist independentlydeveloped by the Company, has entered the research stage of IND. To date, the project issmoothly advanced and it is expected to submit the IND application in early 2024.DR10624, a GLP-1R/GCGR/FGF21R target multiple agonist developed by the Company’sholding subsidiary Doer Biologics, completed its first subject administration in phase I MultipleAscending Dose (MAD) clinical trial for the treatment of obesity in New Zealand in July 2023.DR10624’s IND application for weight management of overweight or obese people in China wasapproved in July 2023, IND application for diabetes indication in China was submitted in June2023, and IND application for hypertriglyceridemia indication in China was submitted in August2023.Liraglutide Injection has had its marketing authorization application for diabetes indicationsapproved by NMPA in March 2023, and its marketing authorization application for obese oroverweight applications was approved in July 2023.Semaglutide Injection has now completed the phase I clinical trial and reached the
equivalence study end point, with its phase III clinical study launched.Insulin Degludec Injection has now completed the phase I clinical trial and reached theequivalence study end point, with its phase III clinical study launched.AutoimmunityThe Company has had over 10 varieties of biomedicines and micromolecule innovativeproducts in the field of autoimmunity.The marketing authorization application of HDM3001 (QX001S), a biological similar ofUstekinumab (Stelara
?) for plaque psoriasis has been accepted by NMPA in August 2023.The IND application of HDM3002 (PRV-3279), an innovative medicine used for thetreatment of systemic lupus erythematosus (SLE), has been approved by CDE in April 2023 andhas been formally included in IIa phase MRCT (PREVAIL-2).Being listed as Overseas New Medicine in Urgent Need for Clinical Purpose (First Batch)by CDE, ARCALYST
?
, a global innovative product introduced from Kiniksa in the U.S., is usedfor the treatment of Cryo-Pyrin-Associated Periodic Syndromes (CAPS). It is expected that itsBLA for this application will be formally submitted in China in 2023. Moreover, the Companyhas submitted the Pre-BLA for recurrent pericarditis in China at the end of June 2023.
The Company developed multiple new target and biological mechanism immune diseaseearly projects, which are all smoothly advanced. In the second half of 2023, a type of independentinnovative product for autoimmunity will receive PCC confirmation and enter the INDdevelopment.Innovative pharmaceutical apparatusesHD-NP-102 (Dynamic Monitoring System of Glomerular Filtration Rate and MB-102Injection): The Dynamic Monitoring System of Glomerular Filtration Rate and MB-102 Injectionjointly developed by the Company and MediBeacon, Inc of the U.S. can continuously measure theglomerular filtration rate (GFR) of patients with normal or impaired renal functions by non-invasive monitoring of the fluorescence emitted by MB-102 through intravenous injection. In July2022, NMPA formally accepted the pharmaceutical apparatus registration application for thesystem and is now reviewing the application. The MB-102 injection (Relmapirazin) used inconjunction with this system is a global innovative medicine that completed the enrollment of allsubjects for international multi-center phase III clinical trial in February 2023. The pre-NDA has
submitted in China in April 2023. The PMA has been submitted in the U.S. in June 2023, whichhas been accepted by FDA in July 2023.
Pipeline Diagram of Main Innovative Medicines and Biosimilars as of the Date of the
Report.
(4) Others tasks regarding Innovation R&D
Rapidly expanding scientific research teamThe company has set up a full-chain efficient and hardworking core R&D team withinternational visions composed of 1,500 high-level developers of various levels, and hasestablished a relatively sound R&D management system that covers the whole process ofmedicinal development from target research, early medicinal discovery, pre-clinical research,clinical trials to new medicine registration and marketing.The early R&D team carried out a lot of pre-researches on novel and cutting-edge targets,systematically studied from such aspects as target mechanism, phenotypic analysis and indicationselection, and supported the selection of early development strategies with high-quality internaldata, in a bid to advance the Company’s two major strategies of innovation andinternationalization and keep pace with industrial development trend of advancement of targets.Since 2023, the Company has implemented the early exploratory project mechanism, soughtgradual development and accelerated its innovation by piloting the cutting-edge targets andbuilding platforms for popular fields, and placed its focus on three key fields of endocrinology,autoimmunity and oncology. The Company has launched 9 early exploratory projects in the firsthalf of 2023, expecting to develop the first-in-class or best innovative medicines of the same type.The Company’s clinical R&D team has continued to explore the speed and coverage ofinnovation and break through the differentiated bottleneck in innovation in accordance with theorientation of high efficiency and high quality, endeavoring to achieve the leap-forwarddevelopment of diversified innovation in clinical R&D. The R&D team has charged andsupported clinical projects from such dimensions as clinical study, operation, registration andpharmaco-vigilance. In 2023, the Company is expected to submit the formal marketingauthorization applications for at least 3 innovation projects.Advanced technical platformsThe Company has built such medicinal R&D platforms as new target screening andverification platform, ADC R&D platform, CADD/AIDD platform and PROTAC technologyplatform, aiming at accelerating the promotion of numerous pipe lines with original innovation(first-in-class, best-in-class) or differentiated/iterative development values. Over the past 3 years,
the Company has obtained 6 PCC modular cumulatively and had 9 clinical applications approvedwith the support from these platforms.Among them, AI drug discovery & design (CADD/AIDD) platform is a key orientationcurrently valued by the Company, which strengthens the construction of computing power andalgorithm system and intelligently process the data generated and accumulated in combinationwith the research progress of the industry. In the meantime, rich data on the properties of finishedmedicines accumulated by the Company lays the foundation for continuous optimization anditerative prediction model of the properties of finished medicines and greatly improves the R&Dprogress of several projects at different stages. At present, the platform is also expanding itsapplication in the R&D of polypeptide, ADC, protein and nucleic acid medicines. To date, theplatform has submitted about 30 patent applications and got about 2,000 compounds.Other innovation results as of the reporting period
1) Patent applications
The Company’s Innovative Medicine Global R&D Center attached great importance to theprotection of intellectual property rights, valued the management of intellectual property rights inthe whole life cycle of medicines and the formulation of patent strategies, and set up anintellectual property BP for the early warning, declaration and retention of patents in and out ofChina, thus improving the comprehensive competitiveness of its products. To date, the Center hasclaimed a total of over 80 patent applications, including 21 formal and PCT patent applicationssince its establishment. All these patents cover such aspects as structures, preparation processes,applications and formulations of new medicines.
2) Academic publications
Since 2022, the innovative medicine team has published 9 innovative research results onjournals/conferences. In 2023, the innovative medicine team published 5 papers in the fields ofoncology and endocrinology at conferences or on journals, including KRAS
G12D
-PROTACresearch selected in the summary of 2023 WCLC (with an oral report made), oral GLP-1micromolecule agonist HMD1002 selected in the summary of 2023 EASD (with an oral reportmade), targeted HPK1 micromolecule inhibitor research selected in the summary of 2023 CSCO,PROTAC research results targeting BTK published on RSC Medicinal Chemistry Journal, and
clinical study results of Mefatinib at the first-line treatment for NSCLC published on CancerCommunications.
3) Governmental subsidies
To date, the Company’s Innovative Medicine Global R&D Center has obtained approvalsfrom the government for 12 projects (applications for 3 new projects submitted in 2023 and areunder review), with the certified subsidies of 27.25 million yuan. The Company won the honor of“Pioneering Innovation Team” of Zhejiang Province in 2021 and obtained the fund underZhejiang Province’s Pioneer Scientific and Technology Program for two consecutive years in2021 and 2022. Meanwhile, HDM1002 and some other programs were all awarded prizes forscientific and technological projects at the provincial and/or municipal level. Mefatinib won thefund from the “Special Program for High-quality Development of Bio-pharmaceutical Industry inHangzhou”. The Company’s Innovative Medicine Global R&D Center has kept advancing thehigh efficiency and high quality work style of various team revolving around its scientificinnovation and internationalization strategy to attract more high-end talents, successfullyimporting multiple “Hangzhou 115” overseas talents and experts.
(5) Progress of development of major generic medicines
The Company further clarified the focused and prioritized varieties of existing genericmedicines under development by regularly organizing dynamic evaluation and analysis. As of thedate of the Report, key varieties are as follows:
| S/N | Field | Item | Specification | Latest Progress |
| 1 | Endocrinology | Canagliflozin Tablets | 0.1g, 0.3g | Approved to be launched by NMPA in January 2023 |
| 2 | Endocrine | Pioglitazone Hydrochloride and Metformin Hydrochloride Tablets | 15/850mg | Application for launching accepted in June 2022 and supplementary materials submitted in March 2023. |
| 3 | Immunity | Tacrolimus Ointment | 0.03%, 0.1% | Application for launching accepted in April 2022 and supplementary materials submitted in April 2023. |
| 4 | Immunity | Tacrolimus Granules | 1mg | Application for launching submitted and accepted in January 2023. |
| 5 | Immunity | Tacrolimus Sustained-release Capsules | 5mg, 1mg, 0.5mg | Application for launching of 5mg version submitted and accepted; Applications for launching of 1mg and 0.5mg versions submitted and accepted in February 2023. |
| 6 | Oncology | Olaparib Tablets | 100mg, 150mg | Application for launching submitted and accepted in October 2022. |
| 7 | Oncology | Ibrutinib Capsules | 140mg | Process certification completed and BE test in progress. |
| 8 | Angiocarpy | Macitentan Tablets | 10mg | Supplementary materials have been submitted. |
| 9 | Anti-infection | Fusidic Acid Cream | 15g: 0.3g | Application for launching accepted in May 2023. |
| 10 | Easing pain | Lornoxicam for Injection | 8mg | Application for launching submitted in August 2023. |
(6) Progress of international registration
The Company has actively conducted its international registration tasks. As of the date of theReport, main progress is as follows:
| S/N | Field | Item | Remarks | Latest Progress |
| 1 | Endocrinology | Acarbose | APIs | Officially approved by India in June 2023. Supplementary materials for registration in Taiwan, China submitted in April and June 2023. |
| 2 | Immunity | Tacrolimus Capsules | 0.5mg, 1mg, 5mg | Approved by FDA in the U.S. in April 2023. |
| 3 | Oncology | Exatecan Mesylate | Intermediate | DMF application submitted in the U.S. in March 2023. |
| 4 | Anti-infection | Mupirocin | APIs | Approved to be registered in India February 2023. |
| 5 | Anti-infection | Caspofungin Acetate for Injection | 50mg, 70mg | Supplementary materials for ANDA application (the U.S.) submitted in May 2022. |
| 6 | Anti-infection | Polymyxin B Sulfate | APIs | CEP application for Jiangdong Premise approved by EDQM in May 2023. Approved to be registered in India February 2023. |
| 7 | Anticoagulant | Fondaparinux Sodium | APIs | Registration in Taiwan, China approved. DMF defect reply submitted in the U.S. in April 2023. |
| 8 | Anticoagulant | Fondaparinux Sodium Injection | 2.5 mg/0.5 mL, 5 mg/0.4 mL, 7.5 mg/0.6 mL, 10 mg/0.8 mL | Supplementary materials for ANDA application (the U.S.) submitted in August, October and December 2022, and February and May 2023. |
| 9 | Traditional Chinese Medicine | Bailing Capsule | 0.5g | Registration of premise in Canada approved in May 2023. |
(7) Progress of consistency evaluation
As of the date of the Report, the progress of consistency evaluation on quality and efficacyof Company’s generic medicines is as follows:
| S/N | Field | Item | Specification | Latest Progress |
| 1 | Immunity | Tacrolimus Capsules | 1mg, 0.5mg | The notification of approval for supplementary application of consistency evaluation for 1mg specification obtained in July 2023. Application for consistency |
| evaluation of 0.5mg version submitted and accepted in February 2023. | ||||
| 2 | Gastroenterology | Pantoprazole Sodium Enteric Capsules | 40mg | The notification of approval for supplementary application of consistency evaluation obtained in May 2023. |
| 3 | Angiocarpy | Indobufen Tablets | 0.2g | Application for consistency evaluation submitted and accepted in March 2023. |
| 4 | Angiocarpy | Adenosine Injection | 20ml:60mg, 30ml:90mg | Application for consistency evaluation submitted and accepted in October 2022, and supplementary materials submitted in April 2023. |
(8) Progress of registration and launching of aesthetic medicine products in China
| S/N | Type | Product Designation | Purpose | Latest Progress |
| 1 | Injections | MaiLi Extreme Hyaluronic acid | Facial filling | Collection of curative effect indexes of all subjects for clinical trial in China completed in August 2023. |
| 2 | Injections | MaiLi Precise Hyaluronic acid | Facial filling | Testing for registration in China completed and pre-clinical work under preparation. |
| 3 | Injections | Ellansé-M | Facial filling | Enrollment of all subjects for clinical trial in China completed in March 2023 and follow-up in progress. |
| 4 | Injections | Perfectha? Diphasic hyaluronic acid | Facial filling | Preparing for registration in China. |
| 5 | Injections | Lanluma V Poly-l-lactic Acid | Facial filling | Preparing for registration in China. |
| 6 | Energy source equipment | Glacial Rx (F1) | Removing benign pigmented lesions of skin, etc. | Testing for registration in China and preparation of technical data in progress. |
| 7 | Energy source equipment | V series products (V20, V30) | Skin compactness, body and facial shaping, skin rejuvenation, depilation, etc. | Testing for registration in China and preparation of technical data for V20 completed, and registration application expected to be submitted in Q3 2023. Registration of V30 in China in progress. |
| 8 | Energy source equipment | Préime DermaFacial | Facial skin management | Commercial marketing achieved in European, American and other key aesthetic medicine markets successively in September 2022. Device attribute identification in progress in China; matching cosmetics approved for registration in December 2022. |
| 9 | Energy source equipment | Reaction? | Body and facial shaping, skin compactness | Re-launching in China completed in June 2023. |
(9) Progress of patents
In recent years, the Company attached great importance to the protection of intellectualproperty and the commercialization and application of achievements, and the number of patent
applications and authorization were steadily increased. Over the years, the Company applied for1,204 patents at home and abroad, including 426 authorized invention patents. Hangzhou ZhongmeiHuadong Pharmaceutical Co., Ltd., the Company’s wholly-controlled subsidiary, is a nationalintellectual property demonstration enterprise. In November 2014, it passed the external audit ofZhongzhi (Beijing) Certification Co., Ltd., becoming one of the first 147 companies that passed thestandards implementation certification and successfully passed the supervision and re-examinationof the enterprise intellectual property management system in October 2022.
During the reporting period, application and renewal of patents of the Company wereprogressed smoothly, with a total of 68 patent applications submitted, including 38 patents forinvention. A total of 52 patents were granted.
| Patent type | Increase during the reporting period | Total quantity | ||
| Number of patents applied for (unit) | Number of patents received (unit) | Number of patents applied for (unit) | Number of patents received (unit) | |
| Invention patent | 38 | 22 | 969 | 426 |
| Utility patent | 30 | 25 | 201 | 175 |
| Appearance design patent | 0 | 5 | 34 | 30 |
| Total | 68 | 52 | 1204 | 631 |
Note: Data in the above table represent the statistical patent information of main subsidiaries engaging in thepharmaceutical industry, industrial microbiology and aesthetic medicine within the Company’s consolidatedstatements.II. Core competitiveness
1. Open innovative medicine R&D system and continuously improved innovation ability
The Company has always attached great importance to innovative R&D and maintained greatinput in R&D. Being “Scientific Research-based and Patient-centered”, the Company has fostered asound independent innovation system for R&D of medicines that covers the whole process frommedicine discovery, pharmaceutical research, pre-clinical study and clinical study to industrialproduction, and set up its Global New Medicine R&D Center after years of vigorous development,with “clinical value, pharmaco-economic value and commercial value” as the starting point.
Focusing on three core therapeutic fields of oncology, endocrinology and autoimmunity, theCompany has established in-depth strategic cooperation with leading pharmaceutical enterprises inand out of China through collaborative product development, equity investment or by other means,successfully building its global R&D ecosystem via introduction, fusion and innovation. In recentyears, the Company kept expanding its differentiated in-depth layout in the field of ADC,
successively invested in Qyuns Therapeutics, an anti-body R&D and production company, NuolingBiomedical Technology (Beijing) Co., Ltd., an ADC linker and coupling technology company,incubated Zhejiang Huida Biotech Co., Ltd. with full product lines for ADC drug toxin rawmaterials, and held shares of Doer Biologics, a multi-antibody platform R&D company. Moreover,the Company established cooperation with Heidelberg Pharma, a global emerging technologycompany in the field of ADC based in Germany, on equity investment and products, and organicallyintegrating with its advanced ATAC
?(Antibody-Amanita Conjugate) technology platform. In thefuture, the Company will keep strengthening the construction of innovative platform and integrationof resources, further expand the cooperation on new technology platforms based on the ADC GlobalR&D Ecology of Huadong Medicine, and create a world-leading ADC independent R&D platform.Moreover, the Company keeps developing and has fostered differentiated innovative productlines that cover the full R&D cycle via independent R&D, external cooperation, license-in, etc. Asof the date of the Report, the Company has reserved 51 types of innovative and biosimilarmedicines under development, which cover oncology, endocrinology, autoimmunity and other fields.All these merits effectively empower the continuous initiation and launching of innovative products,offering impetuses for the medium- and long-term development.
2. Comprehensive ability in developing international businesses
Vigorously advancing its internationalization, the Company has further strengthened itspresence in global energy-source aesthetic medicine apparatuses market by acquiring 100% equityof High Tech and Viora. Meanwhile, the Company has also established product or equitycooperation with Akso, Kiniksa and Provention Bioin in the U.S., Heidelberg Pharma in Germany,etc. to complement and enrich the interests of commercial development of innovative medicines inand out of China. Efforts are made to facilitate the international registration of products, and allchemical raw medicines launched have obtained authorized certifications from FDA or EU. Ourproducts such as Daptomycin for Injection, Acarbose Tablets and Pantoprazole Sodium for Injectionhave been approved by FDA, while some high-end industrial microbiological raw products enjoystrong international competitiveness. The Company never stops its pace in developing internationallogistics and purchase supplies to foster international purchasing abilities, and has been a part ofglobal innovative medicine R&D industry chain by driving the constant improvement of its abilitiesin CMO/CDMO businesses.
3. Diverse product lines for specialized and chronic diseases, and comprehensivecompetitiveness in diabetes treatment and care
Specialized in specialized and chronic diseases, as well as special medicines for years, theCompany has fostered good brand effect and laid strong market foundation in such fields as chronic
nephrosis, transplantation immunity, internal secretion and digestive system, continuously keepingin the forefront of similar products in China in terms of market share. The Company hascomprehensively laid out product lines of innovative and differentiated generic medicines forclinical mainstream therapeutic targets of diabetes, with over 20 types of products underdevelopment or put in commercial production. The Company has also achieved full coverage ofclinical first-line immune-suppressive medicines and subsequent products in the field of organtransplantation. With the world’s first-in-class layout in three core therapeutic fields of oncology,endocrinology and autoimmunity, the Company has fostered multiple global innovative medicinelayouts and R&D ecologies in the field of ADC medicines, forming differentiated advantages.
4. Comprehensive competitive advantages that cover multiple diseases in the field ofautoimmunityIn recent years, the Company has continuously made in-depth layout around the field ofautoimmunity, introduced the world’s leading innovative technologies and products, and keptimproving its own innovative R&D capabilities. To date, the Company has had over 10 varieties ofbiomedicines and micromolecule innovative products in the field of autoimmunity. In the meantime,the Company’s Innovative Medicine R&D Center developed multiple new target and biologicalmechanism immune disease early projects, which are all smoothly advanced.In the field of autoimmunity, the indications of the Company’s existing and under-developmentproducts include transplant immunity, systemic lupus erythematosus, psoriasis, atopic dermatitis,seborrheic dermatitis, recurrent pericarditis, Cryopyrin-Associated Periodic Syndromes and other
diseases, covering such diseases as skin, rheumatism, cardiovascular, respiratory, andtransplantation. The Company has become one of the pharmaceutical companies withcomprehensive coverage in the field of autoimmunity in China. The Company established itsexternal preparations R&D platform in the field of autoimmunity, steadily promoted the R&Dinnovation for external and complex preparations in combination with actual project practicesplatform, mainly the development of external liquores, ointments, gelling agents and creams, aswell as improvement of the development ability of in vitro release and transdermal experimentmethod, ability in biochemical detection of biomedicine, level in impurity spectrum analysis andstructure confirmation of APIs. To date, its holding subsidiary Huadong Medicine (Xi’an) BohuaPharmaceutical Co., Ltd. has fostered three production lines for external preparations.
5. China’s leading professional pharmaceutical service team and extensive marketnetwork
In the pharmaceutical industry segment, the Company has fostered a professionalpharmaceutical service and market development team. Coring at the clinical values and academicpromotion, the team vigorously promotes the marketing mode that features the online integration ofcomprehensive hospitals, primary level medical institutions, retailing, third-party terminals andInternet, and has gradually formed multi-channel effective coverage and strong competitiveadvantages.As for pharmaceutical business, the Company has made its presence in Zhejiang market foryears and boasts a complete business ecosystem with diverse categories of products and services,forming comprehensive competitive advantages in market access and coverage. Keeping improvingits four core competencies of logistics, information, finance and operation, and offering such high-end value-added services as policy affairs, the Company has established business partnership with90% mainstream pharmaceutical enterprises in and out of China, and covered all public medicalinstitutions, key private medical institutions and retain pharmacies in Zhejiang Province, with aleading market share in Zhejiang Province and forefront ranking in the industry for consecutiveyears. In recent years, the Company has witnessed rapid development in innovative businesses suchas products agency and market development, characteristic massive health industry, third-partymedical logistics featuring cold chain and medical e-commerce and has formed complete cold chainlogistics service system and ability at a leading level in China.
6. High-end international aesthetic medicine product lines that cover noninvasive andmicro-invasive mainstream non-operative fields
The Company successfully made its presence in the aesthetic medicine industry by acquiringSinclair based in UK. Acquiring international energy-source aesthetic medicine apparatusenterprises High Tech and Viora in 2021 and 2022 respectively, Sinclair was granted the globaldistributorship (except for Germany and UK) of Préime Derma Facial Multi-functional facial skinmanagement platform of EMA Aesthetics, an Irish company, in May 2022. Covering all middle-and high-end markets of non-operative aesthetic medicine injections and energy-source aestheticmedicine apparatuses, the Company has now held global rights of multiple patented products insuch fields as facial and body filling, facial cleansing, body shaping, catgut embedding, and energy-source apparatuses, and set up an international aesthetic medicine operation and BD team. TheCompany further integrates its R&D resources and competencies focusing on global high-endaesthetic medicine markets. The Company has successfully developed its international aestheticmedicine businesses that organically combine R&D, manufacturing and marketing, and establishedan international aesthetic medicine marketing network based on its six global R&D centers in UK,the Netherlands, France, Switzerland, Spain and Israel, as well as Sinclair’s six global production
bases in the Netherlands, France, the U.S., Switzerland, Bulgaria and Israel, with its products soldin over 80 countries and regions. To date, the Company has developed 36 types of internationalhigh-end “noninvasive and micro-invasive” aesthetic medicine products that cover facial and bodyfilling, catgut embedding, skin management, body shaping, depilation, private repair and other non-operative mainstream aesthetic medicine fields. Specifically, 24 types of these products have beenlaunched in and out of China, and the other 12 types are “first-in-class” products underdevelopment. With comprehensive product clusters formed, the Company now ranks in theforefront of the industry in terms of product quantity and coverage.
7. Comprehensively improving the international competitiveness of the industrialmicrobiology segment based on solid R&D and industrial baseWith profound industrial base thanks to over 40 years of development in the industrialmicrobiology sector, the Company has successfully developed and manufactured multiple types ofmicrobiological medicines, and established the key technology system for R&D and production ofmicrobiological products, ranking in the forefront of the industry in terms of scale and technologicallevel of microbiological fermented products. Being market demand-oriented, R&D technology-driven and industrial resource-coordinative in the industrial microbiology segment, the Companyhas fostered differentiated product lines and solutions. Since the establishment of the IndustrialMicrobiology Division, the Company has led the overall business development in the field ofindustrial microbiology, and formed a complete independent management system in operation,R&D, investment, human resources and marketing. In the industrial microbiology segment, theCompany has also established the R&D clusters with Industrial Microbiology of ZhongmeiHuadong, HIT Institute of Synthetic Biology, Huida Biotech, Hizyme Biotech and Perfect mRNA asthe core, and seven industrial bases in Hangzhou Xiangfuqiao, Qiantang New Area, Jiangsu JoyangLaboratories, Magic Health, Twisun Hi-tech, Wuhu Huaren, and NAU Animal Pharmaceutical.Moreover, the Company has set up the largest fermentation monomer plants in Zhejiang, formed theindustry-leading microbiological medicine production ability and high-level R&D capacity thatcovers all stages of microbiological engineering technologies from strain construction, metabolicregulation, enzymatic catalysis, synthetic modification to separation and purification, and built acomplete manufacturing system for R&D, pilot test, commercial production, engineering and publicsystem guarantee of microbiological projects.In the industrial microbiology segment, the Company has initiated over 230 R&D projects,including 36 projects for xRNA (including 127 subprojects), 44 projects for featured APIs&intermediates, and 28 projects for massive health & biomaterials, animal health, etc. By the end ofJune 2023, the Company had 121 patents in the field of industrial microbiology, and 88 patents
were under review. In terms of R&D, the Company’s industrial microbiology segment has beencommitted to forming an efficient R&D team with high-quality talents as the core. To date, there areover 300 R&D personnel, over 20% of whom have obtained their master and/or doctoral degrees.
8. Prudent and pragmatic operation style, and stable returns to shareholdersValuing innovation in management, the Company has always endeavored to satisfy thedemands for market competition by improving the quality of its operation. As a result, the Companyhas achieved long-term steady development thanks to its high-quality products, excellentcommercialization capability, compliant yet efficient marketing services, differentiated marketpositioning, innovative R&D layout, and complete talent planning. Over the past 23 years since itwas listed, the Company has distributed dividends for 20 times with the cumulative amount of
5.593 billion yuan, which is well in excess of the 250 million yuan raised during IPO. TheCompany brings shareholders consistent and steady returns on investment.III. Main businesses
OverviewRefer to “I. Main Businesses of the Company during the Reporting Period”Year-on-year Changes in Major Financial Data
Unit: yuan
| Current reporting period | Same period last year | Year-on-year percentage increase/decrease | Reasons for changes | |
| Operating revenue | 20,385,344,288.81 | 18,197,963,991.01 | 12.02% | |
| Operating cost | 13,917,418,061.11 | 12,243,374,078.15 | 13.67% | |
| Sales expenses | 3,083,786,005.03 | 3,032,965,177.95 | 1.68% | |
| Administrative expenses | 721,477,862.62 | 572,048,249.55 | 26.12% | |
| Financial expenses | 55,848,182.30 | 5,447,966.20 | 925.12% | Mainly due to the increase in net interest expenses |
| Income tax expenses | 345,279,440.91 | 287,938,727.72 | 19.91% | |
| R&D input | 558,407,142.27 | 566,596,381.67 | -1.45% | |
| Net cash flow from operating activities | 2,021,743,748.65 | 284,234,410.27 | 611.29% | Mainly due to the increase in revenue in the current period and accelerated withdrawal of fund |
| Net cash flow from investing activities | -577,687,027.42 | -995,224,437.77 | 41.95% | Mainly due to the decrease in investment in the current period |
| Net cash flow from financing activities | -926,491,607.55 | 277,803,243.85 | -433.51% | Mainly due to the year-on-year increase in debt repayment in the current period |
| Net increase of cash and cash equivalents | 526,515,832.72 | -459,496,727.95 | 214.59% |
Material changes in profit composition or profit sources during the reporting period
□ Applicable ? N/A
No material changes in profit composition or profit sources during the reporting period.
(1) Composition of operating revenue
Unit: yuan
| 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 revenue | 20,385,344,288.81 | 100% | 18,197,963,991.01 | 100% | 12.02% |
| By sector | |||||
| Business | 13,636,059,547.28 | 66.89% | 12,227,544,864.77 | 67.19% | 11.52% |
| Manufacturing | 6,155,987,802.07 | 30.20% | 5,728,897,548.63 | 31.48% | 7.46% |
| Aesthetic medicine [Note: 1] | 1,224,069,602.01 | 6.00% | 897,380,506.25 | 4.93% | 36.40% |
| Including: International aesthetic medicine | 668,946,339.96 | 3.28% | 530,599,252.48 | 2.92% | 26.07% |
| Aesthetic medicine in China | 646,500,104.35 | 3.17% | 413,184,704.69 | 2.27% | 56.47% |
| Offset (inter-sectoral offset) | -506,685,654.27 | -519,490,722.47 | |||
| By product | |||||
| By region | |||||
| Domestic sales | 19,679,447,121.24 | 96.54% | 17,641,053,155.99 | 96.94% | 11.55% |
| Overseas sales | 705,897,167.57 | 3.46% | 556,910,835.02 | 3.06% | 26.75% |
[Note 1] The domestic aesthetic medicine business includes the income from the self-operated products of Sinclair (Shanghai), theincome from the aesthetic medicine products of the Company’s pharmaceutical commercial agency and the income from the OTCweight-loss products of the Company. The statistical specification of the semi-annual of 2023 is consistent with that of the semi-annual of 2022.The operating revenue or profit accounts for more than 10% of the total by industry, product, or region? Applicable □ N/A
Unit: 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 | 13,636,059,547.28 | 12,832,274,870.44 | 5.89% | 11.52% | 12.74% | -1.02% |
| Manufacturing | 6,155,987,802.07 | 1,270,066,961.31 | 79.37% | 7.46% | 4.52% | 0.58% |
| By product | ||||||
| By region | ||||||
| Domestic sales | 19,679,447,121.24 | 13,680,511,269.29 | 30.48% | 11.55% | 13.37% | -1.11% |
| Overseas sales | 705,897,167.57 | 233,906,791.82 | 66.86% | 26.75% | 32.87% | -1.53% |
If the statistical specifications of the Company’s main business data have been adjusted during the reporting period, theCompany’s main business data of the latest period should be adjusted according to the specifications at the end of the reportingperiod.
□ Applicable ? N/A
IV. Non-main businesses? Applicable □ N/A
Unit: yuan
| Amount | Proportion in total profit | Note on reasons | Sustainable or not | |
| Investment gains | -136,885,042.56 | -7.67% | Mainly due to long-term equity investment gains measured at equity method | |
| Gains and losses from changes in fair value | -5,100,698.38 | -0.29% | ||
| Asset impairment losses | -3,175,583.57 | -0.18% | ||
| Non-operating revenue | 2,972,826.61 | 0.17% | No | |
| Non-operating expenses | 16,298,554.80 | 0.91% | No | |
| Other income | 34,813,373.70 | 1.95% | Mainly due to the confirmation of government grants in the current period | No |
| Gains on asset disposal | 3,519,820.08 | 0.20% | No |
V. Assets and Liabilities
1. Major changes in asset composition
Unit: 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 | 4,393,835,953.54 | 13.33% | 3,996,302,178.41 | 12.81% | 0.52% | |
| Accounts receivable | 7,396,011,322.70 | 22.44% | 7,198,746,788.59 | 23.08% | -0.64% | |
| Inventories | 4,600,017,100.80 | 13.96% | 4,495,483,328.54 | 14.41% | -0.45% | |
| Investment real estate | 13,174,524.11 | 0.04% | 13,648,240.14 | 0.04% | 0.00% | |
| Long-term equity investment | 1,554,304,930.05 | 4.72% | 1,659,076,538.78 | 5.32% | -0.60% | |
| Fixed assets | 3,882,268,169.12 | 11.78% | 3,981,653,265.52 | 12.76% | -0.98% | |
| Construction in progress | 995,490,666.09 | 3.02% | 873,159,427.47 | 2.80% | 0.22% | |
| Right-of-use assets | 140,455,892.14 | 0.43% | 166,505,297.17 | 0.53% | -0.10% | |
| Short-term borrowings | 1,052,194,176.07 | 3.19% | 947,516,383.37 | 3.04% | 0.15% | |
| Contract liabilities | 125,334,375.52 | 0.38% | 146,488,489.07 | 0.47% | -0.09% | |
| Long-term borrowings | 746,918,081.65 | 2.27% | 1,051,457,747.44 | 3.37% | -1.10% | Mainly due to repayment of debt in the current period |
| Lease liabilities | 92,232,272.51 | 0.28% | 84,610,324.98 | 0.27% | 0.01% | |
| Other non-current assets | 1,320,687,263.41 | 4.01% | 1,037,279,933.15 | 3.33% | 0.68% |
2. Information about main overseas assets
? Applicable □ N/A
| Contents of assets | Reasons | Asset size | Location | Operation mode | Control measures to ensure assets security | Earnings position | Proportion of overseas assets to the Company’s net assets | Where there are significant impairment risk |
| Sinclair Pharma Limited | Equity acquisition | 2,264,625,300 yuan | United Kingdom | Independent auditing | Approval of decisions on major matters and daily financial supervision by the Board of Directors, and audit by external intermediaries | Loss in the current period | 11.22% | No |
3. Assets and liabilities measured at fair value
? Applicable □ N/A
Unit: yuan
| Item | Amount at the beginning of the period | Gain/loss from fair value changes in the current period | Accumulate d fair value changes recognized in equity | Depreciation reserves withdrawn during the period | Purchase amount in the current period | Selling amount in the current period | Other changes | Amount at the end of the period |
| Financial | ||||||||
| assets | ||||||||
| 2. Derivative financial assets | 29,907,470.68 | -5,100,698.38 | 24,806,772.30 | |||||
| 4. Other equity instrument investments | 360,910,876.41 | -808,768.81 | 1,114,211.66 | 51,794,250.00 | 2,051,811.65 | 4,145.32 | 409,848,691.27 | |
| Total | 390,818,347.09 | -5,909,467.19 | 114,211.66 | 51,794,250.00 | 2,856,435.14 | 4,145.32 | 434,655,463.57 | |
| Financial liabilities | 0.00 | 0.00 |
Other changesChanges in exchange rateWhether there are significant changes in the main asset measurement attribute of the Company during the reporting period.
□Yes ?No
4. Limitation of asset rights at the end of the reporting period
| Item | Ending book value | Reasons for limitation |
| Monetary funds | 450,409,418.49 | Certificate of deposit and cash deposit that cannot be withdrawn at any time |
| Intangible assets | 52,246,350.00 | Land use rights mortgaged for bank loans |
| Total | 502,655,768.49 |
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 |
| 1,101,613,342.52 | 1,128,489,759.34 | -2.38% |
2. Significant equity investments acquired during the reporting period? Applicable □ N/A
Unit: yuan
| Name of invested company | Main business | Way of investment | Investment amount | Shareholding ratio | Fund source | Partner | Term of investment | Product type | Progress as of the balance sheet | Projected income | Profit or loss of investment | Involved in litigation or not | Disclosure date (if any) | Disclosure index (if any) |
| date | in the current period | |||||||||||||
| Jiangsu NAU Animal Pharmaceutical Co., Ltd. | R&D, production and sales of animal drugs and health care products | Acquisition | 265,333,300.00 | 70.00% | Equity funds | None | Long term | Equity | Payment of some equity transfer amount and equity capital increase amount according to the agreement | -586,713.83 [Note] | No | April 20, 2023 | Cninfo (http://www.cninfo.com.cn) | |
| Hangzhou Guoshunjianheng Venture Capital Partnership (Limited Partnership) | Venture capital investment (investment in unlisted companies only) | Newly established | 40,000,000.00 | 19.05% | Equity funds | Hangzhou Jianheng Enterprise Management Co., Ltd., Hangzhou Industrial Investment Co., Ltd., Hangzhou Taikun Equity Investment Fund Partn | Long term | Equity | Fund registration not completed and fund not contributed | 0.00 | No | March 28, 2023 | Cninfo (http://www.cninfo.com.cn) |
| ership (Limited Partnership), Betta Pharmaceuticals Co., Ltd., Hangzhou West Lake Industrial Fund Co., Ltd. | ||||||||||||||
| Total | -- | -- | 305,333,300.00 | -- | -- | -- | -- | -- | -- | -586,713.83 | -- | -- | -- |
Note: For the acquisition project of NAU Animal Pharmaceutical, non-operating special circumstances such as divestiture oftransaction-related assets and disposal of transaction-related expenses occurred in Q2 2023, which are main reasons for book lossin the first half of 2023.
3. Significant non-equity investments in progress during the reporting period? Applicable □ N/A
Unit: yuan
| Item | 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 | Fund 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 Techn | Self-built project | Y | Pharmaceutical manufacturing | 7,826,888.70 | 1,790,932,433.36 | Equity funds | 98.80% | 0.00 | 0.00 | N/A | March 9, 2017 | Cninfo (http://www.cninfo.com.cn) |
| ology Park Project Phase II | ||||||||||||
| Huadong Medicine Life Science Industrial Park (Xiangfu south plot) project | Self-built project | Y | Pharmaceutical R&D | 61,553,130.93 | 330,329,801.21 | Equity funds | 90.68% | 0.00 | 0.00 | N/A | April 21, 2021 | Cninfo (http://www.cninfo.com.cn) |
| Total | -- | -- | -- | 69,380,019.63 | 2,121,262,234.57 | -- | -- | 0.00 | 0.00 | -- | -- | -- |
4. Investment in financial assets
(1) Securities Investment
? Applicable □ N/A
Unit: yuan
| 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 | Accumulate d fair value changes recognized in equity | Purchase amount in the current period | Selling amount in the current period | Gain/loss during the reporting period | Ending book value | Accounting item | Fund source |
| Domestic and overseas stock | RAPT | RAPT | 20,207,400.00 | Fair value measurement | 8,064,797.86 | -804,623.49 | 1,475,616.75 | 0.00 | 2,051,811.65 | 0.00 | 5,208,362.72 | Other equity instrument investments | Equity funds |
| Total | 20,207,400.00 | -- | 8,064,797.86 | -804,623.49 | 1,475,616.75 | 0.00 | 2,051,811.65 | 0.00 | 5,208,362.72 | -- | -- | ||
Note: Huadong Medicine Investment Holding (Hong Kong) Limited, a subsidiary of the Company, purchased 218,102 Series C-2preferred shares of RAPT Therapeutics, Inc. in a total of 3 million US dollars in 2018. RAPT Therapeutics, Inc. was listed onNASDAQ exchange on October 30, 2019 (stock code: RAPT). As of the end of the reporting period, Huadong MedicineInvestment Holding (Hong Kong) Limited holds 39,500 shares in RAPT after it reduced its stake, accounting for 0.115% of thetotal shares of RAPT Therapeutics, Inc.
(2) Derivatives investment
? Applicable □ N/A
Unit: Ten thousand yuan
| Name of derivatives investment operator | Association | Related party transaction | Type of derivatives investment | Initial derivatives investment amount | Commencement date | Termination date | Investment amount at the beginning of the period | Purchase amount during the reporting period | Selling amount during the reporting period | Provision of impairment reserve (if any) | Investment amount at the end of the period | Proportion of the investment amount at the end of the period in the net assets of the Company at the end of the reporting period | Actual gain/loss during the reporting period |
| Sinclair Pharma Limited | Wholly-owned subsidiary | No | Currency swap | 0.00 | January 18, 2022 | -- | 2,990.75 | 0.00 | 0.00 | 0.00 | 2,480.68 | 0.12% | -510.07 |
| Total | 0.00 | -- | -- | 2,990.75 | 0.00 | 0.00 | 0.00 | 2,480.68 | 0.12% | -510.07 | |||
| Capital source of derivatives investment | Equity or self-raised funds | ||||||||||||
| Litigation (if applicable) | N/A | ||||||||||||
| Date of announcement of the Board of Directors on derivatives investment approval (if any) | August 10, 2022 | ||||||||||||
| Note on the risk analysis and control measures for derivatives holding during the reporting period (including but not limited to market risks, liquidity risks, credit risks, operational risks and legal risks) | Risks: 1. Market risks: The interest rate, exchange rate and other prices on the market may fluctuate due to changed domestic and overseas economic policies and situations, thus changing the price of financial derivative instruments and causing losses. 2. Liquidity risks: Transactions fail to be completed due to the market lacking liquidity and counter-parties. 3. Operational risks: Trading financial derivative instruments requires experts who can deal with complexity, which may cause operational risks due to traders or managers thinking there is an error or system failure and out of control. 4. Contractual risks: Contracts on financial derivative business expire, some of which cannot be performed on time, and thus they are breached. 5. Legal risks: Relevant legal changes lead to a contract that is not in conformity with local laws, so that the contract cannot be performed, or contractual terms are omitted and unclear; or losses are caused to the Company due to the counter-party violating relevant laws and regulations, and thus the contract cannot be performed as required. | ||||||||||||
| Measures: The Company and its wholly-controlled subsidiaries avoid speculation and arbitrage when trading financial derivatives, so that strict risk control will be employed during the execution of contracts concerning financial derivatives trading. 1. The Company strictly abides by prudent investment principles, selects prudent investment types, and makes investments within the amount approved by the Board of Directors. 2. The Company carefully selects counter-parties for trading, and only trades derivatives with financial institutions featuring robust operations, sound reputation and business license for financial derivative trading. The Company may resort to external professional investment and legal service institutions if necessary to provide consulting services for the Company’s financial derivative trading, as well as scientific and precise investment strategies and suggestions. 3. The Company has formulated the Management Rules for Securities Investment and Derivative Trading, setting detailed rules on the management, supervision and information closure related to the Company’s derivative trading principles, scope, decision-making authority and capital use, which can effectively prevent investment risks. Besides, the Company will strictly implement related management rules, assign special personnel to follow up on the progress of financial derivative trading. For instance, relevant measures shall be taken in time to control investment risks if there are risks that may affect the Company’s capital safety The Company’s audit department is in charge of monitoring and checking the execution of financial derivative trading and reporting to the Audit Committee of the Board of Directors. 4. The Company’s audit department is in charge of monitoring and checking the execution of financial derivative trading and reporting to the Audit Committee of the Board of Directors. | |
| In case of changing market prices or fair values of invested derivatives during the reporting period, the analysis of the derivatives’ fair values shall disclose the specific methods adopted, relevant assumptions and parameter settings. | Please refer to “Disclosure of fair value” in the “Financial Report” for details when the derivatives are measured at fair value on the market. |
| Note on accounting policies and specific principles of accounting concerning derivatives during the reporting period, and whether they change significantly when compared with that in the previous reporting period | N/A |
| Specific opinions of independent directors on the Company’s investments in derivatives and risk control | The Company invests in derivatives for the avoidance of market fluctuation risks and hedging, which is closely associated with daily operation requirements. The Company has formulated the Management Rules for Securities Investment and Derivative Trading and enhanced trading risk management and control, which contributes to the avoidance and control of operational risks, improving the Company’s capability to withstand market risks. No loss is caused to the Company and all shareholders. |
5. Use of raised funds
□ 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 controlling and shareholding companies? Applicable □ N/AMain subsidiaries and the shareholding companies that have an impact on the Company’s net profit of more than 10%
Unit: yuan
| Company Name | Company type | Main business | Registered capital | Total assets | Net assets | Operating revenue | Operating Profits | Net profits |
| 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 | 14,501,992,385.70 | 9,752,573,849.66 | 5,918,597,584.28 | 1,361,020,837.61 | 1,181,491,352.18 |
Acquisition and disposal of subsidiaries during the reporting period? Applicable □ N/A
| Company Name | Methods of acquisition and disposal of subsidiaries during the reporting period | Impact on the overall production, operation and performance |
| Jiangsu NAU Animal Pharmaceutical Co., Ltd. | Equity acquisition, capital increase | Industrial platform of industrial microbiology |
| Huadong Medicine Dongyang Co., Ltd. | Equity acquisition | Expand the pharmaceutical business network coverage in Zhejiang Province |
| Hangzhou Perfect mRNA Biotechnology Co., Ltd. | Newly established | Technology innovation platform in the field of industrial microbiology and pharmaceuticals |
Information of major shareholding companies
IX Structured entities controlled by the company
□ Applicable ? N/A
X. Risks and countermeasures
1. Industry policy and market operation risks
The healthy development of the pharmaceutical industry in China is inseparable fromChina’s supervision over the pharmaceutical industry. In recent years, policies have beencontinuously promoted, gradually standardized, normalized and systematized with the deepeningof reforms in the medical and health care field. The external factors such as geopolitics andmacroeconomic policies disturb the market and bring uncertainties to the pharmaceutical marketin China, which poses new challenges to the production cost and profitability of thepharmaceutical industry. Besides, there is a risk of price reduction of new drug products.
Countermeasures: the Company will pays close attention to China’s pharmaceutical policiesand the industrial development trend, makes adjustments in time, increases investment in R&D,integrates independent R&D with external introduction, accelerates the layout of innovativevarieties in the core treatment field, keeps enriching the product lines, and improves the corecompetitiveness. In the meantime, the Company reduces the production & operation risks throughlean management, cost reduction, and benefit increase, and vigorously expands grassroots andself-funded markets to enlarge the market coverage. Great efforts are made to explore the fields ofaesthetic medicine and industrial microbiology, constantly improve brand competitiveness, andcreate new profit points.
2. Risk in new drug R&D
R&D of innovative drugs is a high-investment, high-risk, and long-term task. Generally, ittakes a long time for a new product to be launched from R&D to pre-clinical research, clinicaltrials, application for registration, production approval, etc. It is always time-consuming andaffected by such factors as national policies, market factors, and regulatory approval. In addition,the new drug R&D sets higher requirements for R&D personnel; the investment of manpower andearly R&D expenses will put some pressure on the Company to achieve its current businessobjectives. Meanwhile, new medicines will be tested by the market demands after launching,resulting in the return on R&D investment less than expected.
Countermeasures: the Company will continue to optimize the innovation mechanism,constantly improve the scientific research, evaluation and decision-making system of new drugs,and strengthen the establishment of close ties with well-known R&D institutions at home andabroad. It will also focus on the core treatment field, continuously enrich and optimize the productlines through independent initiation and external introduction, and continuously improve theindependent R&D strength to foster its own R&D ecosystem. The Company will continue toincrease its introduction of high-level scientific research talents, strengthen the training andencouragement of internal core technicians, and cultivate a high-level innovative scientificresearch team that can support the whole cycle of innovative drugs R&D.
3. Risk in exchange rate fluctuation
As the internationalization is further advanced, the Company increasingly developsinternational cooperation and exchanges, expands the sales network of aesthetic medicine in theworld, and accelerates the development of its industrial microbiology segment, rising theproportion of foreign currency settlement business. There is uncertainty in exchange ratefluctuation affected by the complicated international political and economic situations. Thefluctuation in exchange rate has a far-reaching and lasting impact on the Company, i.e. bringinggood economic benefits but also affecting the cost and profit level. The fluctuation in exchangerate will affect the price of the Company’s export products and cause exchange gains and losses tothe Company, thus directly affecting the Company’s assets, liabilities and income, further theoperation ability, debt repayment ability and profitability.
Countermeasures: the Company will pay close attention to the fluctuation in exchange rate,adjust our business countermeasures in time according to its own situation, and resolve theadverse effects; develop the exchange risk awareness, and improve the foreign exchange riskmanagement system; strengthen the training of financial personnel’s professional skills and riskawareness, enhance the awareness of risk avoidance, and make good use of financial means toavoid exchange rate risks.
4. Risk in investment and merger
Foreign investment is one of the important ways of enterprise development. In recent years,the Company has continued to invest and do mergers and acquisitions in such fields as innovativemedicines, aesthetic medicine and industrial microbiology, so as to form goodwill and realize theinnovation and transformation development strategy. If the company acquired in the future facesthe risk of performance fluctuation, there may be a risk of goodwill impairment, adverselyaffecting the Company’s current operation performance. At the same time, the post-investmentmanagement and business integration of the target company also put forward higher requirementsfor the management of the Company.Countermeasures: The Company will strive to comprehensively improve our capabilities inoverall planning, management structure, financial management, overall operation and governance,and business integration; strengthen the resource sharing and synergy of acquired subsidiaries;regularly test the impairment of goodwill; and enhance comprehensive, scientific and timely post-investment management.XI. Registration form of receptions, including research, communication and interview,during the reporting period
| Reception date | Reception address | Reception method | Type of visitor | Reception object | Main content of discussion and information provided | Index of basic information of the research |
| January 17, 2023 | Conference Room of the Company | Others | Institution and individual | CICC, TF Securities, Industrial Securities, CSC Financial, etc. | Huadong Medicine & CARsgen Therapeutics Commercialization Project Exchange | Please refer to the Record of Investor Relations Activities on January 17, 2023 presented on the websites of irm.cninfo.com.cn and cninfo.com.cn for details. |
| February 15 to 16, 2023 | Conference Room of the Company | On-site survey | Institution | China Securities Cooperation, Zheshang Securities, etc. | Investor communication | Please refer to the Record of Investor Relations Activities on February 15 to 16, 2023 presented on the websites of irm.cninfo.com.cn and cninfo.com.cn for details. |
| May 2 to 3, 2023 | Conference Room of the Company | On-site survey | Institution and individual | Kaiyuan Securities, CCIC, GF Securities, | Investor communication | Please refer to the Record of Investor Relations Activities on March 2 to 3, |
| etc. | 2023 presented on the websites of irm.cninfo.com.cn and cninfo.com.cn for details. | |||||
| April 14, 2023 | Conference Room of the Company | Online meeting | Institution and individual | GF Securities, Haitong International, CCIC, etc. | 2022 Annual Performance Exchange Meeting of Huadong Medicine | Please refer to the Record of Investor Relations Activities on April 14, 2023 presented on the websites of irm.cninfo.com.cn and cninfo.com.cn for details. |
| April 21, 2023 | Conference Room of the Company | Online meeting | Institution and individual | Citic Securities, TF Securities, Haitong Securities, etc. | 2023 Q1 Performance Exchange Meeting of Huadong Medicine | Please refer to the Record of Investor Relations Activities on April 21, 2023 presented on the websites of irm.cninfo.com.cn and cninfo.com.cn for details. |
| May 8, 2023 | Conference Room of the Company | On-site survey | Institution and individual | CICC, Citic Securities, etc. | Activities of Investors’ Reception Day | Please refer to the Record of Investor Relations Activities on May 8, 2023 (Activities of Investors’ Reception Day) presented on the websites of irm.cninfo.com.cn and cninfo.com.cn for details. |
| May 12, 2023 | Conference Room of the Company | Online meeting | Institution and individual | Institution and individual investors | 2022 Annual and 2023 Q1 Online Performance Meeting of Huadong Medicine | Please refer to the Record of Investor Relations Activities on May 12, 2023 presented on the websites of irm.cninfo.com.cn and cninfo.com.cn for details. |
| June 13, June 15 and June 16, 2023 | Conference Room of the Company | On-site survey | Institution | Huatai Securities, China Life Assets, UBS Securities, etc. | Investor communication | Please refer to the Record of Investor Relations Activities on June 13, 15 and 16, 2023 presented on the websites of irm.cninfo.com.cn and cninfo.com.cn for details. |
Section IV. Corporate Governance
I. Annual and extraordinary general meetings held during the reporting period
1. Shareholders’ meetings in the reporting period
| Sessions | Meeting type | Proportion of investors present | Convene date | Disclosure date | Meeting resolution |
| 2022 Annual General Meeting | Annual general meeting | 61.65% | May 8, 2023 | May 8, 2023 | Please refer to the Announcement of Resolutions of 2022 Annual General Meeting of Huadong Medicine (Announcement No.: 2023-033) on Cninfo (http://www.Cninfo.com.cn) for details. |
2. Extraordinary general meetings convened at the request of preference shareholders with resumedvoting rights:
□ Applicable ? N/A
II. Change of directors, supervisors and senior managers of the Company
? Applicable □ N/A
| Name | Title | Type | Date | Reasons |
| Huang Jian | Independent Director | Elected | May 8, 2023 | Additional Independent Director |
| Yang Lan | Independent Director | Retirement at expiration of the term | May 8, 2023 | Retirement at expiration of the term |
| Niu Zhanqi | Director | Retired | June 21, 2023 | Personal reasons |
III. Profit distribution and share capital increase by capital reserve conversion during thecurrent reporting period
□ Applicable ? N/A
The Company does not plan to distribute cash dividends, no bonus share will be issued; and no capital reserve will be converted toincrease the share capital in the first half of 2023.IV. Implementation of the Company’s equity incentive plan, employee stock ownership planor other employee incentive measures
? Applicable □ N/A
1. Equity incentive
(1) On August 31, 2022, the Company convened the second meeting of the 10th Board of Directors and the2nd meeting of the 10th Board of Supervisors, deliberating on and passing the Proposal on the Company’s 2022Restricted Share Incentive Scheme (Draft) and Its Summary, the Proposal on Management Rules for theImplementation and Assessment of the Company’s 2022 Restricted Share Incentive Scheme, the Proposal on theManagement Rules of the Company’s 2022 Restricted Share Incentive Scheme, and the Proposal on Applying tothe General Meeting for Authorizing the Board of Directors to Handle Equity Incentive-related Matters.Independent directors expressed their independent opinions on whether this incentive scheme is conducive to thesustainable development of the Company and whether there is any situation that harms the interests of theCompany and all shareholders. See the relevant announcement of the Company published on Cninfo(http://www.Cninfo.com.cn) on August 10, 2022 for details.
(2) On August 10, the Company disclosed the Announcement on Independent Directors Publicly SolicitingProxy Voting Rights on Cninfo (www.cninfo.com.cn). Mr. Wang Ruwei, Independent Director of the Company,commissioned by other independent directors publicly solicited proxy voting rights from all shareholders of theCompany on proposals related to the 2022 Restricted Share Incentive Scheme reviewed on the 1st extraordinarygeneral meeting in 2022 that was set to be convened on August 31, 2022.
(3) The Company announced publicly the list of the first batch of employees receiving the incentive from therestricted share incentive scheme on the Company’s intra-net from August 15 to 25, 2022, which lasted for 10days in total. As of the end of the announcement on August 25, 2022, the Board of Supervisors did not receive anyobjection against these employees. On August 25, 2022, the Company convened a session of the Board ofSupervisors, during which the Verification Opinions and Announcement Note on the List of the First Batch ofEmployees Receiving the Incentive from the Company’s 2022 Restricted Share Incentive Scheme was reviewedand approved. On the same day, the Company disclosed the Board of Supervisors’ Verification Opinions andAnnouncement Note on the List of the First Batch of Employees Receiving the Incentive from the Company’s 2022Restricted Share Incentive Scheme and a related announcement on www.cninfo.com.cn.
(4) On August 31, 2022, the Company convened the first extraordinary general meeting in 2022. During themeeting, the Proposal on the Company’s 2022 Restricted Share Incentive Scheme (Draft) and Its Summary, theProposal on Management Rules for the Implementation and Assessment of the Company’s 2022 Restricted ShareIncentive Scheme, the Proposal on the Management Rules of the Company’s 2022 Restricted Share IncentiveScheme, and the Proposal on Applying to the General Meeting for Authorizing the Board of Directors to HandleEquity Incentive-related Matters were deliberated on and approved. On the same day, the Company disclosed onwww.cninfo.com.cn the Self-Inspection Report on Insiders and Incentive Receivers of the 2022 Restricted ShareIncentive Scheme Purchasing and Selling the Company’s Shares and a related announcement. The incentivescheme was approved in the Company’s first extraordinary general meeting in 2022, and the Board of Directorswas authorized to implement the restricted share incentive scheme and handle relevant matters according to lawsand regulations.
(5) On October 27, 2022, the Company convened the fourth session of the tenth Board of Directors and thefifth session of the tenth Board of Supervisors. During these two sessions, the Proposal on Adjustments of the
Company’s 2022 Restricted Share Incentive Scheme, and the Proposal on Granting Restricted Shares to the FirstBatch of Employees Receiving Incentive from the 2022 Restricted Share Incentive Scheme were deliberated on andapproved. The Company’s Board of Directors believed that conditions of the incentive scheme for grantingrestricted shares were fulfilled, and the Board of Supervisors re-verified the list of incentive receivers on the firstgrant date, and expressed opinions on the grant. The Company’s independent directors agreed on the aboveproposals. Lawyers and independent financial advisers prepared related reports. On October 28, 2022, theCompany disclosed a related announcement on www.cninfo.com.cn.
(6) On November 9, 2022, the Company disclosed the Announcement on Completion of Registration of theFirst Grant of the Restricted Share Incentive Scheme in 2022. The Company completed the registration of the firstgrant of the restricted share incentive scheme in 2022, and the listing date of the granted restricted shares wasNovember 15, 2022.
(7) On July 12, 2023, the Company convened the twelfth session of the tenth Board of Directors and theeighth session of the tenth Board of Supervisors. During these two sessions, the Proposal on Adjustments of theGranted Price of the Company’s 2022 Restricted Share Incentive Scheme, and the Proposal on Granting ReservedRestricted Shares to the First Batch of Employees Receiving Incentive from the 2022 Restricted Share IncentiveScheme were deliberated on and approved. The Company’s Board of Directors believed that reserved conditionsof the incentive scheme for granting restricted shares were fulfilled, and the Board of Supervisors re-verified thelist of incentive receivers on the date of granting reserved shares, and expressed opinions on the grant. TheCompany’s independent directors agreed on the above proposals. Lawyers and independent financial advisersprepared related reports. On the same day, the Company disclosed a related announcement onwww.cninfo.com.cn.
2. Implementation of the employee stock ownership plan
□ Applicable ? N/A
3. Other employee incentives
□ Applicable ? N/A
Section V Environmental and Social ResponsibilitiesI. Major Environmental Protection Issues
Are the listed company and its subsidiaries belong to the key pollutant discharge units announced by the environmental protectiondepartment?□Yes □NoRelevant policies and industry standards for environmental protectionEnvironmental Protection Law of the People’s Republic of China, Law of the People’s Republic of China onWater Pollution Prevention and Control, Law of the People’s Republic of China on Atmospheric PollutionPrevention and Control, Law of the People’s Republic of China on the Prevention and Control of EnvironmentalPollution by Solid Waste, Law of the People’s Republic of China on the Prevention and Control of Ambient NoisePollution, Law of the People’s Republic of China on the Prevention and Control of Soil Pollution, Measures forthe Administration of Pollutant Discharge Permits, Emission Standard of Air Pollutants for PharmaceuticalIndustry (DB33/ 310005-2021), Discharge Standard of Pollutants for Bio-pharmaceutical Industry (DB 33/ 923-2014), Emission Standard for Industrial Enterprises Noise at Boundary (GB 12348-2008), Standard for PollutionControl on the Non-hazardous Industrial Solid Waste Storage and Landfill (GB 18599-2020), Standard forPollution Control on Hazardous Waste Storage (GB 18597-2023), Technical Specification for SettingIdentification Signs of Hazardous Waste (HJ 1276-2022), Integrated Wastewater Discharge Standard of YellowRiver Basin in Shaanxi Province (DB 61/ 224-2018), Emission Limits of Water and Air Pollutants for Bio-pharmaceutical Industry (DB 32/ 3560-2019), Emission Standard of Air Pollutants for Pharmaceutical Industry(DB 32/4042-2021), Emission Standard of Air Pollutants for Pharmaceutical Industry (GB 37823-2019),Emission Standard of Volatile Organic Compounds for Chemical Industry (DB 32/3151-2016), IntegratedEmission Standard of Air Pollutants (DB 32/4041-2021), Standard for Fugitive Emission of Volatile OrganicCompounds (GB 37822-2019), Emission Standards for Odor Pollutants (GB 14554-93), Emission Limits of Waterand Air Pollutants for Bio-Pharmaceutical Industry (DB 32/ 3560-2019), Wastewater Quality Standards forDischarge to Municipal Sewers (GB/T 31962-2015), Integrated Wastewater Discharge Standard (GB 8978-1996),Discharge Standard of Water Pollutants for Pharmaceutical Industry - Chemical Synthesis Products Category(GB 21904-2008), Discharge Standard of Pollutants for Bio-Pharmaceutical Industry (DB 31/373-2010),Technical Methods for Making Local Emission Standards of Air Pollutants (GB13201-1991), etc.Information on environmental protection-related administrative licensing
All the construction projects of the Company were declared, constructed and accepted strictly according tothe requirements, approved by EIA, and met the requirements for environmental impact assessment ofconstruction projects.Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. re-applied for the Pollutant Emission Permit onJune 20, 2023, which is valid until June 19, 2028.
Hangzhou Zhongmei Huadong Pharmaceutical (Jiangdong) Co., Ltd. re-applied for the Pollutant EmissionPermit on March 4, 2023, which is valid until March 3, 2028. In addition, Hangzhou Zhongmei Huadong
Pharmaceutical (Jiangdong) Co., Ltd. has obtained the EIA approval of Product Transfer and Expansion ofIndobufen Tablets and Clarithromycin Tablets and Expansion and Transformation Project of Acarbose ChewableTablets on April 25, 2023, with the approval number of HHQ EIA Batch [2023] No. 28; obtained the EIAapproval of the Acceptance of EIA Registration Form for PulsecathiVAC2L API Product Construction Project onJuly 18, 2023, with the approval number of HHQ EIA Batch [2023] No. 32.
The Pollutant Emission Permit of Huadong Medicine (Xi’an) Bohua Pharmaceutical Co., Ltd. is valid fromDecember 27, 2020 to December 26, 2025. In addition, Huadong Medicine (Xi’an) Bohua Pharmaceutical Co.,Ltd. has obtained the EIA approval of the Transformation Project of Storage Tank Area of the Second Workshopof APIs within the reporting period, with the approval number of WHYF (2023) No. 34.The Pollutant Emission Permit of Jiangsu Joyang Laboratories is valid from February 28, 2022 to February27, 2027.
The Pollutant Emission Permit of Wuhu Huaren Science and Technology Co., Ltd. is valid from February 26,2021 to February 25, 2024.
| Designation of Company or Subsidiary | Category of main and particular pollutants | Name of main and particular pollutants | Discharge pattern | Quantity of discharge outlet | Distribution of discharge outlet | Discharge concentration/intensity | Executive pollutant discharge standard | Total discharges | Approved total discharges | Excessive discharge |
| Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. | Water pollutant | pH value | Intermittent discharge | 1 | Main Entrance Moganshan Road, No.866 | 6.93 | 6-9 | / | / | None |
| Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. | Water pollutant | COD | Intermittent discharge | 1 | Main Entrance Moganshan Road, No.866 | 39.85mg/l | 500mg/l | 3.26 tons (discharged to environment) | 33.3 t/a | None |
| Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. | Water pollutant | Ammonia-nitrogen | Intermittent discharge | 1 | Main Entrance Moganshan Road, No.866 | 1.18mg/l | 35mg/l | 0.047 tons (discharged to environment) | 2.38 t/a | None |
| Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. | Solid pollutant | Hazardous solid waste | Compliant disposal by entrusted qualified units | 2 | Within the factory at Moganshan Road, No.866 | / | / | 406.55 tons | / | None |
| Hangzhou Zhongmei Huadong Pharmaceuti | Solid pollutant | General solid waste | Compliant disposal by | 2 | Within the factory at | / | / | 74.7 tons | / | None |
| cal Co., Ltd. | entrusted qualified units | Moganshan Road, No.866 | ||||||||
| Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. | Air pollutant | Nitric oxide | Organized discharge | 1 | Roof of Boiler Room at Building 25 | 28mg/m3 | 50mg/m3 | 1.021 tons | 17.7 t/a | None |
| Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. | Air pollutant | Sulfur dioxide | Organized discharge | 1 | Roof of Boiler Room at Building 25 | 4mg/m3 | 20mg/m3 | 0.151 tons | / | None |
| Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. | Air pollutant | Dust and fume | Organized discharge | 1 | Roof of Boiler Room at Building 25 | 4.6mg/m3 | 10mg/m3 | 0.127 tons | / | None |
| Hangzhou Zhongmei Huadong Pharmaceutical Jiangdong Co., Ltd. | Wastewater | COD | Continuous discharge | 1 | Phase II Factory Area | 100-350mg/L | 500mg/L | 152.5020 tons(Nanotube discharge) | 141.299 tons (discharged to environment) | None |
| Hangzhou Zhongmei Huadong Pharmaceutical Jiangdong Co., Ltd. | Wastewater | Ammonia-nitrogen | Continuous discharge | 1 | Phase II Factory Area | 0-25mg/L | 35mg/L | 1.8687 tons(Nanotube discharge) | 7.066 tons (discharged to environment) | None |
| Hangzhou Zhongmei Huadong Pharmaceutical Jiangdong Co., Ltd. | Exhaust gas | Non-methane hydrocarbon | Organized discharge | 1 | Phase II Factory Area | 0-30mg/L | 60mg/L | 1.6654 tons | 3.002 tons | None |
| Huadong Medicine (Xi’an) Bohua Pharmaceutical Co., Ltd. | Water pollutant | pH value | Intermittent discharge | 1 | Beside National Highway 310, Liuye River, Huayin City | 8.0 | 6-9 | / | / | None |
| Huadong Medicin e (Xi’an) Bohua Pharmaceutical Co., Ltd. | Water pollutant | COD | Intermittent discharge | 1 | Beside National Highway 310, Liuye River, Huayin City | 36.7mg/l | 50mg/l | 0.544 tons | 3 tons | None |
| Huadong | Water | Ammo | Intermitt | 1 | Beside | 0.418mg | 8mg/l | 0.005 | 0.48 | None |
| Medicin e (Xi’an) Bohua Pharmaceutical Co., Ltd. | pollutant | nia-nitrogen | ent discharge | National Highway 310, Liuye River, Huayin City | /l | tons | tons | |||
| Huadong Medicine (Xi’an) Bohua Pharmaceutical Co., Ltd. | Water pollutant | Total nitrogen | Intermittent discharge | 1 | Beside National Highway 310, Liuye River, Huayin City | 11.5mg/l | 15mg/l | 0.167 tons | / | None |
| Huadong Medicine (Xi’an) Bohua Pharmaceutical Co., Ltd. | Solid pollutant | Hazardous waste | Compliant disposal by entrusted qualified units | 3 | Within the Company | / | / | 158.19 tons | / | None |
| Huadong Medicine (Xi’an) Bohua Pharmaceutical Co., Ltd. | Air pollutant | Volatile organic compounds | Organized discharge | 1 | APIs Plant 1 | / | 60mg/m3 | / | / | None |
| Huadong Medicine (Xi’an) Bohua Pharmaceutical Co., Ltd. | Air pollutant | Hydrogen chloride | Organized discharge | 1 | APIs Plant 1 | / | 30mg/m3 | / | / | None |
| Huadong Medicine (Xi’an) Bohua Pharmaceutical Co., Ltd. | Air pollutant | Ammonia (ammonia) | Organized discharge | 1 | APIs Plant 1 | / | 20mg/m3 | / | / | None |
| Huadong Medicine (Xi’an) Bohua Pharmaceutical Co., Ltd. | Air pollutant | Hydrogen chloride | Organized discharge | 1 | APIs Plant 2 | / | 30mg/m3 | / | / | None |
| Huadong Medicine (Xi’an) Bohua Pharmaceutical Co., Ltd. | Air pollutant | PM | Organized discharge | 1 | APIs Plant 2 | / | 20mg/m3 | / | / | None |
| Huadong Medicine (Xi’an) Bohua Pharmaceuti | Air pollutant | Ammonia (ammonia) | Organized discharge | 1 | Sewage treatment station | / | 20mg/m3 | / | / | None |
| cal Co., Ltd. | ||||||||||
| Huadong Medicine (Xi’an) Bohua Pharmaceutical Co., Ltd. | Air pollutant | Hydrogen sulfide | Organized discharge | 1 | Sewage treatment station | / | 5mg/m3 | / | / | None |
| Jiangsu Joyang Laboratories | Water pollutant | pH value | Intermittent discharge | 1 | No. 9, Haidu North Road | 8.4 | 6-9 | / | / | None |
| Jiangsu Joyang Laboratories | Water pollutant | COD | Intermittent discharge | 1 | No. 9, Haidu North Road | 329mg/l | 500mg/l | 12.19 tons | 22.401 t/a | None |
| Jiangsu Joyang Laboratories | Water pollutant | Ammonia-nitrogen | Intermittent discharge | 1 | No. 9, Haidu North Road | 6.44mg/l | 35mg/l | 0.238 tons | 1.156 t/a | None |
| Jiangsu Joyang Laboratories | Water pollutant | Total nitrogen | Intermittent discharge | 1 | No. 9, Haidu North Road | 8.95mg/l | 45mg/l | 0.331 tons | 1.486 t/a | None |
| Jiangsu Joyang Laboratories | Water pollutant | Total phosphorus | Intermittent discharge | 1 | No. 9, Haidu North Road | 0.84mg/l | 8mg/l | 0.03 tons | 0.164 t/a | None |
| Jiangsu Joyang Laboratories | Solid pollutant | Hazardous solid waste | Compliant disposal by entrusted qualified units | / | No. 9, Haidu North Road | / | / | 619.814 tons | 3148.7 t/a | None |
| Jiangsu Joyang Laboratories | Air pollutant | PM | Organized discharge | 3 | No. 9, Haidu North Road | 2.28mg/m3 | 60mg/Nm3 | 1.11 t/semi-annual | 42.7409 t/a | None |
| Wuhu Huaren Science and Technology Co., Ltd. | Water pollutant | COD | Intermittent discharge | 1 | At the east gate of the factory area | 8mg/L | 500mg/L | 0.13t | 0.2t | No |
| Wuhu Huaren Science and Technology Co., Ltd. | Water pollutant | Ammonia-nitrogen | Intermittent discharge | 1 | At the east gate of the factory area | 0.04mg/L | 45mg/L | 0.000505t | 0.018t | No |
| Wuhu Huaren Science and Technology Co., Ltd. | Water pollutant | Suspended solids | Intermittent discharge | 1 | At the east gate of the factory area | 12mg/L | 400mg/L | 0.0214t | / | No |
| Wuhu Huaren Science and Technology | Water pollutant | Total nitrogen | Intermittent discharge | 1 | At the east gate of the factory | 9.95mg/L | 35mg/L | 0.0172t | / | No |
| Co., Ltd. | area | |||||||||
| Wuhu Huaren Science and Technology Co., Ltd. | Water pollutant | Total phosphorus | Intermittent discharge | 1 | At the east gate of the factory area | 0.05 | 1mg/L | 0.001086t | / | No |
| Wuhu Huaren Science and Technology Co., Ltd. | Water pollutant | Dichloromethane | Intermittent discharge | 1 | At the east gate of the factory area | 0.001mg/L | 0.3mg/L | 0.000002t | / | No |
| Wuhu Huaren Science and Technology Co., Ltd. | Water pollutant | PH value | Intermittent discharge | 1 | At the east gate of the factory area | 7.1mg/L | 6-9 | / | / | No |
| Wuhu Huaren Science and Technology Co., Ltd. | Air pollutant | Dichloromethane | Organized discharge | 1 | In the middle of the factory area | / | 150 mg/Nm3 | / | / | No |
| Wuhu Huaren Science and Technology Co., Ltd. | Air pollutant | Methyl alcohol | Organized discharge | 1 | In the middle of the factory area | / | 100 mg/Nm3 | / | / | No |
| Wuhu Huaren Science and Technology Co., Ltd. | Air pollutant | n-Ethane | Organized discharge | 1 | In the middle of the factory area | / | 80mg/Nm3 | / | / | No |
| Wuhu Huaren Science and Technology Co., Ltd. | Air pollutant | Volatile organic compounds | Organized discharge | 1 | In the middle of the factory area | 4.85mg/Nm3 | 100 mg/Nm3 | 0.093t | 9t | No |
| Wuhu Huaren Science and Technology Co., Ltd. | Air pollutant | Pyridine | Organized discharge | 1 | In the middle of the factory area | / | 71.1 mg/Nm3 | / | / | No |
| Wuhu Huaren Science and Technology Co., Ltd. | Air pollutant | Ethyl alcohol | Organized discharge | 1 | In the middle of the factory area | / | 317.7 mg/Nm3 | / | / | No |
| Wuhu Huaren Science and Technology Co., Ltd. | Air pollutant | Hydrogen chloride | Organized discharge | 1 | In the middle of the factory area | / | 30mg/Nm3 | / | / | No |
| Wuhu Huaren Science and Technology Co., Ltd. | Air pollutant | Ethyl acetate | Organized discharge | 1 | In the middle of the factory area | / | 150 mg/Nm3 | / | / | No |
| Wuhu | Air | Odor | Unorgani | / | Around | / | 20mg/N | / | / | No |
| Huaren Science and Technology Co., Ltd. | pollutant | concentration | zed discharge | the factory boundaries | m3 | |||||
| Wuhu Huaren Science and Technology Co., Ltd. | Air pollutant | Methyl alcohol | Unorganized discharge | / | Around the factory boundaries | / | 12mg/Nm3 | / | / | No |
| Wuhu Huaren Science and Technology Co., Ltd. | Air pollutant | Dichloromethane | Unorganized discharge | / | Around the factory boundaries | / | 1.5mg/Nm3 | / | / | No |
| Wuhu Huaren Science and Technology Co., Ltd. | Air pollutant | Ethyl acetate | Unorganized discharge | / | Around the factory boundaries | / | 0.5mg/Nm3 | / | / | No |
| Wuhu Huaren Science and Technology Co., Ltd. | Air pollutant | n-Hexane | Unorganized discharge | / | Around the factory boundaries | / | 0.7 mg/Nm3 | / | / | No |
| Wuhu Huaren Science and Technology Co., Ltd. | Air pollutant | Hydrogen chloride | Unorganized discharge | / | Around the factory boundaries | / | 0.2 mg/Nm3 | / | / | No |
| Wuhu Huaren Science and Technology Co., Ltd. | Air pollutant | Volatile organic compounds | Unorganized discharge | / | Around the factory boundaries | / | 6mg/Nm3 | / | / | No |
Pollutant treatment
1. Pollutant treatment of Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd.
(1) Wastewater
| Designation of pollution prevention and control facility | Treatment process | Treatment capacity | Time when put into operation | Operation condition |
| Wastewater treatment system of old sewage treatment station | Facultative + fluidized bed process | Originally 600 t/d, and 800 t/d after technical improvement | November 1993 Technical improvement in 2007 | Demolished |
| Wastewater treatment system of new sewage treatment station | Facultative + CASS + steam flotation | 2,200 t/d | December 2001 Technical improvement in 2014 (adding IC and steam flotation) IC tower outage for demolition in 2022 | Normal operation |
(2) Exhaust gas
| Designation of pollution prevention and control facility | Treatment process | Treatment capacity (CMH) | Time when put into operation | Operation condition |
| DA010 (35#-1) | Secondary water spraying + surface cooling + activated carbon adsorption and desorption | 15000 | 2017 | Demolished |
| DA011 (35#-2) | Secondary water spraying | 22000 | 2013 | Demolished |
| DA012 (40#-2) | Activated carbon + horizontal spraying | 6000 | 2019 | Demolished |
| DA013 (32#-1) | Secondary alkaline water spraying | 22000 | 2013 | Demolished |
| DA014 (36#-1) | Secondary clean water spraying + surface cooling + low-temperature plasma + primary water spraying | 27000 | 2017 | Normal operation |
| DA015 (40#-1) | Secondary clean water spraying | 24200 | / | Demolished |
DA016 (18#-1)
| DA016 (18#-1) | Secondary water spraying + activated carbon + primary spraying | 30000 | 2022 | Normal operation |
| DA017 (19#-1) | Combustion tower | / | 2018 | Demolished |
| DA018 (19#-2) | Combustion tower | / | 2018 | Demolished |
| DA019 (3#-1) | Primary water spraying + photo-oxidation | 20000+52000 | 2019 | Normal operation |
| DA020 (36#-2) | Secondary water spraying + condensation + photo-oxidation + activated carbon + inorganic nano-catalysis + water spraying | 10000 | 2019 | Normal operation |
| DA021 (16#-1) | Primary water spraying + primary alkaline water spraying | 12000 | 2012 | Demolished |
DA022 (16#-2)
| DA022 (16#-2) | Primary water spraying + primary vegetable oil water spraying | 30000 | 2014 | Demolished |
| DA023 (27#-1) | Condensation + primary alkaline water spraying + all-in-one machine + primary alkaline water spraying | 15000 | 2009 | Outage |
| DA024 (33#-1) | Secondary alkaline water spraying + condensing tank + shared primary alkaline water spraying | 48000 | 2019 | Demolished |
| DA025 (32#-2) | Bag dust removal + high efficiency filter | / | 2017 | Demolished |
| DA026 (34#-1) | Secondary alkaline water spraying | 54000 | 2008 | Demolished |
| DA027 (7#-1) | Secondary alkaline water spraying | 26000 | 2015 | Normal operation |
| DA028 (6#-1) | Primary clean water spraying | 12200 | 2016 | Normal operation |
| DA029 (18#-2) | Secondary alkaline water spraying + photo-oxidation + activated carbon + primary alkaline water spraying | 16000 | 2018 | Demolished |
| DA030 (18#-3) | Primary clean water spraying + primary alkaline water spraying | 5000 | 2017 | Normal operation |
| DA031 (25#-2) | Low nitrogen combustion + high altitude emission | 8000 | 2009 Low nitrogen transformation completed in December 2019 | Normal operation |
| DA032 (25#-1) | Low nitrogen combustion + high altitude emission | 8000 | 2009 Low nitrogen transformation completed in December 2019 | Normal operation |
DA033 (1#-1)
| DA033 (1#-1) | Oil fume purifier | / | / | Normal operation |
| DA034 (27#-2) | Secondary water spraying + activated carbon adsorption and desorption | 15000 | 2011 | Outage |
| DA035 (27#-3) | Photo-oxidation + primary alkaline water spraying | 22300 | 2016 | Outage |
| DA036 (8#-1) | Secondary water spraying | 25000 | 2017 | Normal operation |
| DA037 (13#-1) | Secondary water spraying + surface cooling + activated carbon adsorption and desorption | 25000 | 2017 | Normal operation |
| DA038 (28#-1) | Primary water spraying + photo-oxidation | 22000 | 2011 | Demolished |
| DA039 (28#-2) | Primary water spraying + photo-oxidation | 48000 | 2011 | Demolished |
| DA040 (29#-1) | Primary water spraying + primary alkaline water spraying | 22000 | 2011 | Demolished |
| DA041 (33#-2) | Primary water spraying | 18600 | 2012 | Demolished |
| DA042 (10#-1) | Primary clean water spraying | 20000 | 2016 | Normal operation |
| DA043 (15#-1) | Primary alkaline water spraying + photo?oxidation | 25000 | 2018 | Normal operation |
| DA044 (43#-1) | Primary alkaline water spraying + primary water spraying | 45000 | 2014 | Normal operation |
| DA045 (46#-1) | Primary clean water spraying | 3000 | 2015 | Normal operation |
DA046 (46#-2)
| DA046 (46#-2) | Primary clean water spraying | 25000 | 2015 | Normal operation |
| DA047 (46#-3) | Primary clean water spraying | 30000 | 2015 | Normal operation |
| DA048 (23#-1) | Secondary water spraying | 7000 | 2019 | Normal operation |
(3) Solid wastes
| Designation of pollution prevention and control facility | Treatment process | Treatment capacity | Time when put into operation | Operation condition |
| Hazardous waste warehouse | Normative storage | 160 tons | March 2012 | Normative storage, compliant disposal by entrusted qualified units |
| Normative storage | 240 tons | March 2010 | ||
| General solid waste storage yard | Normative storage | 7 tons | March 2010 | Normative storage, compliant disposal by entrusted qualified units |
| Normative storage | 30 tons | June 2004 |
2. Pollutant treatment of Hangzhou Zhongmei Huadong Pharmaceutical (Jiangdong) Co., Ltd.
(1) Wastewater
| Designation of pollution prevention and control facility | Treatment process | Treatment capacity | Time when put into operation | Operation condition |
| Phase I sewage treatment station | Primary sedimentation + EGSB + facultative + aerobic + advanced treatment | 1500 t/d | March 2016 | Normal operation |
| Phase II sewage treatment station | EGSB + facultative + aerobic + advanced treatment | 8500 t/d | July 2019 | Normal operation |
(2) Exhaust gas
| Designation of pollution prevention and control facility | Treatment process | Treatment capacity (CMH) | Time when put into operation | Operation condition | |
| DA001 | Exhaust gas from fermenting east section | Secondary alkaline spraying + photo-catalytic oxidation | 45000 | May 2016 | Normal operation |
| DA002 | Exhaust gas from fermenting west section | Secondary alkaline spraying + photo-catalytic oxidation | 40000 | May 2016 | Normal operation |
| DA003 | Exhaust gas from drying north section | Secondary alkaline spraying | 80000 | May 2016 | Normal operation |
| DA004 | Exhaust gas from sewage treatment station | Secondary alkaline spraying | 50000 | May 2016 | Normal operation |
| DA006 | Exhaust gas from batching section | Primary alkaline spraying | 10000 | May 2016 | Normal operation |
| DA007 | Exhaust gas from quality testing and R&D | Primary alkaline spraying + photo-catalytic oxidation | 20000 | May 2016 | Normal operation |
| DA008 | Exhaust gas from drying south section | Secondary alkaline spraying | 80000 | May 2016 | Normal operation |
| DA010 | Exhaust gas from plate-and-frame filter | Secondary alkaline spraying + photo-catalytic oxidation | 40000 | May 2017 | Normal operation |
DA011
| DA011 | Exhaust gas from drying cooling bin | Secondary alkaline spraying | 20000 | May 2017 | Normal operation |
| DA012 | Exhaust gas from drying 7m | Primary alkaline spraying | 20000 | May 2016 | Normal operation |
| DA013 | Exhaust gas from drying 18m | Primary alkaline spraying | 20000 | May 2016 | Normal operation |
| DA014 | Exhaust gas from tank area | Activated carbon + alkaline spraying | Few | June 2019 | Normal operation |
| DA015 | RTO exhaust gas | Water spraying + RTO + alkaline spraying | 100000 | June 2019 | Normal operation |
DA016
| DA016 | Exhaust gas from Vogely preparation | Bag dust removal | Few | June 2019 | Normal operation |
| DA017 | MP exhaust gas | Photo-catalytic oxidation | 44000 | June 2019 | Normal operation |
| DA018 | Exhaust gas from super-resistant fermentation | Alkaline spraying + photo- catalytic oxidation + water spraying | 20000 | June 2019 | Normal operation |
| DA019 | X8 exhaust gas | Acid spraying + water spraying | 6000 | June 2019 | Normal operation |
| DA021 | Exhaust gas from quality testing | Alkaline spraying + photo- catalytic oxidation + water spraying | 30000 | June 2019 | Normal operation |
DA022
| DA022 | Exhaust gas from AK refining hydrochloric acid | Alkaline spraying + water spraying | 10000 | June 2019 | Normal operation |
| DA023 | Exhaust gas I from spray drying | Bag dust removal + water spraying | Few | June 2019 | Normal operation |
| DA024 | Exhaust gas from AK fermenting north section | Alkaline spraying + photo- catalytic oxidation + water spraying | 90000 | June 2019 | Normal operation |
| DA025 | Exhaust gas from AK fermenting south section | Alkaline spraying + photo- catalytic oxidation + water spraying | 90000 | June 2019 | Normal operation |
| DA026 | Exhaust gas from Phase II sewage treatment station | Alkaline spraying + water spraying | 58000 | June 2019 | Normal operation |
| DA027 | Exhaust gas from center control | Alkaline spraying + photo- catalytic oxidation + water spraying | 8000 | June 2019 | Normal operation |
DA028
| DA028 | YT exhaust gas | Alkaline spraying + water spraying | 4000 | June 2019 | Normal operation |
| DA029 | Exhaust gas II from spray drying | Bag dust removal + water spraying | Few | June 2019 | Normal operation |
| DA030 | Exhaust gas from AK refining ethyl alcohol | Alkaline spraying + water spraying | 1000 | June 2019 | Normal operation |
| DA031 | Exhaust gas from Bailing Tablets preparation | Condensation + Secondary water spraying | 20000 | July 2022 | Normal operation |
| HDBL-FQ217 | HDG solvent-containing exhaust gas | Oxidation spraying + secondary alkaline spraying | 2000 | September 2022 | Outage |
| HDBL-FQ218 | HDG odor exhaust gas | Oxidation spraying + alkaline spraying | 20000 | September 2022 | Outage |
(3) Solid wastes
| Designation of pollution prevention and control facility | Treatment process | Treatment capacity | Time when put into operation | Operation condition |
| Hazardous waste warehouse | Normative storage, compliant disposal by entrusted qualified units | |||
| Normative storage | 10 tons | March 2017 | ||
| Normative storage | 200 tons | May 2021 | ||
| General solid waste storage yard | Normative storage | 20 tons | March 2016 | Normative storage, compliant disposal by entrusted qualified units |
| Normative storage | 15 tons | March 2016 | ||
| Normative storage | 40 tons | July 2019 | ||
| Normative storage | 30 tons | July 2019 |
3. Pollutant treatment of Huadong Medicine (Xi ‘an) Bohua Pharmaceutical Co., Ltd.
(1) Wastewater
| Designation of pollution prevention and control facility | Treatment process | Treatment capacity | Time when put into operation | Operation condition |
| Wastewater treatment system of sewage treatment station | Pretreatment + Fenton system + facultative + aerobic + MBR + carbon filtration | 250 t/d | July 2012 | Normal operation |
(2) Exhaust gas
| Designation of pollution prevention and control facility | Treatment process | Time when put into operation | Operation condition |
Exhaust gas treatment equipment for APIs Plant 1
| Exhaust gas treatment equipment for APIs Plant 1 | Alkaline solution spraying + dry filter (filter cotton) + UV photolysis + activated carbon adsorption | October 2020 | Normal operation |
| Exhaust gas treatment equipment for APIs Plant 2 | Secondary alkaline solution spraying + dry filter + UV photolysis + activated carbon | November 2019 | Normal operation |
| Exhaust gas treatment equipment for solid preparation | Bag dust removal | 2018 | Normal operation |
(3) Solid wastes
| Designation of pollution prevention and control facility | Treatment process | Storage capacity | Time when put into operation | Operation condition |
| Hazardous waste repository | Normative storage | 60 tons | January 2012 | Normative storage, compliant transfer and disposal by entrusted qualified units |
4. Pollutant treatment of Jiangsu Joyang Laboratories
(1) Wastewater
| Designation of pollution prevention and control facility | Treatment process | Treatment capacity | Time when put into operation | Operation condition |
| Wastewater treatment system of sewage treatment station | Steam flotation tank + hydrolytic acidification + IC tower + UASB tank + A/O tank + O tank + secondary sedimentation tank | 300 t/d | December 2014 | Normal operation |
(2) Exhaust gas
| Designation of pollution prevention and control facility | Treatment process | Treatment capacity (CMH) | Time when put into operation | Operation condition |
| Exhaust gas treatment equipment for extracting section in Plant 101 | Primary water spraying + water-gas separator + photo-catalytic oxidation + secondary activated carbon adsorption + 25m exhaust pipe high altitude emission | 10000 | 2014 | Normal operation |
| Exhaust gas treatment equipment for fermentation section in Plant 101 | Primary water spraying + water-gas separator + secondary activated carbon adsorption + 25m exhaust pipe high altitude emission | 20000 | 2019 | Normal operation |
| Exhaust gas treatment equipment for drying section in Plant 101 | Primary water spraying + water-gas separator + secondary activated carbon adsorption + 25m exhaust pipe high altitude emission | 22000 | 2017 | Normal operation |
Exhaust gas treatment equipment for
batching section in Plant 101
| Exhaust gas treatment equipment for batching section in Plant 101 | Cyclone separator + primary water spray + 15m exhaust pipe high altitude emission | 5000 | 2014 | Normal operation |
| Exhaust gas treatment equipment for fermentation sections in Plants 104/107/108 | Primary water spraying + water-gas separator + secondary activated carbon adsorption + 25m exhaust pipe high altitude emission | 75000 | 2021 | Normal operation |
| Exhaust gas treatment equipment for extracting section in Plant 104 | Primary water spraying + water-gas separator + photo-catalytic oxidation + secondary activated carbon adsorption + 25m exhaust pipe high altitude emission | 10000 | 2015 | Normal operation |
| Exhaust gas treatment equipment for batching sections in Plants 104/107/108 | Cyclone separator + primary water spray + 15m exhaust pipe high altitude emission | 5000 | 2015 | Normal operation |
| Exhaust gas treatment equipment for drying sections in Plants 104/107/108 | Primary water spraying + water-gas separator + secondary activated carbon adsorption | 20000 | 2015 | Normal operation |
| Exhaust gas treatment equipment for pretreatment tank and hazardous waste repository in Plant 103 and Plant 303 | Primary water spraying + water-gas separator + photo-catalytic oxidation + secondary activated carbon adsorption + 25m exhaust pipe high altitude emission | 40000 | 2019 | Normal operation |
Exhaust gas treatment equipment for Plant
| Exhaust gas treatment equipment for Plant 106 | Primary water spraying + water-gas separator + photo-catalytic oxidation + secondary activated carbon adsorption + 25m exhaust pipe high altitude emission | 10000 | 2015 | Normal operation |
| Exhaust gas treatment equipment for extracting section in Plant 107 | Primary water spraying + water-gas separator + photo-catalytic oxidation + secondary activated carbon adsorption + 25m exhaust pipe high altitude emission | 20000 | 2019 | Normal operation |
| Exhaust gas treatment equipment for extracting section in Plant 108 | Primary water spraying + water-gas separator + photo-catalytic oxidation + secondary activated carbon adsorption + 25m exhaust pipe high altitude emission | 40000 | 2019 | Normal operation |
| Exhaust gas treatment equipment for Plant 109 | Primary water spraying +25m exhaust pipe high altitude emission | 20000 | 2019 | Normal operation |
| Exhaust gas treatment equipment for sewage treatment station 303 | Primary water spraying + water-gas separator + photo-catalytic + 25m exhaust pipe high altitude emission | 15000 | 2021 | Normal operation |
Exhaust gas treatment equipment for Plant
| Exhaust gas treatment equipment for Plant 103 | Primary water spraying + water-gas separator + photo-catalytic oxidation + secondary activated carbon adsorption + 25m exhaust pipe high altitude emission | 45000 | 2022 | Normal operation |
| Exhaust gas treatment equipment in laboratories | Spraying + activated carbon adsorption | 25000 | 2023 | Normal operation |
(3) Solid wastes
| Designation of pollution prevention and control facility | Treatment process | Treatment capacity | Time when put into operation | Operation condition |
| Hazardous waste warehouse | Normative storage | 300 tons | October 2020 | Normative storage, compliant disposal by entrusted qualified units |
| Household garbage dumping site | Normative storage | 3 tons | March 2015 | Garbage disposal site in the east of the city |
5. Pollutant treatment by Wuhu Huaren Science and Technology Co., Ltd.
(1) Wastewater
| Designation of pollution prevention and control facility | Treatment process | Treatment capacity | Time when put into operation | Operation condition |
| Sewage treatment station | Chemical flocculation + bio-treatment | 30t/d | July 26, 2020 | Normal |
(2) Exhaust gas
| Designation of pollution prevention and control facility | Treatment process | Treatment capacity (CMH) | Time when put into operation | Operation condition |
| Organic exhaust gas treatment facilities | Activated carbon adsorption | / | 2016.11 | Normal operation |
(3) Solid wastes
| Designation of pollution prevention and control facility | Treatment process | Treatment capacity | Time when put into operation | Operation condition |
| Hazardous waste warehouse | Disposal by qualified units | 20 | July 15, 2022 | Normal operation |
Emergency plan for sudden environmental eventsHangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. has formulated, regularly modified and perfected the Emergency Planfor Sudden Environmental Events as required, with the record No. of 330105-2021-003-M.Hangzhou Zhongmei Huadong Pharmaceutical (Jiangdong) Co., Ltd. has modified and recorded the Emergency Plan for SuddenEnvironmental Events in 2022, with the record No. of 330114-2022-069-M.Huadong Medicine (Xi ‘an) Bohua Pharmaceutical Co., Ltd. has modified and perfected the Emergency Plan for SuddenEnvironmental Events as required in 2021, and recorded the Plan in Weinan Ecological Environment Bureau, with the record No. of610582-2021-090-L.Jiangsu Joyang Laboratories has formulated the Emergency Plan for Sudden Environmental Events, which has been approvedand recorded in June 2021, with the record No. of 320924–2021-039-M.
Wuhu Huaren Science and Technology Co., Ltd. Has formulated and recorded the Emergency Plan for Sudden EnvironmentalEvents, with the record No. of 340203-2022-018-L.
Investment in environmental governance and protection, and the relevant information on paying environmental protectiontaxHangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. invested 1,290,000 yuan in environmental governance and protection,and paid the environmental protection tax of 1,578.73 yuan.Hangzhou Zhongmei Huadong Pharmaceutical (Jiangdong) Co., Ltd. is not required to pay environmental protection taxaccording to relevant policies.Huadong Medicine (Xi’an) Bohua Pharmaceutical Co., Ltd. invested 945,300 yuan in environmental governance and protection,and paid the environmental protection tax of 833.21 yuan.Jiangsu Joyang Laboratories invested about 3,400,000 yuan in environmental governance and protection in the first half of 2023.Wuhu Huaren Science and Technology Co., Ltd. invested about 196,000 yuan in environmental governance and protection, andpaid the environmental protection tax of 146.72 yuan in the first half of 2023.Environmental self-monitoring programHangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. has formulated the Pollution Source Self-monitoring Program,registered the Program in the environmental protection department, and reported all the monitoring data as required.Hangzhou Zhongmei Huadong Pharmaceutical (Jiangdong) Co., Ltd. has formulated the entrusted monitoring plan according tothe self-monitoring requirements in the Pollutant Emission Permit, and carried out daily, monthly, quarterly or annual entrustedmonitoring according to the monitoring plan.
Huadong Medicine (Xi ‘an) Bohua Pharmaceutical Co., Ltd. has formulated the Self-monitoring Program, registered theProgram in the environmental protection department, and reported the monitoring data as required.
Jiangsu Joyang Laboratories has formulated the Pollution Source Self-monitoring Program according to the relevant nationalenvironmental protection requirements, and reported daily monitoring data as required.
Wuhu Huaren Science and Technology Co., Ltd. has formulated the entrusted monitoring plan according to the self-inspectionrequirements in the Pollutant Emission Permit, and carried out daily, monthly, quarterly or annual entrusted monitoring according tothe monitoring plan.Administrative penalties for environmental issues during the reporting period
No administrative penalties for environmental issues during the reporting periodOther environmental information to be disclosed
NoneMeasures taken to reduce carbon emissions during the reporting period and corresponding effects? Applicable □ N/A
Hangzhou Zhongmei Huadong Pharmaceutical (Jiangdong) Co., Ltd. continued to use biogas to generate electricity, reducingthe emissions of methane, hydrogen sulfide, and other pollutants, and continuously took lean measures in the plants to reducepollutant emissions, such as saving water and reducing consumption.
Jiangsu Joyang Laboratories made technical improvement for air-conditioning units and heat exchanger pipes and reduced directsteam discharge by combing the Company’s steam use points, expecting to save 150 tons of standard coal every year. Moreover, itadjusted the actual load and demand load by analyzing the power consumption of the Company, which saves the transformercapacity fee of 45,000 kW·h every month.Other environmental protection related information
None
II. Social Responsibilities
During the reporting period, the Company actively fulfilled its social responsibilities, quickly responded tospecial situations, and established a complete set of emergency call plans. With the upstream and downstreampharmaceutical supply chain partners gathered, the Company actively practiced the idea of “seizing time is to savelives” to foster its own brands with social benefits.The Company actively responded to the “Spring Breeze Action” with the theme of “Pooling Efforts of AllWalks of Life to Help People with Urgent Needs” launched by Hangzhou. Aiming to satisfy the people in need fora better life, the “Spring Breeze Action” gathers pools the efforts of social forces to help the low-income groupsand people in need accurately, which plays an important role in promoting the improvement of people’s livelihoodand strengthening social governance.
Section VI. Important Matters
I. Commitments made by interested parties such as the Company’s de facto controller,shareholders, related parties, acquirer(s), and the Company that are fulfilled during thereporting period or unfulfilled by the end of the reporting period
□ Applicable ? N/A
The Company does not have commitments made by interested parties such as the Company’s de facto controller, shareholders,related parties, acquirer(s), and the Company that are fulfilled during the reporting period or unfulfilled by the end of the reportingperiod.II. Controlling shareholders’ 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 semi-annual financial report has been audited?
□Yes ?No
The Company’s semi-annual report is not audited.V. Explanation by the Board of Directors and the Board of Supervisors on the “nonstandardaudit report” of the accounting firm during the current reporting period
□ Applicable ? N/A
VI. Explanation by the Board of Directors on the “nonstandard audit report” in the firsthalf of 2023
□ Applicable ? N/A
VII. Bankruptcy reorganization
□ Applicable ? N/A
The Company does not have related matters of bankruptcy reorganization during the reporting period.
VIII. Contentious mattersMajor litigations and arbitrations
□ Applicable ? N/A
The Company has no major litigations and arbitrations during the current reporting period.Other litigations and arbitrations? Applicable □ N/A
| Basic of litigations (arbitrations) | Amount involved (Ten thousand yuan) | Whether an estimated liability is formed | Litigation (arbitration) progress | Litigation (arbitration) adjudication result and impact | Execution of litigation (arbitration) judgments | Disclosure date | Disclosure index (if any) |
| Summary of matters don’t satisfy the standards for major litigations (arbitrations) (domestic) | 5220.04 | No | Some cases are under trials and some adjudications have come into force | This summary of litigation s has no significant impact on the Company | Some cases have been executed; some adjudicated cases are being executed; some are not adjudicated. | Do not meet the disclosure standards for major litigations | / |
| Summary of matters don’t satisfy the standards for major litigations (arbitrations) (overseas) | 121.6 | No | Under trails | This summary of litigation s has no significant impact on the Company | Cases are under trails and are to be adjudicated | Do not meet the disclosure standards for major litigation | / |
IX. Punishment and rectification
□ Applicable ? N/A
X. Integrity of the Company and its controlling shareholders and de facto controller
□ Applicable ? N/A
XI. Major related transactions
1. Transactions related to daily operations
? Applicable □ N/A
| Related party | Association | Type of related tran | Content of related transa | Pricing principles for related transactio | Price of relate | Related transaction amou | Proportion in the amount of | Approved transaction amou | Whether it exceeds the appro | Settlement method of relate | Available market prices | Disclosure date | Disclosure index (if any) |
| saction | ction | n | d transaction | nt (ten thousand yuan) | similar transactions | nt (ten thousand yuan) | ved amount | d transaction | of similar transactions | ||||
| 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 | 1,433.41 | 0.10% | 3,300 | No | Cash, banker’s acceptance bill | Market price | April 14, 2023 | Cninfo (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 | 68.89 | 0.00% | 0 | Y | Cash, banker’s acceptance bill | Market price | April 14, 2023 | Cninfo (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 | 3,942.72 | 0.28% | 7,600 | No | Cash, banker’s acceptance bill | Market price | April 14, 2023 | Cninfo (http://www.Cninfo.com.cn) |
| Grandpharma Huangshi Feiyun 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 | 7.77 | 0.00% | 14,110 | No | Cash, banker’s acceptance bill | Market price | April 14, 2023 | Cninfo (http://www.Cninfo.com.cn) |
| Sichuan Yuanda Shuyang Pharmaceutical Co., Ltd. | Subsidiary of the Company’s controlling shareh | Drug purchase | Drug purchase | Market price determined by the Company’s related transaction | Market price | 1,539 | 0.11% | 4,000 | No | Cash, banker’s acceptance bill | Market price | April 14, 2023 | Cninfo (http://www.Cninfo.com.cn) |
| older | decision-making process | ||||||||||||
| 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 | 69.42 | 0.00% | 0 | Y | Cash, banker’s acceptance bill | Market price | April 14, 2023 | Cninfo (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 | 148.61 | 0.01% | 0 | Y | Cash, banker’s acceptance bill | Market price | April 14, 2023 | Cninfo (http://www.Cninfo.com.cn) |
| 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 | 1,252.35 | 0.09% | 3,200 | No | Cash, banker’s acceptance bill | Market price | April 14, 2023 | Cninfo (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 transaction decision-making process | Market price | 1,438.01 | 0.10% | 2,800 | No | Cash, banker’s acceptance bill | Market price | April 14, 2023 | Cninfo (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 | 121.9 | 0.01% | 0 | Y | Cash, banker’s acceptance bill | Market price | April 14, 2023 | Cninfo (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 | 948.65 | 0.07% | 3,460 | No | Cash, banker’s acceptance bill | Market price | April 14, 2023 | Cninfo (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 | 272.94 | 0.02% | 0 | Y | Cash, banker’s acceptance bill | Market price | April 14, 2023 | Cninfo (http://www.Cninfo.com.cn) |
| Xi’an Yuanda new Beilin 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 | 159.85 | 0.01% | 14,110 | No | Cash, banker’s acceptance bill | Market price | April 14, 2023 | Cninfo (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 | 1,276.07 | 0.09% | 14,110 | No | Cash, banker’s acceptance bill | Market price | April 14, 2023 | Cninfo (http://www.Cninfo.com.cn) |
| 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 | 3,443.28 | 0.25% | 14,110 | No | Cash, banker’s acceptance bill | Market price | April 14, 2023 | Cninfo (http://www.Cninfo.com.cn) |
| Beijing Grand Johamu | Subsidiary of the | Drug pur | Drug purchase | Market price determin | Market | 2,165.98 | 0.16% | 14,110 | No | Cash, banker’s | Market price | April 14, 2023 | Cninfo (http:/ |
| Pharmaceutical Co., Ltd. | Company’s controlling shareholder | chase | ed by the Company’s related transaction decision-making process | price | acceptance bill | /www.Cninfo.com.cn) | |||||||
| Grand Life Science (Chongqing) 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 | 178.07 | 0.01% | 0 | Y | Cash, banker’s acceptance bill | Market price | April 14, 2023 | Cninfo (http://www.Cninfo.com.cn) |
| Anhui 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 | 74.31 | 0.01% | 0 | Y | Cash, banker’s acceptance bill | Market price | April 14, 2023 | Cninfo (http://www.Cninfo.com.cn) |
| Grand Life Science (Wuhan) 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 | 532.57 | 0.04% | 1,000 | No | Cash, banker’s acceptance bill | Market price | April 14, 2023 | Cninfo (http://www.Cninfo.com.cn) |
| Liaoning Weibang Biopharmaceutical 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 | 20.62 | 0.00% | 0 | Y | Cash, banker’s acceptance bill | Market price | April 14, 2023 | Cninfo (http://www.Cninfo.com.cn) |
| Grand Life Science (Liaoning) Co., Ltd. | Subsidiary of the Company’s contro | Drug purchase | Drug purchase | Market price determined by the Company’s related | Market price | 982.44 | 0.07% | 830 | Y | Cash, banker’s acceptance bill | Market price | April 14, 2023 | Cninfo (http://www.Cninfo.com |
| lling shareholder | transaction decision-making process | .cn) | |||||||||||
| Beijing Yuanda Chuangxin Property Management Co., Ltd. | Subsidiary of the Company’s controlling shareholder | Property management fee | Property management fee | Market price determined by the Company’s related transaction decision-making process | Market price | 23.86 | 0.00% | 0 | Y | Cash, banker’s acceptance bill | Market price | April 14, 2023 | Cninfo (http://www.Cninfo.com.cn) |
| Hangzhou Jiuyuan Gene Engineering Co., Ltd. | Joint venture of the Company | Processing charge | Processing charge | Market price determined by the Company’s related transaction decision-making process | Market price | 812.5 | 0.06% | 8,750 | No | Cash, banker’s acceptance bill | Market price | April 14, 2023 | Cninfo (http://www.Cninfo.com.cn) |
| Hangzhou Jiuyuan Gene Engineering Co., Ltd. | Joint venture of the Company | Technical service fee | Technical service fee | Market price determined by the Company’s related transaction decision-making process | Market price | 800 | 0.06% | 8,750 | No | Cash, banker’s acceptance bill | Market price | April 14, 2023 | Cninfo (http://www.Cninfo.com.cn) |
| Grand Bay Hotel View Chengdu 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 | 31.5 | 0.00% | 0 | Y | Cash, banker’s acceptance bill | Market price | April 14, 2023 | Cninfo (http://www.Cninfo.com.cn) |
| 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- | Market price | 7 | 0.00% | 0 | Y | Cash, banker’s acceptance bill | Market price | April 14, 2023 | Cninfo (http://www.Cninfo.com.cn) |
| making process | |||||||||||||
| Leiyunshang Pharmaceutical Group Co. Ltd. | Subsidiary of the Company’s controlling shareholder | Medicine sales | Medicine sales | Market price determined by the Company’s related transaction decision-making process | Market price | 28.72 | 0.00% | 600 | No | Cash, banker’s acceptance bill | Market price | April 14, 2023 | Cninfo (http://www.Cninfo.com.cn) |
| Hangzhou Grand Biologic Pharmaceutical Inc. | Subsidiary of the Company’s controlling shareholder | Medicine sales | Medicine sales | Market price determined by the Company’s related transaction decision-making process | Market price | 81.08 | 0.00% | 178 | No | Cash, banker’s acceptance bill | Market price | April 14, 2023 | Cninfo (http://www.Cninfo.com.cn) |
| Hangzhou Jiuyuan Gene Engineering Co., Ltd. | Joint venture of the Company | Medicine sales | Medicine sales | Market price determined by the Company’s related transaction decision-making process | Market price | 537.71 | 0.03% | 500 | Y | Cash, banker’s acceptance bill | Market price | April 14, 2023 | Cninfo (http://www.Cninfo.com.cn) |
| Guangdong Leiyunshang Pharmaceutical Co., Ltd. | Subsidiary of the Company’s controlling shareholder | Medicine sales | Medicine sales | Market price determined by the Company’s related transaction decision-making process | Market price | 238.84 | 0.01% | 0 | Y | Cash, banker’s acceptance bill | Market price | April 14, 2023 | Cninfo (http://www.Cninfo.com.cn) |
| Chongqing Peg-Bio Biopharm Co., Ltd. | Joint venture of the Company | Drug production and technical services | Drug production and technical services | Market price determined by the Company’s related transaction decision-making process | Market price | 223.62 | 0.01% | 276 | No | Cash, banker’s acceptance bill | Market price | April 14, 2023 | Cninfo (http://www.Cninfo.com.cn) |
| Xi’an Yuanda Detian Pharmaceutical Co., Ltd | Subsidiary of the Company’s controlling shareholder | Agent service fee | Agent service fee | Market price determined by the Company’s related transaction decision-making process | Market price | 93.58 | 0.00% | 1,000 | No | Cash, banker’s acceptance bill | Market price | April 14, 2023 | Cninfo (http://www.Cninfo.com.cn) |
| Penglai Nuokang Pharmaceutical Co. Ltd. | Subsidiary of the Company’s controlling shareholder | Agent service fee | Agent service fee | Market price determined by the Company’s related transaction decision-making process | Market price | 61.92 | 0.00% | 40 | Y | Cash, banker’s acceptance bill | Market price | April 14, 2023 | Cninfo (http://www.Cninfo.com.cn) |
| Beijing Grand Johamu Pharmaceutical Co., Ltd. | Subsidiary of the Company’s controlling shareholder | Technical service fee | Technical service fee | Market price determined by the Company’s related transaction decision-making process | Market price | 79.08 | 0.00% | 0 | Y | Cash, banker’s acceptance bill | Market price | April 14, 2023 | Cninfo (http://www.Cninfo.com.cn) |
| Grandpharma (China) Co., Ltd. | Subsidiary of the Company’s controlling shareholder | Technical service fee | Technical service fee | Market price determined by the Company’s related transaction decision-making process | Market price | 0.75 | 0.00% | 0 | Y | Cash, banker’s acceptance bill | Market price | April 14, 2023 | Cninfo (http://www.Cninfo.com.cn) |
| Hangzhou Grand Biologic Pharmaceutical Inc. | Subsidiary of the Company’s controlling shareholder | Technical services | Technical services | Market price determined by the Company’s related transaction decision-making process | Market price | 4.34 | 0.00% | 0 | Y | Cash, banker’s acceptance bill | Market price | April 14, 2023 | Cninfo (http://www.Cninfo.com.cn) |
| Sichuan Yuanda Shuyang | Subsidiary of the | Transporta | Transportation | Market price determin | Market | 5.51 | 0.00% | 400 | No | Cash, banker’s | Market price | April 14, 2023 | Cninfo (http:/ |
| Pharmaceutical Co., Ltd. | Company’s controlling shareholder | tion and warehousing services | and warehousing services | ed by the Company’s related transaction decision-making process | price | acceptance bill | /www.Cninfo.com.cn) | ||||||
| Hangzhou Jiuyuan Gene Engineering Co., Ltd. | Joint venture of the Company | House leasing | House leasing | Market price determined by the Company’s related transaction decision-making process | Market price | 6.42 | 0.00% | 6.42 | No | Cash, banker’s acceptance bill | Market price | April 14, 2023 | Cninfo (http://www.Cninfo.com.cn) |
| Bering 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 | 30.32 | 0.00% | 0 | Y | Cash, banker’s acceptance bill | Market price | April 14, 2023 | Cninfo (http://www.Cninfo.com.cn) |
| Total | -- | -- | 23,143.61 | -- | 52,050.42 | -- | -- | -- | -- | -- | |||
| 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) | Actual amount occurred in daily transactions related to daily operations of the Company and its subsidiaries did not exceed the annual estimate during the reporting period. | ||||||||||||
| 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 selling assets and equity
□ Applicable ? N/A
No such case during the reporting period.
3. Related transactions of joint external investment
□ Applicable ? N/A
No such case during the reporting period.
4. Associated claim and debt transactions
□ Applicable ? N/A
No such case during the reporting period.
5. Transactions with financial companies who are related parties of the Company
□ Applicable ? N/A
No deposit, loan, credit or other financial business between the Company and the related financial companies
6. Transactions between the financial companies controlled by the Company and the related parties
□ Applicable ? N/A
No deposit, loan, credit or other financial business between the financial companies controlled by the Company and the relatedparties.
7. Other major related transactions
□ Applicable ? N/A
No such case during the reporting period.XII. Major contracts and their fulfillment
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: Ten thousand yuan
| External guarantees of the Company and its subsidiaries (excluding guarantees for subsidiaries) | ||||||||||
| Guaranteed party | Disclosure date | Guarantee Cap | Actual date of | Actual guarante | Type of guarantee | Collateral (if | Counter guaranty | Period of | Fulfilled or not | Guarantee for a |
| of the announcement related to the guarantee Cap | occurrence | ed amount | any) | (if any) | guarantee | related party or not | ||||
| 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 guaranty (if any) | Period of guarantee | Fulfilled or not | Guarantee for a related party or not |
| Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. | April 28, 2022 | 85,000 | October 12, 2022 | 8,561.45 | Joint and several liability guarantee | Annually | No | No | ||
| Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. | April 14, 2023 | 85,000 | January 18, 2023 | 17,419.44 | Joint and several liability guarantee | Annually | No | No | ||
| Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. | April 14, 2023 | 85,000 | January 30, 2023 | 2,205.52 | Joint and several liability guarantee | Annually | No | No | ||
| Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. | April 14, 2023 | 85,000 | February 23, 2023 | 2,466.02 | Joint and several liability guarantee | Annually | No | No | ||
| Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. | April 14, 2023 | 85,000 | February 24, 2023 | 1,826.2 | Joint and several liability guarantee | Annually | No | No | ||
| Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. | April 14, 2023 | 85,000 | March 3, 2023 | 1,890.49 | Joint and several liability guarantee | Annually | No | No | ||
| Hangzhou Zhongmei Huadong Pharmace | April 14, 2023 | 85,000 | March 22, 2023 | 10,000 | Joint and several liability guarantee | Annually | No | No | ||
| utical Co., Ltd. | ||||||||||
| Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. | April 14, 2023 | 85,000 | March 24, 2023 | 8,667.58 | Joint and several liability guarantee | Annually | No | No | ||
| Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. | April 14, 2023 | 85,000 | March 29, 2023 | 1,098.71 | Joint and several liability guarantee | Annually | No | No | ||
| Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. | April 14, 2023 | 85,000 | April 25, 2023 | 17,229.4 | Joint and several liability guarantee | Annually | No | No | ||
| Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. | April 14, 2023 | 85,000 | April 26, 2023 | 11,227.01 | Joint and several liability guarantee | Annually | No | No | ||
| Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. | April 14, 2023 | 85,000 | May 12, 2023 | 788.55 | Joint and several liability guarantee | Annually | No | No | ||
| Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. | April 14, 2023 | 85,000 | May 26, 2023 | 8,904.02 | Joint and several liability guarantee | Annually | No | No | ||
| Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. | April 14, 2023 | 85,000 | May 30, 2023 | 4,381.65 | Joint and several liability guarantee | Annually | No | No | ||
| Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. | April 14, 2023 | 85,000 | June 16, 2023 | 3,127 | Joint and several liability guarantee | Annually | No | No | ||
| Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. | April 14, 2023 | 85,000 | June 25, 2023 | 10,000 | Joint and several liability guarantee | Annually | No | No | ||
| Hangzhou | April | 85,000 | June 30, | 6,234.09 | Joint and | Annuall | No | No |
| Zhongmei Huadong Pharmaceutical Co., Ltd. | 14, 2023 | 2023 | several liability guarantee | y | ||||||
| Huadong Medicine Supply Chain Management (Jinhua) Co., Ltd. | April 19, 2019 | 20,000 | Ten years | |||||||
| Huadong Medicine (Xi’an) Bohua Pharmaceutical Co., Ltd. | April 14, 2023 | 5,000 | Annually | |||||||
| Huadong Medicine Ningbo Sales Co., Ltd. | April 14, 2023 | 16,000 | Annually | |||||||
| Huadong Medicine Huzhou Co., Ltd. | April 14, 2023 | 15,000 | April 20, 2023 | 4,275 | Joint and several liability guarantee | Annually | No | No | ||
| Huadong Medicine Shaoxing Co., Ltd. | April 14, 2023 | 19,000 | February 13, 2023 | 100 | Joint and several liability guarantee | Annually | No | No | ||
| Huadong Medicine Shaoxing Co., Ltd. | April 14, 2023 | 19,000 | March 31, 2023 | 7,000 | Joint and several liability guarantee | Annually | No | No | ||
| Huadong Medicine (Hangzhou) Biological Products Co., Ltd. | April 14, 2023 | 3,000 | April 13, 2023 | 105.14 | Joint and several liability guarantee | Annually | No | No | ||
| Huadong Medicine (Hangzhou) Biological Products Co., Ltd. | April 14, 2023 | 3,000 | April 21, 2023 | 184.02 | Joint and several liability guarantee | Annually | No | No | ||
| Huadong Medicine (Hangzhou) Biological Products | April 14, 2023 | 3,000 | April 27, 2023 | 37.45 | Joint and several liability guarantee | Annually | No | No |
| Co., Ltd. | ||||||||||
| Huadong Medicine (Hangzhou) Biological Products Co., Ltd. | April 14, 2023 | 3,000 | May 19, 2023 | 20.3 | Joint and several liability guarantee | Annually | No | No | ||
| Huadong Medicine (Hangzhou) Biological Products Co., Ltd. | April 14, 2023 | 3,000 | June 13, 2023 | 293.6 | Joint and several liability guarantee | Annually | No | No | ||
| Huadong Medicine (Hangzhou) Biological Products Co., Ltd. | April 14, 2023 | 3,000 | June 16, 2023 | 54 | Joint and several liability guarantee | Annually | No | No | ||
| Jiangsu Joyang Laboratories | April 14, 2023 | 7,000 | Annually | |||||||
| Huadong Medicine Wenzhou Co., Ltd. | April 28, 2022 | 24,000 | July 12, 2022 | 1,000 | Joint and several liability guarantee | Annually | No | No | ||
| Huadong Medicine Wenzhou Co., Ltd. | April 28, 2022 | 24,000 | July 13, 2022 | 1,000 | Joint and several liability guarantee | Annually | No | No | ||
| Huadong Medicine Wenzhou Co., Ltd. | April 28, 2022 | 24,000 | August 4, 2022 | 1,000 | Joint and several liability guarantee | Annually | No | No | ||
| Huadong Medicine Wenzhou Co., Ltd. | April 28, 2022 | 24,000 | August 5, 2022 | 1,000 | Joint and several liability guarantee | Annually | No | No | ||
| Huadong Medicine Wenzhou Co., Ltd. | April 28, 2022 | 24,000 | August 24, 2022 | 1,000 | Joint and several liability guarantee | Annually | No | No | ||
| Huadong Medicine Wenzhou Co., Ltd. | April 28, 2022 | 24,000 | September 13, 2022 | 1,000 | Joint and several liability guarantee | Annually | No | No | ||
| Huadong Medicine Wenzhou Co., Ltd. | April 28, 2022 | 24,000 | September 15, 2022 | 1,000 | Joint and several liability guarantee | Annually | No | No | ||
| Huadong Medicine Wenzhou | April 28, 2022 | 24,000 | October 14, 2022 | 1,000 | Joint and several liability | Annually | No | No |
| Co., Ltd. | guarantee | |||||||||
| Huadong Medicine Wenzhou Co., Ltd. | April 28, 2022 | 24,000 | October 26, 2022 | 1,000 | Joint and several liability guarantee | Annually | No | No | ||
| Huadong Medicine Wenzhou Co., Ltd. | April 28, 2022 | 24,000 | November 7, 2022 | 1,000 | Joint and several liability guarantee | Annually | No | No | ||
| Huadong Medicine Wenzhou Co., Ltd. | April 28, 2022 | 24,000 | November 9, 2022 | 1,000 | Joint and several liability guarantee | Annually | No | No | ||
| Huadong Medicine Wenzhou Co., Ltd. | April 28, 2022 | 24,000 | December 8, 2022 | 1,000 | Joint and several liability guarantee | Annually | No | No | ||
| Huadong Medicine Wenzhou Co., Ltd. | April 28, 2022 | 24,000 | December 9, 2022 | 1,000 | Joint and several liability guarantee | Annually | No | No | ||
| Huadong Medicine Wenzhou Co., Ltd. | April 14, 2023 | 24,000 | January 3, 2023 | 1,000 | Joint and several liability guarantee | Annually | No | No | ||
| Huadong Medicine Wenzhou Co., Ltd. | April 14, 2023 | 24,000 | January 4, 2023 | 1,000 | Joint and several liability guarantee | Annually | No | No | ||
| Huadong Medicine Wenzhou Co., Ltd. | April 14, 2023 | 24,000 | January 4, 2023 | 990 | Joint and several liability guarantee | Annually | No | No | ||
| Huadong Medicine Wenzhou Co., Ltd. | April 14, 2023 | 24,000 | April 6, 2023 | 1,000 | Joint and several liability guarantee | Annually | No | No | ||
| Huadong Medicine Wenzhou Co., Ltd. | April 14, 2023 | 24,000 | April 7, 2023 | 1,000 | Joint and several liability guarantee | Annually | No | No | ||
| Huadong Medicine Wenzhou Co., Ltd. | April 14, 2023 | 24,000 | April 18, 2023 | 1,000 | Joint and several liability guarantee | Annually | No | No | ||
| Huadong Medicine Wenzhou Co., Ltd. | April 14, 2023 | 24,000 | April 21, 2023 | 1,210 | Joint and several liability guarantee | Annually | No | No | ||
| Huadong Medicine Wenzhou Co., Ltd. | April 14, 2023 | 24,000 | May 25, 2023 | 140 | Joint and several liability guarantee | Annually | No | No | ||
| Huadong Medicine Wenzhou Co., Ltd. | April 14, 2023 | 24,000 | June 21, 2023 | 616.78 | Joint and several liability guarantee | Annually | No | No |
| Huadong Medicine Wenzhou Co., Ltd. | April 14, 2023 | 24,000 | June 27, 2023 | 35 | Joint and several liability guarantee | Annually | No | No | ||
| Huadong Medicine Lishui Co., Ltd. | April 14, 2023 | 15,000 | April 7, 2023 | 6,000 | Joint and several liability guarantee | Annually | No | No | ||
| Huadong Medicine Daishan Co., Ltd. | April 14, 2023 | 2,600 | Annually | |||||||
| Huadong Medicine Cunde (Zhoushan) Co., Ltd. | April 14, 2023 | 9,900 | Annually | |||||||
| Hangzhou Zhongmei Huadong Pharmaceutical Jiangdong Co., Ltd. | April 14, 2023 | 40,000 | January 19, 2023 | 307.44 | Joint and several liability guarantee | Annually | No | No | ||
| Hangzhou Zhongmei Huadong Pharmaceutical Jiangdong Co., Ltd. | April 14, 2023 | 40,000 | March 27, 2023 | 8,000 | Joint and several liability guarantee | Annually | No | No | ||
| Hangzhou Huadong Pharmacy Chain Co., Ltd. | April 14, 2023 | 5,000 | May 26, 2023 | 4,750 | Joint and several liability guarantee | Annually | No | No | ||
| Huadong Medicine Jinhua Co., Ltd. | April 14, 2023 | 15,000 | April 23, 2023 | 3,990 | Joint and several liability guarantee | Annually | No | No | ||
| Anhui Meihua Hi-Tech Pharmaceutical Co., Ltd. | April 14, 2023 | 3,500 | Annually | |||||||
| Hubei Meiqi Health Technology Co., Ltd. | April 14, 2023 | 5,400 | Annually | |||||||
| Huadong Pharmaceutical (Hong Kong) Investmen | April 14, 2023 | 76,000 | Annually |
| t Holding Co., Ltd. | ||||||||||
| Sinclair Pharma Limited | November 23, 2018 | 40,000 | May 21, 2020 | 10,971.84 | Joint and several liability guarantee | Three years | No | No | ||
| Sinclair Pharma Limited | November 23, 2018 | 40,000 | July 30, 2020 | 2,742.96 | Joint and several liability guarantee | Three years | No | No | ||
| Sinclair Pharma Limited | November 23, 2018 | 40,000 | November 16, 2020 | 1,828.64 | Joint and several liability guarantee | Three years | No | No | ||
| Sinclair Pharma Limited | November 23, 2018 | 40,000 | February 4, 2021 | 2,742.96 | Joint and several liability guarantee | Three years | No | No | ||
| Sinclair Pharma Limited | September 17, 2020 | 12,591.15 | March 30, 2021 | 2,742.96 | Joint and several liability guarantee | Three years | No | No | ||
| Sinclair Pharma Limited | September 17, 2020 | 12,591.15 | April 19, 2021 | 3,657.28 | Joint and several liability guarantee | Three years | No | No | ||
| Sinclair Pharma Limited | September 17, 2020 | 12,591.15 | May 26, 2021 | 3,657.28 | Joint and several liability guarantee | Three years | No | No | ||
| Sinclair Pharma Limited | September 17, 2020 | 12,591.15 | August 11, 2021 | 1,828.64 | Joint and several liability guarantee | Three years | No | No | ||
| Sinclair Pharma Limited | September 17, 2020 | 12,591.15 | September 14, 2021 | 1,828.64 | Joint and several liability guarantee | Three years | No | No | ||
| Sinclair Pharma Limited | July 16, 2021 | 38,305.3 | January 13, 2022 | 39,741.9 | Joint and several liability guarantee | Three years | No | No | ||
| Sinclair Pharma Limited | March 16, 2021 | 14,845.8 | April 8, 2021 | 15,754.2 | Joint and several liability guarantee | Three years | No | No | ||
| Sinclair Pharma Limited | March 16, 2021 | 14,845.8 | March 17, 2021 | 15,754.2 | Joint and several liability guarantee | December 31, 2024 | No | No | ||
| Sinclair Pharma Limited | March 16, 2021 | 31,695.78 | Three years | |||||||
| Sinclair Pharma Limited | April 28, 2022 | 58,600 | Annually | |||||||
| Sinclair | April | 65,000 | Annuall |
| Pharma Limited | 14, 2023 | y | ||||||||
| Total guarantee cap for subsidiaries approved during the reporting period (Bl) | 411,400 | Total guarantee amount for subsidiaries actually occurred during the reporting period (B2) | 150,574.42 | |||||||
| Total approved guarantee cap for subsidiaries at the end of the reporting period (B3) | 736,438 | Total actual guarantee balance for subsidiaries at the end of the reporting period (B4) | 275,387.37 | |||||||
| Subsidiaries guarantee 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 guaranty (if any) | Period of guarantee | Fulfilled or not | Guarantee for a related party or not |
| Chongqing Peg-Bio Biopharm Co., Ltd. | April 14, 2023 | 4,800 | 0 | Annually | Y | |||||
| Total guarantee cap for subsidiaries approved during the reporting period (C1) | 4,800 | Total guarantee amount for subsidiaries actually occurred during the reporting period (C2) | ||||||||
| Total approved guarantee cap for subsidiaries at the end of the reporting period (C3) | 4,800 | Total actual guarantee balance for subsidiaries at the end of the reporting period (C4) | ||||||||
| 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) | 416,200 | Total actual guarantee amount during the reporting period (A2+B2+C2) | 150,574.42 | |||||||
| Total approved guarantee cap at the end of the reporting period (A3+B3+C3) | 741,238 | Total actual guarantee balance at the end of the reporting period (A4+B4+C4) | 275,387.37 | |||||||
| Proportion of the actual guarantee amount (i.e. A4+B4+C4) in the Company’s net assets | 14.10% | |||||||||
| Among them: | ||||||||||
| Amount of debt guarantees provided directly or indirectly for the entities with a liability to asset ratio over 70% (E) | 128,993.28 | |||||||||
| Total guarantee amount of the above-mentioned three kinds of guarantees | 128,993.28 | |||||||||
(D+E+F)
Note on the specific circumstance if multiple methods are adopted for guaranteesN/A
3. Entrusted wealth management
□ Applicable ? N/A
No such case during the reporting period.
4. Other significant contracts
□ Applicable ? N/A
No other significant contract during the reporting period.
XIII. Other major events
□ Applicable ? N/A
No such case during the reporting period.XIV. Major events of subsidiaries? Applicable □ N/AAs of the release of this report, major assets had been disposed in the liquidation of Huadong NingboMedicine Co., Ltd. in the court. Some claims and accounts receivable are remained to be collected. The Companyhas arranged special personnel for participation and actively promoted the subsequent liquidation work. It isexpected that this does not have any significant impact on the Company’s operating results.
Section VII. Share Change and ShareholdersI. Changes in shares
1. Table of changes in shares
Unit: Share
| Before the change | Change in the period (+/-) | After the change | |||||||
| Quantity | Ratio | New shares | Bonus shares | Shares converted from capital reserve | Others | Sub-total | Quantity | Ratio | |
| I. Shares subject to conditional restriction | 4,268,300 | 0.24% | 0 | 0 | 0 | 0 | 0 | 4,268,300 | 0.24% |
| 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 | 4,068,300 | 0.23% | 0 | 0 | 0 | 0 | 0 | 4,068,300 | 0.23% |
| Including: Shares held by domestic corporations | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| Shares held by domestic natural persons | 4,068,300 | 0.23% | 0 | 0 | 0 | 0 | 0 | 4,068,300 | 0.23% |
| 4. Shares held by overseas | 200,000 | 0.01% | 0 | 0 | 0 | 0 | 0 | 200,000 | 0.01% |
| investors | |||||||||
| Including: Shares held by overseas corporations | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| Shares held by overseas natural persons | 200,000 | 0.01% | 0 | 0 | 0 | 0 | 0 | 200,000 | 0.01% |
| II. Shares without restriction | 1,749,727,048 | 99.76% | 0 | 0 | 0 | 0 | 0 | 1,749,727,048 | 99.76% |
| 1. RMB common shares | 1,749,727,048 | 99.76% | 0 | 0 | 0 | 0 | 0 | 1,749,727,048 | 99.76% |
| 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 | 1,753,995,348 | 100.00% | 0 | 0 | 0 | 0 | 0 | 1,753,995,348 | 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 common shareholders 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 shareholders at the end of the reporting period | 74,378 | 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 common shareholders with a shareholding ratio over 5% or the top 10 common shareholders | ||||||||
| Name of Shareholder | Nature of shareholder | Shareholding ratio | Total common shares not held at the end of the reporting period | Changes in the reporting period | Number of common shares held with trading restrictions | Number of shares held without trading restriction | Pledged or frozen | |
| Status | Quantity | |||||||
| China Grand Enterprises, Inc. | Domestic non-state-owned corporation | 41.67% | 730,938,157 | 0 | 0 | 730,938,157 | Pledged | 131,630,000 |
| Hangzhou Huadong Medicine Group Co., Ltd. | State- owned corporation | 16.42% | 288,000,000 | 0 | 0 | 288,000,000 | ||
| Hong Kong Securities Clearing Company Ltd. | Overseas corporation | 3.27% | 57,408,083 | 1,400,012 | 0 | 57,408,083 | ||
| Industrial and Commercial Bank of China Limited - China-Europe Healthcare Hybrid Securities Investment Fund | Others | 2.74% | 48,004,441 | -1,311,800 | 0 | 48,004,441 | ||
| China Securities | Domestic non-state- | 1.26% | 22,186,818 | 0 | 0 | 22,186,818 | ||
| Finance Co., | owned corporation | |||||||
| China Construction Bank Co., Ltd. - ICBC Credit Suisse Frontier Medical Equity Fund | Others | 1.00% | 17,500,000 | -2,500,078 | 0 | 17,500,000 | ||
| China Construction Bank Corporation - E Fund CSI 300 Healthcare Exchange Traded Fund | Others | 0.72% | 12,565,632 | 5,530,600 | 0 | 12,565,632 | ||
| National Social Security Fund - Profile 0 | Others | 0.59% | 10,380,842 | 0 | 0 | 10,380,842 | ||
| National Social Security Fund - Profile 503 | Others | 0.48% | 8,500,000 | 2,500,000 | 0 | 8,500,000 | ||
| Industrial and Commercial Bank of China Limited - China-Europe Healthcare Innovation Stock Investment Fund | Others | 0.43% | 7,461,104 | -2,116,480 | 0 | 7,461,104 | ||
| Strategic investors or general corporations become the top 10 common 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 | ||
| Explanation of special account for repurchase among the top 10 shareholders (if any) (see Note 11) | N/A | ||
| Shareholding of the top 10 common shareholders without trading restrictions | |||
| Name of Shareholder | Number of common without restrictions held at the end of the reporting period | Type of shares | |
| Type of shares | Quantity | ||
| China Grand Enterprises, Inc. | 730,938,157 | RMB common shares | 730,938,157 |
| Hangzhou Huadong Medicine Group Co., Ltd. | 288,000,000 | RMB common shares | 288,000,000 |
| Hong Kong Securities Clearing Company Ltd. | 57,408,083 | RMB common shares | 57,408,083 |
| Industrial and Commercial Bank of China Limited - China-Europe Healthcare Hybrid Securities Investment Fund | 48,004,441 | RMB common shares | 48,004,441 |
| China Securities Finance Co., | 22,186,818 | RMB common shares | 22,186,818 |
| China Construction Bank Co., Ltd. - ICBC Credit Suisse Frontier Medical Equity Fund | 17,500,000 | RMB common shares | 17,500,000 |
| China Construction Bank Corporation - E Fund CSI 300 Healthcare Exchange Traded Fund | 12,565,632 | RMB common shares | 12,565,632 |
| National Social Security Fund - Profile 0 | 10,380,842 | RMB common shares | 10,380,842 |
| National Social Security Fund - Profile 503 | 8,500,000 | RMB common shares | 8,500,000 |
| Industrial and Commercial Bank of China Limited - China-Europe Healthcare Innovation Stock Investment Fund | 7,461,104 | RMB common shares | 7,461,104 |
| Description for affiliated relationship or concerted action among the top 10 | The Company does not know whether the above-mentioned shareholders are related parties or whether they are acting-in- concert parties with one another. | ||
| shareholders holding common shares without trading restrictions and between the top 10 shareholders holding common shares without trading restrictions and the top 10 shareholders | |
| Description of the participation in margin trading business of the top 10 common shareholders (if any) (see Note 4) | At the end of the reporting period, the Company had no shareholders holding its shares through margin trading and securities lending accounts among the top 10 common shareholders. |
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
The Company’s top 10 common shareholders or the top 10 common shareholders without trading restrictions have not carried outany agreement to repurchase transaction during the reporting period.IV. Changes in shareholding of directors, supervisors and senior management members
□ Applicable ? N/A
The shareholding of directors, supervisors and senior management of the Company has not changed during the reporting period.Please refer to the 2022 Annual Report for details.
V. Changes in holding shareholders or the de facto controllerChange of the controlling shareholder during the reporting period
□ Applicable ? N/A
No such case during the reporting period.Change of the de facto controller during the reporting period
□ Applicable ? N/A
No such case during the reporting period.
Section VIII. Information on Preferred Shares
□ Applicable ? N/A
No such case during the reporting period.
Section IX. Information on Bonds
□ Applicable ? N/A
Section X. Financial Report
I. Audit report
Whether the semi-annual report has been audited?
□Yes ?No
The Company’s semi-annual financial report is not audited.II. Financial statementsThe unit of statements in the financial notes is: yuan.
1. Consolidated balance sheet
Prepared by: Huadong Medicine Co., Ltd.
June 30, 2023
Unit: yuan
| Item | June 30, 2023 | January 01, 2023 |
| Current assets: | ||
| Monetary funds | 4,393,835,953.54 | 3,996,302,178.41 |
| Settlement reserve | ||
| Lending funds | ||
| Trading financial assets | ||
| Derivative financial assets | 24,806,772.30 | 29,907,470.68 |
| Notes receivable | 8,424,980.99 | |
| Accounts receivable | 7,396,011,322.70 | 7,198,746,788.59 |
| Receivables financing | 1,343,534,867.76 | 1,002,511,208.21 |
| Prepayments | 362,087,140.00 | 500,083,953.14 |
| Premiums receivable | ||
| Reinsurance accounts receivable | ||
| Reinsurance contract reserve receivable | ||
| Other receivables | 553,681,604.74 | 283,710,955.63 |
| Include: Interest receivable | ||
| Dividend receivable | 223,747.65 | 223,747.65 |
| Financial assets purchased for resale | ||
| Inventories | 4,600,017,100.80 | 4,495,483,328.54 |
| Contract assets | ||
| Assets held for sale | ||
| Other non-current assets expiring within one year | ||
| Other non-current assets | 54,881,711.01 | 52,692,618.78 |
| Total current assets | 18,728,856,472.85 | 17,567,863,482.97 |
| Non-current assets: | ||
| Loans and prepayments issuance | ||
| Debt investment | ||
| Other debt investments | ||
| Long-term receivables | ||
| Long-term equity investment | 1,554,304,930.05 | 1,659,076,538.78 |
| Other equity instrument investments | 409,848,691.27 | 360,910,876.41 |
| Other non-current financial assets | ||
| Investment real estate | 13,174,524.11 | 13,648,240.14 |
| Fixed assets | 3,882,268,169.12 | 3,981,653,265.52 |
| Construction in progress | 995,490,666.09 | 873,159,427.47 |
| Productive biological assets | ||
| Oil and gas assets | ||
| Right-of-use assets | 140,455,892.14 | 166,505,297.17 |
| Intangible assets | 2,336,097,668.47 | 2,280,064,207.30 |
| Development expenditure | 774,096,145.13 | 641,354,586.80 |
| Goodwill | 2,587,351,458.30 | 2,441,387,413.59 |
| Long-term deferred expenses | 20,981,527.19 | 16,457,278.57 |
| Deferred income tax assets | 192,386,807.93 | 152,842,858.97 |
| Other non-current assets | 1,320,687,263.41 | 1,037,279,933.15 |
| Total non-current assets | 14,227,143,743.21 | 13,624,339,923.87 |
| Total Assets | 32,956,000,216.06 | 31,192,203,406.84 |
| Current liabilities: | ||
| Short-term borrowings | 1,052,194,176.07 | 947,516,383.37 |
| Borrowing from the central bank | ||
| Borrowing from other banks and other financial institutions | ||
| Trading financial liabilities | 8,970,278.04 | 14,841,896.97 |
| Derivative financial liabilities | ||
| Notes payable | 1,728,257,564.68 | 1,029,409,686.81 |
| Accounts payable | 4,717,793,829.40 | 4,873,029,466.44 |
| Advances from customers | 1,869,073.27 | 1,154,243.42 |
| Contract liabilities | 125,334,375.52 | 146,488,489.07 |
| Financial assets sold for repurchase | ||
| Deposits from customers and due from banks | ||
| Receipts for buying and selling securities as proxy | ||
| Receipts for underwriting securities as proxy | ||
| Employee benefits payable | 215,063,488.67 | 256,883,423.68 |
| Taxes payable | 335,297,295.69 | 429,457,804.81 |
| Other payables | 2,810,793,780.14 | 2,290,407,022.05 |
| Include: Interests payable | ||
| Dividend payable | 224,219.60 | 14,924,219.60 |
| Handling fees and commissions payable | ||
| Reinsurance accounts payable | ||
| Liabilities held for sale | ||
| Other non-current liabilities due within one year | 349,680,396.42 | 147,835,514.81 |
| Other current liabilities | 12,763,947.51 | 15,788,164.30 |
| Total current liabilities | 11,358,018,205.41 | 10,152,812,095.73 |
| Non-current liabilities: | ||
| Insurance policy reserve | ||
| Long-term borrowings | 746,918,081.65 | 1,051,457,747.44 |
| Bonds payable | ||
| Include: Preferred stock | ||
| Perpetual bond | ||
| Lease liabilities | 92,232,272.51 | 84,610,324.98 |
| Long-term payables | 91,008,860.30 | 287,497,209.49 |
| Long-term employee remuneration payable | ||
| Estimated liabilities | 41,068,049.26 | 37,925,549.41 |
| Deferred income | 176,825,542.10 | 126,123,512.71 |
| Deferred income tax liabilities | 193,669,206.28 | 202,084,083.93 |
| Other non-current liabilities | 73,251,500.00 | 73,251,500.00 |
| Total non-current liabilities | 1,414,973,512.10 | 1,862,949,927.96 |
| Total liabilities | 12,772,991,717.51 | 12,015,762,023.69 |
| Owners’ Equity: | ||
| Share capital | 1,753,995,348.00 | 1,753,995,348.00 |
| Other equity instruments | ||
| Include: Preferred stock | ||
| Perpetual bond | ||
| Capital reserves | 2,407,928,799.63 | 2,377,887,246.39 |
| Less: Treasury stock | 104,645,000.00 | 104,645,000.00 |
| Other comprehensive income | -91,570,465.50 | -88,552,636.42 |
| Special reserves | ||
| Surplus reserves | 1,151,441,705.28 | 1,151,213,039.48 |
| General risk reserve | ||
| Undistributed profit | 14,415,245,210.75 | 13,488,021,239.94 |
| Total owners’ equity attributable to owner of the Company | 19,532,395,598.16 | 18,577,919,237.39 |
| Minority interests | 650,612,900.39 | 598,522,145.76 |
| Total owners’ equity | 20,183,008,498.55 | 19,176,441,383.15 |
| Total liabilities & owners’ equity | 32,956,000,216.06 | 31,192,203,406.84 |
Legal representative: Lv Liang Person in charge of accounting: Lv Liang Person in charge of the Accounting Department: QiuRenbo
2. Balance sheet of the parent company
Unit: yuan
| Item | June 30, 2023 | January 01, 2023 |
| Current assets: | ||
| Monetary funds | 3,035,047,307.02 | 2,486,399,844.96 |
| Trading financial assets | ||
| Derivative financial assets | ||
| Notes receivable | 8,424,980.99 | |
| Accounts receivable | 4,080,636,027.16 | 4,224,944,294.54 |
| Receivables financing | 439,506,917.27 | 157,097,728.09 |
| Prepayments | 99,551,906.14 | 271,448,367.52 |
| Other receivables | 1,782,359,340.53 | 1,065,267,397.05 |
| Include: Interest receivable | ||
| Dividend receivable | 400,000,000.00 | |
| Inventories | 2,438,626,619.48 | 2,391,038,707.33 |
| Contract assets | ||
| Assets held for sale | ||
| Other non-current assets expiring within one year | ||
| Other non-current assets | 417,032.05 | |
| Total current assets | 11,876,145,149.65 | 10,604,621,320.48 |
| Non-current assets: | ||
| Debt investment | ||
| Other debt investments | ||
| Long-term receivables | ||
| Long-term equity investment | 5,862,418,196.29 | 5,473,824,934.24 |
| Other equity instrument investments | 10,100,870.56 | 10,100,870.56 |
| Other non-current financial assets | ||
| Investment real estate | 6,959,994.94 | 7,193,111.26 |
| Fixed assets | 138,895,929.52 | 144,023,222.94 |
| Construction in progress | 530,156.96 | 824,024.88 |
| Productive biological assets | ||
| Oil and gas assets | ||
| Right-of-use assets | 2,084,255.60 | 3,631,025.07 |
| Intangible assets | 174,300,679.26 | 188,198,218.40 |
| Development expenditure | ||
| Goodwill | ||
| Long-term deferred expenses | 77,379.81 | |
| Deferred income tax assets | 58,469,297.94 | 49,729,544.62 |
| Other non-current assets | 259,185,602.33 | 346,564,596.26 |
| Total non-current assets | 6,512,944,983.40 | 6,224,166,928.04 |
| Total Assets | 18,389,090,133.05 | 16,828,788,248.52 |
| Current liabilities: | ||
| Short-term borrowings | 500,086,610.91 | 431,081,029.52 |
| Trading financial liabilities | ||
| Derivative financial liabilities | ||
| Notes payable | 829,240,274.76 | 629,281,486.95 |
| Accounts payable | 3,605,728,508.22 | 3,373,959,848.93 |
| Advances from customers | ||
| Contract liabilities | 37,810,455.50 | 46,097,912.05 |
| Employee benefits payable | 3,937,885.92 | 10,063,669.60 |
| Taxes payable | 40,329,748.32 | 86,458,570.85 |
| Other payables | 1,348,814,904.68 | 949,611,806.93 |
| Include: Interests payable | ||
| Dividend payable | 224,219.60 | 224,219.60 |
| Liabilities held for sale | ||
| Other non-current liabilities due within one year | 31,393,500.00 | 33,427,007.32 |
| Other current liabilities | 4,889,117.73 | 5,830,680.38 |
| Total current liabilities | 6,402,231,006.04 | 5,565,812,012.53 |
| Non-current liabilities: | ||
| Long-term borrowings | ||
| Bonds payable | ||
| Include: Preferred stock | ||
| Perpetual bond | ||
| Lease liabilities | 49,984.66 | 59,030.94 |
| Long-term payables | ||
| Long-term employee benefits payable | ||
| Estimated liabilities | ||
| Deferred income | 34,284,223.65 | 35,567,161.11 |
| Deferred income tax liabilities | ||
| Other non-current liabilities | 73,251,500.00 | 73,251,500.00 |
| Total non-current liabilities | 107,585,708.31 | 108,877,692.05 |
| Total liabilities | 6,509,816,714.35 | 5,674,689,704.58 |
| Owners’ Equity: | ||
| Share capital | 1,753,995,348.00 | 1,753,995,348.00 |
| Other equity instruments | ||
| Include: Preferred stock | ||
| Perpetual bond | ||
| Capital reserves | 2,302,867,706.56 | 2,276,383,543.02 |
| Less: Treasury stock | 104,645,000.00 | 104,645,000.00 |
| Other comprehensive income | -129,129.44 | -129,129.44 |
| Special reserves | ||
| Surplus reserves | 1,229,068,798.92 | 1,229,068,798.92 |
| Undistributed profit | 6,698,115,694.66 | 5,999,424,983.44 |
| Total owners’ equity | 11,879,273,418.70 | 11,154,098,543.94 |
| Total liabilities & owners’ equity | 18,389,090,133.05 | 16,828,788,248.52 |
3. Consolidated income statement
Unit: yuan
| Item | Semi-Annual 2023 | Semi-Annual 2022 |
| I. Total operating revenue | 20,385,344,288.81 | 18,197,963,991.01 |
| Including: Operating revenue | 20,385,344,288.81 | 18,197,963,991.01 |
| Interests income | ||
| Premiums earned | ||
| Handling fees and commissions received | ||
| II. Total operating cost | 18,443,622,876.24 | 16,516,515,436.25 |
| Including: Operating cost | 13,917,418,061.11 | 12,243,374,078.15 |
| Interest expenses | ||
| 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 | 106,685,622.91 | 96,083,582.73 |
| Sales expenses | 3,083,786,005.03 | 3,032,965,177.95 |
| Administrative expenses | 721,477,862.62 | 572,048,249.55 |
| R&D expenses | 558,407,142.27 | 566,596,381.67 |
| Financial expenses | 55,848,182.30 | 5,447,966.20 |
| Including: Interests expenses | 55,401,149.67 | 41,795,243.41 |
| Interests income | 33,022,555.87 | 49,960,917.39 |
| Add: Other income | 34,813,373.70 | 81,653,430.69 |
| Investment income (Losses are indicated by “-”) | -136,885,042.56 | -53,479,017.66 |
| Including: Investment gains (losses) in associated enterprise and joint-venture enterprise | -120,429,152.98 | -43,145,347.52 |
| 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 from changes in fair values (Losses are indicated by “-”) | -5,100,698.38 | |
| Credit impairment losses (Losses are indicated by “-”) | -36,432,398.31 | -71,965,559.59 |
| Impairment gains (losses) of assets (Losses are indicated by “-”) | -3,175,583.57 | 0.00 |
| Asset disposal income (Losses are indicated by “-”) | 3,519,820.08 | 8,506,580.12 |
| III. Operating profit (Losses are indicated by “-”) | 1,798,460,883.53 | 1,646,163,988.32 |
| Add: Non-operating revenue | 2,972,826.61 | 4,341,628.44 |
| Less: Non-operating expenses | 16,298,554.80 | 8,661,496.73 |
| IV. Total profit (Total losses are indicated by “-”) | 1,785,135,155.34 | 1,641,844,120.03 |
| Less: Income tax expense | 345,279,440.91 | 287,938,727.72 |
| V. Net profit (Net losses are indicated by “”) | 1,439,855,714.43 | 1,353,905,392.31 |
| (I) Classification by business continuity | ||
| 1. Net profit from continuing operations (Net losses are indicated by “-”) | 1,439,855,714.43 | 1,353,905,392.31 |
| 2. Net profit at terminational operation (Net losses are indicated by “-”) | ||
| (II) Classification by attribution of ownership | ||
| 1. Net profit attributable to shareholders of the parent company (Net losses are indicated by “-”) | 1,433,824,629.56 | 1,340,570,484.98 |
| 2. Profit or loss attributable to minority shareholders (Net losses are indicated by “-”) | 6,031,084.87 | 13,334,907.33 |
| VI. Other comprehensive income, net of income tax | -8,889,448.01 | -98,252,733.94 |
| Other comprehensive income attributable to owners of the parent company, net of tax | -8,889,448.01 | -98,252,733.94 |
| (I) Other comprehensive income that cannot be reclassified into gains/losses | -808,768.81 | -7,023,104.32 |
| 1. Changes in re-measurement 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 | -808,768.81 | -7,023,104.32 |
| 4. Changes in fair value of credit risk of the enterprise | ||
| 5. Others | ||
| (II) Other comprehensive income to be reclassified into gains/losses | -8,080,679.20 | -91,229,629.62 |
| 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 | -8,080,679.20 | -91,229,629.62 |
| 7. Others | ||
| Net amount after tax of other comprehensive income attributable to minority shareholders | ||
| VII. Total comprehensive income | 1,430,966,266.42 | 1,255,652,658.37 |
| Total comprehensive income attributable to owners of the parent company | 1,424,935,181.55 | 1,242,317,751.04 |
| Total comprehensive income attributable to minority shareholders | 6,031,084.87 | 13,334,907.33 |
| VIII. Earnings per share (EPS): | ||
| (I) Basic EPS | 0.8194 | 0.7661 |
| (II) Diluted EPS | 0.8190 | 0.7661 |
As for business merger under the same control in the current period, the net profit generated by the merged party before was yuan,and that generated during the previous period was yuan.Legal representative: Lv Liang Person in charge of accounting: Lv Liang Person in charge of the Accounting Department: QiuRenbo
4. Income statement of the parent company
Unit: yuan
| Item | Semi-Annual 2023 | Semi-Annual 2022 |
| I. Total operating revenue | 11,079,388,260.41 | 9,908,981,203.23 |
| Less: Total operating cost | 10,420,679,546.07 | 9,247,554,807.79 |
| Business taxes and surcharges | 12,616,117.10 | 14,000,999.79 |
| Sales expenses | 207,782,464.30 | 227,664,922.41 |
| Administrative expenses | 96,229,619.65 | 82,342,556.23 |
| R&D expenses | ||
| Financial expenses | 4,055,926.11 | -396,898.80 |
| Including: Interests expenses | 21,720,831.46 | 27,507,061.68 |
| Interests income | 23,053,892.55 | 32,303,808.77 |
| Add: Other income | 2,284,938.08 | 12,314,150.33 |
| Investment income (Losses are indicated by “-”) | 1,023,821,754.37 | 1,013,355,132.27 |
| Including: Investment gains (losses) in associated enterprise and joint-venture enterprise | -10,790,429.82 | -7,439,207.20 |
| 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 “-”) | -54,688,951.13 | -91,642,566.80 |
| Impairment gains (losses) of assets (Losses are indicated by “-”) | ||
| Asset disposal income (Losses are indicated by “-”) | 3,543,591.91 | 7,341,180.70 |
| II. Operating profit (Losses are indicated by “-”) | 1,312,985,920.41 | 1,279,182,712.31 |
| Add: Non-operating revenue | 17,440.99 | 669,874.31 |
| Less: Non-operating expenses | 1,518,858.46 | 3,286,049.77 |
| III. Total profit (Total losses are indicated by “-”) | 1,311,484,502.94 | 1,276,566,536.85 |
| Less: Income tax expense | 104,135,140.80 | 88,593,758.11 |
| IV. Net profit (Net losses are indicated by “”) | 1,207,349,362.14 | 1,187,972,778.74 |
| (I) Net profit from continuous operations (Net losses are indicated by “-”) | 1,207,349,362.14 | 1,187,972,778.74 |
| (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 re-measurement 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 | 1,207,349,362.14 | 1,187,972,778.74 |
| VII. Earnings per share (EPS): | ||
| (I) Basic EPS | ||
| (II) Diluted EPS |
5. Consolidated cash flow statement
Unit: yuan
| Item | Semi-Annual 2023 | Semi-Annual 2022 |
| I. Cash flows from operating activities: | ||
| Cash received from the sale of goods and the rendering of services | 22,512,508,261.51 | 18,859,480,723.70 |
| 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 refund | 13,105,796.43 | 11,410,179.66 |
| Other cash receipts in relation to operating activities | 253,862,517.46 | 264,979,395.43 |
| Cash inflows from operating activities | 22,779,476,575.40 | 19,135,870,298.79 |
| Cash payments for goods purchased and services received | 14,322,943,161.95 | 12,623,103,224.34 |
| 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 funds 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 | 1,739,212,838.99 | 1,600,540,802.72 |
| Payments of various types of taxes | 1,395,137,423.20 | 1,824,842,188.89 |
| Other cash payments in relation to operating activities | 3,300,439,402.61 | 2,803,149,672.57 |
| Cash outflows for operating activities | 20,757,732,826.75 | 18,851,635,888.52 |
| Net cash flow from operating activities | 2,021,743,748.65 | 284,234,410.27 |
| II. Cash flows from investing activities | ||
| Cash receipts from recovery of investments | ||
| Cash receipts from investment income | 76,500,000.00 | 900,000.00 |
| Net cash receipts from disposal of fixed assets, intangible assets and other long-term assets | 5,336,825.17 | 8,138,807.00 |
| Net cash from disposal of subsidiaries and other business units | ||
| Other cash receipts in relation to investing activities | 148,464,580.63 | 0.00 |
| Cash inflows from investing activities | 230,301,405.80 | 9,038,807.00 |
| Cash payments for purchase and construction of fixed assets, intangible assets and other long-term assets | 597,637,675.13 | 603,911,034.60 |
| Cash payments for investment | 52,794,250.00 | 29,400,000.00 |
| Net increase in pledge loans | 0.00 | |
| Net cash paid for acquisition of subsidiaries and other business units | 130,057,945.49 | 270,952,210.17 |
| Other cash payments in relation to investing activities | 27,498,562.60 | 100,000,000.00 |
| Sub-total of cash outflows of investment activities | 807,988,433.22 | 1,004,263,244.77 |
| Net cash flow from investing activities | -577,687,027.42 | -995,224,437.77 |
| III. Cash flows from financing activities: | ||
| Cash receipts from absorbing investments | 30,000,000.00 | |
| Including: Cash receipts from capital contributions from minority owners of subsidiaries | 30,000,000.00 | |
| Cash receipts from borrowing | 2,148,865,020.50 | 2,750,601,977.68 |
| Other cash receipts in relation to financing activities | 457,402,316.71 | 248,207,838.55 |
| Cash inflows from financing activities | 2,606,267,337.21 | 3,028,809,816.23 |
| Cash repayments of borrowings | 2,557,868,542.48 | 2,144,574,467.10 |
| Cash payments for distribution of dividends or profits or settlement of interest expenses | 618,612,489.40 | 585,723,656.08 |
| Including: Dividends and profits paid by subsidiaries to minority shareholders | 13,328,000.00 | 1,960,000.00 |
| Other cash payments in relation to financing activities | 356,277,912.88 | 20,708,449.20 |
| Cash outflows for financing activities | 3,532,758,944.76 | 2,751,006,572.38 |
| Net cash flow from financing activities | -926,491,607.55 | 277,803,243.85 |
| IV Effect of foreign exchange rate changes on Cash and Cash Equivalents | 8,950,719.04 | -26,309,944.30 |
| V. Net increase in cash and cash equivalents | 526,515,832.72 | -459,496,727.95 |
| Add: Opening balance of cash and cash equivalents | 3,416,910,702.33 | 3,580,140,638.17 |
| VI. Closing balance of cash and cash equivalents | 3,943,426,535.05 | 3,120,643,910.22 |
6. Cash flow statement of the parent company
Unit: yuan
| Item | Semi-Annual 2023 | Semi-Annual 2022 |
| I. Cash flows from operating activities: | ||
| Cash received from the sale of goods and the rendering of services | 12,114,913,125.10 | 9,993,053,097.54 |
| Receipts of tax refund | ||
| Other cash receipts in relation to operating activities | 347,415,767.25 | 322,420,601.02 |
| Cash inflows from operating activities | 12,462,328,892.35 | 10,315,473,698.56 |
| Cash payments for goods purchased and services received | 11,092,284,263.73 | 9,590,776,506.25 |
| Cash payments to and on behalf of employees | 142,869,496.55 | 157,221,560.98 |
| Payments of various types of taxes | 195,302,704.64 | 436,406,580.06 |
| Other cash payments in relation to operating activities | 460,908,694.29 | 257,469,024.63 |
| Cash outflows for operating activities | 11,891,365,159.21 | 10,441,873,671.92 |
| Net cash flow from operating activities | 570,963,733.14 | -126,399,973.36 |
| II. Cash flows from investing activities | ||
| Cash receipts from recovery of investments | 50,059,838.75 | |
| Cash receipts from investment income | 676,500,000.00 | 0.00 |
| Net cash receipts from disposal of fixed assets, intangible assets and other long-term assets | 5,172,908.53 | 5,936,300.00 |
| Net cash from disposal of subsidiaries and other business units | ||
| Other cash receipts in relation to investing activities | 334,071,068.06 | 245,102,300.59 |
| Cash inflows from investing activities | 1,015,743,976.59 | 301,098,439.34 |
| Cash payments for purchase and construction of fixed assets, intangible assets and other long-term assets | 13,018,410.49 | 3,052,228.94 |
| Cash payments for investment | 360,565,000.00 | 36,400,000.00 |
| Net cash paid for acquisition of subsidiaries and other business units | 10,000,000.00 | |
| Other cash payments in relation to investing activities | 385,407,000.00 | 433,741,844.00 |
| Sub-total of cash outflows of investment activities | 768,990,410.49 | 473,194,072.94 |
| Net cash flow from investing activities | 246,753,566.10 | -172,095,633.60 |
| III. Cash flows from financing activities: | ||
| Cash receipts from absorbing investments | ||
| Cash receipts from borrowing | 1,771,457,855.10 | 1,146,017,508.00 |
| Other cash receipts in relation to financing activities | 2,410,893,781.55 | 1,109,442,166.67 |
| Cash inflows from financing activities | 4,182,351,636.65 | 2,255,459,674.67 |
| Cash repayments of borrowings | 1,722,457,855.10 | 1,255,017,310.01 |
| Cash payments for distribution of dividends or profits or settlement of interest expenses | 573,738,738.44 | 567,035,703.19 |
| Other cash payments in relation to financing activities | 1,950,457,429.10 | 983,212,333.68 |
| Cash outflows for financing activities | 4,246,654,022.64 | 2,805,265,346.88 |
| Net cash flow from financing activities | -64,302,385.99 | -549,805,672.21 |
| IV Effect of foreign exchange rate changes on Cash and Cash Equivalents | -138,375.85 | |
| V. Net increase in cash and cash equivalents | 753,276,537.40 | -848,301,279.17 |
| Add: Opening balance of cash and cash equivalents | 2,029,798,269.62 | 1,919,097,181.16 |
| VI. Closing balance of cash and cash equivalents | 2,783,074,807.02 | 1,070,795,901.99 |
7. Consolidated statement of changes in owners’ equity
Amount in the current period
Unit: yuan
| Item | Semi-Annual 2023 | ||||||||||||||
| Owners’ equity attributable to the parent company | Minority interests | Total owners’ equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury stock | Other comprehensive income | Special reserves | Surplus reserves | General risk reserve | Undistributed profit | Others | Sub-total | |||||
| Minority interest | Perpetual bond | Others | |||||||||||||
| I. Balance at the end of the period of the prior year | 1,753,995,348.00 | 2,377,887,246.39 | 104,645,000.00 | -88,552,636.42 | 1,151,213,039.48 | 13,488,021,239.94 | 18,577,919,237.39 | 598,522,145.76 | 19,176,441,383.15 | ||||||
| Add: Changes in accounting policies | |||||||||||||||
| Error correction in the prior periods | |||||||||||||||
| Consolidation of enterprises under common control | |||||||||||||||
| Others | |||||||||||||||
| II. Balance at the beginning of the period of the current year | 1,753,995,348.00 | 2,377,887,246.39 | 104,645,000.00 | -88,552,636.42 | 1,151,213,039.48 | 13,488,021,239.94 | 18,577,919,237.39 | 598,522,145.76 | 19,176,441,383.15 | ||||||
| III. Amount of change in | 30,041,5 | -3,01 | 228,665. | 927,223, | 954,476, | 52,090,7 | 1,006,56 | ||||||||
| the current period (Decreases are indicated by “") | 53.24 | 7,829.08 | 80 | 970.81 | 360.77 | 54.63 | 7,115.40 | ||||||||
| (I) Total comprehensive income | -3,017,829.08 | 1,433,824,629.56 | 1,430,806,800.48 | 6,031,084.87 | 1,436,837,885.35 | ||||||||||
| Capital contributed by owners and capital decreases | 19,748,639.58 | 19,748,639.58 | 47,989,727.86 | 67,738,367.44 | |||||||||||
| 1. Common shares invested by owners | 47,869,770.10 | 47,869,770.10 | |||||||||||||
| 2. Capital invested by holders of other equity instruments | |||||||||||||||
| 3. Amount of share-based payment included in owners’ equity | 19,748,639.58 | 19,748,639.58 | 119,957.76 | 19,868,597.34 | |||||||||||
| 4. Others | |||||||||||||||
| Profit distribution | -508,658,650.92 | -508,658,650.92 | -1,960,000.00 | -510,618,650.92 | |||||||||||
| 1. Withdrawal of surplus reserve | |||||||||||||||
| 2. Provision of general risk reserve | |||||||||||||||
| 3. Distribution to owners (or shareholders) | -508,658,650.92 | -508,658,650.92 | -1,960,000.00 | -510,618,650.92 | |||||||||||
| 4. Others | |||||||||||||||
| Internal conversion of owners’ equity | 228,665.80 | 2,057,992.17 | 2,286,657.97 | 2,286,657.97 | |||||||||||
| 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 | 228,665.80 | 2,057,992.17 | 2,286,657.97 | 2,286,657.97 | |||||||||||
| 6. Others | |||||||||||||||
| Special reserve | |||||||||||||||
| 1. Withdrawal in the current period | |||||||||||||||
| 2. Use in the current period | |||||||||||||||
| (VI) Others | 10,292,913.66 | 10,292,913.66 | 29,941.90 | 10,322,855.56 | |||||||||||
| IV. Balance at the end of the current period | 1,753,995,348.00 | 2,407,928,799.63 | 104,645,000.00 | -91,570,465.50 | 1,151,441,705.28 | 14,415,245,210.75 | 19,532,395,598.16 | 650,612,900.39 | 20,183,008,498.55 |
Amount in the prior year
Unit: yuan
| Item | Semi-Annual 2022 | ||||||||||||||
| Owners’ equity attributable to the parent company | Minority interests | Total owners’ equi | |||||||||||||
| Share capi | Other equity instruments | Capital rese | Less: Trea | Other com | Special rese | Surplus rese | General risk | Undistribute | Others | Sub-total | |||||
| Min | Perp | Oth | |||||||||||||
| tal | ority interest | etual bond | ers | rves | sury stock | prehensive income | rves | rves | reserve | d profit | ty | ||||
| I. Balance at the end of the period of the prior year | 1,749,809,548.00 | 2,229,868,312.11 | 0.00 | -47,768,225.80 | 1,021,670,687.31 | 0.00 | 11,625,794,001.46 | 16,579,374,323.08 | 361,944,682.60 | 16,941,319,005.68 | |||||
| Add: Changes in accounting policies | |||||||||||||||
| Error correction in the prior periods | |||||||||||||||
| Consolidation of enterprises under common control | |||||||||||||||
| Others | |||||||||||||||
| II. Balance at the beginning of the period of the current year | 1,749,809,548.00 | 2,229,868,312.11 | 0.00 | -47,768,225.80 | 0.00 | 1,021,670,687.31 | 0.00 | 11,625,794,001.46 | 16,579,374,323.08 | 361,944,682.60 | 16,941,319,005.68 | ||||
| III. Amount of change in the current period (Decreases are indicated by “") | 0.00 | 34,342,690.68 | 0.00 | -98,252,733.94 | 0.00 | 0.00 | 0.00 | 833,125,716.06 | 769,215,672.80 | 43,334,907.33 | 812,550,580.13 | ||||
| (I) Total comprehensive income | -98,252,733.94 | 1,340,570,484.98 | 1,242,317,751.04 | 13,334,907.33 | 1,255,652,658.37 | ||||||||||
| Capital contributed by owners and capital decreases | 30,000,000.00 | 30,000,000.00 | |||||||||||||
| 1. Common shares invested by owners | 30,000,000.00 | 30,000,000.00 | |||||||||||||
| 2. Capital |
| invested by holders of other equity instruments | |||||||||||||||
| 3. Amount of share-based payment included in owners’ equity | |||||||||||||||
| 4. Others | |||||||||||||||
| Profit distribution | -507,444,768.92 | -507,444,768.92 | 0.00 | -507,444,768.92 | |||||||||||
| 1. Withdrawal of surplus reserve | 0.00 | 0.00 | |||||||||||||
| 2. Provision of general risk reserve | 0.00 | ||||||||||||||
| 3. Distribution to owners (or shareholders) | -507,444,768.92 | -507,444,768.92 | -507,444,768.92 | ||||||||||||
| 4. Others | |||||||||||||||
| Internal conversion of owners’ equity | |||||||||||||||
| 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 | |||||||||||||||
| Special reserve | |||||||||||||||
| 1. Withdrawal in the current period | |||||||||||||||
| 2. Use in the current period | |||||||||||||||
| (VI) Others | 34,342,690.68 | 34,342,690.68 | 34,342,690.68 | ||||||||||||
| IV. Balance at the end of the current period | 1,749,809,548.00 | 2,264,211,002.79 | 0.00 | -146,020,959.74 | 0.00 | 1,021,670,687.31 | 0.00 | 12,458,919,717.52 | 17,348,589,995.88 | 405,279,589.93 | 17,753,869,585.81 |
8. Statement of changes in owners’ equity of the parent company
Amount in the current period
Unit: yuan
| Item | Semi-Annual 2023 | |||||||||||
| Share capital | Other equity instruments | Capital reserves | Less: Treasury stock | Other comprehensive income | Special reserves | Surplus reserves | Undistributed profit | Others | Total owners’ equity | |||
| Minority interest | Perpetual bond | Others | ||||||||||
| I. Balance at the end of the period of the prior year | 1,753,995,348.00 | 2,276,383,543.02 | 104,645,000.00 | -129,129.44 | 1,229,068,798.92 | 5,999,424,983.44 | 11,154,098,543.94 | |||||
| Add: Changes in accounting policies | ||||||||||||
| Error correction in the prior periods | ||||||||||||
| Others | ||||||||||||
| II. Balance at the beginning of the period of the current year | 1,753,995,348.00 | 2,276,383,543.02 | 104,645,000.00 | -129,129.44 | 1,229,068,798.92 | 5,999,424,983.44 | 11,154,098,543.94 | |||||
| III. Amount of change in the current period (Decreases are indicated by “") | 26,484,163.54 | 698,690,711.22 | 725,174,874.76 | |||||||||
| (I) Total comprehensive income | 1,207,349,362.14 | 1,207,349,362.14 | ||||||||||
| Capital contributed by owners and capital decreases | 19,868,597.33 | 19,868,597.33 | ||||||||||
| 1. Common shares invested by owners | ||||||||||||
| 2. Capital invested by holders of other equity instruments | ||||||||||||
| 3. Amount of share-based payment included in owners’ equity | 19,868,597.33 | 19,868,597.33 | ||||||||||
| 4. Others | ||||||||||||
| Profit distribution | -508,658,650.92 | -508,658,650.92 | ||||||||||
| 1. Withdrawal of surplus reserve | ||||||||||||
| 2. Distribution to owners (or shareholders) | -508,658,650.92 | -508,658,650.92 | ||||||||||
| 3. Others | ||||||||||||
| Internal conversion of owners’ |
| equity | ||||||||||||
| 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 | ||||||||||||
| Special reserve | ||||||||||||
| 1. Withdrawal in the current period | ||||||||||||
| 2. Use in the current period | ||||||||||||
| (VI) Others | 6,615,566.21 | 6,615,566.21 | ||||||||||
| IV. Balance at the end of the current period | 1,753,995,348.00 | 2,302,867,706.56 | 104,645,000.00 | -129,129.44 | 1,229,068,798.92 | 6,698,115,694.66 | 11,879,273,418.70 |
Amount in the prior year
Unit: yuan
| Item | Semi-Annual 2022 | |||||||||||
| Share capital | Other equity instruments | Capital reserv | Less: Treasury | Other comprehensi | Special reserv | Surplus reserv | Undistributed | Others | Total owners’ | |||
| Minority | Perpetual | Others | ||||||||||
| interest | bond | es | stock | ve income | es | es | profit | equity | ||||
| I. Balance at the end of the period of the prior year | 1,749,809,548.00 | 2,168,451,528.01 | 0.00 | -129,129.44 | 1,099,526,446.75 | 5,340,988,582.88 | 10,358,646,976.20 | |||||
| Add: Changes in accounting policies | 0.00 | |||||||||||
| Error correction in the prior periods | 0.00 | |||||||||||
| Others | 0.00 | |||||||||||
| II. Balance at the beginning of the period of the current year | 1,749,809,548.00 | 2,168,451,528.01 | 0.00 | -129,129.44 | 1,099,526,446.75 | 5,340,988,582.88 | 10,358,646,976.20 | |||||
| III. Amount of change in the current period (Decreases are indicated by “-") | 680,528,009.83 | 680,528,009.83 | ||||||||||
| (I) Total comprehensive income | 1,187,972,778.75 | 1,187,972,778.75 | ||||||||||
| 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 owners’ equity |
| 4. Others | ||||||||||||
| Profit distribution | -507,444,768.92 | -507,444,768.92 | ||||||||||
| 1. Withdrawal of surplus reserve | 0.00 | |||||||||||
| 2. Distribution to owners (or shareholders) | -507,444,768.92 | -507,444,768.92 | ||||||||||
| 3. Others | ||||||||||||
| Internal conversion of owners’ equity | ||||||||||||
| 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 | ||||||||||||
| Special reserve | ||||||||||||
| 1. Withdrawal in the current period |
| 2. Use in the current period | ||||||||||||
| (VI) Others | 0.00 | |||||||||||
| IV. Balance at the end of the current period | 1,749,809,548.00 | 2,168,451,528.01 | -129,129.44 | 1,099,526,446.75 | 6,021,516,592.71 | 11,039,174,986.03 |
Huadong Medicine Co., Ltd.Chairman of the Board: Lv Liang
August 16, 2023