Huadong Medicine Co., Ltd.2019 Third Quarterly Report
October 2019
Section I Important NotesThe Board of Directors, Board of Supervisors, directors, supervisors and seniormanagement of Huadong Medicine Co., Ltd. (the “Company”) hereby guaranteethat the information presented in this report is authentic, accurate and completeand free of any false records, misleading statements or material omissions, andwill undertake individual and joint legal liabilities.
All directors have attended the board meeting to review this quarterly report.
Lyu Liang, the Company’s legal representative and the officer in charge ofaccounting, and Ma Honglan, head of accounting department (accountingsupervisor) hereby declare and warrant that the financial statements in thisreport are authentic, accurate and complete.
According to “Stock Listing Rules of the Shenzhen Stock Exchange (2018Revision)”, if listed companies have both Chinese and other language versions ofpublic notice, they should ensure the content of both versions are the same. Inthe case of discrepancy, the original version in Chinese shall prevail.
Section II Company ProfileI. Key accounting data and financial indicators
Whether the Company needs to perform a retroactive adjustment or restatement of the previous accounting data
√ Yes □ No
Reasons for retroactive adjustment or restatementOther reason
| At September 30, 2019 | At December 31, 2018 | Change between December 31, 2018 and September 30, 2019 (%) | ||
| Before adjustment | After adjustment | After adjustment | ||
| Total assets (yuan) | 22,510,034,334.48 | 19,217,357,282.33 | 19,217,357,282.33 | 17.13% |
| Net assets attributable to shareholders of the Company (yuan) | 11,661,608,297.70 | 9,938,148,996.53 | 9,938,148,996.53 | 17.34% |
| 2019 Q3 | YoY Change between 2018 Q3 and 2019 Q3 (%) | 2019 Q1 - Q3 | YoY Change between 2018 Q1 - Q3 and 2019 Q1 - Q3 (%) | |
| Operating revenue (yuan) | 9,379,217,601.89 | 19.03% | 27,627,885,218.87 | 19.06% |
| Net profits attributable to shareholders of the Company (yuan) | 616,830,635.77 | 19.61% | 2,213,114,054.08 | 22.33% |
| Net profits attributable to shareholders of the Company after deducting non-recurring profit or loss (yuan) | 605,703,004.52 | 17.68% | 2,079,980,188.55 | 16.59% |
| Net cash flows from operating activities (yuan) | - | - | 909,038,245.94 | -35.59% |
| Basic earnings per share (yuan per share) | 0.3525 | 19.61% | 1.2648 | 22.33% |
| Diluted earnings per share (yuan per share) | 0.3525 | 19.61% | 1.2648 | 22.33% |
| Weighted average Return on Equity (ROE) | 5.44% | -0.14% | 20.14% | 0.18% |
Note: As the Company increased share capital by converting capital reserve in June 2019, earnings per share ofpreceding period was adjusted based on the increased capital under relevant accounting standards.
Non-recurring profit or loss items and amounts
√ Applicable □ N/A
Monetary unit: RMB Yuan
| Items | Amount (January 1 - September 30, 2019) | Remarks |
| Profit or loss from disposal of non-current assets (including written-off of provision for impairment) | 112,098,352.29 | Mainly due to the recognition of house demolition fees. |
| Tax refund, credit or exemption approved beyond the power of authorities or without formal documents | 470,984.63 | |
| Government grant included in profit or loss (excluding those closely related to operating activities, or regular government grants) | 100,202,966.33 | Mainly due to the recognition of government subsidy by the subsidiaries Hangzhou |
| Items | Amount (January 1 - September 30, 2019) | Remarks |
| Zhongmeihuadong Pharmaceutical Co., Ltd and Huadong Ningbo Medicine Co., Ltd. in the current period. | ||
| Other non-operating revenue or expenditures | -13,128,532.14 | |
| Less: Enterprise income tax affected | 47,237,243.48 | |
| Non-controlling interest affected (after tax) | 19,272,662.10 | |
| Total | 133,133,865.53 | -- |
If the Company recognizes an item as a non-recurring profit or loss based on the “Interpretation Pronouncement on InformationDisclosure Criteria for Public Companies No. 1 - Non-Recurring Profit or Loss” or recognizes an item satisfying the definition ofnon-recurring profit or loss as a recurring profit or loss, reasons should be specified.
□ Applicable √ N/A
No such case during the reporting period.
II. Total number of shareholders at the end of the reporting period and information of top 10shareholders
1. Total number of shareholders of ordinary shares and shareholders of preferred shares with voting rightsresumed and information about top 10 shareholders
Unit: Share
| Total number of shareholders of ordinary shares at the end of the reporting period | 101,640 | Total number of shareholders of preferred shares whose voting rights have been recovered at the end of the reporting period (if any) | 0 | |||||
| Information about top 10 shareholders | ||||||||
| Name of shareholders | Nature | Holding proportion (%) | Number of holding shares | Number of holding shares with restrictions | Pledged or frozen | |||
| Status | Number | |||||||
| 中国远大集团有限责任公司 (China Grand Enterprises, Inc.?) | Domestic non-state-owned legal person | 41.77% | 730,938,157 | 0 | Pledged | 247,964,000 | ||
| 杭州华东医药集团有限公司 (Hangzhou Huadong Medicine Group Co., Ltd.*) | State-owned legal person | 16.46% | 288,000,000 | 0 | ||||
| 香港中央结算有限公司 (Hong Kong Securities Clearing Company Ltd.*) | Overseas legal person | 2.45% | 42,831,179 | 0 | ||||
| National Social Security Fund Portfolio 106 | Other | 1.33% | 23,341,513 | 0 | ||||
| 中国证券金融股份有限公司 (China Securities Finance Co., Ltd.*) | Domestic non-state-owned legal person | 1.27% | 22,186,818 | 0 | ||||
| 泰康资产管理有限责任公司 (Taikang Asset Management Co., Ltd.*) - actively allocated investment products | Other | 0.95% | 16,645,294 | 0 | ||||
| 泰康人寿保险有限责任公司 (Taikang Life Insurance Co., Ltd.*) - Dividend – Personal dividend - | Other | 0.70% | 12,275,192 | 0 | ||||
?The English names are for identification purpose only.
| 019L-FH002 Shen | |||||||||
| 中国银行股份有限公司 (Bank of China Co., Ltd.?) – Jiashi Shanghai HK Shenzhen Selected Stock Securities Investment Fund | Other | 0.63% | 11,000,026 | 0 | |||||
| 澳门金融管理局 (Autoridade Monetaria de Macau*) – Self-owned fund | Overseas legal person | 0.60% | 10,434,399 | 0 | |||||
| Guotai Junan Securities Asset Management - CCB - Guotai Junan Jundexin Stock Collective Asset Management Plan | Other | 0.50% | 8,794,016 | 0 | |||||
| Information about top 10 shareholders holding unrestricted shares | |||||||||
| Name of shareholders | Number of holding shares without restrictions | Type of shares | |||||||
| Type | Number | ||||||||
| China Grand Enterprises, Inc. | 730,938,157 | RMB ordinary shares | 730,938,157 | ||||||
| Hangzhou Huadong Medicine Group Co., Ltd.. | 288,000,000 | RMB ordinary shares | 288,000,000 | ||||||
| Hong Kong Securities Clearing Company Ltd. | 42,831,179 | RMB ordinary shares | 42,831,179 | ||||||
| National Social Security Fund Portfolio 106 | 23,341,513 | RMB ordinary shares | 23,341,513 | ||||||
| China Securities Finance Co., Ltd. | 22,186,818 | RMB ordinary shares | 22,186,818 | ||||||
| Taikang Asset Management Co., Ltd. - actively allocated investment products | 16,645,294 | RMB ordinary shares | 16,645,294 | ||||||
| Taikang Life Insurance Co., Ltd. - Dividend – Personal dividend - 019L-FH002 Shen | 12,275,192 | RMB ordinary shares | 12,275,192 | ||||||
| Bank of China Co., Ltd. – Jiashi Shanghai HK Shenzhen Selected Stock Securities Investment Fund | 11,000,026 | RMB ordinary shares | 11,000,026 | ||||||
| Autoridade Monetaria de Macau – Self-owned fund | 10,434,399 | RMB ordinary shares | 10,434,399 | ||||||
| Guotai Junan Securities Asset Management - CCB - Guotai Junan Jundexin Stock Collective Asset Management Plan | 8,794,016 | RMB ordinary shares | 8,794,016 | ||||||
| Explanation on relationship and concerted actions among above shareholders | The Company does not know whether the above shareholders are related parties with each other or whether they are acting-in-concert parties with each other. | ||||||||
| Explanation on the margin trading and short selling business conducted by top 10 shareholders (if any) | N/A | ||||||||
Any of the Company’s top 10 of ordinary shares or top 10 shareholders holding unrestricted ordinary shares conducts any agreedbuy-back transaction in the reporting period?
□ Yes √ No
No such case during the reporting period.
2. Total number of shareholders of preferred shares and information about top 10 shareholders ofpreferred shares
□ Applicable √ N/A
?The English names are for identification purpose only.
Section III Significant EventsI. Information and explanation about changes in key financial data and financial indicatorsduring the reporting period
√ Applicable □ N/A
| Unit: in ten thousand yuan | ||||
| Balance sheet items | Closing balance | Opening balance | Change rate | Remarks on changes |
| Accounts receivable | 788,655.16 | 563,301.12 | 40.01% | Mainly due to sales growth. |
| Advances paid | 55,953.12 | 35,167.61 | 59.10% | Mainly due to the increase of prepayments for medicines. |
| Other receivables | 12,702.15 | 8,209.89 | 54.72% | Mainly due to the increase of temporary payment and deposits. |
| Long-term equity investments | 22,033.66 | 8,891.82 | 147.80% | Mainly due to the increase of external equity investments. |
| Other equity investments | 21,902.63 | / | / | Mainly due to reclassification of revised financial statement items and the increase of external equity investments. |
| Construction in progress | 120,929.87 | 61,700.50 | 95.99% | Mainly due to the increase of Biomedical Science and Technology Park Project Phase II. |
| Other non-current assets | 79,080.89 | 22,340.41 | 253.98% | Mainly due to the year-on-year increase of prepayment for equipment and prepayment for technology transfer at the end of the period. |
| Notes payable | 92,632.64 | 56,695.51 | 63.39% | Mainly due to the increase of notes for purchasing. |
| Advances received | 6,638.60 | 15,551.63 | -57.31% | Mainly due to the decrease of advanced receipt of medicine sales |
| Other payables | 178,264.51 | 135,698.33 | 31.37% | Mainly due to the increase of temporary receipts payable. |
| Non-current liabilities due within one year | 106,568.56 | 4,090.47 | 2505.29% | Mainly due to reclassification of bonds payable due within one year. |
| Income statement items | Current period cumulative | Preceding period comparative | Change rate | Remarks on changes |
| Selling expenses | 457,280.64 | 337,956.32 | 35.31% | Mainly due to sale growth and the consolidation of Sinclair Pharma limited. |
| Administrative expenses | 77,329.53 | 51,553.48 | 50.00% | Mainly due to the increase of employee benefits and the consolidation of Sinclair Pharma limited. |
| R&D expenses | 71,222.72 | 46,600.70 | 52.84% | Mainly due to the increase of R&D expenses of the subsidiary Hangzhou Zhongmeihuadong Pharmaceutical Co., Ltd |
| Financial expenses | 10,983.69 | 4,177.79 | 162.91% | Mainly due to the increase of interest-bearing liabilities and decrease of interest income on deposits in the current period. |
| Gains on asset disposal | 11,434.74 | 6.98 | 163615.84% | Mainly due to the recognition of house demolition fees in the current period. |
| Investment income | 876.39 | 2,834.10 | -69.08% | Mainly due to the year-on-year decrease of net profit generated by associates and inclusion of loss from newly consolidated associates. |
| Cash flow statement items | Current period cumulative | Preceding period comparative | Change rate | Remarks on changes |
| Net cash flows from operating activities | 90,903.82 | 141,142.63 | -35.59% | Mainly due to the year-on-year increase of payment for operating expenses. |
| Net cash flows from investing activities | -115,923.50 | -165,986.57 | 30.16% | Mainly due to the large amount of undue financial products in the preceding period. |
| Net cash flows from financing activities | -62,018.87 | -88,685.52 | 30.07% | Mainly due to year-on-year decrease of payment for dividends. |
II. Progress and influence of significant events, analysis and explanation of correspondingsolutions
□ Applicable √ N/A
Implementation progress of share repurchase
□ Applicable √ N/A
Progress in the implementation of reducing repurchased shares by centralized price bidding
□ Applicable √ N/A
III. Unfulfilled and overdue commitments from the related committed parties such as theCompany’s actual controller, shareholders, related parties, acquirer(s), and the Companyduring the reporting period
□ Applicable √ N/A
No such case during the reporting period.IV. Securities investment
□ Applicable √ N/A
No such case during the reporting period.V. Entrusted financial management
□ Applicable √ N/A
No such case during the reporting period.VI. Derivatives investment
□ Applicable √ N/A
No such case during the reporting period.VII. Schedule of reception activities including research, communication and interviews duringthe reporting period
√ Applicable □ N/A
| Time of reception | Method of reception | Type of reception object | Index of basic information of the research |
| 1/16/2019 | Field research | Institutional investors | Please refer to the “000963 Huadong Medicine Research Activity: January 18, 2019” presented on the websites of irm.cninfo.com.cn and cninfo.com.cn for |
| Time of reception | Method of reception | Type of reception object | Index of basic information of the research |
| details. | |||
| 2/19/2019 | Field research | Institutional investors | Please refer to the “Investor Relations Activity Record: from February 19, 2019 to February 20, 2019” presented on the websites of irm.cninfo.com.cn and cninfo.com.cn for details. |
| 2/20/2019 | Field research | Institutional investors | Please refer to the “Investor Relations Activity Record: from February 19, 2019 to February 20, 2019” presented on the websites of irm.cninfo.com.cn and cninfo.com.cn for details. |
| 4/19/2019 | Conference call | Institutional investors | Please refer to the “Investor Relations Activity Record: from April 19, 2019 to April 24, 2019” presented on the websites of irm.cninfo.com.cn and cninfo.com.cn for details. |
| 4/23/2019 | Conference call | Institutional investors | Please refer to the “Investor Relations Activity Record: from April 19, 2019 to April 24, 2019” presented on the websites of irm.cninfo.com.cn and cninfo.com.cn for details. |
| 4/24/2019 | Field research | Institutional investors | Please refer to the “Investor Relations Activity Record: from April 19, 2019 to April 24, 2019” presented on the websites of irm.cninfo.com.cn and cninfo.com.cn for details. |
| 4/30/2019 | Conference call | Institutional investors | Please refer to the “000963 Huadong Medicine Research Activity: May 6, 2019” presented on the websites of irm.cninfo.com.cn and cninfo.com.cn for details. |
| 5/28/2019 | Conference call | Institutional investors | Please refer to the “Investor Relations Activity Record: from May 28, 2019 to May 29, 2019” presented on the websites of irm.cninfo.com.cn and cninfo.com.cn for details. |
| 5/29/2019 | Field research | Institutional investors | Please refer to the “Investor Relations Activity Record: from May 28, 2019 to May 29, 2019” presented on the websites of irm.cninfo.com.cn and cninfo.com.cn for details. |
| 6/06/2019 | Field research | Institutional investors | Please refer to the “Investor Relations Activity Record: June 6, 2019” presented on the websites of irm.cninfo.com.cn and cninfo.com.cn for details. |
| 7/18/2019 | Field research | Institutional investors | Please refer to the “Investor Relations Activity Record: from July 18, 2019 to July 19, 2019” presented on the websites of irm.cninfo.com.cn and cninfo.com.cn for details. |
| 7/19/2019 | Field research | Institutional investors | Please refer to the “Investor Relations Activity Record: from July 18, 2019 to July 19, 2019” presented on the websites of irm.cninfo.com.cn and cninfo.com.cn for details. |
| 8/28/2019 | Conference call | Institutional investors | Please refer to the “Investor Relations Activity Record: August 28, 2019” presented on the websites of irm.cninfo.com.cn and cninfo.com.cn for details. |
| 9/23/2019 | Field research | Institutional investors | Please refer to the “Investor Relations Activity Record: from September 23, 2019 to September 25, 2019” presented on the websites of irm.cninfo.com.cn and cninfo.com.cn for details. |
| 9/25/2019 | Field research | Institutional investors | Please refer to the “Investor Relations Activity Record: from September 23, 2019 to September 25, 2019” presented on the websites of irm.cninfo.com.cn and cninfo.com.cn for details. |
VIII. Illegal provision of guarantees for external parties
□ Applicable √ N/A
No such case during the reporting period.
IX. The Company’s funds used by the controlling shareholder or its related parties fornon-operating purposes
□ Applicable √ N/A
No such case during the reporting period.
X. Overview of the Company’s operations from January to September 2019In 2019, the Company takes innovation and transformation as the working principle throughout the year,vigorously carries out the set-up of scientific R&D system as of Global Development Center, and activelymonitors the KPIs of productions and operations related objectives. From January to September 2019, HangzhouZhongmeihuadong Pharmaceutical Co., Ltd, the Company’s core wholly-owned subsidiary, generated operatingrevenue of 8.39 billion yuan, representing a year-on-year increase of 29.88%, and a net profit of 1.85 billion yuan,representing a year-on-year increase of 26.99%. Both operating revenue and net profit continued to maintain fastgrowth. The total operating revenue of pharmaceutical business, aesthetic business and other businesses was 19.24billion yuan, representing a year-on-year increase of 14.89%. From January to September 2019, the Company’stotal R&D expenditures added up to 712 million yuan, which presented a year-on-year increase of 52.84%.During the reporting period, and in order to strengthen the overall capabilities of R&D, as well as to build anadvanced system of drug innovation, Hangzhou Zhongmeihuadong Pharmaceutical Co., Ltd has established aglobal new-drug innovation center, which is positioned as an international platform for the Company’s new drugR&D and external innovation. By building a leading scientific team of R&D researchers and external experts, thecenter is aiming to integrate resources into an open, sustainable and high-quality innovation-driven ecologicalsystem. In the future, the Company will focus on three key areas - new drug screening, safety evaluation andclinical development, covering end-to-end process of new drug development from pre-clinical research to newdrug application with global standards. At present, the innovation center is responsible for carrying out thecorresponding clinical development of the Company’s innovative drugs TTP273 and HD118, and other fourinnovative products introduced from MediBeacon pipeline.The Company continues to be innovation-oriented and adopts a “two-wheel drive” new drug development strategyby combining internal R&D and external collaboration which enables the Company to keep up with leading-edgeof international drug research and development. Meanwhile, the Company also focuses on high-end generic drugswith high technical barriers, drugs for special target patient populations, and new modified drug products. Duringthe reporting period, the Company has accomplished more than 10 innovative projects kick-off(includinginnovative drugs, generic drugs with high technical barriers, and US 505 b (2)). All these initiatives will enable asof a good foundation for the sustainable enrichment of product pipeline and the continuous introduction of newdrugs. As for the approved generic drug projects, the Company has reevaluated the on-going projects to streamlineand prioritize key projects with high unmet medical needs and differentiation.During the reporting period, the Company accelerated the internal reform of R&D incentives mechanism andKPI-based performance assessment policy. By improving the internal scientific research and innovation
environment, and building the basis for innovation culture, the Company has further deepened the reform of R&Dsystem. The Company introduced a step-wised assessment and incentive recognition approach, by combiningR&D deliverables with future commercial value of the products. The establishment of a long-term incentivemechanism will motivate talents with higher efficiency and effectiveness.Sinclair, the Company’s international aesthetic business platform will continue to explore new markets. During thereporting period, Sinclair has accomplished the registration and introduction in five countries and regions. Theoverall business operation of the whole year is expected to meet the annual target. Sinclair has completed clinicaltrials of its key product Ellansé (long-acting injectable microsphere) in China and will submit the clinical report tothe National Medical Products Administration for registration as long as it has been done. The company will
continuously carry out technology introduction and resource integration. After signing the strategic cooperationagreement with R2 Dermatology, the Company initiated the clinical research for the original freckle-removingmedical equipment F1 in China.During the reporting period, the Company also signed off a strategic cooperation agreement with MediBeacon in
order to obtain the exclusive commercialization right of all products as owned by MediBeacon (including renalfunction monitoring and assessment, gastrointestinal function assessment, surgical visualization, etc.) in 25 Asiancountries and regions including Mainland China after it has subscribed part of its B-round preferred shares issuedby MediBeacon. This partnership will continuously accelerate the Company’s synergy between the drug productportfolio and the accurate monitoring methods for chronic diseases, while further strengthening the Company’sleading competitiveness for chronic disease diagnosis and treatment.
Section IV Financial Statements
I. Financial statements
1. Consolidated balance sheet as at September 30, 2019
Prepared by: Huadong Medicine Co., Ltd.
Monetary unit: RMB Yuan
| Items | September 30, 2019 | December 31, 2018 |
| Current assets: | ||
| Cash and bank balances | 1,725,868,074.04 | 2,442,723,381.93 |
| Settlement funds | ||
| Loans to other banks | ||
| Held-for-trading financial assets | ||
| Financial assets at fair value through profit or loss | ||
| Derivative financial assets | ||
| Notes receivable | 712,334,083.97 | 639,854,829.69 |
| Accounts receivable | 7,886,551,580.89 | 5,633,011,225.41 |
| Receivables financing | ||
| Advances paid | 559,531,177.14 | 351,676,102.16 |
| Premiums receivable | ||
| Reinsurance accounts receivable | ||
| Reinsurance reserve receivable | ||
| Other receivables | 133,277,142.84 | 82,878,867.32 |
| Including: Interest receivable | ||
| Dividend receivable | 6,255,557.18 | 779,957.18 |
| Financial assets under reverse repo | ||
| Inventories | 3,902,687,914.90 | 3,875,647,048.31 |
| Contract assets | ||
| Assets as held for sale | ||
| Non-current assets due within one year | ||
| Other current assets | 43,566,311.73 | 38,097,580.91 |
| Total current assets | 14,963,816,285.51 | 13,063,889,035.73 |
| Non-current assets: | ||
| Loans and advances paid | ||
| Debt investments | ||
| Available-for-sale financial assets | 91,111,431.20 | |
| Other debt investments | ||
| Held-to-maturity investments | ||
| Long-term receivable | ||
| Long-term equity investments | 220,336,557.13 | 88,918,218.64 |
| Items | September 30, 2019 | December 31, 2018 |
| Other equity instrument investments | 219,026,331.20 | |
| Other non-current financial assets | ||
| Investment property | 22,768,100.38 | 23,841,968.85 |
| Fixed assets | 2,039,505,556.08 | 2,033,587,957.65 |
| Construction in progress | 1,209,298,693.60 | 617,004,995.98 |
| Productive biological assets | ||
| Oil & gas assets | ||
| Use right assets | ||
| Intangible assets | 1,436,805,135.32 | 1,507,864,929.72 |
| Development expenditures | ||
| Goodwill | 1,469,564,972.95 | 1,458,322,456.39 |
| Long-term prepayments | 24,827,688.40 | 12,487,374.06 |
| Deferred tax assets | 113,276,137.31 | 96,924,790.85 |
| Other non-current assets | 790,808,876.60 | 223,404,123.26 |
| Total non-current assets | 7,546,218,048.97 | 6,153,468,246.60 |
| Total assets | 22,510,034,334.48 | 19,217,357,282.33 |
| Current liabilities: | ||
| Short-term borrowings | 505,650,000.00 | 625,731,594.90 |
| Central bank loans | ||
| Loans from other banks | ||
| Held-for-trading financial liabilities | ||
| Financial liabilities at fair value through profit or loss | ||
| Derivative financial liabilities | ||
| Notes payable | 926,326,393.05 | 566,955,074.64 |
| Accounts payable | 4,687,426,229.27 | 3,905,462,438.68 |
| Advances received | 66,386,046.04 | 155,516,265.85 |
| Contract liabilities | ||
| Financial liabilities under repo | ||
| Absorbing deposit and interbank deposit | ||
| Deposit for agency security transaction | ||
| Deposit for agency security underwriting | ||
| Employee benefits payable | 117,344,985.46 | 115,269,567.11 |
| Taxes and rates payable | 583,028,826.69 | 591,738,858.25 |
| Other payables | 1,805,738,720.39 | 1,397,399,947.38 |
| Including: Interest payable | 22,869,369.38 | 40,192,471.83 |
| Dividend payable | 224,219.60 | 224,219.60 |
| Handling fee and commission payable | ||
| Reinsurance accounts payable | ||
| Liabilities classified as held for sale | ||
| Non-current liabilities due within one year | 1,065,685,587.57 | 40,904,660.77 |
| Items | September 30, 2019 | December 31, 2018 |
| Other current liabilities | ||
| Total current liabilities | 9,757,586,788.47 | 7,398,978,407.58 |
| Non-current liabilities: | ||
| Insurance policy reserve | ||
| Long-term borrowings | 178,569,509.41 | |
| Bonds payable | 995,545,627.39 | |
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Lease liabilities | ||
| Long-term payables | 264,065,312.44 | 274,759,833.53 |
| Long-term employee benefits payable | ||
| Provisions | 28,800,025.76 | 34,746,434.39 |
| Deferred income | 63,269,711.44 | 68,138,547.84 |
| Deferred tax liabilities | 18,371,094.01 | 19,659,864.09 |
| Other non-current liabilities | ||
| Total non-current liabilities | 553,075,653.06 | 1,392,850,307.24 |
| Total liabilities | 10,310,662,441.53 | 8,791,828,714.82 |
| Equity: | ||
| Share capital | 1,749,809,548.00 | 1,458,174,624.00 |
| Other equity instruments | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Capital reserve | 2,157,832,946.57 | 2,455,526,993.18 |
| Less: Treasury shares | ||
| Other comprehensive income | -24,824,158.96 | -22,426,154.59 |
| Special reserve | ||
| Surplus reserve | 592,903,007.98 | 592,903,007.98 |
| General risk reserve | ||
| Undistributed profit | 7,185,886,954.11 | 5,453,970,525.96 |
| Total equity attributable to the parent company | 11,661,608,297.70 | 9,938,148,996.53 |
| Non-controlling interest | 537,763,595.25 | 487,379,570.98 |
| Total equity | 12,199,371,892.95 | 10,425,528,567.51 |
| Total liabilities & equity | 22,510,034,334.48 | 19,217,357,282.33 |
| Lyu Liang Legal representative | Lyu Liang Officer in charge of accounting | Ma Honglan Head of accounting department |
2. Parent company balance sheet as at September 30, 2019
Monetary unit: RMB Yuan
| Items | September 30, 2019 | December 31, 2018 |
| Current assets: | ||
| Cash and bank balances | 821,337,646.05 | 1,385,023,943.20 |
| Held-for-trading financial assets | ||
| Financial assets at fair value through profit or loss | ||
| Derivative financial assets | ||
| Notes receivable | 136,308,925.38 | 240,692,611.41 |
| Accounts receivable | 4,997,226,962.31 | 3,169,895,951.84 |
| Receivables financing | ||
| Advances paid | 146,133,582.87 | 190,099,922.21 |
| Other receivables | 840,329,752.82 | 671,375,825.45 |
| Including: Interest receivable | ||
| Dividend receivable | ||
| Inventories | 1,718,758,305.62 | 1,699,409,254.34 |
| Contract assets | ||
| Assets classified as held for sale | ||
| Non-current assets due within one year | ||
| Other current assets | 11,574.97 | 501,622.85 |
| Total current assets | 8,660,106,750.02 | 7,356,999,131.30 |
| Non-current assets: | ||
| Debt investments | ||
| Available-for-sale financial assets | 91,111,431.20 | |
| Other debt investments | ||
| Held-to-maturity investments | ||
| Long-term receivable | ||
| Long-term equity investments | 4,591,521,228.65 | 4,324,003,989.90 |
| Other equity instrument investments | 91,261,431.20 | |
| Other non-current financial assets | ||
| Investment property | 8,708,367.34 | 9,058,041.82 |
| Fixed assets | 68,368,615.03 | 76,599,082.48 |
| Construction in progress | 61,863,083.27 | 46,137,210.35 |
| Productive biological assets | ||
| Oil & gas assets | ||
| Use right assets | ||
| Intangible assets | 46,018,086.80 | 46,549,160.16 |
| Development expenditures | ||
| Goodwill | ||
| Long-term prepayments | 930,380.88 | 1,341,804.52 |
| Deferred tax assets | 51,655,668.67 | 44,071,892.75 |
| Items | September 30, 2019 | December 31, 2018 |
| Other non-current assets | ||
| Total non-current assets | 4,920,326,861.84 | 4,638,872,613.18 |
| Total assets | 13,580,433,611.86 | 11,995,871,744.48 |
| Current liabilities: | ||
| Short-term borrowings | 47,000,000.00 | 20,000,000.00 |
| Held-for-trading financial liabilities | ||
| Financial liabilities at fair value through profit or loss | ||
| Derivative financial liabilities | ||
| Notes payable | 319,331,785.86 | 262,559,098.87 |
| Accounts payable | 3,223,181,658.19 | 2,571,660,073.04 |
| Advances received | 1,639,136.19 | 25,072,721.43 |
| Contract liabilities | ||
| Employee benefits payable | 3,875,680.07 | 2,828,750.56 |
| Taxes and rates payable | 35,430,053.47 | 68,310,184.18 |
| Other payables | 820,013,368.07 | 559,364,820.54 |
| Including: Interest payable | 17,383,561.66 | 29,256,720.34 |
| Dividend payable | 224,219.60 | 224,219.60 |
| Liabilities as held for sale | ||
| Non-current liabilities due within one year | 997,947,820.75 | |
| Other current liabilities | ||
| Total current liabilities | 5,448,419,502.60 | 3,509,795,648.62 |
| Non-current liabilities: | ||
| Long-term borrowings | ||
| Bonds payable | 995,545,627.39 | |
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Lease liabilities | ||
| Long-term payables | ||
| Long-term employee benefits payable | ||
| Provisions | ||
| Deferred income | 43,906,254.60 | 45,830,660.79 |
| Deferred tax liabilities | ||
| Other non-current liabilities | ||
| Total non-current liabilities | 43,906,254.60 | 1,041,376,288.18 |
| Total liabilities | 5,492,325,757.20 | 4,551,171,936.80 |
| Equity: | ||
| Share capital | 1,749,809,548.00 | 1,458,174,624.00 |
| Other equity instruments | ||
| Including: Preferred shares | ||
| Perpetual bonds | ||
| Capital reserve | 2,168,451,528.01 | 2,460,086,452.01 |
| Items | September 30, 2019 | December 31, 2018 |
| Less: Treasury shares | ||
| Other comprehensive income | ||
| Special reserve | ||
| Surplus reserve | 670,758,767.42 | 670,758,767.42 |
| Undistributed profit | 3,499,088,011.23 | 2,855,679,964.25 |
| Total equity | 8,088,107,854.66 | 7,444,699,807.68 |
| Total liabilities & equity | 13,580,433,611.86 | 11,995,871,744.48 |
3. Consolidated income statement for the three months ended September 30, 2019
Monetary unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| I. Total operating revenue | 9,379,217,601.89 | 7,879,523,915.85 |
| Including: Operating revenue | 9,379,217,601.89 | 7,879,523,915.85 |
| Interest income | ||
| Premium earned | ||
| Revenue from handling charges and commission | ||
| II. Total operating cost | 8,618,965,918.08 | 7,195,038,226.20 |
| Including: Operating cost | 6,530,011,823.86 | 5,690,198,648.16 |
| Interest expenses | ||
| Handling charges and commission expenditures | ||
| Surrender value | ||
| Net payment of insurance claims | ||
| Net provision of insurance policy reserve | ||
| Premium bonus expenditures | ||
| Reinsurance expenses | ||
| Taxes and surcharges | 38,178,625.13 | 38,210,923.51 |
| Selling expenses | 1,519,078,821.04 | 1,057,821,839.93 |
| Administrative expenses | 246,637,621.16 | 185,162,037.81 |
| R&D expenses | 243,558,122.30 | 201,959,797.30 |
| Financial expenses | 41,500,904.59 | 21,684,979.50 |
| Including: Interest expenses | 98,312,209.64 | 29,507,714.90 |
| Interest income | 63,390,852.02 | 9,224,680.38 |
| Add: Other income | 14,508,606.35 | 6,066,019.70 |
| Investment income (or less: losses) | 706,857.54 | 11,177,071.95 |
| Including: Investment income from associates and joint ventures | 706,857.54 | 4,084,800.04 |
| Gains from the derecognition of financial assets measured at amortized cost | ||
| Gains on foreign exchange (or less: losses) | ||
| Gains on net exposure to hedging risk (or less: losses) | ||
| Gains on changes in fair value (or |
| Items | Current period cumulative | Preceding period comparative |
| less: losses) | ||
| Credit impairment loss ( less: losses) | ||
| Assets impairment loss ( less: losses) | ||
| Gains on asset disposal (or less: losses) | 3,151,854.72 | 62,871.14 |
| III. Operating profit (or less: losses) | 778,619,002.42 | 701,791,652.44 |
| Add: Non-operating revenue | 5,741,109.69 | 1,955,312.06 |
| Less: Non-operating expenditures | 8,842,809.50 | 10,953,012.38 |
| IV. Profit before tax (or less: total loss) | 775,517,302.61 | 692,793,952.12 |
| Less: Income tax | 134,060,752.36 | 146,239,165.14 |
| V. Net profit (or less: net loss) | 641,456,550.25 | 546,554,786.98 |
| (I) Categorized by the continuity of operations | ||
| 1. Net profit from continuing operations (or less: net loss) | 641,456,550.25 | 546,554,786.98 |
| 2. Net profit from discontinued operations (or less: net loss) | ||
| (II) Categorized by the portion of equity ownership | ||
| 1. Net profit attributable to owners of parent company | 616,830,635.77 | 515,692,006.71 |
| 2. Net profit attributable to non-controlling shareholders | 24,625,914.48 | 30,862,780.27 |
| VI. Other comprehensive income after tax | 5,120,322.24 | |
| Items attributable to the owners of the parent company | 5,120,322.24 | |
| (I) Not to be reclassified subsequently to profit or loss | ||
| 1.Changes in remeasurement on the net defined benefit plan | ||
| 2. Items under equity method that will not be reclassified to profit or loss | ||
| 3. Changes in fair value of other equity instrument investments | ||
| 4. Changes in fair value of own credit risk | ||
| 5. Others | ||
| (II) To be reclassified subsequently to profit or loss | 5,120,322.24 | |
| 1. Items under equity method that may be reclassified to profit or loss | ||
| 2. Changes in fair value of other debt investments | ||
| 3. Profit or loss from changes in fair value of available-for-sale financial assets | ||
| 4. Profit or loss from reclassification of financial assets into other comprehensive income | ||
| 5. Profit or loss from reclassification of held-to-maturity investments as available-for-sale financial assets | ||
| 6. Provision for credit impairment of other debt investments | ||
| 7.Cash flow hedging reserve | ||
| 8. Translation reserve | 5,120,322.24 |
| Items | Current period cumulative | Preceding period comparative |
| 9. Others | ||
| Items attributable to non-controlling shareholders | ||
| VII. Total comprehensive income | 646,576,872.49 | 546,554,786.98 |
| Items attributable to the owners of the parent company | 621,950,958.01 | 515,692,006.71 |
| Items attributable to non-controlling shareholders | 24,625,914.48 | 30,862,780.27 |
| VIII. Earnings per share (EPS): | ||
| (I) Basic EPS | 0.3525 | 0.2947 |
| (II) Diluted EPS | 0.3525 | 0.2947 |
As for the business combination under common control in the current period, net profit generated by the combined party before thecombination is 0.00 yuan, and that generated in the preceding period is 0.00 yuan.
| Lyu Liang Legal representative | Lyu Liang Officer in charge of accounting | Ma Honglan Head of accounting department |
4. Parent company income statement for the three months ended September 30, 2019
Monetary unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| I. Operating revenue | 5,182,126,633.77 | 4,316,569,724.24 |
| Less: Operating cost | 4,978,946,269.84 | 4,090,169,378.47 |
| Taxes and surcharges | 1,967,436.65 | 1,490,195.83 |
| Selling expenses | 88,177,037.72 | 91,230,287.06 |
| Administrative expenses | 28,005,562.61 | 28,860,642.30 |
| R&D expenses | ||
| Financial expenses | 4,109,247.77 | 2,840,392.71 |
| Including: Interest expenses | 22,585,823.19 | 16,314,220.30 |
| Interest income | 18,753,277.91 | 14,574,274.45 |
| Add: Other income | 1,200,268.73 | 1,855,356.33 |
| Investment income (or less: losses) | 1,512,000.00 | 31,363,058.64 |
| Including: Investment income from associates and joint ventures | ||
| Gains from the derecognition of financial assets measured at amortized cost | ||
| Gains on net exposure to hedging risk (or less: losses) | ||
| Gains on changes in fair value (or less: losses) | ||
| Credit impairment loss (less: losses) | ||
| Assets impairment loss (less: losses) | ||
| Gains on asset disposal (or less: losses) | 3,296,727.00 | 12,960.60 |
| II. Operating profit (or less: losses) | 86,930,074.91 | 135,210,203.44 |
| Add: Non-operating revenue | 3,131,226.80 | 1,061,010.96 |
| Items | Current period cumulative | Preceding period comparative |
| Less: Non-operating expenditures | 1,248,362.78 | 1,540,853.28 |
| III. Profit before tax (or less: total loss) | 88,812,938.93 | 134,730,361.12 |
| Less: Income tax | 17,289,210.53 | 45,661,358.38 |
| IV. Net profit (or less: net loss) | 71,523,728.40 | 89,069,002.74 |
| (I) Net profit from continuing operations (or less: net loss) | 71,523,728.40 | 89,069,002.74 |
| (II) Net profit from discontinued operations (or less: net loss) | ||
| V. Other comprehensive income after tax | ||
| (I) Not to be reclassified subsequently to profit or loss | ||
| 1.Changes in remeasurement on the net defined benefit plan | ||
| 2. Items under equity method that will not be reclassified to profit or loss | ||
| 3. Changes in fair value of other equity instrument investments | ||
| 4. Changes in fair value of own credit risk | ||
| 5. Others | ||
| (II) To be reclassified subsequently to profit or loss | ||
| 1. Items under equity method that may be reclassified to profit or loss | ||
| 2. Changes in fair value of other debt investments | ||
| 3. Profit or loss from changes in fair value of available-for-sale financial assets | ||
| 4. Profit or loss from reclassification of financial assets into other comprehensive income | ||
| 5. Profit or loss from reclassification of held-to-maturity investments as available-for-sale financial assets | ||
| 6. Provision for credit impairment of other debt investments | ||
| 7. Cash flow hedging reserve | ||
| 8. Translation reserve | ||
| 9. Others | ||
| VI. Total comprehensive income | 71,523,728.40 | 89,069,002.74 |
| VII. Earnings per share (EPS): | ||
| (I) Basic EPS | ||
| (II) Diluted EPS |
5. Consolidated income statement for the nine months ended September 30, 2019
Monetary unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| I. Total operating revenue | 27,627,885,218.87 | 23,204,473,939.34 |
| Including: Operating revenue | 27,627,885,218.87 | 23,204,473,939.34 |
| Interest income |
| Items | Current period cumulative | Preceding period comparative |
| Premium earned | ||
| Revenue from handling charges and commission | ||
| II. Total operating cost | 25,005,132,440.34 | 20,891,595,911.32 |
| Including: Operating cost | 18,693,219,439.56 | 16,355,806,107.94 |
| Interest expenses | ||
| Handling charges and commission expenditures | ||
| Surrender value | ||
| Net payment of insurance claims | ||
| Net provision of insurance policy reserve | ||
| Premium bonus expenditures | ||
| Reinsurance expenses | ||
| Taxes and surcharges | 143,747,259.50 | 132,906,924.59 |
| Selling expenses | 4,572,806,352.64 | 3,379,563,235.82 |
| Administrative expenses | 773,295,251.59 | 515,534,771.20 |
| R&D expenses | 712,227,234.86 | 466,006,973.37 |
| Financial expenses | 109,836,902.19 | 41,777,898.41 |
| Including: Interest expenses | 120,743,347.18 | 81,409,278.37 |
| Interest income | 26,477,339.86 | 38,090,383.35 |
| Add: Other income | 100,578,832.37 | 64,493,605.70 |
| Investment income (or less: losses) | 8,763,938.51 | 28,340,970.67 |
| Including: Investment income from associates and joint ventures | 8,763,938.51 | 14,999,593.70 |
| Gains from the derecognition of financial assets measured at amortized cost | ||
| Gains on foreign exchange (or less: losses) | ||
| Gains on net exposure to hedging risk (or less: losses) | ||
| Gains on changes in fair value (or less: losses) | ||
| Credit impairment loss (less: losses) | -64,662,855.38 | |
| Assets impairment loss (less: losses) | 4,216,269.24 | -32,630,911.85 |
| Gains on asset disposal (or less: losses) | 114,347,426.77 | 69,845.06 |
| III. Operating profit (or less: losses) | 2,785,996,390.04 | 2,373,151,537.60 |
| Add: Non-operating revenue | 9,904,357.05 | 4,097,872.06 |
| Less: Non-operating expenditures | 25,280,163.60 | 23,533,214.14 |
| IV. Profit before tax (or less: total loss) | 2,770,620,583.49 | 2,353,716,195.52 |
| Less: Income tax | 465,973,627.74 | 443,178,869.72 |
| V. Net profit (or less: net loss) | 2,304,646,955.75 | 1,910,537,325.80 |
| (I) Categorized by the continuity of operations | ||
| 1. Net profit from continuing operations (or less: net loss) | 2,304,646,955.75 | 1,910,537,325.80 |
| 2. Net profit from discontinued operations (or less: net loss) |
| Items | Current period cumulative | Preceding period comparative |
| (II) Categorized by the portion of equity ownership | ||
| 1. Net profit attributable to owners of parent company | 2,213,114,054.08 | 1,809,081,209.36 |
| 2. Net profit attributable to non-controlling shareholders | 91,532,901.67 | 101,456,116.44 |
| VI. Other comprehensive income after tax | -2,398,004.37 | |
| Items attributable to the owners of the parent company | -2,398,004.37 | |
| (I) Not to be reclassified subsequently to profit or loss | ||
| 1.Changes in remeasurement on the net defined benefit plan | ||
| 2. Items under equity method that will not be reclassified to profit or loss | ||
| 3. Changes in fair value of other equity instrument investments | ||
| 4. Changes in fair value of own credit risk | ||
| 5. Others | ||
| (II) To be reclassified subsequently to profit or loss | -2,398,004.37 | |
| 1. Items under equity method that may be reclassified to profit or loss | ||
| 2. Changes in fair value of other debt investments | ||
| 3. Profit or loss from changes in fair value of available-for-sale financial assets | ||
| 4. Profit or loss from reclassification of financial assets into other comprehensive income | ||
| 5. Profit or loss from reclassification of held-to-maturity investments as available-for-sale financial assets | ||
| 6. Provision for credit impairment of other debt investments | ||
| 7.Cash flow hedging reserve | ||
| 8. Translation reserve | -2,398,004.37 | |
| 9. Others | ||
| Items attributable to non-controlling shareholders | ||
| VII. Total comprehensive income | 2,302,248,951.38 | 1,910,537,325.80 |
| Items attributable to the owners of the parent company | 2,210,716,049.71 | 1,809,081,209.36 |
| Items attributable to non-controlling shareholders | 91,532,901.67 | 101,456,116.44 |
| VIII. Earnings per share (EPS): | ||
| (I) Basic EPS | 1.2648 | 1.0339 |
| (II) Diluted EPS | 1.2648 | 1.0339 |
As for the business combination under common control in the current period, net profit generated by the combined party before thecombination is 0.00 yuan, and that generated in the preceding period is 0.00 yuan.
| Lyu Liang Legal representative | Lyu Liang Officer in charge of accounting | Ma Honglan Head of accounting department |
6. Parent company income statement for the nine months ended September 30, 2019
Monetary unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| I. Operating revenue | 14,392,526,732.46 | 12,683,134,739.66 |
| Less: Operating cost | 13,648,150,345.97 | 12,004,899,508.87 |
| Taxes and surcharges | 11,915,143.04 | 6,635,908.47 |
| Selling expenses | 291,307,268.26 | 263,859,498.73 |
| Administrative expenses | 91,903,249.87 | 94,863,422.85 |
| R&D expenses | ||
| Financial expenses | 28,085,582.70 | -4,612,596.22 |
| Including: Interest expenses | 72,726,605.93 | 42,152,281.55 |
| Interest income | 45,925,702.07 | 49,657,170.03 |
| Add: Other income | 3,975,252.18 | 5,245,370.45 |
| Investment income (or less: losses) | 852,512,000.00 | 794,227,331.48 |
| Including: Investment income from associates and joint ventures | ||
| Gains from the derecognition of financial assets measured at amortized cost | ||
| Gains on net exposure to hedging risk (or less: losses) | ||
| Gains on changes in fair value (or less: losses) | ||
| Credit impairment loss (less: losses) | -62,996,903.82 | |
| Assets impairment loss (less: losses) | -24,741,864.55 | |
| Gains on asset disposal (or less: losses) | 114,481,393.83 | 12,960.60 |
| II. Operating profit (or less: losses) | 1,229,136,884.81 | 1,092,232,794.94 |
| Add: Non-operating revenue | 6,333,924.40 | 2,468,232.04 |
| Less: Non-operating expenditures | 5,584,454.90 | 3,935,724.64 |
| III. Profit before tax (or less: total loss) | 1,229,886,354.31 | 1,090,765,302.34 |
| Less: Income tax | 105,280,681.41 | 98,543,732.55 |
| IV. Net profit (or less: net loss) | 1,124,605,672.90 | 992,221,569.79 |
| (I) Net profit from continuing operations (or less: net loss) | 1,124,605,672.90 | 992,221,569.79 |
| (II) Net profit from discontinued operations (or less: net loss) | ||
| V. Other comprehensive income after tax | ||
| (I) Not to be reclassified subsequently to profit or loss | ||
| 1.Changes in remeasurement on the net defined benefit plan | ||
| 2. Items under equity method that will not be reclassified to profit or loss | ||
| 3. Changes in fair value of other equity instrument investments | ||
| 4. Changes in fair value of own credit risk | ||
| 5. Others | ||
| (II) To be reclassified subsequently to profit or loss |
| Items | Current period cumulative | Preceding period comparative |
| 1. Items under equity method that may be reclassified to profit or loss | ||
| 2. Changes in fair value of other debt investments | ||
| 3. Profit or loss from changes in fair value of available-for-sale financial assets | ||
| 4. Profit or loss from reclassification of financial assets into other comprehensive income | ||
| 5. Profit or loss from reclassification of held-to-maturity investments as available-for-sale financial assets | ||
| 6. Provision for credit impairment of other debt investments | ||
| 7. Cash flow hedging reserve | ||
| 8. Translation reserve | ||
| 9. Others | ||
| VI. Total comprehensive income | 1,124,605,672.90 | 992,221,569.79 |
| VII. Earnings per share (EPS): | ||
| (I) Basic EPS | ||
| (II) Diluted EPS |
7. Consolidated cash flow statement for the nine months ended September 30, 2019
Monetary unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| I. Cash flows from operating activities: | ||
| Cash receipts from sale of goods or rendering of services | 27,974,289,685.61 | 25,878,097,338.39 |
| Net increase of client deposit and interbank deposit | ||
| Net increase of central bank loans | ||
| Net increase of loans from other financial institutions | ||
| Cash receipts from original insurance contract premium | ||
| Net cash receipts from reinsurance | ||
| Net increase of policy-holder deposit and investment | ||
| Cash receipts from interest, handling charges and commission | ||
| Net increase of loans from others | ||
| Net increase of repurchase | ||
| Net cash receipts from agency security transaction | ||
| Receipts of tax refund | 3,509,309.91 | 12,388,840.73 |
| Other cash receipts related to operating activities | 910,566,277.20 | 799,172,970.80 |
| Subtotal of cash inflows from operating activities | 28,888,365,272.72 | 26,689,659,149.92 |
| Cash payments for goods purchased and services received | 19,475,142,964.99 | 18,435,651,812.89 |
| Net increase of loans and advances to clients |
| Items | Current period cumulative | Preceding period comparative |
| Net increase of central bank deposit and interbank deposit | ||
| Cash payments for insurance indemnities of original insurance contracts | ||
| Net increase of loans to others | ||
| Cash payments for interest, handling charges and commission | ||
| Cash payments for policy bonus | ||
| Cash paid to and on behalf of employees | 1,392,446,790.07 | 1,145,387,596.08 |
| Cash payments for taxes and rates | 1,721,105,543.87 | 1,876,130,500.31 |
| Other cash payments related to operating activities | 5,390,631,727.85 | 3,821,062,936.31 |
| Subtotal of cash outflows from operating activities | 27,979,327,026.78 | 25,278,232,845.59 |
| Net cash flows from operating activities | 909,038,245.94 | 1,411,426,304.33 |
| II. Cash flows from investing activities: | ||
| Cash receipts from withdrawal of investments | ||
| Cash receipts from investment income | 900,000.00 | 17,858,250.88 |
| Net cash receipts from the disposal of fixed assets, intangible assets and other long-term assets | 44,373,345.73 | 257,656.36 |
| Net cash receipts from the disposal of subsidiaries & other business units | ||
| Other cash receipts related to investing activities | 4,575,605,506.59 | |
| Subtotal of cash inflows from investing activities | 45,273,345.73 | 4,593,721,413.83 |
| Cash payments for the acquisition of fixed assets, intangible assets and other long-term assets | 892,858,638.47 | 701,262,416.23 |
| Cash payments for investments | 256,944,900.00 | |
| Net increase of pledged borrowings | ||
| Net cash payments for the acquisition of subsidiaries & other business units | 1,199,793.01 | 5,100,000.00 |
| Other cash payments related to investing activities | 53,505,038.76 | 5,547,224,705.40 |
| Subtotal of cash outflows from investing activities | 1,204,508,370.24 | 6,253,587,121.63 |
| Net cash flows from investing activities | -1,159,235,024.51 | -1,659,865,707.80 |
| III. Cash flows from financing activities: | ||
| Cash receipts from absorbing investments | 9,800,000.00 | 19,200,000.00 |
| Including: Cash received by subsidiaries from non-controlling shareholders as investments | ||
| Cash receipts from borrowings | 1,564,929,901.12 | 559,609,600.36 |
| Other cash receipts related to financing activities | 4,000,000.00 | 30,000,000.00 |
| Subtotal of cash inflows from financing activities | 1,578,729,901.12 | 608,809,600.36 |
| Cash payments for the repayment of borrowings | 1,522,743,554.14 | 633,950,840.36 |
| Cash payments for distribution of | 658,094,315.61 | 846,713,966.81 |
| Items | Current period cumulative | Preceding period comparative |
| dividends or profits and for interest expenses | ||
| Including: Cash paid by subsidiaries to non-controlling shareholders as dividend or profit | 50,512,000.00 | 66,931,502.28 |
| Other cash payments related to financing activities | 18,080,734.99 | 15,000,000.00 |
| Subtotal of cash outflows from financing activities | 2,198,918,604.74 | 1,495,664,807.17 |
| Net cash flows from financing activities | -620,188,703.62 | -886,855,206.81 |
| IV. Effect of foreign exchange rate changes on cash & cash equivalents | -7,776,333.09 | 2,870,314.57 |
| V. Net increase in cash and cash equivalents | -878,161,815.28 | -1,132,424,295.71 |
| Add: Opening balance of cash and cash equivalents | 2,398,709,506.06 | 2,372,819,624.82 |
| VI. Closing balance of cash and cash equivalents | 1,520,547,690.78 | 1,240,395,329.11 |
8. Parent company cash flow statement for the nine months ended September 30, 2019
Monetary unit: RMB Yuan
| Items | Current period cumulative | Preceding period comparative |
| I. Cash flows from operating activities: | ||
| Cash receipts from sale of goods and rendering of services | 14,477,219,497.23 | 13,738,345,389.32 |
| Receipts of tax refund | ||
| Other cash receipts related to operating activities | 874,387,153.77 | 1,121,978,747.65 |
| Subtotal of cash inflows from operating activities | 15,351,606,651.00 | 14,860,324,136.97 |
| Cash payments for goods purchased and services received | 14,681,841,784.49 | 13,579,716,479.11 |
| Cash paid to and on behalf of employees | 116,707,767.78 | 134,157,786.32 |
| Cash payments for taxes and rates | 233,069,793.79 | 167,680,234.03 |
| Other cash payments related to operating activities | 843,853,594.57 | 775,235,685.03 |
| Subtotal of cash outflows from operating activities | 15,875,472,940.63 | 14,656,790,184.49 |
| Net cash flows from operating activities | -523,866,289.63 | 203,533,952.48 |
| II. Cash flows from investing activities: | ||
| Cash receipts from withdrawal of investments | ||
| Cash receipts from investment income | 432,512,000.00 | 783,385,289.90 |
| Net cash receipts from the disposal of fixed assets, intangible assets and other long-term assets | 43,344,599.85 | 1,630.00 |
| Net cash receipts from the disposal of subsidiaries & other business units | ||
| Other cash receipts related to investing activities | 491,900,000.00 | 3,989,191,195.89 |
| Subtotal of cash inflows from investing activities | 967,756,599.85 | 4,772,578,115.79 |
| Cash payments for the acquisition of fixed assets, intangible assets and other long-term assets | 30,322,745.47 | 9,477,869.26 |
| Items | Current period cumulative | Preceding period comparative |
| Cash payments for investments | 245,607,400.00 | 28,800,000.00 |
| Net cash payments for the acquisition of subsidiaries & other business units | 5,100,000.00 | |
| Other cash payments related to investing activities | 736,750,000.00 | 5,233,800,000.00 |
| Subtotal of cash outflows from investing activities | 1,012,680,145.47 | 5,277,177,869.26 |
| Net cash flows from investing activities | -44,923,545.62 | -504,599,753.47 |
| III. Cash flows from financing activities: | ||
| Cash receipts from absorbing investments | ||
| Cash receipts from borrowings | 701,857,401.68 | 85,009,600.36 |
| Other cash receipts related to financing activities | 576,500,000.00 | 46,000,000.00 |
| Subtotal of cash inflows from financing activities | 1,278,357,401.68 | 131,009,600.36 |
| Cash payments for the repayment of borrowings | 674,787,776.40 | 85,010,840.36 |
| Cash payments for distribution of dividends or profits and for interest expenses | 556,049,101.48 | 747,032,688.27 |
| Other cash payments related to financing activities | 92,000,000.00 | 20,500,000.00 |
| Subtotal of cash outflows from financing activities | 1,322,836,877.88 | 852,543,528.63 |
| Net cash flows from financing activities | -44,479,476.20 | -721,533,928.27 |
| IV. Effect of foreign exchange rate changes on cash and cash equivalents | 106,466.60 | -484,288.71 |
| V. Net increase in cash and cash equivalents | -613,162,844.85 | -1,023,084,017.97 |
| Add: Opening balance of cash and cash equivalents | 1,384,560,116.18 | 1,591,016,109.85 |
| VI. Closing balance of cash and cash equivalents | 771,397,271.33 | 567,932,091.88 |
II. Remarks on adjustments of financial statements
1. Adjustments on related financial statement items at the beginning of the period due to adoption of newfinancial instruments standards, new revenue standards and new lease standards since 2019
√ Applicable □ N/A
Remarks on adjustments
| Items | Consolidated statements | Parent company statements | ||
| Before adjustments | After adjustments | Before adjustments | After adjustments | |
| Opening balance/ Preceding period comparative | Opening balance/ Preceding period comparative | Opening balance/ Preceding period comparative | Opening balance/ Preceding period comparative | |
| Notes receivable and accounts receivable | 6,272,866,055.10 | 3,410,588,563.25 | ||
| Notes receivable | 639,854,829.69 | 240,692,611.41 | ||
| Accounts receivable | 5,633,011,225.41 | 3,169,895,951.84 | ||
| Available-for-sale financial assets | 91,111,431.20 | 91,111,431.20 | 0.00 | |
| Items | Consolidated statements | Parent company statements | ||
| Before adjustments | After adjustments | Before adjustments | After adjustments | |
| Opening balance/ Preceding period comparative | Opening balance/ Preceding period comparative | Opening balance/ Preceding period comparative | Opening balance/ Preceding period comparative | |
| Other equity instrument investments | 91,111,431.20 | 91,111,431.20 | ||
| Notes payable and accounts payable | 4,472,417,513.32 | 2,834,219,171.91 | ||
| Notes payable | 566,955,074.64 | 262,559,098.87 | ||
| Accounts payable | 3,905,462,438.68 | 2,571,660,073.04 | ||
| Administrative expenses | 594,419,909.46 | 330,372,733.39 | 63,897,687.26 | 63,897,687.26 |
| R&D expenses | 264,047,176.07 | |||
| Assets impairment loss | 32,630,911.85 | 24,741,864.55 | ||
| Credit impairment loss (less: losses) | -32,630,911.85 | -24,741,864.55 | ||
| Assets impairment loss (less: losses) | ||||
2. Remarks on retrospective adjustments on comparative data in previous period due to adoption of newfinancial instruments standards or new lease standards since 2019
□ Applicable √ N/A
III. Auditor’s reportHas the third quarterly report been audited?
□ Yes √ No
The third quarterly report has not been audited.
Huadong Medicine Co., Ltd.Chairman of the Board: Lyu Liang
October 30, 2019