[中报]健康元(600380):健康元药业集团股份有限公司2022年半年度报告（英文版）
原标题:健康元:健康元药业集团股份有限公司2022年半年度报告（英文版） lnterim Report 2022 【Mission】For the health, For the future Important Notice I The Board of Directors (the “Board”), the Board of Supervisors and directors, supervisors and senior management of the Company hereby warrant the truthfulness, accuracy and completeness of the contents of the interim report (the “Report”), and that there are no false representations, misleading statements or material omissions contained in the Report, and severally and jointly accept responsibility. II All the directors of the Company attended the Board meeting.III The interim report of the Company is unaudited. IV Mr. Zhu Baoguo (朱保国), the person-in-charge of the Company, and Mr. Qiu Qingfeng (邱庆丰), the person-in-charge of the Company’s accounting work and the person-in-charge of the accounting department (the head of the accounting department), declare that they hereby warrant the truthfulness, accuracy and completeness of the financial statements contained in the Report. V Profit distribution plan or plan for conversion of capital reserve to share capital approved by the Board during the Reporting Period Not applicable VI Risk declaration for the forward-looking statements √ Applicable?□ N/A The Report contains forward-looking statements which involve the future plans, development strategies, etc. of the Company, yet do not constitute substantive undertakings of the Company to investors. Investors should exercise caution prior to making investment decisions. VII Whether there is non-operating use of funds by the controlling shareholder and their related parties No VIII Whether there is a violation of the prescribed decision-making procedures to provide external guarantees No IX Whether more than half of directors cannot warrant the truthfulness, accuracy and completeness of the Report disclosed by the Company No X Significant risk warnings There is no exceptionally significant risk that will have a material impact on the productions and operations of the Company during the Reporting Period. The Company has described various risks related to productions and operations that the Company may face and the corresponding response measures taken. Please refer to “Risks” in Chapter 3 “Management Discussion and Analysis”. XI Others √ □ Applicable N/A XII The Report is prepared in both Chinese and English. In case of any discrepancies between two versions, the Chinese version shall prevail. Table of Contents Financial Highlights 2 Chapter 1 Definitions 4 Chapter 2 Company Profile and Major Financial Indicators 7 Chapter 3 Management Discussion and Analysis 12 Chapter 4 Corporate Governance 35 Chapter 5 Environmental and Corporate Social Responsibility 40 Chapter 6 Major Events 67 Chapter 7 Changes in Equity and Shareholders 82 Financial Highlights Net profit attributable to shareholders Net profit attributable Revenues of the listed company after deducting to shareholders of the the extraordinary gain or loss listed company EPS (RMB/share) EPS-Diluted (RMB/share) 0.4235 0.4232 0.3514 0.3504 Chemical pharmaceuticals 56.51% 27.72 from principal Chemical APIs and intermediates 47.99 businesses: Traditional Chinese medicine 84.92 6.06% Diagnostic reagents and equipment 5.14 0.64% 4.07% 0.55 In this Report, unless the context otherwise requires, the following expressions shall have the following meanings: Definitions of common terms CSRC Refers to China Securities Regulatory Commission SSE Refers to Shanghai Stock Exchange SZSE Refers to Shenzhen Stock Exchange Baiyeyuan or the Controlling Refers to Shenzhen Baiyeyuan Investment Co., Ltd.* (深圳市百业源投资有限公司) Shareholder Company or the Company Refers to Joincare Pharmaceutical Group Industry Co., Ltd.* (健康元药业集团股份有限公司) GDR Refers to Global Depositary Receipts GMP Refers to Good Manufacturing Practice GSP Refers to Good Supply Practice BE Refers to Bioequivalence BLA Refers to Biologics License Application WHO Refers to World Health Organization CDE Refers to Center for Drug Evaluation EUA Refers to Emergency Use Authorizations KOL Refers to Key Opinion Leader MVR Refers to Mechanical Vapor Recompression QC Refers to Quality Control Livzon Group Refers to Livzon Pharmaceutical Group Inc.* (丽珠医药集团股份有限公司)Haibin Pharma Refers to Shenzhen Haibin Pharmaceutical Co., Ltd.* (深圳市海滨制药有限公司)Xinxiang Haibin Refers to Xinxiang Haibin Pharmaceutical Co., Ltd.* (新乡海滨药业有限公司)Taitai Pharmaceutical Refers to Shenzhen Taitai Pharmaceutical Co., Ltd.* (深圳太太药业有限公司)Joincare Haibin Refers to Joincare Haibin Pharmaceutical Co., Ltd.* (健康元海滨药业有限公司)Taitai Genomics Refers to Shenzhen Taitai Genomics Inc. Co., Ltd.* (深圳太太基因工程有限公司)Jiaozuo Joincare Refers to Jiaozuo Joincare Bio Technological Co., Ltd.* (焦作健康元生物制品有限公司) Joincare Daily-Use Refers to Joincare Daily-Use & Health Care Co., Ltd.* (健康元日用保健品有限公司)Topsino Refers to Topsino Industries Limited* (天诚实业有限公司)Fenglei Electric Power Refers to Shenzhen Fenglei Electric Power Investment Co., Ltd.* (深圳市风雷电力投资有 限公司) Definitions of common terms Health Pharmaceutical Refers to Health Pharmaceutical (China) Co., Ltd.* (健康药业(中国)有限公司)Hiyeah Industry Refers to Shenzhen Hiyeah Industry Co., Ltd.* (深圳市喜悦实业有限公司)Shanghai Frontier Refers to Shanghai Frontier Health Pharmaceutical Technology Co., Ltd.* (上海方予健康 医药科技有限公司) Appraisal Institution Refers to Guangdong Taitai Forenstic Test Institute* (广东太太法医物证司法鉴定所) Hong Kong Pharmaceutical Refers to Hong Kong Health Pharmaceutical Industry Company Limited* (香港健康药业 有限公司) Health Investment Refers to Health Investment Holdings Ltd. Joincare Special Medicine Refers to Joincare (Guangdong) Special Medicine Food Co., Ltd.* (健康元(广东)特医食品 Food 有限公司) Livzon MAB Refers to Livzon MABPharm Inc.* (珠海市丽珠单抗生物技术有限公司)Livzon Diagnostics Refers to Zhuhai Livzon Diagnostics Inc.* (珠海丽珠试剂股份有限公司)Xinbeijiang Pharmaceutical Refers to Livzon Group Xinbeijiang Pharmaceutical Manufacturing Inc.* (丽珠集团新北江 制药股份有限公司) Ningxia Pharmaceutical Refers to Livzon Group (Ningxia) Pharmaceutical Manufacturing Co., Ltd.* (丽珠集团(宁夏) 制药有限公司) Gutian Fuxing Refers to Gutian Fuxing Pharmaceutical Co., Ltd.* (古田福兴医药有限公司)Fuzhou Fuxing Refers to Livzon Group Fuzhou Fuxing Pharmaceutical Co., Ltd.* (丽珠集团福州福兴医药有限公司) Livzon Hecheng Refers to Zhuhai FTZ Livzon Hecheng Pharmaceutical Manufacturing Co., Ltd.* (珠海保税 区丽珠合成制药有限公司) Livzon Limin Refers to Livzon Group Limin Pharmaceutical Manufacturing Factory* (丽珠集团利民制药厂) Livzon Pharmaceutical Refers to Livzon Group Livzon Pharmaceutical Factory* (丽珠集团丽珠制药厂)Factory Shanghai Livzon Refers to Shanghai Livzon Pharmaceutical Manufacturing Co., Ltd.* (上海丽珠制药有限公 司) Sichuan Guangda Refers to Sichuan Guangda Pharmaceutical Manufacturing Co., Ltd.* (四川光大制药有限公司) Jiaozuo Hecheng Refers to Jiaozuo Livzon Hecheng Pharmaceutical Manufacturing Co., Ltd.* (焦作丽珠合 成制药有限公司) Jinguan Electric Power Refers to Jiaozuo Jinguan Jiahua Electric Power Co., Ltd.* (焦作金冠嘉华电力有限公司) Tianjin Tongrentang Refers to Tianjin Tongrentang Group Co., Ltd.* (天津同仁堂集团股份有限公司)LivzonBio Refers to Zhuhai Livzon Biotechnology Co., Ltd.* (珠海市丽珠生物医药科技有限公司)National COVID-19 Vaccine Refers to Working group for vaccine development under the State Council joint Working Group prevention and control mechanism against COVID-19COVID-19 Refers to A new coronavirus (SARS-CoV-2) COVID-19 pandemic or Refers to The outbreak of the disease caused by a new coronavirus called SARS-CoV-2 pandemic Ruihua Certified Public Refers to Ruihua Certified Public Accountants (Special General Partnership)Accountants Reporting Period Refers to From 1 January 2022 to 30 June 2022Chapter 2 Company Profile and Major Financial Indicators I Company profile Chinese name of the Company 健康元药业集团股份有限公司 Abbreviation of the Chinese name 健康元 English name of the Company Joincare Pharmaceutical Group Industry Co., Ltd.Abbreviation of the English name Joincare Legal representative of the Company Zhu Baoguo II Contact persons and contact details Board Secretary Representative of Securities Affairs Name Zhao Fengguang (赵凤光) Li Hongtao(李洪涛), Luo Xiao(罗逍)Address Joincare Pharmaceutical Group Building, No. 17, Joincare Pharmaceutical Group Building, No. 17, Langshan Road, North District, Hi-tech Zone, Langshan Road, North District, Hi-tech Zone, Nanshan District, Shenzhen Nanshan District, Shenzhen Telephone 0755-86252656, 0755-86252388 0755-86252656, 0755-86252388Fax 0755-86252165 0755-86252165 E-mail [email protected] [email protected], [email protected] Introduction of the Company’s basic information Registered address Joincare Pharmaceutical Group Building, No. 17, Langshan Road, North District, Hi-tech Zone, Nanshan District, Shenzhen Historical changes in Registered at B5, Hengfeng Industrial City, Hezhou Community, Huangtian Village, Xin’an registered address Town, Bao’an County on 18 December 1992 Changed its registered address to 4-5/F, Dongpeng Building, Shangmeilin Industrial Area, Futian District, Shenzhen on 25 May 1994 Changed its registered address to 24/F, Block B, Fujian Building, Caitian South Road, Futian District, Shenzhen on 4 July 1995 Changed its registered address to 23/F, Diwang Building, Shun Hing Square, No. 333, Shennan East Road, Shenzhen on 20 June 1997 Changed its registered address to Taitai Pharmaceutical Industrial Building, the 5th Industrial Area, Nanshan District, Shenzhen on 22 September 2000Changed its registered address to 23/F, Diwang Building, Shun Hing Square, No. 5002, Shennan East Road, Luohu District, Shenzhen on 4 June 2003 Changed its registered address to Joincare Pharmaceutical Group Building, No. 17, Langshan Road, North District, Hi-tech Zone, Nanshan District, Shenzhen on 29 January 2008 Changed its registered address to Joincare Pharmaceutical Group Building, No. 17, Langshan Road, North District, Hi-tech Zone, Nanshan District, Shenzhen on 27 November 2012 Office address Joincare Pharmaceutical Group Building, No. 17, Langshan Road, North District, Hi-tech Zone, Nanshan District, Shenzhen Postal code of Office address 518057 Website http://www.joincare.com E-mail [email protected] Index for query of changes There was no change during the Reporting PeriodIV Introduction of changes in information disclosure and places for inspectionName of designated newspapers for information China Securities Journal, Securities Times, Securities Daily, disclosure by the Company and Shanghai Securities News Website for publication of the interim report http://www.sse.com.cnPlace for inspection of the interim report of the Company Office address of the CompanyIndex for query of changes during the Reporting Period There was no change during the Reporting Period V Company stock profile Class of stock Listed on Stock Abbreviation Stock code Stock abbreviation prior to change太太药业, S健康元 A Share Shanghai Stock Exchange 健康元 600380 VI Other relevant information □ Applicable?√ N/A VII Principal accounting data and financial indicators of the Company(I) Principal accounting data Unit: Yuan Currency: RMB Increase/(decrease) for the Reporting Period as compared to the same Principal accounting data Reporting Period Same Period Last Year period last year (From January to June) (%) Revenues 8,564,945,285.55 7,835,372,274.66 9.31 Net profit attributable to Shareholders of 801,268,519.50 687,347,494.53 16.57the listed company Net profit attributable to Shareholders of 803,994,432.03 597,892,327.43 34.47the listed company after deducting the extraordinary gain or loss Net cash flow from operating activities 1,902,953,224.79 745,787,513.36 155.16Increase/decrease as at the end of the Reporting Period as End of the compared to the end of Reporting Period End of the Last Year last year (%) Net assets attributable to Shareholders of 11,922,666,818.93 11,820,293,656.69 0.87the listed company Total assets 32,181,512,667.29 31,103,900,389.29 3.46 (II) Major Financial Indicators Increase/decrease for the Reporting Period as compared to the same Major Financial Indicators Reporting Period Same Period Last Year period last year (From January to June) (%) EPS (RMB/share) 0.4235 0.3514 20.52 EPS Diluted (RMB/share) 0.4232 0.3504 20.78 Basic earnings per share after deducting 0.4249 0.3057 38.99the extraordinary gain or loss (RMB/share) Weighted average return on net assets (%) 6.65 6.04 Increased by 0.61 percentage point Weighted average return on net assets after 6.67 5.26 Increased by 1.41 deducting the extraordinary gain or loss (%) percentage pointsDescription of principal accounting data and financial indicators of the Company√ Applicable?□ N/A At the end of the Reporting Period, the net profit attributable to Shareholders of the listed company after deducting the extraordinary gain or loss was RMB804 million, representing a year-on-year increase of 34.47%, mainly due to the growth of the sales revenues from the chemical pharmaceuticals and APIs products during the Reporting Period, which is the main driver of the growth of the net incomes. The net cash flow from operating activities was RMB1, 903 million, representing a year-on-year increase of 155.16%, mainly due to an increase of cash collections of sales revenues during the Reporting Period. VIII Differences in accounting data under domestic and foreign accounting standards□ Applicable?√ N/A IX Items and amounts of extraordinary gains and losses √ Applicable?□ N/A Unit: Yuan Currency: RMB Items of Extraordinary Gains and Losses Amounts Notes (If applicable)Gains and losses on disposal of non-current assets 3,731,885.55 Proceeds from disposal of fixed assets Government grants as included in the profit or loss of 94,185,202.59 Government grants through profit and current period (Note: Government grants that are closely loss for the Periodrelated to the normal business, in compliance with the relevant policies and continuously entitled with specific amount according to certain standards are not included) Gains and losses on fair value changes derived from holding -98,936,528.71 Gains or losses arising from changes in of financial assets held for trading, derivative financial assets, fair value of financial assets/liabilities financial liabilities held for trading, derivative financial held for trading, and investment gains liabilities, and investment income generated on disposal of from holding and disposal of financial financial assets held for trading, derivative financial assets, assets/liabilities held for tradingfinancial liabilities held for trading, derivative financial liabilities and other debt investments, except for effective hedging activities related to the ordinary operating business of the Company Reversals of provision for impairment of accounts receivable 158,470.77 Reversal of accounts receivable tested and contract assets with individual impairment test for impairment individuallyOther non-operating Revenues and non-operating -2,270,691.97 Other non-operating Revenues and expenditures apart from the above items non-operating expenditures apart from the above items Less: Effect of income tax 10,439,515.79 Effect of the above items on income taxEffect of minority equity (after tax) -10,845,265.03 The portion of the above items to which minority shareholders are entitled Total -2,725,912.53 Explanations for classifying items of extraordinary gains and losses defined in the Explanatory Announcement No. 1 for Public Company Information Disclosures – Extraordinary gains and losses as items of recurring profit or loss □ Applicable?√ N/A X Others √ □ Applicable? N/A (II) Business model of the Company With the stable operation and rapid development over the years, the Company has become an integrated pharmaceutical group which is driven by scientific research and innovation and integrates the R&D, production, sale and service of pharmaceutical and health care products. It has complete systems of R&D, procurement, production and sale. Main business functions of the Company are as follows: 1. R&D Taking independent R&D as the mainstay and combining external introduction and cooperative development, the Company has been emphasizing cutting-edge technology and unmet clinical needs. Focusing on innovative medicines and high-barrier complex formulation, the Company has established an efficient R&D innovation management model. In terms of independent innovation, the Company has diversified, multi-dimensional R&D organizations with mature R&D teams for chemical pharmaceuticals, traditional Chinese medicine, biologics, APIs, diagnostic reagents and health care products. Based on technology platform construction, the Company has built a clear product R&D pipeline centering on key areas such as respiration, tumor immunity and psychiatry. In terms of cooperative innovation, the Company has launched technical cooperation with domestic and foreign scientific research institutions by way of commissioned development or cooperative development, and introduced new technologies and products that meet the strategical goal of the Company through technology transfer or licensing to implement industrial transformation, so as to reinforce and strengthen our position and strategy in leading fields and emerging fields.2. Procurement In terms of procurement, the Company pays close attention to effectiveness, quality and cost of procurement and has established long-term and stable partnership with many suppliers. Active pharmaceutical ingredients, supplementary materials, and packaging materials is purchased and stocked up by manufacturers according to production schedules. The Company has developed strict quality standards and procurement management systems and required subordinate manufacturers to make procurements in accordance with the GMP. Meanwhile, the Company established long-term strategic partnerships with bulk material suppliers, and strengthened the management of supply quality and cost control based on strict quality standards. The Company has established an internal evaluation system and files of market prices so as to promptly master market information for procurement through comparisons of quality and price.3. Production In terms of production, the Company adopts the principle of market demand-oriented approach. Specifically, the Sales Department of the Company investigated market demands, made sales plans, and comprehensively considered factors such as the product inventory quantity and capacity of production lines of the Company so as to determine the monthly production quantities and specifications. Moreover, the purchase orders of raw materials are determined according to the production schedule and the inventory levels of raw materials. The final production plans are issued upon approval of the management of the Company and implemented by the Production Technology Department of the Company.The Company carried out production in strict compliance with the GMP. The Company and its affiliates have established a sound quality management system and implemented the qualified person system. In terms of quality control, the Company established a strict and sound production quality assurance system, and was geared to international standards and subject to international certification while in compliance with national standards. The Company conducted annual GMP self-inspection, ISO9001 internal and external audits, and was subject to various external audits. It actively pursued the internationally advanced GMP management, and implemented whole-process quality control over supplier selection, audit, incoming material inspection, production process, product release from factory, and market tracking with good system operation. 4. Sales (1) Drug formulation products End customers of drug formulation products (including Chemical pharmaceuticals, traditional Chinese medicine) of the Company are mainly hospitals, clinics, and retail pharmacies. In line with the pharmaceutical industry practice and the sales model of most peers in the industry, the Company has conducted sales of drug formulation products through drug distribution enterprises. The Company carried out selection and centralized management of qualified drug distribution enterprises (with Drug Supply Certificate, GSP Certification, etc.) according to their distribution capability, market familiarity, financial strength, credit record, and operation scale. General sales process: After end customers place purchase orders to distribution enterprises, drug distribution enterprises will send those orders to the Company according to their inventories, distribution agreements and conditions; then, the Group will deliver products to drug distribution enterprises and do the revenues recognitions. (2) APIs and intermediates Main target customers of APIs are large pharmaceutical manufacturers. The selling prices are determined based on a set of comprehensive factors such as costs of production, inventory levels, industry rivalry and market conditions. The detailed process of price determination are as follows: The sales and marketing department conduct weekly or bi-weekly meetings to analyze the current market conditions and the trends and drivers of prices; the selling prices are determined based on a set of comprehensive factors such as market trends, costs of production, inventory levels; the selling prices will be effective once are reported by the sales department to our management team and get approvals.Specific sales methods of APIs include: ① Domestic market: The Company directly signs product sales contracts with large manufacturers to directly sell products to customers. Meanwhile, the Company also sells products through distributors. ② Overseas market: The Company directly sells products in the overseas market and also sells products through distributors in areas with high risks. At present, products of the Company are mainly exported to over 60 countries and regions in Asia, Europe, North America, and Africa. (3) Diagnostic reagents and equipment Diagnostic reagents and equipment sold by the Company are both in-house manufactured and imported. Main end customers are hospitals, centers for disease control and prevention, and health departments. The Company mainly sells those products in combination with direct sales and sales through drug distribution enterprises.The Company has an experienced sales team responsible for the sales of diagnostic reagents and equipment and provision of marketing support for some drug distribution enterprises. The Company carried out selection and centralized management of qualified drug distribution enterprises (with Drug Supply Certificate, GSP Certification, etc.) according to their distribution capability, market familiarity, financial strength, credit record, and operation scale. (4) Health care products The sales model of health care products is mainly distributor management model. Product promotion, price control, and channel carding are managed and improved with the distributor distribution channel and terminal coverage capability. At present, the Company has set up 27 provincial branches and 92 subordinate offices across China and maintained long-term partnership with distributors with better area coverage capability for stable strategic alliance and common development. The Company has cooperated with about 103 primary distributors in total, including 78 businesses in drug production line and around 25 businesses in food production line with over 150,000 subordinate secondary businesses and terminal businesses in drug and food production lines. Products are well managed and promoted through the tiered marketing channel. In addition to the traditional distribution management model, the Company realizes segment growth through coordinated marketing in E-commerce channel. (III) Analysis of industry development As a national strategic and emerging industry which concerns national economy and the people’s livelihood, pharmaceutical industry is an integral part of the national economy. According to the Development Plan of the Pharmaceutical Industry during the “14th Five-Year Plan" Period, the overall development level of the pharmaceutical industry is expected to reach a new level. During the “13th Five-Year Plan” period, the added value of the pharmaceutical industry above designated scale increased by 9.5% annually, 4.2 percentage points higher than the overall industrial growth rate, and its proportion in the whole industrial added value increased from 3.0% to 3.9%. The revenue and total profits of enterprises above designated scale increased by 9.9% and 13.8% annually, ranking high among all industries. At the same time, the scale of leading pharmaceutical manufacturing enterprises has further expanded, contributing to the steady increase of the industrial concentration. In the first half of 2022, reforms in the pharmaceutical and health care system have deepened further, the environment for innovation continues to improve, and the pharmaceutical industry continues to make progress in the direction of further transformation and upgrading and high-quality development that encourages innovation. As the aging population of our nation grows and the level of urbanization keeps on increasing, the pharmaceutical industry of our nation, in the long run and as a whole, will show a continuous upward development trend. Meanwhile, we should also pay attention to the severe challenges and universal impacts brought by the COVID-19 pandemic and the ever-mutating COVID-19 variants on national life and the production and operation of pharmaceutical enterprises. In the first half of 2022, the domestic outbreak of COVID-19 occurred and spread repeatedly. Especially in some areas, outbreak emergencies were declared and cases of successive variants reported. In the short term, the prevention and control of domestic pandemic remains rigorous. Data of National Bureau of Statistics shows that in the first half of 2022, enterprises in the pharmaceutical manufacturing industry above designated scale in China have realized revenues of RMB1,400.78 billion, representing a year-on-year decrease of 0.6%; operating costs of RMB815.96 billion, representing a year-on-year increase of 10.3%; total profits of RMB220.95 billion, representing a year-on-year decrease of 27.6%.(IV) Industry status of the Company Through years of development, the Company has become an integrated pharmaceutical enterprise covering multiple areas including chemical pharmaceuticals, chemical APIs and intermediates, traditional Chinese medicine, diagnostic reagents and equipment as well as health care products. Chemical pharmaceuticals are the largest revenue generator of the Company, among which drugs for alimentary tract medicine, anti-infective drugs and gonadorelin hormone drugs are traditional competitive products of the Company, with key products securing a long-term position in national drug formulation market segment, and respiratory and psychiatrical medicine have been the focus of the Company, with key products maintaining a strong sales growth momentum. During the Reporting Period, the Company, with solid strength in R&D and production and steady marketing presence, “ ” “ ranked Top 9 in 2021 Annual Ranking of Top 100 Chinese Chemical Drug Enterprises under 2021 Annual Ranking of Top ” 100 Enterprises in Pharmaceutical Industry in China of menet.com.cn.(V) Performance drivers in the Reporting Period In the first half of 2022, the Company actively implemented sales planning, promoted marketing and reinforced sales specialization amid domestic localized outbreaks and stricter industry supervision and access policies. In addition, the Company increased digital marketing and enhanced delicacy management. That is how we can realize steady growth of main business revenue and consolidate the foundation and ability of sustainable development of enterprises. During the Reporting Period, sales of main varieties in key specialist areas, especially in fields of respiratory system, psychiatry, gonadorelin hormone of the Company kept steady growth, and contribution of sales revenue of key formulation products to overall revenues was continuously improved. In addition, the sales revenue of API segment grew noticeably with an obvious increase of gross profit rate as the Company taken measures to integrate resources, adjust product mix, reinforce II Analysis of core competitive strengths during the Reporting Period√ Applicable?□ N/A 1. Leading PRC integrated pharmaceutical company under continuous innovation and developmentThe Company is primarily engaged in the R&D, production and sale of pharmaceutical products and health care products. The business scope of the Company covers chemical pharmaceuticals, chemical APIs and intermediates, traditional Chinese medicine, diagnostic reagents and equipment, as well as health care products, allowing the Company to establish competitive advantages across various therapeutic areas such as respiratory, anti-infection, assisted reproduction, gastroenterology, psychiatry, and tumor immunity. 1) Innovative R&D drives growth: The Company has developed and launched a number of innovative medicine products and high-barrier complex formulation products, strengthening the Group’s product portfolio and drug candidates in the pipeline. 2) The Company has first-tier commercialization ability, and its sales network covers all provinces in China and over 80 overseas countries and regions in the world. The Company emphasizes scientific promotion and evidence-based marketing. By building a professional marketing team, the Company has established a comprehensive marketing system, and market education and brand building have been deeply strengthened through digital marketing. Leveraging our comprehensive sales channels, broad market coverage, leading digital marketing and brand awareness, the Company is able to sell the products at scale in an efficient manner. 3) Cross-industry and multi-specialist innovative R&D and coordinated development: On the one hand, the Company actively adapts to the changes in the pharmaceutical market and constantly adjusts its product strategy and R&D direction according to policies and clinical needs. This will realize the continuous iteration and upgrade of the main products; On the other hand, the Company fully utilizes external scientific research and commercial resources, such as strategic collaboration with Chinese Academy of Sciences, Tencent Quantum Lab and other scientific research institutes and innovative companies, and invests in cutting-edge biotechnology companies to expand the Company’s product portfolio and R&D pipeline and realize the Company’s sustainable development.2. Strong R&D capabilities, diversified product portfolio and leading commercialisation capabilities Focusing on innovative medicines and high-barrier complex formulation, the Company has formed diversified product portfolio. With the huge clinical demand and high product quality, it has established market competitive advantages in many pharmaceutical segments. The Company’s chemical pharmaceuticals cover gastroenterology diseases, assisted reproduction, infectious diseases, respiratory diseases, psychiatric diseases, tumor and other disease treatment fields, among which alimentary tract proton pump inhibitor (PPI) medicines, gonadorelin hormone drugs, and inhalation formulation for respiratory diseases have an advantageous market position. Relying on APIs, the Company’s core products, together with our chemical APIs and intermediates, form an integrated and stable pharmaceutical industry chain of “APIs-integration drug formulations”. Meanwhile, the Company actively develops overseas markets, and our products are marketed and distributed worldwide, facilitating strategic cooperation with many internationally renowned pharmaceutical companies. In addition, the Company also has a number of traditional Chinese medicine and in vitro diagnostic reagent products, and has accumulated resources and extensive brand influence in health care products for many years. 3. Making breakthroughs in the key R&D and industrialization technologies of Complex formulationThe technology platform, which has been developed over the years in the field of innovative medicines and high-barrier complex formulation, enables the Company to address the complex process problems in the R&D and production of relevant drugs. Guided by clinical value, the Company develops R&D projects with high short-term certainty and cutting-edge technologies with long-term growth potential (such as AI-driven drug molecular design, proteolysis targeted chimeric (PROTAC), synthetic biology, gene-editing and cellular treatment, etc.). All in all, the Company’s R&D system covers through-cycle of drug development and production. Based on the mature R&D platform of innovative medicines and high-barrier complex formulation, the Company has designed extensive pipeline in fields with significant clinical demand such as respiration, gastroenterology, assisted reproduction, psychiatry and tumor.4. Stable management and R&D team with expertise, long-term vision and commitment to social responsibility The Company has a stable, visionary and experienced, results-oriented management team and an outstanding talent team. Outstanding leaders are the key to the Company’s rapid development. The founder of the Company has over 30 years of expertise in the pharmaceutical industry as well as a global vision and a strategic mindset. With a deep industry insight, the founder has led us developing platform technologies centered on high-barrier complex formulation, which has established leading position of the Group with sustainable development in the broader healthcare industry. The senior management team of the Company has over 20 years of industry experience on average, with an average of more than 10 years of service in the Company, and has a thorough understanding of market demand, industry development and growth opportunities. Each key R&D field of the Company is led by industry-leading scientists and accompanied by an efficient R&D management team. In addition, the Company has upheld the core value of “Putting People First, Valuing Workmanship and Quality, Pursuing Innovation and Truth, Promoting Cooperation and Sharing” and laid emphasis on talent team training to build a diversified reserve of talents with global vision, advanced knowledge, strong implementation capability and sense of self-reliance. Driven by the corporate culture of pursuing excellence, the talent team works diligently and conscientiously to jointly contribute to the sustainable development of the enterprise through teamwork and collaboration. III Discussion and analysis of business conditions 1. Main business conditions during the Reporting Period During the Reporting Period, the Company realized revenues of RMB8,565 million, representing a year-on-year increase of approximately 9.31%; a net profit attributable to shareholders of the listed company of RMB801 million, representing a year-on-year increase of approximately 16.57%, and a net profit attributable to shareholders of the listed company after deducting the extraordinary gains or loss of RMB804 million, representing a year-on-year increase of approximately 34.47%. Business development of various segments of the Company is as follows:(1) Livzon Group (excluding Livzon MAB) As at the end of the Reporting Period, the Company directly and indirectly held 44.80% equity interest in Livzon Group (000513.SZ, 01513.HK). During the Reporting Period, Livzon Group (excluding Livzon MAB) realized revenues of RMB6,296 million, and a net profit attributable to shareholders of the listed company of about RMB513 million. For the details of business conditions of Livzon Group, please refer to the 2022 Interim Report of Livzon Group.(2) Livzon MAB As at the end of the Reporting Period, the Company held 55.92% equity interest in Livzon MAB and the amount affecting the Company’s net profit attributable to the parent company for the current period was approximately RMB-140 million. During the Reporting Period, Livzon MAB focused on promoting the application on conditional marketing approval of “ ” the Recombinant SARS-CoV-2 Fusion Protein Vaccine (重组新型冠状病毒融合蛋白疫苗) ( V-01 ) project. Livzon MAB has completed the Phase III clinical master analysis report for sequential immunization and basic immunization, submitted related application materials to CDE, and apply sequential EUA (Emergency Use Authorization) with National COVID-19 Vaccine Working Group. In terms of overseas registrations, Livzon MAB has submitted the EUA filings in the Philippines, Indonesia and Malaysia, and has completed the submission of registration filings for the export of stock solution to Pakistan; Livzon MAB actively communicated with WHO on the EUL (Emergency Use Listing) application for V-01. In addition, in response to the global trend of COVID-19 pandemic and the prevalence of COVID-19 variants, Livzon MAB developed several vaccines against the variants and related bivalent vaccines, and carried out animal and clinical trial research related to enhanced immunization/sequential immunization.Meanwhile, Livzon MAB continued to focus on new molecules, new targets and differentiated molecular designs in the fields of tumors, immune diseases and assisted reproduction. During the Reporting Period, Livzon MAB has made phased progress in the R&D of the following projects: Recombinant Human Choriogonadotropin alfa for Injection (注射用重 组人绒促性素) was approved for marketing in 2021 and was already on sale, which is the first generic drug in China, and Livzon MAB has been promoting overseas registrations and has submitted applications for overseas registration in Uzbekistan, Tajikistan and Nigeria; the BLA application of Tocilizumab Solution for Injection (托珠单抗注射液) (i.e. Recombinant Humanized Anti-human IL-6R Monoclonal Antibody Solution for Injection (重组人源化抗人IL-6R单克隆抗体 注射液) is under review by CDE, and it successfully passed the on-site verification of drug registration and the registration inspection report has been received. In addition, Livzon MAB has been actively promoting the PQ (Pre-qualification) with WHO. The phase Ib clinical interim analysis for psoriasis indication for Recombinant Anti-human IL-17A/F Humanized Monoclonal Antibody for Injection (重组抗人IL-17A/F人源化单克隆抗体注射液) was completed, both high, medium and low dose groups demonstrated good efficacy and safety; phase II clinical subjects were enrolled with efficacy and safety under observation. In addition to advancing projects in the clinical phase, Livzon MAB is also exploring through R&D in areas such as bispecific antibodies and cell therapy. (3) Joincare (excluding Livzon Group and Livzon MAB) During the Reporting Period, Joincare (excluding Livzon Group and Livzon MAB) realized revenues of RMB2,371 million, up about 35.81% compared with the same period last year; and realized a net profit attributable to shareholders of listed companies of RMB421 million, a year-on-year increase of approximately 45.25%. Joincare realized a net profit attributable to shareholders of the listed company after deducting the extraordinary gains and losses of RMB414 million, representing a year-on-year increase of approximately 56.39%. Key results of the main therapeutic fields and core products are as follows: ① Prescription medicines During the Reporting Period, Joincare (excluding Livzon Group and Livzon MAB) realized sales revenues of RMB1,060 million from prescription drug segment, representing a year-on-year increase of approximately 67.76%. Among them, the sales revenues and year-on-year change of key therapeutic areas are as follows: the revenue generated from the field of respiratory totaled RMB561 million, representing a year-on-year increase of approximately 259%; the revenue generated from the field of anti-infection totaled RMB488 million, representing a year-on-year increase of 4.75%. In the first half of 2022, the Company continued to accelerate construction of the national sales team in respiratory line, established a three-level fine marketing development system of regional manager, provincial manager, and development manager, actively took various measures to speed up the development of key products in hospitals: 1. Enhanced the coverage and fulfillment rate of evaluation indicators; the development speed of respiratory variety was obviously accelerated; more than 1,400 hospitals above grade II were newly developed; 2. Realized rapid coverage and sales growth of the variety by taking the opportunity that Levosalbutamol Hydrochloride Nebuliser Solution (盐酸左沙丁胺醇雾化吸 入溶液) was included in the list of drugs for negotiation led by National Healthcare Security Administration; 3. Continued to advance the construction of digital marketing platforms, accelerated the marketing process through digital means and comprehensively communicated the brand via the platform of “Talk from A Respiratory Specialist” (呼吸专家说); 4. With three inhalation formulation being successfully included to the fifth batch of the volume-based procurement organised by the PRC Government, the Company has rapidly tapped into the domestic sales market and improved market share for inhalation formulation products. During the Reporting Period, R&D of inhalation formulations of the Company went well. The following products made phased progress: Levosalbutamol Hydrochloride Nebuliser Solution (盐酸左沙丁胺醇雾化吸入溶液) (3mL: 1.25mg); Terbutaline Sulphate Solution for Nebulization (硫酸特布他林雾化吸入用溶液) has been approved for marketing; Tobramycin Inhalation Solution (妥布霉素吸入溶液) (class 2.4) was successfully completed additional research, the product is under review and pending for approval; Fluticasone Propionate Suspension for Inhalation (丙酸氟替卡松雾 化吸入用混悬液) has completed the application for market approval; Salmeterol Xinafoate and Fluticasone Propionate Powder for Inhalation (沙美特罗替卡松吸入粉雾剂) has received the notice of clinical trials and rapidly initiated phase III clinical trials; Indacaterol Maleate Powder for Inhalation (马来酸茚达特罗吸入粉雾剂) expedited its PD-BE study. Meanwhile, the Company acquired rights of XYP-001 in the Greater China, an innovative inhalation formulation with independent intellectual property rights, through license-in, further enriching the Company’s inhalation formulation pipeline. The Company submitted for the first time an application for registration of a medical device to accompany the ② APIs and intermediates During the Reporting Period, Joincare (excluding Livzon Group and Livzon MAB) realized sales income of RMB1,150 million from APIs and intermediates, representing a year-on-year increase of approximately 21.80%.During the Reporting Period, in the API segment, Joincare continued to strengthen safety and environmental protection construction and drive lean production. Production and yield of key products were improved through further enhancement of technical innovation of production process. Production costs were stable with a slight decline against the backdrop of continued rise of bulk commodities prices and increased pressure from procurement cost of raw materials in the first half of 2022. In terms of marketing, Joincare actively expanded domestic and international markets for the key product 7-ACA by optimising strategic cooperation channels and strengthening in-depth cooperation with strategic customers. Leveraging the advantages in the upstream and downstream industry chains, we continued to increase our market share. The export share of Meropenem Trihydrate (美罗培南混粉) has repeatedly set a new high. Despite increased competition in the market this year, the Company continued to strengthen its position in the market through making plans in advance, and the sales of Meropenem Trihydrate remained steady growth based on a higher base in the same period of previous year. In addition, the Company actively expanded overseas business, applying the registration for Meropenem Trihydrate and Meropenem Crude (美罗培南粗品) in Japanese market and Italy market, respectively. In terms of API R&D, the Company focuses on two frontier fields to carry out key scientific research. Firstly, conducting research on genetic component design, functional genome mining, synthetic pathway analysis, metabolic network optimization, gene circuit reconstruction and systems metabolic engineering of industry host microorganism by （未完）  |