[中报]华东医药(000963):2022年半年度报告（英文版）
原标题:华东医药:2022年半年度报告（英文版） Semi-Annual Report 2022 August 2022 Section I. Important Declaration, Contents and Definitions The Board of Directors, Board of Supervisors, directors, supervisors and senior management of Huadong Medicine Co., Ltd. (hereinafter referred to as the “Company”) hereby guarantee that the information presented in this half year report is authentic, accurate and complete and free of any false records, misleading statements or material omissions, and shall undertake individual and joint legal liabilities. Lv Liang, the Company’s legal representative and the officer in charge of accounting, and Qiu Renbo, head of accounting department (accounting supervisor) hereby declare and guarantee that the financial statements in this half year report are authentic, accurate and complete. All directors have attended the Board of Directors meeting to review this half year report. The future plans, development strategies and other forward-looking statements in this half year report shall not be considered as substantial commitment of the Company to investor. Investors and related parties should maintain sufficient risk awareness, and should understand the difference between plans, forecasts and promises. The risks the Company faces in operation including industry policy and market operation risk, new drug R&D risk, exchange rate fluctuation risk and goodwill impairment risk , etc. For details, refer to “X. Risks and Countermeasures” in “Section III. Discussion and Analysis of the Management”. We thank all investors for paying attention to the Company’s operations, and we hope that you can be aware of investment risks. The company does not plan to distribute cash dividends, no bonus share will be issued; and no capital reserve will be converted to increase the share capital. According to “Stock Listing Rules of the Shenzhen Stock Exchange”, if listed companies have both Chinese or other language version of public notice, they should ensure the content of both versions are the same. In the case of discrepancy, the original version in Chinese shall prevail. Contents Section I. Important Declaration, Contents and Definitions ...................................... 2 Contents .................................................................................................................................................... 3 Definitions ............................................................................................................................................... 5 Section II. Company Profile and Key Financial Indicators ....................................... 7 Section III. Discussion and Analysis of the Management..........................................10 Section IV. Corporate Governance ..........................................................................................57 Section V. Environmental and Social Responsibility ....................................................60 Section VI. Important Matters ....................................................................................................72 Section VII. Share Change and Shareholders ....................................................................92 Section VIII. Preferred Shares ..................................................................................................100 Section IX. Information about Bonds ..................................................................................101 Section X. Financial Report .......................................................................................................102 Contents of Reference File I. Financial statements signed and stamped by the legal representative, the person in charge of accounting work and the head of accounting institution (accounting manager). II. The original of all Company’s documents publicly disclosed in the press designated by CSRC during the reporting period and the original of announcements. Definitions
Section II. Company Profile and Key Financial Indicators I. Company information
1. Company’s contact information Whether there is any change in the Company’s registered address, office address, zip code, company website or company email address during the reporting period. □ Applicable √ N/A There is no change in the Company’s registered address, office address, zip code, company website or company email address during the reporting period. For details, please refer to 2021 Annual Report. 2. Information disclosure and place of the report Whether there is alteration in information disclosure and place of the report during the reporting period. □ Applicable √ N/A The media selected by the Company for information disclosure, the website designated by CSRC for publication of the half year report, and the location of preparation of the Company’s half year report have not changed during the reporting period. For details, please refer to the 2021 Annual Report. 3.Other information Changes of other related materials □Applicable Not applicable? IV. Key accounting data and financial indicators Whether the Company needs to perform a retroactive adjustment or restatement of previous accounting data □Yes √No
Chinese accounting standards □ Applicable √ N/A There are no differences in net profit and net assets disclosed in financial statements under international and Chinese accounting standards. 2. Differences in net profit and net assets disclosed in financial statements under overseas and Chinese accounting standards □ Applicable √ N/A There are no differences in net profit and net assets disclosed in financial statements under overseas and Chinese VI. Items and amounts of non-recurring gains/losses √ Applicable □ N/A Unit: RMB yuan
There are no other profit and loss items in line with the definition of non-recurring gains and losses in the Company. Explanation for recognizing an item listed as a non-recurring gain/loss in the “Interpretative Announcement No. 1 on Information Disclosure Criteria for Public Companies – Non-Recurring Profit/Loss” as a recurring gain/loss □Applicable √ N/A Explanation for recognizing an item listed as a non-recurring gain/loss in the “Interpretative Announcement No. 1 on Information Disclosure Criteria for Public Companies – Non-Recurring Profit/Loss” as a recurring gain/loss. Section III. Discussion and Analysis of the Management I. Main business of the company during the reporting period 1. Main business of the company Huangdong Medicine Co., Ltd (hereinafter referred to as the “Company”) (Stock Code: 000963), founded in 1993, is headquartered in Hangzhou, Zhejiang Province. It was listed on the Shenzhen Stock Exchange in December 1999. After more than 20 years of development, the Company’s business has covered the entire pharmaceutical industrial chain. With dominance in the pharmaceutical sector, the Company also expands its aesthetic medicine and industrial microbial business, making the Company a large-scale comprehensive pharmaceutical listed company integrating pharmaceutical R&D, manufacturing and distribution. With the pharmaceutical industry deeply engaged in the R&D, manufacturing and sales of specialty medicine, chronic disease medicine and special medicine, the Company has formed a complete pharmaceutical manufacturing and quality research system, as well as a core product pipeline focusing on the fields of chronic kidney disease, transplantation immunity, endocrinology and digestive system, and it has a number of first-line clinical medicine with market advantages in China. At the same time, the Company focuses on the R&D of innovative medicine and the generic medicine with high-tech barriers in the three core treatment fields of oncology, endocrine and autoimmunity through independent development, external introduction and project cooperation. The Company continuously carry out international product registration, international certification, and consistency assessment, and continuously to achieve results. It has established an international-oriented pharmaceutical industry system, and has maintained healthy R&D and product cooperation relationship with many international innovative and R&D enterprises. The pharmaceutical business of the Company has four business segments, namely, Chinese and Western medicine, medical devices, medicinal ginseng, and health industry, covering general pharmaceutical merchandising, pharmaceutical retail, third-party pharmaceutical goods flow characterized by a cold chain, pharmaceutical e-commerce, Company further develops the field of product agency and market expansion. The traditional Chinese medicine industry has built a whole industrial chain from base planting to decoction piece processing, automatic decoction and functional products, so as to provide customers with comprehensive solutions. Committed to the strategy of "global operation layout and double-cycle operation and development", the aesthetic medical business of the Company has more than 30 products in the non-invasive + minimally invasive aesthetic medical fields with a forward-looking layout and international vision, including more than 20 products listed at home and abroad, and more than 10 global innovative products under research. The product portfolio covers non-surgical mainstream aesthetic medical fields such as facial filling, facial cleaning, thread lifting, skin care management, body shaping, hair removal, and private part repair. A comprehensive product cluster has been formed, and the number of products and coverage areas have been at the forefront of the industry. Sinclair, a wholly owned subsidiary, is the Company’s global aesthetic medical operation platform. Headquartered in the United Kingdom, it has manufacturing bases in the Netherlands, France, the United States, Switzerland and Bulgaria. Sinclair promotes and sells products such as long-acting microspheres for injection, hyaluronic acid and facial lifting in the global market, and explores and develops the business of energy-based devices for aesthetic medicine in the global market through High Tech and Viora, the Company’s wholly owned subsidiaries. The aesthetic medical segment also includes Sinclair (Shanghai) the Company’s wholly owned operation and sales subsidiary in the Chinese market, and R2 in the United States and kylane in Switzerland, the Company’s overseas technology R&D subsidiaries. The Company has been deeply engaged in the field of industrial microbial for more than 40 years. With a profound industrial foundation and transformation capacity, the Company has successfully developed and produced a variety of microbial medicine and built a key technology system for R&D and manufacturing of microbial products. The scale and technical level of existing microbial fermentation products features an industry-leading level. The Company has three microbial R&D platforms in Zhongmei Huadong, Huida Biotech and Huiyi Biotech, five industrial bases of Hangzhou Xiangfu Qiao industrial base, Qiantang New District industrial base, Jiangsu Jiuyang industrial base, Meiqi Health industrial base and Meihua Hi-tech industrial base, and the largest fermentation monomer workshop in Zhejiang Province and the industry-leading capacity in microbial medicine manufacturing. The R&D capability covers all stages of microbial engineering technology, such as strain cultivation, metabolic control, separation and purification, enzyme catalysis, synthesis and modification, and has established a complete manufacturing system for microbial project R&D, pilot test, commercial manufacturing, engineering and public system support. At present, the Company has more than 100 R&D projects in the industrial microbial field. 2. Overview of the Company’s operations during the reporting period In the first half of 2022, under the complex situation of intensified international geopolitical landscape conflicts, rising global stagflation risk and repeated outbreak of global COVID-19 pandemic, China’s economy faces increased risks and uncertainties. Although the uncertainty of the external environment and the partial outbreak of the pandemic have brought obvious pressure on the domestic macro-economic development, through the effective pandemic prevention and control combined with the simultaneous implementation of a series of practical and effective measures for economic and social development, the domestic pandemic prevention and control has achieved positive results, and various economic stabilization policies and measures have made positive progress. The overall situation is stable and positive, and China’s economy has further demonstrated strong development resilience with a very hard-won mid-year report card. During the Reporting Period, in the face of various pressures and challenges such as the complex and changeable external environment, frequent outbreak of domestic pandemic and declining market demand, the Company actively implemented the spirit of the annual work conference, promoted development and stability through fights, and coordinated the pandemic prevention and control with various transformation and innovation tasks. Meanwhile, as unswervingly taking the recovery of growth as the core target, the Company paid close attention to the work style, and actively promoted the steady progress of manufacturing and operation, thus achieving sound operating results, realizing a growth under complex and difficult environment, and successfully completing the business targets of the first half of 2022. During the Reporting Period, the Company realized an operating income of RMB18,198 million, a year-on-year increase of 5.93% (a year-on-year increase of 0.4% in the first quarter); it realized the net profit net of non-recurring gains and losses attributable to shareholders of the listed company of RMB1,272 million, a year-on-year increase of 6.52% (a year-on-year increase of 0.4% in the first quarter); if the calculation is based on the same standard as charging off the previous year’s annual report of Huadong Ningbo Company, the Company’s holding subsidiary, the Company’s operating income during the Reporting Period increased by 9.56% year-on-year, and the net profit net of non-recurring gains and losses attributable to shareholders of the listed company increased by 8.5% year-on-year. The overall operation of the Company shows a sustained and steady growth trend. (Note: Huadong Ningbo Company, which has been closed and liquidated in the Reporting Period, realized an operating income of RMB569 million in the previous Reporting Period, including an operating income of RMB380 million from aesthetic medical agency business, and a net profit attributable to the Company’s consolidated statements of RMB25.67 million.) In the second quarter of 2022, the Company overcame various unfavorable factors and achieved growth in the pharmaceutical industry, pharmaceutical business, aesthetic medical business and industrial microbial business. The Company realized a total operating income of RMB9,265 million, a year-on-year increase of 11.86%; it realized the net profit net of non-recurring gains and losses attributable to shareholders of the listed company of RMB573 million, a year-on-year increase of 15.06%. Specific operation of each business segment during the Reporting Period: 1. The pharmaceutical industry recovered steadily, and the R&D and innovation continuously accelerated During the Reporting Period, closely focused on the Company’s strategic goals and annual business plans, Zhongmei Huadong, the Company’s core subsidiary, carried out various tasks, withstood the pressure from all aspects, actively overcome the difficulties in the Volume-Based Procurement program, the price reduction in medical insurance negotiation and the pandemic in the first half of 2022, and continuously maintained a stable and positive trend in manufacturing and operation. In the second quarter, the sales of core products kept increasing, becoming the core driving force for the Company’s overall performance growth. In the Reporting Period, Zhongmei Huadong realized an operating income of RMB5.5 billion, a year-on-year increase of 1.4%; it realized the net profit net of non-recurring gains and losses of RMB1.06 billion, a year-on-year decrease of 4.3% (a year-on-year decrease of 13.41% in the first quarter), and the net profit net of non-recurring gains and losses attributable to the parent company of RMB1,064 million, a year-on-year decrease of 3.7%, which was significantly narrowed compared with the first quarter. Specifically, the operating income in the second quarter was RMB2.71 billion, a year-on-year increase of 16.2%; the net profit attributable to the parent company was RMB540 million, a year-on-year increase of 16.5%, and the net profit net of non-recurring gains and losses attributable to the parent company was RMB490 million, a year-on-year increase of 12%. The downward trend has been reversed, and the performance has begun to gradually increase. During the Reporting Period, the Company continuously increased investment, accelerated the promotion of R&D, innovation and clinical registration, achieving positive progress. For details, please refer to the corresponding contents of R&D. During the Reporting Period, the Company’s manufacturing system continuously created new operation modes, developed an open manufacturing system, realized the integrated management of the manufacturing system, and deeply promoted the extensive lean manufacturing and full cost management of all employees. Besides, the Company continuously carried out technological innovation, reduced energy consumption, and improved manufacturing efficiency and per capita labor efficiency while ensuring market supply. In addition, the Company strengthened the of quality compliance management and GMP normalized management, actively promoted the internationalization process, and continuously carried out the international registration and certification of products. During the Reporting Period, Zhongmei Huadong’s Pantoprazole Sodium for Injection, which had been approved by the US FDA, was exported to the US market, marking an important achievement of the Company’s preparation product internationalization. During the Reporting Period, the Pharmaceutical Service Company of Zhongmei Huadong actively improved the pharmaceutical service capability in an all-round way through fine management. On the premise of constantly improving market access and professional promotion capability and stabilizing the basic hospital market, the company actively extended to the outside market, deeply explored the potential of the outside and online markets, and continuously built multi-dimensional marketing ability. The company optimized the talent training mechanism and created a team of pharmaceutical service talents. By strengthening talent training and external introduction, the company continuously strengthened the development of county and grass-roots markets in various provinces and cities, paid close attention to the coverage of grass-roots terminals, focused on the blank market and hospital development, and built a grass-roots benchmark hospital. Besides, the company also launched an academic activity management system, actively cooperated with the Company’s Internet hospitals to promote the digital transformation of marketing and optimize the external promotion service system, so as to promote the continuous deepening of transformation of the pharmaceutical service company. In June 2022, Acarbose Tablets (50 mg) and Pantoprazole Sodium for Injection (40 mg) from Zhongmei Huadong were successfully selected in the renewed contract of 44 consecutive varieties of the Volume-Based Procurement program carried out by the medicine alliance consisted of 13 provinces including Henan Province. The results of contract renewal of the Volume-Based Procurement program have been implemented in the provinces of the alliance since July 2022. In July 2022, Zhongmei Huadong and Xi’an Bohua participated in the bidding of the seventh batch of the Volume-Based Procurement program by the Joint Procurement Office organized by the state. The Mycophenolate Mofetil Capsules and Pioglitazone Hydrochloride Tablets of Zhongmei Huadong and the Ornidazole Tablets of Xi’an Bohua participated in the bidding and were successfully qualified to win the bid. The seventh batch of the Volume-Based Procurement program results is expected to be implemented from November 2022. 2. The industrial microbial business maintained a sound development momentum, continuously injecting new energy of R&D During the Reporting Period, although the Company’s industrial microbial segment was affected by the domestic pandemic, which led to the delay in the performance of some sales contracts, the overall revenue of the segment continuously maintained a sound development trend, a year-on-year increase of 31%, driven by the rapid growth of the Company’s anti-infection and pharmaceutical intermediate raw material products in overseas markets. As the operation platform of the Company’s large health business in the industrial microbial field, the green manufacturing project on functional health products invested by Meiqi is about to start construction. At the same time of the project construction, the entrusted manufacturing and sales of vitamin K2, Ectoin and other products have been completed. In addition, Meiqi’s R&D project with sufficient technical reserves will make full use of Angel’s domestic and international product registration capabilities in the field of food and large health to accelerate the manufacturing layout and the building of business promotion system, to accelerate the market development process of Meiqi. Meihua Hi-tech (formerly Huachang High-tech), a wholly-owned acquired subsidiary, was formally put into trial manufacturing at the end of April. Currently, it is undertaking the manufacturing of nucleoside products and integrating the manufacturing of internal API transfer. In the future, Meihua Hi-tech will become a brand-new industrialized platform in the industrial microbial field. Taking nucleoside products as the core and considering the layout of the Company’s upstream and downstream industrial chains, it will create an industrialized base for special functional chemicals, pharmaceutical API and high-end intermediates that meet international standards. As an innovative R&D platform for the Company’s industrial microbial industry, the holding subsidiary Huida Biotech continuously promoted product R&D and made positive progress. In terms of the R&D and commercialization of ADC payloads, it has provided CDMO services for ADC payloads, linkers and related products to more than 100 customers worldwide. Since its founded in 2020, Huida Biotech has established a good reputation and brand image in the industry by virtue of its own advantages. Specifically, Exatecan Mesylate and DM1 successively obtained the US DMF registration number in January 2022 and July 2022, respectively. In May 2022, the Company invested in a wholly-owned subsidiary, Huiyi Biotech, which has a strong level of synthetic biology technology. Through the gene construction and transformation of high-efficiency engineering strains such as yeast, Escherichia coli and Bacillus subtilis, Huida Biotech has realized the wide application of biotechnology in pharmaceutical engineering, fine chemicals, new biological materials and other fields. Huiyi Biotech has a microbial cell plant construction platform, a biological enzyme screening and evolution platform, and a fermentation and product separation and purification platform. It has built an enzyme library resource including all seven major enzyme systems. Besides, its business includes the R&D of industrial enzyme preparation, the R&D of fermentation process optimization technology, and the R&D of bio-based material technology. In July 2022, the Company’s wholly-owned subsidiary Zhongmei Huadong, the Gongshu Government in Hangzhou and Zhejiang University of technology jointly established the Huadong Institute of Synthetic Biology Industry Technology (hereinafter referred to as the "Institute"), which will focus on the four fields of nutrition and pharmaceutical chemicals, aesthetic medical biology, biomaterials and health substitutes based on synthetic biology technology. Meanwhile, the Institute insists on serving the strategic needs of the national "bio-economy", and takes as breakthroughs the new mechanism of intelligent biological manufacturing and industrial revolutionary technical issues, while carrying out technological innovation research and industrial transformation research around intelligent biological manufacturing with the help of artificial intelligence, big data and intelligent automation equipment. The Institute is in the Huadong Medical Life Science Industrial Park (the Company’s Xiangfu Qiao plant), and Zheng Yuguo, an academician of the Chinese Academy of Engineering, is the president. Synthetic biology is one of the core technologies that the Company relies on for the aesthetic medical development. Through linkage, sharing and integration, the pioneer cooperation between "government, industry and university in research and application" will accelerate the transformation of innovative projects, which is expected to help build a new cluster of biological manufacturing industry and give the Company a new impetus for industrial microbial innovation. 3. The innovation business of pharmaceutical business was steadily promoted, and all work was expanded smoothly During the Reporting Period, the Company’s pharmaceutical business continuously explored Zhejiang market, expanded the market outside the hospital market, and accelerated the development of agency business. During the Reporting Period, the operating income was RMB12,211 million, a year-on-year increase of 8.95%, and the accumulated net profit was RMB198 million, a year-on-year increase of 16.52%. In terms of pharmaceutical business, the Company thoroughly implemented the policy of "everything for creating value". In terms of traditional business, the Company was continuously deeply rooted in the Zhejiang market. In terms of innovative business, the Company focused on such fields as product agency, third-party logistics, pharmaceutical e-commerce, and characteristic large health. The Company adhered to consolidating the hospital market, expanding the market outside the hospital market, strengthening the innovative business, steadily improving the operation quality, profitability and operation efficiency. The overall business has returned to the normal state before the pandemic. Adhering to the concept of "providing the best services", the traditional business won a reputation from the industry and customers with good services. The market share in the hospital market continuously maintained a leading position in Zhejiang Province, and the market outside the hospital market continuously grew rapidly. The hospital market focused on key indicators such as new product introduction, hospital share, order fulfillment rate, and actively cooperated in reform measures such as the Volume-Based Procurement and distribution, and medical insurance with dual channels, so as to transform value-added services such as policy affairs and pharmaceutical management into productivity; the market focused on the introduction of new products through the joint procurement and sales, strengthened the assessment on the introduction of new listed innovative medicine, and ensured the account opening rate; the market would rationally undertake the Volume-Based Procurement business and adjust the strategy in time; the market optimized variety structure and expanded high potential varieties; the market cooperated with upstream manufacturers to do a good job in new hospital access; with the help of the distribution channels of the subsidiaries, the medicinal ginseng business improved the sales network of Chinese herbal decoction pieces in the whole province, with the personnel and business downward and a reliance on the expanded agent decoction of the automatic assembly line; the traditional distribution of medical devices and product agency were carried out simultaneously to continuously improve the market share of hospitals in various regions. With a focus on creating new Huadong retail, the market outside the hospital market relied on the advantages of "platform + product + network", expanded service scope, focused on the development of stores in hospitals, near hospitals and DTP stores, optimized community stores, improved the introduction of varieties, and did a good job in undertaking outflow prescriptions. In terms of innovative business, the Company developed beyond Zhejiang, reshaped core competitiveness and brought new income generating opportunities. The Company integrated internal and external resources, strengthened pharmaceutical e-commerce, upgraded "Huadong Pharmaceutical Business Network" by "B2B + B2C", actively operated self-operated flagship stores on various mainstream e-commerce platforms, expanded online sales, and provided a platform for expanding the market outside the hospital market; the Company created a gold brand of "medical cold chain", focused on professional medical logistics represented by high-end products such as "growth hormone and HPV vaccine", and improved the scale of three-party services; the Company focused on specialty special medicine and devices, enriched agent varieties and pipelines, and constantly improved profitability. By expanding the value-added service boundary for upstream and downstream customers, the innovative business connected with the Company’s overall strategy of "extending from medical care to aesthetic medicine and large health", explored rich business forms, and cultivated new pillars of future profits. In terms of the specialized three-party pharmaceutical cold chain, the Company had an insight into the market demand for high-end products such as "growth hormone and HPV vaccine", made layout in advance, faced the challenges and grasped opportunities brought by the pandemic, and paid equal attention to developing innovative business and fulfilling social responsibilities. In the first half of 2022, the number of customers increased from 49 in the same period of last year to 56, and the three-party logistics revenue increased by 25.56% year-on-year, of which the cold chain revenue increased by 31.66% year-on-year. The number of customers, business scale and growth rate were far ahead in the province. The business has built a three-in-one core competitiveness of high skilled talent team, core assets such as cold storage and refrigerated vehicles, and applied cold chain technology innovation, creating a gold brand of "Huadong Cold Chain". （未完）  |