2019 Third Quarterly Report of Huadong Medicine Co., Ltd.
Huadong Medicine Co., Ltd.
2019 Third Quarterly Report
October 2019
1
2019 Third Quarterly Report of Huadong Medicine Co., Ltd.
Section I Important Notes
The Board of Directors, Board of Supervisors, directors, supervisors and senior
management of Huadong Medicine Co., Ltd. (the “Company”) hereby guarantee
that the information presented in this report is authentic, accurate and complete
and free of any false records, misleading statements or material omissions, and
will 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 of
accounting, and Ma Honglan, head of accounting department (accounting
supervisor) hereby declare and warrant that the financial statements in this
report are authentic, accurate and complete.
According to “Stock Listing Rules of the Shenzhen Stock Exchange (2018
Revision)”, if listed companies have both Chinese and other language versions 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.
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2019 Third Quarterly Report of Huadong Medicine Co., Ltd.
Section II Company Profile
I. 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 restatement
Other reason
Change between
At December 31, 2018 December 31, 2018 and
At September 30, 2019
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 11,661,608,297.70 9,938,148,996.53 9,938,148,996.53 17.34%
(yuan)
YoY Change between YoY Change between
2019 Q3 2018 Q3 and 2019 Q3 2019 Q1 - Q3 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 616,830,635.77 19.61% 2,213,114,054.08 22.33%
(yuan)
Net profits attributable to
shareholders of the Company after 605,703,004.52 17.68% 2,079,980,188.55 16.59%
deducting non-recurring profit or
loss (yuan)
Net cash flows from operating - - 909,038,245.94 -35.59%
activities (yuan)
Basic earnings per share (yuan per 0.3525 19.61% 1.2648 22.33%
share)
Diluted earnings per share (yuan 0.3525 19.61% 1.2648 22.33%
per share)
Weighted average Return on 5.44% -0.14% 20.14% 0.18%
Equity (ROE)
Note: As the Company increased share capital by converting capital reserve in June 2019, earnings per share of
preceding 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 - Remarks
September 30, 2019)
Profit or loss from disposal of non-current assets (including 112,098,352.29 Mainly due to the recognition of
written-off of provision for impairment) house demolition fees.
Tax refund, credit or exemption approved beyond the power of 470,984.63
authorities or without formal documents
Government grant included in profit or loss (excluding those Mainly due to the recognition of
closely related to operating activities, or regular government 100,202,966.33 government subsidy by the
grants) subsidiaries Hangzhou
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2019 Third Quarterly Report of Huadong Medicine Co., Ltd.
Items Amount (January 1 - Remarks
September 30, 2019)
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 Information
Disclosure Criteria for Public Companies No. 1 - Non-Recurring Profit or Loss” or recognizes an item satisfying the definition of
non-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 10
shareholders
1. Total number of shareholders of ordinary shares and shareholders of preferred shares with voting rights
resumed and information about top 10 shareholders
Unit: Share
Total number of shareholders
Total number of shareholders of of preferred shares whose
ordinary shares at the end of the 101,640 voting rights have been 0
reporting period recovered at the end of the
reporting period (if any)
Information about top 10 shareholders
Number of Pledged or frozen
Name of shareholders Nature Holding Number of
holding shares
proportion (%) holding shares Status Number
with restrictions
Domestic
中国远大集团有限责任公司 41.77% 730,938,157 0 Pledged 247,964,000
non-state-owned
(China Grand Enterprises, Inc.) legal person
杭州华东医药集团有限公司
State-owned legal 16.46% 288,000,000 0
(Hangzhou Huadong Medicine person
*
Group Co., Ltd. )
香港中央结算有限公司 (Hong
Overseas legal 2.45% 42,831,179 0
Kong Securities Clearing Company
* person
Ltd. )
National Social Security Fund Other 1.33% 23,341,513 0
Portfolio 106
中国证券金融股份有限公司 Domestic
(China Securities Finance Co., non-state-owned 1.27% 22,186,818 0
Ltd.*) legal person
泰康资产管理有限责任公司
(Taikang Asset Management Co., 0.95% 16,645,294 0
Other
Ltd.*) - actively allocated
investment products
泰康人寿保险有限责任公司
(Taikang Life Insurance Co., Ltd. *) - Other 0.70% 12,275,192 0
Dividend – Personal dividend -
The English names are for identification purpose only.
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2019 Third Quarterly Report of Huadong Medicine Co., Ltd.
019L-FH002 Shen
中国银行股份有限公司 (Bank of
China Co., Ltd.) – Jiashi Shanghai Other 0.63% 11,000,026 0
HK Shenzhen Selected Stock
Securities Investment Fund
澳门金融管理局 (Autoridade
Overseas legal 0.60% 10,434,399 0
Monetaria de Macau*) – Self-owned person
fund
Guotai Junan Securities Asset
Management - CCB - Guotai Junan Other 0.50% 8,794,016 0
Jundexin Stock Collective Asset
Management Plan
Information about top 10 shareholders holding unrestricted shares
Type of shares
Name of shareholders Number of holding shares without restrictions
Type Number
China Grand Enterprises, Inc. 730,938,157 RMB ordinary 730,938,157
shares
Hangzhou Huadong Medicine Group 288,000,000 RMB ordinary 288,000,000
Co., Ltd.. shares
Hong Kong Securities Clearing 42,831,179 RMB ordinary 42,831,179
Company Ltd. shares
National Social Security Fund 23,341,513 RMB ordinary 23,341,513
Portfolio 106 shares
China Securities Finance Co., Ltd. 22,186,818 RMB ordinary 22,186,818
shares
Taikang Asset Management Co.,
Ltd. - actively allocated investment 16,645,294 RMB ordinary 16,645,294
shares
products
Taikang Life Insurance Co., Ltd. -
Dividend – Personal dividend - 12,275,192 RMB ordinary 12,275,192
shares
019L-FH002 Shen
Bank of China Co., Ltd. – Jiashi
Shanghai HK Shenzhen Selected 11,000,026 RMB ordinary 11,000,026
shares
Stock Securities Investment Fund
Autoridade Monetaria de Macau – 10,434,399 RMB ordinary 10,434,399
Self-owned fund shares
Guotai Junan Securities Asset
Management - CCB - Guotai Junan 8,794,016 RMB ordinary 8,794,016
Jundexin Stock Collective Asset shares
Management Plan
Explanation on relationship and
The Company does not know whether the above shareholders are related parties with each other
concerted actions among above
or whether they are acting-in-concert parties with each other.
shareholders
Explanation on the margin trading
and short selling business conducted N/A
by top 10 shareholders (if any)
Any of the Company’s top 10 of ordinary shares or top 10 shareholders holding unrestricted ordinary shares conducts any agreed
buy-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 of
preferred shares
□ Applicable √ N/A
The English names are for identification purpose only.
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2019 Third Quarterly Report of Huadong Medicine Co., Ltd.
Section III Significant Events
I. Information and explanation about changes in key financial data and financial indicators
during the reporting period
√ Applicable □ N/A
Unit: in ten thousand yuan
Balance sheet items Opening Change rate Remarks on changes
Closing balance
balance
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.
Mainly due to reclassification of revised financial
Other equity investments 21,902.63 / / 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.
Mainly due to the year-on-year increase of
Other non-current assets 79,080.89 22,340.41 253.98% 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 106,568.56 4,090.47 2505.29% Mainly due to reclassification of bonds payable due
within one year within one year.
Preceding
Income statement items Current period Change rate Remarks on changes
period
cumulative
comparative
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.
Mainly due to the increase of R&D expenses of the
R&D expenses 71,222.72 46,600.70 52.84% subsidiary Hangzhou Zhongmeihuadong
Pharmaceutical Co., Ltd
Mainly due to the increase of interest-bearing
Financial expenses 10,983.69 4,177.79 162.91% 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.
Mainly due to the year-on-year decrease of net
Investment income 876.39 2,834.10 -69.08% profit generated by associates and inclusion of loss
from newly consolidated associates.
Preceding
Cash flow statement items Current period Change rate Remarks on changes
period
cumulative
comparative
Net cash flows from operating 90,903.82 141,142.63 -35.59% Mainly due to the year-on-year increase of payment
activities for operating expenses.
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2019 Third Quarterly Report of Huadong Medicine Co., Ltd.
Net cash flows from investing -115,923.50 -165,986.57 30.16% Mainly due to the large amount of undue financial
activities products in the preceding period.
Net cash flows from financing -62,018.87 -88,685.52 30.07% Mainly due to year-on-year decrease of payment for
activities dividends.
II. Progress and influence of significant events, analysis and explanation of corresponding
solutions
□ 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 the
Company’s actual controller, shareholders, related parties, acquirer(s), and the Company
during 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 during
the reporting period
√ Applicable □ N/A
Time of reception Method of reception Type of reception Index of basic information of the research
object
Please refer to the “000963 Huadong Medicine
1/16/2019 Field research Institutional investors Research Activity: January 18, 2019” presented on the
websites of irm.cninfo.com.cn and cninfo.com.cn for
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2019 Third Quarterly Report of Huadong Medicine Co., Ltd.
Time of reception Method of reception Type of reception Index of basic information of the research
object
details.
Please refer to the “Investor Relations Activity Record:
2/19/2019 Field research Institutional investors from February 19, 2019 to February 20, 2019”
presented on the websites of irm.cninfo.com.cn and
cninfo.com.cn for details.
Please refer to the “Investor Relations Activity Record:
2/20/2019 Field research Institutional investors from February 19, 2019 to February 20, 2019”
presented on the websites of irm.cninfo.com.cn and
cninfo.com.cn for details.
Please refer to the “Investor Relations Activity Record:
4/19/2019 Conference call Institutional investors from April 19, 2019 to April 24, 2019” presented on
the websites of irm.cninfo.com.cn and cninfo.com.cn
for details.
Please refer to the “Investor Relations Activity Record:
4/23/2019 Conference call Institutional investors from April 19, 2019 to April 24, 2019” presented on
the websites of irm.cninfo.com.cn and cninfo.com.cn
for details.
Please refer to the “Investor Relations Activity Record:
4/24/2019 Field research Institutional investors from April 19, 2019 to April 24, 2019” presented on
the websites of irm.cninfo.com.cn and cninfo.com.cn
for details.
Please refer to the “000963 Huadong Medicine
4/30/2019 Conference call Institutional investors Research Activity: May 6, 2019” presented on the
websites of irm.cninfo.com.cn and cninfo.com.cn for
details.
Please refer to the “Investor Relations Activity Record:
5/28/2019 Conference call Institutional investors from May 28, 2019 to May 29, 2019” presented on the
websites of irm.cninfo.com.cn and cninfo.com.cn for
details.
Please refer to the “Investor Relations Activity Record:
5/29/2019 Field research Institutional investors from May 28, 2019 to May 29, 2019” presented on the
websites of irm.cninfo.com.cn and cninfo.com.cn for
details.
Please refer to the “Investor Relations Activity Record:
6/06/2019 Field research Institutional investors June 6, 2019” presented on the websites of
irm.cninfo.com.cn and cninfo.com.cn for details.
Please refer to the “Investor Relations Activity Record:
7/18/2019 Field research Institutional investors from July 18, 2019 to July 19, 2019” presented on the
websites of irm.cninfo.com.cn and cninfo.com.cn for
details.
Please refer to the “Investor Relations Activity Record:
7/19/2019 Field research Institutional investors from July 18, 2019 to July 19, 2019” presented on the
websites of irm.cninfo.com.cn and cninfo.com.cn for
details.
Please refer to the “Investor Relations Activity Record:
8/28/2019 Conference call Institutional investors August 28, 2019” presented on the websites of
irm.cninfo.com.cn and cninfo.com.cn for details.
Please refer to the “Investor Relations Activity Record:
9/23/2019 Field research Institutional investors from September 23, 2019 to September 25, 2019”
presented on the websites of irm.cninfo.com.cn and
cninfo.com.cn for details.
Please refer to the “Investor Relations Activity Record:
9/25/2019 Field research Institutional investors 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.
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2019 Third Quarterly Report of Huadong Medicine Co., Ltd.
IX. The Company’s funds used by the controlling shareholder or its related parties for
non-operating purposes
□ Applicable √ N/A
No such case during the reporting period.
X. Overview of the Company’s operations from January to September 2019
In 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 actively
monitors the KPIs of productions and operations related objectives. From January to September 2019, Hangzhou
Zhongmeihuadong Pharmaceutical Co., Ltd, the Company’s core wholly-owned subsidiary, generated operating
revenue 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 fast
growth. The total operating revenue of pharmaceutical business, aesthetic business and other businesses was 19.24
billion yuan, representing a year-on-year increase of 14.89%. From January to September 2019, the Company’s
total 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 an
advanced system of drug innovation, Hangzhou Zhongmeihuadong Pharmaceutical Co., Ltd has established a
global new-drug innovation center, which is positioned as an international platform for the Company’s new drug
R&D and external innovation. By building a leading scientific team of R&D researchers and external experts, the
center is aiming to integrate resources into an open, sustainable and high-quality innovation-driven ecological
system. In the future, the Company will focus on three key areas - new drug screening, safety evaluation and
clinical development, covering end-to-end process of new drug development from pre-clinical research to new
drug application with global standards. At present, the innovation center is responsible for carrying out the
corresponding clinical development of the Company’s innovative drugs TTP273 and HD118, and other four
innovative products introduced from MediBeacon pipeline.
The Company continues to be innovation-oriented and adopts a “two-wheel drive” new drug development strategy
by combining internal R&D and external collaboration which enables the Company to keep up with leading-edge
of international drug research and development. Meanwhile, the Company also focuses on high-end generic drugs
with high technical barriers, drugs for special target patient populations, and new modified drug products. During
the reporting period, the Company has accomplished more than 10 innovative projects kick-off(including
innovative drugs, generic drugs with high technical barriers, and US 505 b (2)). All these initiatives will enable as
of a good foundation for the sustainable enrichment of product pipeline and the continuous introduction of new
drugs. As for the approved generic drug projects, the Company has reevaluated the on-going projects to streamline
and 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 and
KPI-based performance assessment policy. By improving the internal scientific research and innovation
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2019 Third Quarterly Report of Huadong Medicine Co., Ltd.
environment, and building the basis for innovation culture, the Company has further deepened the reform of R&D
system. The Company introduced a step-wised assessment and incentive recognition approach, by combining
R&D deliverables with future commercial value of the products. The establishment of a long-term incentive
mechanism will motivate talents with higher efficiency and effectiveness.
Sinclair, the Company’s international aesthetic business platform will continue to explore new markets. During the
reporting period, Sinclair has accomplished the registration and introduction in five countries and regions. The
overall business operation of the whole year is expected to meet the annual target. Sinclair has completed clinical
trials of its key product Ellansé(long-acting injectable microsphere) in China and will submit the clinical report to
the 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 cooperation
agreement with R2 Dermatology, the Company initiated the clinical research for the original freckle-removing
medical 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 renal
function monitoring and assessment, gastrointestinal function assessment, surgical visualization, etc.) in 25 Asian
countries and regions including Mainland China after it has subscribed part of its B-round preferred shares issued
by MediBeacon. This partnership will continuously accelerate the Company’s synergy between the drug product
portfolio and the accurate monitoring methods for chronic diseases, while further strengthening the Company’s
leading competitiveness for chronic disease diagnosis and treatment.
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2019 Third Quarterly Report of Huadong Medicine Co., Ltd.
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
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2019 Third Quarterly Report of Huadong Medicine Co., Ltd.
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 1,065,685,587.57 40,904,660.77
year
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2019 Third Quarterly Report of Huadong Medicine Co., Ltd.
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 11,661,608,297.70 9,938,148,996.53
company
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 Lyu Liang Ma Honglan
Legal representative Officer in charge of accounting Head of accounting department
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2019 Third Quarterly Report of Huadong Medicine Co., Ltd.
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
14
2019 Third Quarterly Report of Huadong Medicine Co., Ltd.
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 997,947,820.75
year
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
15
2019 Third Quarterly Report of Huadong Medicine Co., Ltd.
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 706,857.54 4,084,800.04
associates and joint ventures
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
16
2019 Third Quarterly Report of Huadong Medicine Co., Ltd.
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: 3,151,854.72 62,871.14
losses)
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 641,456,550.25 546,554,786.98
operations (or less: net loss)
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 616,830,635.77 515,692,006.71
parent company
2. Net profit attributable to 24,625,914.48 30,862,780.27
non-controlling shareholders
VI. Other comprehensive income after 5,120,322.24
tax
Items attributable to the owners of the 5,120,322.24
parent company
(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 5,120,322.24
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 5,120,322.24
17
2019 Third Quarterly Report of Huadong Medicine Co., Ltd.
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 621,950,958.01 515,692,006.71
parent company
Items attributable to non-controlling 24,625,914.48 30,862,780.27
shareholders
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 the
combination is 0.00 yuan, and that generated in the preceding period is 0.00 yuan.
Lyu Liang Lyu Liang Ma Honglan
Legal representative Officer in charge of accounting 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: 3,296,727.00 12,960.60
losses)
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
18
2019 Third Quarterly Report of Huadong Medicine Co., Ltd.
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 71,523,728.40 89,069,002.74
operations (or less: net loss)
(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
19
2019 Third Quarterly Report of Huadong Medicine Co., Ltd.
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 8,763,938.51 14,999,593.70
associates and joint ventures
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: 114,347,426.77 69,845.06
losses)
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 2,304,646,955.75 1,910,537,325.80
operations (or less: net loss)
2. Net profit from discontinued
operations (or less: net loss)
20
2019 Third Quarterly Report of Huadong Medicine Co., Ltd.
Items Current period cumulative Preceding period comparative
(II) Categorized by the portion of equity
ownership
1. Net profit attributable to owners of 2,213,114,054.08 1,809,081,209.36
parent company
2. Net profit attributable to 91,532,901.67 101,456,116.44
non-controlling shareholders
VI. Other comprehensive income after -2,398,004.37
tax
Items attributable to the owners of the -2,398,004.37
parent company
(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 -2,398,004.37
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 -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 2,210,716,049.71 1,809,081,209.36
parent company
Items attributable to non-controlling 91,532,901.67 101,456,116.44
shareholders
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 the
combination is 0.00 yuan, and that generated in the preceding period is 0.00 yuan.
Lyu Liang Lyu Liang Ma Honglan
Legal representative Officer in charge of accounting Head of accounting department
21
2019 Third Quarterly Report of Huadong Medicine Co., Ltd.
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: 114,481,393.83 12,960.60
losses)
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 1,124,605,672.90 992,221,569.79
operations (or less: net loss)
(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
22
2019 Third Quarterly Report of Huadong Medicine Co., Ltd.
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 27,974,289,685.61 25,878,097,338.39
rendering of services
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 910,566,277.20 799,172,970.80
operating activities
Subtotal of cash inflows from 28,888,365,272.72 26,689,659,149.92
operating activities
Cash payments for goods purchased 19,475,142,964.99 18,435,651,812.89
and services received
Net increase of loans and advances to
clients
23
2019 Third Quarterly Report of Huadong Medicine Co., Ltd.
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 1,392,446,790.07 1,145,387,596.08
employees
Cash payments for taxes and rates 1,721,105,543.87 1,876,130,500.31
Other cash payments related to 5,390,631,727.85 3,821,062,936.31
operating activities
Subtotal of cash outflows from 27,979,327,026.78 25,278,232,845.59
operating activities
Net cash flows from operating 909,038,245.94 1,411,426,304.33
activities
II. Cash flows from investing activities:
Cash receipts from withdrawal of
investments
Cash receipts from investment 900,000.00 17,858,250.88
income
Net cash receipts from the disposal of
fixed assets, intangible assets and 44,373,345.73 257,656.36
other long-term assets
Net cash receipts from the disposal of
subsidiaries & other business units
Other cash receipts related to 4,575,605,506.59
investing activities
Subtotal of cash inflows from 45,273,345.73 4,593,721,413.83
investing activities
Cash payments for the acquisition of
fixed assets, intangible assets and 892,858,638.47 701,262,416.23
other long-term assets
Cash payments for investments 256,944,900.00
Net increase of pledged borrowings
Net cash payments for the acquisition 1,199,793.01 5,100,000.00
of subsidiaries & other business units
Other cash payments related to 53,505,038.76 5,547,224,705.40
investing activities
Subtotal of cash outflows from 1,204,508,370.24 6,253,587,121.63
investing activities
Net cash flows from investing -1,159,235,024.51 -1,659,865,707.80
activities
III. Cash flows from financing
activities:
Cash receipts from absorbing 9,800,000.00 19,200,000.00
investments
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 4,000,000.00 30,000,000.00
financing activities
Subtotal of cash inflows from 1,578,729,901.12 608,809,600.36
financing activities
Cash payments for the repayment of 1,522,743,554.14 633,950,840.36
borrowings
Cash payments for distribution of 658,094,315.61 846,713,966.81
24
2019 Third Quarterly Report of Huadong Medicine Co., Ltd.
Items Current period cumulative Preceding period comparative
dividends or profits and for interest
expenses
Including: Cash paid by subsidiaries
to non-controlling shareholders as 50,512,000.00 66,931,502.28
dividend or profit
Other cash payments related to 18,080,734.99 15,000,000.00
financing activities
Subtotal of cash outflows from 2,198,918,604.74 1,495,664,807.17
financing activities
Net cash flows from financing -620,188,703.62 -886,855,206.81
activities
IV. Effect of foreign exchange rate -7,776,333.09 2,870,314.57
changes on cash & cash equivalents
V. Net increase in cash and cash -878,161,815.28 -1,132,424,295.71
equivalents
Add: Opening balance of cash and 2,398,709,506.06 2,372,819,624.82
cash equivalents
VI. Closing balance of cash and cash 1,520,547,690.78 1,240,395,329.11
equivalents
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 14,477,219,497.23 13,738,345,389.32
rendering of services
Receipts of tax refund
Other cash receipts related to operating 874,387,153.77 1,121,978,747.65
activities
Subtotal of cash inflows from 15,351,606,651.00 14,860,324,136.97
operating activities
Cash payments for goods purchased 14,681,841,784.49 13,579,716,479.11
and services received
Cash paid to and on behalf of 116,707,767.78 134,157,786.32
employees
Cash payments for taxes and rates 233,069,793.79 167,680,234.03
Other cash payments related to 843,853,594.57 775,235,685.03
operating activities
Subtotal of cash outflows from 15,875,472,940.63 14,656,790,184.49
operating activities
Net cash flows from operating -523,866,289.63 203,533,952.48
activities
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 43,344,599.85 1,630.00
long-term assets
Net cash receipts from the disposal of
subsidiaries & other business units
Other cash receipts related to investing 491,900,000.00 3,989,191,195.89
activities
Subtotal of cash inflows from 967,756,599.85 4,772,578,115.79
investing activities
Cash payments for the acquisition of
fixed assets, intangible assets and other 30,322,745.47 9,477,869.26
long-term assets
25
2019 Third Quarterly Report of Huadong Medicine Co., Ltd.
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 5,100,000.00
of subsidiaries & other business units
Other cash payments related to 736,750,000.00 5,233,800,000.00
investing activities
Subtotal of cash outflows from 1,012,680,145.47 5,277,177,869.26
investing activities
Net cash flows from investing -44,923,545.62 -504,599,753.47
activities
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 576,500,000.00 46,000,000.00
activities
Subtotal of cash inflows from 1,278,357,401.68 131,009,600.36
financing activities
Cash payments for the repayment of 674,787,776.40 85,010,840.36
borrowings
Cash payments for distribution of
dividends or profits and for interest 556,049,101.48 747,032,688.27
expenses
Other cash payments related to 92,000,000.00 20,500,000.00
financing activities
Subtotal of cash outflows from 1,322,836,877.88 852,543,528.63
financing activities
Net cash flows from financing -44,479,476.20 -721,533,928.27
activities
IV. Effect of foreign exchange rate 106,466.60 -484,288.71
changes on cash and cash equivalents
V. Net increase in cash and cash -613,162,844.85 -1,023,084,017.97
equivalents
Add: Opening balance of cash and cash 1,384,560,116.18 1,591,016,109.85
equivalents
VI. Closing balance of cash and cash 771,397,271.33 567,932,091.88
equivalents
II. Remarks on adjustments of financial statements
1. Adjustments on related financial statement items at the beginning of the period due to adoption of new
financial instruments standards, new revenue standards and new lease standards since 2019
√ Applicable □ N/A
Remarks on adjustments
Consolidated statements Parent company statements
Before adjustments After adjustments Before adjustments After adjustments
Items
Opening balance/ Opening balance/ Opening balance/ Opening balance/
Preceding period Preceding period Preceding period Preceding period
comparative comparative comparative comparative
Notes receivable and accounts 6,272,866,055.10 3,410,588,563.25
receivable
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
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2019 Third Quarterly Report of Huadong Medicine Co., Ltd.
Consolidated statements Parent company statements
Before adjustments After adjustments Before adjustments After adjustments
Items
Opening balance/ Opening balance/ Opening balance/ Opening balance/
Preceding period Preceding period Preceding period Preceding period
comparative comparative comparative 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 new
financial instruments standards or new lease standards since 2019
□ Applicable √ N/A
III. Auditor’s report
Has 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
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