2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
Huadong Medicine Co., Ltd.
Semi-Annual Report 2023
August 16, 2023
1
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
Section I. Important Declaration, Contents and Definitions
The Board of Directors, Board of Supervisors, directors, supervisors and
senior managers of Huadong Medicine Co., Ltd. (hereinafter referred to as the
“Company”) hereby guarantee that the information presented in this semi-
annual report is authentic, accurate and complete and free of any false records,
misleading statements or material omissions, and shall undertake individual
and joint legal liabilities.
Lv Liang, the Company’s legal representative and the officer in charge of
accounting, and Qiu Renbo, head of the Accounting Department (accounting
supervisor) hereby declare and guarantee that the financial statements in this
semi-annual report are authentic, accurate and complete.
All directors have attended the board meeting to review this semi-annual
report.
The future plans, development strategies and other forward-looking
statements in this semi-annual report shall not be considered as substantial
commitment of the Company to investors. Investors and related parties should
be fully aware of the risks, and understand the differences between plans,
forecasts and commitments.
The risks the Company faces in operation include industry policy and
product price reduction risk, new drug R&D risk, investment and M&A risk,
and exchange rate fluctuation risk. For details, please refer to “X. Potential
risks and responses” in “Section III. Management Discussion and Analysis”.
Therefore, investors are kindly reminded to pay attention to possible
2
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
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.
3
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
Contents
Section I. Important Declaration, Contents and Definitions ............................................................................... 2
Section II. Company Profile and Key Financial Indicators ................................................................................. 9
Section III Discussion and Analysis of the Management .................................................................................... 13
Section IV. Corporate Governance....................................................................................................................... 60
Section V Environmental and Social Responsibilities ........................................................................................ 63
Section VI. Important Matters ............................................................................................................................. 78
Section VII. Share Change and Shareholders ..................................................................................................... 98
Section VIII. Information on Preferred Shares ................................................................................................ 104
Section IX. Information on Bonds ...................................................................................................................... 105
Section X. Financial Report ................................................................................................................................ 106
4
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
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.
5
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
Definitions
Term refers to Definition
CSRC refers to China Securities Regulatory Commission
SSE refers to Shenzhen Stock Exchange
Huadong Medicine/the Company/our
refers to Huadong Medicine Co., Ltd.
Company
CGE refers to China Grand Enterprises, Inc.
Hangzhou Huadong Medicine Group
Huadong Medicine Group refers to
Co., Ltd.
Hangzhou Zhongmei Huadong
Zhongmei Huadong refers to
Pharmaceutical Co., Ltd.
Hangzhou Zhongmei Huadong
Jiangdong Company refers to
Pharmaceutical Jiangdong Co., Ltd.
Jiangsu Joyang Laboratories refers to Jiangsu Joyang Laboratories
Huadong Medicine (Xi’an) Bohua
Xi’an Bohua refers to
Pharmaceutical Co., Ltd.
Hangzhou Jiuyuan Gene Engineering
Jiuyuan Gene refers to
Co., Ltd.
Doer Biologics refers to Zhejiang Doer Biologics Co., Ltd.
Huadong Ningbo Company refers to Huadong Ningbo Medicine Co., Ltd.
Chongqing Peg-Bio refers to Chongqing Peg-Bio Biopharm Co., Ltd.
Qyuns Therapeutics refers to Qyuns Therapeutics Co., Ltd.
Nuoling Biomedical technology
Nuoling Bio refers to
(Beijing) Co., Ltd.
Shanghai Grand Industrial and Financial
Grand Chanrong refers to
Investment Management Co., Ltd.
Hangzhou Hi-Tech Venture Capital
Hangzhou Gaotou refers to
Management Co., Ltd.
Beijing Grand Huachuang Investment
Grand Huachuang refers to
Co., Ltd.
Hangzhou Heda Industrial Fund
Hangzhou Heda refers to
Investment Co., Ltd.
Hangzhou Fuguang Hongxin Equity
Pharmaceutical Industry Fund/Fuguang
refers to Investment Partnership (Limited
Hongxin
Partnership)
Anhui Meihua Hi-Tech Pharmaceutical
Meihua Hi-Tech refers to
Co., Ltd.
Wuhu Huaren Science and Technology
Wuhu Huaren refers to
Co., Ltd.
Hubei Meiqi Health Technology Co.,
Meiqi Health refers to
Ltd.
Angel Group refers to Hubei Angel Biological Group Co., Ltd.
CARsgen Therapeutics refers to CARsgen Therapeutics Holdings Limited
Jiangsu NAU Animal Pharmaceutical
NAU Animal Pharmaceutical refers to
Co., Ltd.
Takeda refers to Takeda Pharmaceuticals Company Ltd.
Sinclair refers to Sinclair Pharma Limited
vTv refers to vTv Therapeutics LLC
R2 refers to R2 Technologies, Inc.
MediBeacon refers to MediBeacon Inc.
6
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
ImmunoGen refers to ImmunoGen,Inc.
Provention Bio refers to Provention Bio, Inc.
RAPT refers to RAPT Therapeutics,Inc.
Kylane refers to Kylane Laboratoires SA
High Tech refers to High Technology Products, S.L.U.
Exscientia refers to Exscientia Ltd.
Heidelberg
refers to Heidelberg Pharma AG
Pharma
Kiniksa refers to Kiniksa Pharmaceuticals (UK), Ltd.
KiOmed refers to KiOmed Pharma SA
Daewon refers to Daewon Pharmaceutical Co., Ltd.
AKSO refers to AKSO Biopharmaceutical, Inc.
Ashvattha refers to Ashvattha Therapeutic, Inc.
SCOHIA refers to SCOHIA PHARMA, Inc.
EMA Aesthetics refers to EMA Aesthetics Limited
Gulf Pharmaceutical Industries
Julphar refers to
PJSC(JULPHAR)
Arcutis refers to Arcutis Biotherapeutics, Inc.
GMP refers to Good Manufacturing Practice
cGMP refers to Current Good Manufacturing Practices
GSP refers to Good Supply Practice
BE refers to Bioequivalence
Center for Drug Evaluation (of National
CDE refers to
Medical Products Administration)
MAH refers to Marketing Authorization Holder
FDA refers to (U.S.) Food and Drug Administration
National Medical Products
NMPA refers to
Administration
National Healthcare Security
NHSA refers to
Administration
NDA refers to New Drug Application
Abbreviated New Drug Application (or
ANDA refers to
Generic Drug Application)
International Council for Harmonisation
ICH refers to of Technical Requirements for
Pharmaceuticals for Human Use
IND refers to Investigational New Drug
PK/PD refers to Pharmacokinetics/ pharmacodynamics
Chemistry, Manufacturing and Control,
mainly such pharmaceutical researches
as manufacturing technology, impurity
CMC refers to
research, quality research, and stability
research during drug research and
development.
Contract Manufacturing Organization,
i.e. Providing such services as
CMO refers to customized manufacturing of medical
intermediates, APIs and pharmaceutical
preparations entrusted by pharmaceutical
7
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
companies.
Contract Development and
Manufacturing Organization, mainly
including providing customized R&D
and production services for multinational
pharmaceutical companies and
biotechnology companies, such as
CDMO refers to
process R&D and preparation, process
optimization, scale-up manufacturing,
registration and verification batches
manufacturing, and commercial
manufacturing of medicines, especially
innovative medicines.
QA refers to Quality Assurance (department)
ADC refers to Antibody-Drug Conjugates
EBD refers to Energy Based Devices
license-in refers to Product license introduction
license-out refers to Product External License Authorization
BD refers to Business Development
Earnings Before Interest, Taxes,
EBITDA refers to
Depreciation and Amortization
Environment, Health and Safety
EHS refers to
Management Systems
MRCT refers to International Multi-center Clinical Trial
Over The Counter, i.e. medicines
published by the medical products
administration under the State Council
OTC refers to and purchased and used by consumers at
their discretion without the prescription
of practicing doctors or assistant
practicing doctors.
PFS refers to Progression-free survival
Drugs that require medical prescriptions
Prescription Drugs refers to issued by physicians to be bought and
used
Real World Research/Study, RWR/RWS,
refers to collect data related to patients in
the real world environment (Real World
Real World Research/Study, RWR/RWS refers to Data), through analysis, acquiring the use
value of medical products and clinical
evidence of potential benefits or risks
(Real World Evidence).
Catalogue of Drugs for Basic National
2022 Drug Catalog refers to Medical Insurance/Employment Injury
Insurance/Birth Insurance (2022)
Reporting Period refers to From January 1, 2023 to June 30, 2023
8
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
Section II. Company Profile and Key Financial Indicators
I. Company information
Stock name (abbreviation) Huadong Medicine Stock code 000963
Stock listed on Shenzhen Stock Exchange
Company name in Chinese 华东医药股份有限公司
Company name in Chinese
华东医药
(abbreviation, if any)
Company name in English (if
HUADONG MEDICINE CO., LTD
any)
Company name in English
HUADONG MEDICINE
(abbreviation, if any)
Legal representative Lv Liang
II. Contact persons and contact information
Secretary of the Board of Directors Securities affairs representative
Name Chen Bo Hu Shufen
Contact address No. 866 Moganshan Road, Hangzhou No. 866 Moganshan Road, Hangzhou
Tel. 0571~89903300 0571~89903300
Fax 0571~89903300 0571~89903300
Email address hz000963@126.com hz000963@126.com
III. Other information
1. Company’s contact information
Whether there is any change in the Company’s registered address, office address, zip code, company website or company email
address during the reporting period.
Applicable □ N/A
In June 2023, the registered address of the Company was
altered from “Floor 9/10, Gate No. 9, 1, Building No. 1, No.
468 Yan’an Road, Hangzhou, Zhejiang Province” to “Floor 4/7,
No. 439, Zhongshan North Road, Gongshu District, Hangzhou,
Registered address of the Company Zhejiang Province”. The Company completed the industrial
and commercial change registration, filing of articles of
association and other formalities, and got the Business License
issued by Market Supervision and Management Bureau of
Zhejiang Province.
Zip code of the registered address of the Company 310006
Office address of the Company No. 866 Moganshan Road, Hangzhou, Zhejiang Province
Zip code of the office address of the Company 310011
Official website www.eastchinapharm.com
Email address of the Company hz000963@126.com
9
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
Designated website inquiry date disclosed in the temporary
June 10, 2023
announcement (if any)
Designated website inquiry index disclosed in the temporary
http://www.cninfo.com.cn/
announcement (if any)
2. Channels of disclosure and location of preparation
Whether there is alteration in channels of disclosure and location of preparation
□ Applicable N/A
The website of the stock exchange, media and website for disclosing the semi-annual report, and the location of preparation of the
Company’s semi-annual report have not changed during the reporting period. For details, please refer to the 2022 Annual Report.
3. Other information
Changes of other related materials
□ Applicable N/A
IV. Key accounting data and financial indicators
Whether the Company needs to perform a retroactive adjustment or restatement of previous accounting data
□Yes No
Change of the current
Current reporting period Same period last year reporting period over the
same period last year(%)
Operating revenue (yuan) 20,385,344,288.81 18,197,963,991.01 12.02%
Net profit attributable to
shareholders of listed 1,433,824,629.56 1,340,570,484.98 6.96%
companies (yuan)
Net profit attributable to
shareholders of listed
companies after deducting 1,427,487,870.97 1,271,839,179.63 12.24%
non-recurring gains/losses
(yuan)
Net cash flow from operating
2,021,743,748.65 284,234,410.27 611.29%
activities (yuan)
Basic earnings per share
0.8194 0.7661 6.96%
(yuan/share)
Diluted earnings per share
0.8190 0.7661 6.91%
(yuan/share)
Weighted average return on
7.43% 7.79% -0.36%
equity (ROE)
Change of the end of the
End of the current reporting End of last year current reporting period over
the end of last year (%)
Total assets (yuan) 32,956,000,216.06 31,192,203,406.84 5.65%
Net assets attributable to
shareholders of listed 19,532,395,598.16 18,577,919,237.39 5.14%
companies (yuan)
10
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
The Company’s total share capital as of the trading day prior to disclosure:
The Company’s total share capital as of the trading day prior to
1,753,995,348.00
disclosure (share)
Fully diluted earnings per share based on the latest share capital:
Paid preference dividends 0.00
Paid perpetual bond interest (yuan) 0.00
Fully diluted earnings per share based on the latest share capital
0.8175
(yuan/share)
V. Differences in accounting data under domestic and overseas accounting standards
1. Differences in net profit and net assets disclosed in financial statements under international and
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 during the reporting period.
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 accounting
standards during the reporting period.
VI. Items and amounts of non-recurring gains/losses
Applicable □ N/A
Unit: yuan
Item Amount Explanation
Gains/losses on disposal of non-current
assets (including the written-off part of -1,403,178.70
the accrued assets impairment reserve)
Government grants included in current
gains/losses (excluding those closely
Mainly due to the confirmation of
related to daily business operation and
32,245,085.57 government grants for subsidiaries in the
distributed constantly in accordance with
current period
certain standard quota or quantity in line
with national policies and regulations)
Gains/losses caused by fair value
changes for holding financial assets for
trading and financial liabilities for
trading, and investment income for
-5,100,698.38
handling financial assets for trading,
financial liabilities for trading and AFS
securities, excluding hedging business
related to operating activities
Other non-operating income and -8,253,167.53
11
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
expenditures except the aforesaid items
Other profit and loss items that satisfy
the definition of non-recurring profit and -7,873,330.91
loss
Minus: Amount affected by income tax 3,070,663.74
Impact on minority interests (post-
207,287.72
tax)
Total 6,336,758.59
Details of other items of gains/losses meet the definition of non-recurring gains/losses:
□ Applicable N/A
Details of other items of gains/losses meet the definition of non-recurring gains/losses.
Explanation for recognizing an item listed as a non-recurring gain/loss in the Interpretative Announcement No. 1 on 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.
12
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
Section III Discussion and Analysis of the Management
I. Main business of the company during the reporting period
(1) Main businesses
Founded in 1993 and headquartered in Hangzhou, Zhejiang Province, Huadong Medicine Co.,
Ltd. (stock code: 000963) was listed on Shenzhen Stock Exchange in December 1999. With its
businesses covering the entire pharmaceutical industry chain thanks to over 30 years of vigorous
development, the Company has now fostered four major business segments of pharmaceutical
industry, pharmaceutical business, aesthetic medicine and industrial microbiology, and has been a
large comprehensive listed pharmaceutical enterprise specialized in pharmaceutical R&D,
production and marketing.
Specialized in the R&D, production and marketing of specialized and chronic diseases, as well
as special medicines for years, the Company has established complete pharmaceutical production
and quality research systems, and fostered core product lines focusing on chronic nephrosis,
transplantation immunity, internal secretion, digestive system and other fields. With multiple first-
line clinical medicines with market advantages in China, the Company has made layout in R&D of
innovative and high technology barrier generic medicines in three core therapeutic fields of
oncology, endocrinology and autoimmunity through independent development, external
introduction, project cooperation and by other means. The Company has continued to engage in
international registration, international certification, consistency evaluation, etc. of products, with
successive results achieved. Moreover, the Company has fostered the internationally-oriented
pharmaceutical industry system, established and maintained R&D and project cooperation with
multiple international innovative R&D enterprises.
With regard to the pharmaceutical business, the Company has vigorously consolidated its
foundation in Zhejiang Province and has been ranked among top 10 pharmaceutical business
enterprises in China for consecutive years. To date, the Company has established 11 regional
subsidiaries in Zhejiang Province, with its customers distributed in 11 cities and 90 districts,
counties and county-level cities throughout Zhejiang Province. The Company has four business
segments of Chinese & western medicine, medical apparatus, medicine materials and ginseng &
antler, and health industry that cover the pharmaceutical wholesale & retailing, third-party medical
logistics featuring cold chain, medical e-commerce, hospital value-added services and featured
massive health industry. Further expanding the product agency and market development, the
13
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
Company has formed the whole industry chain from planting in bases to processing of prepared
pieces, automatic decoction, own-brand functional products for its traditional Chinese medicine
industry. As the leader of pharmaceutical business in Zhejiang Province, the Company has always
focused on strengthening the policy affairs, reserve, distribution and marketing ability, established
service platforms, and fostered the competitive advantages of regional enterprises to offer
customers comprehensive solutions.
In terms of aesthetic medicine, the Company has created a comprehensive and differentiated
product matrix by following the strategy of “global operation layout and dual-circulation operation
& development” with an international vision through forward-looking layout, and now ranks in the
forefront of the industry in terms of product quantity and coverage. Specifically, over 20 products
have been launched in China and abroad, and more than a dozen innovative global products are in
development. Now, the Company is committed to becoming a global leading aesthetic medicine
comprehensive solution provider by offering patients with more professional, efficient,
comprehensive and safer integrated solutions through diversified combined therapy techniques that
combine “noninvasive and micro-invasive”, “facial and body filling”, “products + technologies”,
and “injection + energy source equipment”. Headquartered in UK, the Company’s wholly-owned
subsidiary Sinclair is its global aesthetic medicine operation platform that has R&D centers in UK,
the Netherlands, France, Switzerland, Spain and Israel, and production bases in the Netherlands,
France, the U.S., Switzerland, Bulgaria and Israel. Promoting and marketing sustained-release
microspheres for injection, hyaluronic acid, facial thread lifting and other products in global
markets, Sinclair researches, develops and expands its energy-source aesthetic medicine apparatus
businesses through its wholly-owned subsidiaries High Tech and Viora. As for the aesthetic
medicine segment, the Company also has Sinclair (Shanghai), a wholly-owned subsidiary and its
market operation platform in China, as well as R2 in the U.S. and Kylane in Switzerland, two
overseas technical development type joint-stock subsidiaries.
With profound industrial base and powerful industrial transformation ability thanks to over 40
years of development in the industrial microbiology sector, the Company has successfully
developed and manufactured multiple types of microbiological medicines, and established the key
technology system for R&D and production of microbiological products, ranking in the forefront of
the industry in terms of scale and technological level of microbiological fermented products. Being
market demand-oriented, R&D technology-driven and industrial resource-coordinative in the
industrial microbiology segment, the Company has placed its focus on two business scenarios of
application of synthetic biology technology system and innovative development of bio-
pharmaceuticals, and has fostered differentiated product lines and business solutions in four major
14
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
fields of xRNA, featured APIs, massive health &biomaterials and animal health. The Company has
also established the R&D clusters with Industrial Microbiology of Zhongmei Huadong, HIT
Institute of Synthetic Biology, Huida Biotech, Hizyme Biotech and Perfect mRNA as the core, and
seven industrial bases in Hangzhou Xiangfuqiao, Qiantang New Area, Jiangsu Joyang Laboratories,
Magic Health, Twisun Hi-tech, Wuhu Huaren, and NAU Animal Pharmaceutical. Moreover, the
Company has set up the largest fermentation monomer plants in Zhejiang, formed the industry-
leading microbiological medicine production ability and high-level R&D capacity that covers all
stages of microbiological engineering technologies from strain construction, metabolic regulation,
enzymatic catalysis, synthetic modification to separation and purification, and built a complete
manufacturing system for R&D, pilot test, commercial production, engineering and public system
guarantee of microbiological projects. To date, the Company has a total of over 230 R&D programs
in the industrial microbiology sector.
(2) Overview of the Company’s operations during the reporting period
The global economic recovery faces continuous challenges due to accelerated changing
international order in turmoil, dramatically adjusted geopolitical pattern, continuously accumulated
risks in global financial sectors, multiple downside risks, and rising inflationary pressure since 2023.
The year 2023 is the first year to practice the guiding principles of the 20th CPC National
Congress, and also a critical year to implement the “Fourteenth Five-year Plan”. In the face of tough
external environment, China has resumed normalized operation in economy and society in full
swing since the first half of 2023, witnessing upturn of national economy thanks to the efficient
macro policies. The reform of the pharmaceutical industry in China has also been deepened, with
diverse reform policies launched and implemented. The pharmaceutical industry still faces changes
and challenges in diverse aspects such as policy regulation, structural reform, technological
innovation, and intensified market competition, while it is continuously transformed driven by
innovation. In the meantime, new bio-pharmaceutical technologies, continuously advancement of
technological innovation, as well as rapid application of AI, big data and other new technologies in
the pharmaceutical sector bring new opportunities for the transformation and development of the
pharmaceutical industry.
During the reporting period, the Company has steadily facilitated the innovative
transformation and international development strategy, made concerted efforts to tide over diverse
difficulties, and solidly promoted the innovation in scientific research, production and operation to a
new level revolving around its annual operation plan and the seventh third-year plan. In the first
half of 2023, the Company achieved the operating revenue of 20.385 billion yuan, up 12.02% year
on year (up 13.23% year on year in the first quarter), and the net profit attributable to shareholders
15
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
of listed companies after deducting non-recurring gains/losses of 1.427 billion yuan, up 12.24%
year on year (up 8.45% year on year in the first quarter). During the reporting period, after
deducting the equity incentive expenses and the profits and losses of participating and holding R&D
institutions, the Company achieved the net profit attributable to shareholders of listed companies
after deducting non-recurring gains/losses of 1.656 billion yuan, up 20.61% year on year. The
Company achieved the double-digit growth in both operating revenue and net profits for the first
time since 2020 and witnessed favorable upturn of the overall operation, laying a solid foundation
for fully attaining its annual work goals.
During the reporting period, four major business segments of the Company, i.e. pharmaceutical
industry, pharmaceutical business, aesthetic medicine and industrial microbiology, all achieved
positive growth in business indicators, accelerating the release of the Company’s momentum in
overall growth. As its operating revenue in the first quarter exceeded 10 billion yuan for the first
time, the Company achieved a total operating revenue of 10.271 billion yuan in the second quarter,
up 10.85% year on year. The net profit attributable to shareholders of listed companies after
deducting non-recurring gains/losses was 670 million yuan, up 16.85% year on year.
Specific operation of each business segment during the reporting period:
1. The production and operation of the pharmaceutical industry saw and kept positive
trend
During the reporting period, the Company’s core subsidiary Zhongmei Huadong witnessed
positive growth as a whole and achieved the operating revenue (including CSO business) of 6.054
billion yuan, up 10.04% year on year, and the consolidated net profit after deducting net profits
attributable to the parent company of 1.226 billion yuan, up 15.11% year on year. The net return on
equity was 12.38%.
During the reporting period, the Company has further consolidated its three core therapeutic
fields of oncology, endocrinology and autoimmunity. In the first half of 2023, the Company’s key
varieties of products maintained steady and rapid growth, and core products subject to national
centralized procurement and medical insurance negotiations still maintained stable market share. In
the meantime, the Company kept enriching its product lines through independent R&D and
introduction of external products, and formed differentiated and innovative product lines that cover
multiple indications and feature reasonable product echelon layout, becoming a leading enterprise
in the field of endocrinology and autoimmunity in China. In the field of oncology, the Company
kept enriching its pipelines around the key layout of ADC products and continued to maintain its
dominant position in the field of ADC in China. During the reporting period, the Company’s
16
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
innovative R&D kept advancing in an orderly manner, with positive results achieved. Please refer to
“(III) R&D situation” below in this section for details.
During the reporting period, Hangzhou Zhongmei Huadong Pharmaceutical Service
Corporation continued to build its multi-dimensional market access and professional promotion
capabilities, strengthen the academic driving, stabilize the hospital markets, expand the out-of-
hospital markets, strengthen the online markets, promote and optimize the construction of the
regional marketing department and KA system, enhance the market coverage of grassroots
terminals, and continuously promote the digital transformation of pharmaceutical services by taking
the opportunity of its product strategic cooperation with RLD multinational pharmaceutical
companies.
During the reporting period, the Company’s production systems kept making innovative in
production and operation modes and deepening the integrated management of production systems
with “high quality and high efficiency” as its goal. While ensuring the market supply, the Company
continued to promote the standardization construction of workshops and consolidate the basic
management. In the meantime, it further deepened the implementation of lean production and
actively promoted the reduction of production costs, witnessing continuous improvement in skill
level and per capita labor efficiency of employees. Moreover, the quality compliance and GMP
normalization management were further strengthened, and international registration and
certification of products were advanced. During the reporting period, the Tacrolimus Capsules of
Zhongmei Huadong was approved for marketing by the FDA, becoming another product of the
Company that is approved following Pantoprazole Sodium for Injection, Acarbose Tablets and
Daptomycin for Injection, China’s first Tacrolimus Preparation approved for marketing in the U.S.
and an important achievement of the international strategy of the Company’s preparation products.
2. The industrial microbiology achieved good results in four fields
The Company kept practicing the industrial microbiology development strategy, clarifying its
strategic layout focusing on four major fields of xRNA, featured APIs & intermediates, massive
health & biomaterials and animal health. In the meantime, the Company continuously enriched the
product lines in four major strategic segments of high innovation, high technology barrier and high
added-values and optimized its product structures through R&D. During the reporting period, the
overall sales revenue of the Company’s industrial microbiology segment deducting that of specific
commercial products businesses achieved a year-on-year increase of 27.47%.
During the reporting period, the field of xRNA expanded the application market in China with
low-cost and high-quality products, developed international businesses and created an efficient
market service system. The field of featured APIs & intermediates gave full play to the advantages
17
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
of three technical platforms of synthetic biology, fermentation and enzyme engineering and
maximized the production and manufacturing resources, making the Company an international,
distinctive and differentiated API enterprise featuring highly active APIs. Focusing on such
industrial orientations as bone health, brain health, antioxidation, personal care and aesthetic
medicine, high barriers, and import substitution of injectable medicinal materials, the field of
massive health & biomaterials created the automatic and standard industrial manufacturing system
and stepped out of C-end product markets with the technical support from the HIT Institute of
Synthetic Biology. In the field of animal health, the Company focused on three orientations of pet
treatment, pet nutrition, and water nutrition and water environment, and endeavored to become a
leader in China’s pet and aquatic animal health industry driven by R&D, led by markets and
guaranteed by production.
xRNA: In January 2023, the Company established Hangzhou Perfect mRNA Biotechnology
Co., Ltd. (hereinafter referred to as “Perfect mRNA”), which is mainly engaged in the development
of raw materials of mRNA enzyme and molecular diagnostic enzyme, as well as mRNA CDMO
services, together with the upstream enzyme raw materials and downstream preparation services.
Perfect mRNA comprised industrial collaboration with Anhui Meihua and Wuhu Huaren in the field
of xRNA, further optimizing the whole-industrial chain layout of xRNA.
Featured APIs & intermediates: The Company’s core subsidiaries Huida Biotech, Hizyme
Biotech and Jiangsu Joyang Laboratories vigorously expanded international key customers,
established the key customer service system, cultivated multiple new product lines, endeavored to
develop ADC drug toxin raw materials and services, senior intermediates and other businesses, and
gave full play to the advantages of industrial technologies of industrial microbiology, successfully
building a favorable reputation of “high technology, high quality and high efficiency” in this field.
Massive health & biomaterials: The Company’s core subsidiary Meiqi Health further
strengthened its sales manpower in overseas markets, built the core dealers network, and put in
place its channel layout in Asia Pacific, Europe, America, and China. It also set up the application
service system to create market opportunities for the differentiation of application services.
Animal health: Being optimistic about the development of animal health industry, the
Company acquired Jiangsu NAU Animal Pharmaceutical Co., Ltd. (herein after referred to as
“NAU Animal Pharmaceutical”) in April 2023, quickly setting foot in pet and aquatic animal health
segments. In the field of animal health, the Company has reserved more than 10 varieties of high-
end raw materials for pet health care, application and development of a variety of massive health
raw materials in the field of animal health, and more than 10 potential opportunities for people-to-
animal medicines, with a potential to realize integrated development of raw materials and
18
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
preparations in the future. NAU Animal Pharmaceutical will become an important development
platform for the Company’s animal health businesses in the field of industrial microbiology. The
Company’s existing industrial ecological chain, R&D resources and financial guarantee will keep
empowering and promoting the rapid development of NAU Animal Pharmaceutical in the field of
animal health.
At present, the Company’s industrial microbiology field has set up an international marketing
team with about 50 staff, forming a business structure featuring sales and market management
system of the industrial microbiology headquarters + professional sales team of subsidiaries, further
establishing an overseas localized marketing team and enhancing the ability to serve overseas
customers. In the future, the industrial microbiology field will further increase the proportion of
international business, with R&D, quality, service and regulatory registration as its main
competitiveness, thus forming a competitive advantage in international businesses.
3. The pharmaceutical business kept a stable growth trend as a whole and continued to
develop innovative businesses.
During the reporting period, the Company’s pharmaceutical business segment kept
consolidating its hospital markets and expanding out-of-hospital markets, and actively advanced its
innovative businesses. The Company’s pharmaceutical business segment achieved the operating
revenue of 13.631 billion yuan, up 11.19% year on year, and the net profit of 216 million yuan, up
9.14% year on year.
Adhering to the development principle of “High Quality + High Efficiency”, the Company’s
pharmaceutical business segment actively endeavored to build itself into an enterprise with leading
position in scale, network and services for the high-quality development, with the core placed on
“profits increase and costs reduction” for high-efficient development. In terms of traditional
businesses, the Company continuously consolidated its presence in Zhejiang Province and
endeavored to improve the quality and efficiency for high growth rate. For innovative businesses,
the focus was placed on product agency, third-party logistics, pharmaceutical e-commerce, featured
massive health and other fields. Focusing on its comprehensive abilities in policy affairs, marketing,
distribution and reserve, the Company set up the service platform to provide upstream and
downstream customers with personalized solutions, fostered the comprehensive competitive
advantages as a regional enterprise, and formed its full-channel promotion ability.
With regard to the traditional businesses, the Company always insisted on the service
philosophy of “High Quality + Fast Speed”, cared about policies with significant impacts on the
industry, made scientific prediction and optimized the layout, witnessing stable increase of the
hospital market share and fast growth trend in out-of-hospital markets, and maintaining its leading
19
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
position in Zhejiang Province. As for the hospital market, the Company placed its focus on such key
indicators as introduction of new products, hospital shares and order satisfaction rate, and converted
value-added services like police affairs and pharmacy administration into productivity, occupying a
leading position in the industry. In the field of medicinal materials, ginseng and antler, the Company
further improved its sales networks throughout Zhejiang Province, assigned more personnel to the
grassroots and expanded businesses in sub-markets by leveraging channels of its subsidiaries.
Moreover, the Company further expanded its decoction businesses throughout Zhejiang and
prepared for the expansion of Phase II of the Decoction Center relying on the advantages in
automation. The out-of-hospital markets were further expanded, with more private hospitals, clinics
and retail pharmacies covered. In the meantime, the Company continuously improved the
profitability of its self-retail businesses, created a new retail mode in East China, expanded its
service scope, imported more varieties, and made good preparations for introduction of
prescriptions relying on its advantages of “platform + products + network”.
Innovative businesses were further advanced and more efforts were made in innovative
products, innovative logistics, innovative services, etc. to facilitate multi-warehouse linkage,
integrate internal and external resources, and improve the overall efficiency of innovative
businesses. The Company continued to expand its agency businesses, focus on specialized medical
devices and enrich varieties of agent products. Moreover, the Company spared no effort to develop
the tripartite businesses of the supply chain. To date, the operation level of Jinhua Warehouse has
gradually approached that of Hangzhou Warehouse. The distribution tasks in areas not covered by
Hangzhou Warehouse will be transferred to Jinhua Warehouse. Hangzhou Warehouse launches the
expansion of its cold storage warehouse to fully develop the tripartite logistics of cold chain, further
consolidate its trump card of “medicine cold chain” and strive for licenses for more products.
Attaching equal importance to both “B2B+B2C”, the Company continued to upgrade the “Huadong
Medicine Business Network” and actively operated self-operated flagship stores of major e-
commerce platforms for better online sales. The Company launched and promoted the “Xuguanghe”
series online, constantly enriching its massive health product matrix.
During the reporting period, the Company’s pharmaceutical business segment actively fulfilled
its social responsibilities, quickly responded to special situations, and established a complete set of
emergency call plans. With the upstream and downstream pharmaceutical supply chain partners
gathered, the segment actively practiced the idea of “seizing time is to save lives” to foster its own
brands with social benefits, create economic benefits with brands, and promote the high-quality and
high-efficiency development of the Company through innovation.
20
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
4. Overseas aesthetic medicine witnessed increased profits and aesthetic medicine in
China saw rapid growth.
During the reporting period, the Company’s aesthetic medicine segment witnessed rapid
growth as a whole and achieved the total operating revenue of 1.224 billion yuan (excluding
internal offsetting factors), up 36.40% year on year.
Its wholly-owned subsidiary Sinclair actively overcame the negative impact of the slowing
global economic growth and kept expanding the global aesthetic medicine market. During the
reporting period, Sinclair achieved the sales revenue of 76.29 million pounds (about 669 million
yuan), up 26.07% year on year, and the EBITDA of 12.6 million pounds, attaining the operating
profit. In the second half of 2023, it is expected that Sinclair will maintain its growth trend as a
whole and may see better performance as the global market is further expanded.
As the aesthetic medicine market in China rebounded during the reporting period, Sinclair
(Shanghai), the Company’s wholly-owned subsidiary in China, kept expanding and maintained its
leading position in the regenerative aesthetic medicine market in compliance with relevant
requirements according to the concept of “medicine first” with experience as the core. In the first
half of 2023, Sinclair (Shanghai) achieved the cumulative operating revenue of 516 million yuan,
up 90.66% year on year and marking the continuous improvement of its profitability. The
Company’s aesthetic medicine business in China will maintain the favorable growth trend in the
second half as the consumption market in China keeps rebounding.
During the reporting period, the Company actively practiced the long-term vision of
cultivating and building the world’s leading innovative aesthetic medicine enterprise, continued to
steadily promote the strategy of dual-circulation development in and out of China, focused on the
global high-end aesthetic medicine market, strengthened its brand building, and accelerated the
integration of internal resources. To date, the Company has launched 36 high-end products in the
field of “non-invasive + micro-invasive” aesthetic medicine worldwide, of which 24 have been
marketed. The product portfolio covers non-surgical mainstream aesthetic medicine fields such as
facial and whole-body filling, energy source skin management, and body shaping. In the meantime,
the Company has formed integrated product clusters and ranks in forefront of the industry in terms
of quantity of products and number of fields covered, with continuously improved international
influence. With a professional marketing and promotion team comprised of about 300 talents, the
Company’s aesthetic medicine segment has built its global aesthetic medicine marketing network
with over 80 countries and regions covered.
During the reporting period, the Company actively advanced the global registration of its
aesthetic medicine products and simultaneously facilitated the registration and launching of
21
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
overseas products in China. Actively facilitating the registration for marketing in over 40 countries,
Sinclair has had obtained marketing authorizations for 11 products in 19 countries during the
reporting period. The Company also introduced and arranged multiple international innovative
aesthetic medicine products for different body parts. KiOmed Skinbooster, a global innovative
chitosan aesthetic medicine introduced by Sinclair from a Belgian company KiOmed Pharma SA
(hereinafter referred to as “KiOmed”) is now under clinical trial and its overseas registration
application is expected to be submitted in Q4 2023. Moreover, KiOmed is now developing multiple
types of global innovative products for facial (KiOmed Moderate lines, KiOmed Volumizer) and lip
(KiOmed Lips) filling. Sinclair actively promoted the registration and marketing of its core
products in global key markets, and has now started relevant clinical work necessary for marketing
Ellansé and MaiLi in the U.S.
During the reporting period, the Company kept advancing the registration and launching of its
core products in China. The Company’s V version and X version of poly-L-lactic acid (PLLA)
collagen stimulant Lanluma obtained the approval from Hainan Medical Products Administration
that Lanluma can be used in Bo’ao Lecheng International Medical Tourism Pilot Zone as an urgent
imported medical device for clinical purpose. In February 2023, China’s first case of treatment with
Lanluma was completed in ARSMO. In April 2023, Lanluma, a PLLA product of Sinclair, was
awarded “The Best Injectable Body Filler” by the 2023 AMWC, which vividly showcases the
authoritative recognition of Lanluma products and technologies by the international aesthetic
medicine industry, as well as the great affirmation of Sinclair’s achievements in the high-end
aesthetic medicine field. In addition, the Company is advancing the application for franchise rights
of Silhouette and Ellansé series products in Bo’ao Lecheng International Medical Tourism Pilot
Zone. Please see “(8) Progress of registration and marketing of aesthetic medicine products” in “(III)
R&D situation” below in this section for the progress of registration of the Company’s other key
aesthetic medicine products in China.
22
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
23
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
Figure: Key Aesthetic Medicine Products of Huadong Medicine
24
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
During the reporting period, Sinclair attended the IMCAS Conference in Paris, the world’s
leading conference on dermatology and plastic surgery, attracting extensive attention for its product
lines and new products launched. The on-site presentation of MaiLi products, the high-end HC
series of Sinclair, attracted over 2,000 physicians in the main venue. Sinclair also devoted itself to
offering high-quality training and education, kept enhancing its brand building, and continuously
improved the industry influence and competitiveness through practical training and sharing of
insights on industry leaders with Sinclair College, its education and training platform, as the carrier.
In March 2023, Sinclair held a half-year “Focus on Excellence World Tour” through its affiliated
Sinclair College. The “Focus on Excellence World Tour” will bring the best practice lectures, live
demonstrations, insights of experts from global aesthetic medicine industry, and interactive Q&A
exchanges for audiences eight international cities including Milan, Barcelona, So Paulo and Dubai,
as well as Chinese cities like Beijing, Shanghai, Hangzhou, Shenzhen and Chengdu. Sinclair
(Shanghai), the Company’s wholly-owned subsidiary and its aesthetic medicine business operating
center in Chinese market, kept developing the high-end markets for aesthetic medicine injections.
By the end of June 2023, Sinclair (Shanghai) has signed cooperation contracts with over 600
hospitals and trained over 1,100 certified physicians. Sinclair (Shanghai) also gives full play to the
advantages of global experts’ medical resources through its official learning platform “Sinclair
Education Vision” and keeps providing more rich, high-quality and innovative medical courses for
Chinese physicians, thus making sure to provide patients with professional and efficient services.
In the future, the Company’s aesthetic medicine segment will continue to focus on the high-
end market of global aesthetic medicine to form an international aesthetic medicine business
integrating R&D, manufacturing and marketing by upholding the strategy of “global operation
layout and dual-circulation operation & development”. With its core subsidiary Sinclair as the
global operation platform and integrating global technological and innovative resources, the
Company has achieved the global operation layout for its aesthetic medicine segment and
successively introduces “aesthetic medicine + biomedicine” products with great scientific
connotation and huge market potential into China. Internationally, the Company empowers the rapid
launching and commercialization of its superior international products relying on its great
registration and marketing abilities in China and steadily expands its presence in China, thus
fostering a new pattern features dual-circulation coordinated development and mutual promotion of
domestic and international businesses.
4. BD cooperation
In January 2023, the Company’s wholly-owned subsidiary Huadong Medicine (Hangzhou) Co.,
Ltd., signed an exclusive commercialization cooperation agreement with Kaixing Life Science and
25
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
Technology (Shanghai) Co., Ltd., a wholly-owned subsidiary of CARsgen Therapeutics Holdings
Limited. Under the agreement, Huadong Medicine (Hangzhou) obtained the exclusive
commercialization rights of Zevorcabtagene Autoleucel Injection (R&D code: CT053), a candidate
product of fully human anti-autologous BCMA (B cell mature antigen) CAR-T used by Kaixing for
the treatment of relapsed/refractory multiple myeloma. With great potential, Zevorcabtagene
Autoleucel Injection will further enrich the Company’s product lines in the field of blood diseases,
and will also share the expert network, research and clinical resources with existing key varieties of
the Company in the field in terms of marketing, thus achieving mutual complementary, mutual
development and effective collaboration. The Company will form multi-dimensional product lines
of chemotherapy medicines, ADC products and CAR-T products in the field of neoplastic
hematologic treatment after this transaction. Please refer to the Announcement on Signing an
Exclusive Commercialization Cooperation Agreement for Products by a Wholly-owned Subsidiary
(Announcement No.: 2023-004) disclosed by the Company on Cninfo (http://www.Cninfo.com.cn)
for details.
In March 2023, the Company intended to sign the Partnership Agreement of Hangzhou Capital
Biomedical Achievements Transformation Fund (hereinafter referred to as the “Partnership
Agreement”) with Hangzhou Jianheng Enterprise Management Co., Ltd., Hangzhou Industrial
Investment Co., Ltd., Hangzhou Taikun Equity Investment Fund Partnership (Limited Partnership),
Betta Pharmaceuticals Co., Ltd. and Hangzhou West Lake Industrial Fund Co., Ltd. to jointly invest
in the establishment of Guoshun Jianheng Venture Capital Partnership (Limited Partnership) with a
total subscribed capital of 210 million yuan, in a bid to further enrich the Company’s industrial
investment ecosystem relying on the industrial management experience of business managers and
resource advantages of other contributors by organically integrating government’s guidance fund
and excellent pharmaceutical capitals. By contributing 40 million yuan (or a contribution ratio of
19.05%), the Company will be the limited partner (LP) of the Partnership. Please refer to the
Announcement on Joint Investment with Professional Investment Institutions (Announcement No.:
2023-008) disclosed by the Company on Cninfo (http://www.Cninfo.com.cn) for details.
In April 2023, the Company’s wholly-owned subsidiary Hangzhou Zhongmei Huadong
Pharmaceutical Co., Ltd. signed the Agreement on Equity Transfer and Capital Increase of Jiangsu
NAU Animal Pharmaceutical Co., Ltd. (hereinafter referred to as “NAU Animal Pharmaceutical”),
with NAU Animal Pharmaceutical, natural person Zhai Zhongshu and Nanjing Jiuheng
Pharmaceutical LP (Limited Partnership). Zhongmei Huadong will invest no more than
265,333,300 yuan in total and acquire 70% of the equity in NAU Animal Pharmaceutical in the
form of equity transfer and capital increase, becoming a controlling shareholder of the latter. This
26
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
acquisition of NAU Animal Pharmaceutical further improved the industrial layout of the Company
in industrial microbiology. NAU Animal Pharmaceutical is at a stage of rapid growth. The average
annual growth rate of sales revenue in the past three years has exceeded 50% and the preliminary
construction has laid a solid foundation for its rapid development. After this transaction, NAU
Animal Pharmaceutical will become an important platform for Huadong Medicine to develop its
animal health business in industrial microbiology sector, while making full use of Huadong
Medicine’s advantages in industrial ecological chain and financial support capabilities to achieve
coordinated development in R&D, manufacturing, marketing, selling and other dimensions. Please
refer to the Announcement on Acquisition of 70% Equity of Jiangsu NAU Animal Pharmaceutical
Co., Ltd. via Equity Transfer and Capital Increase (Announcement No.: 2023-024) disclosed by the
Company on Cninfo (http://www.Cninfo.com.cn) for details.
In August 2023, the Company’s wholly-owned subsidiary Zhongmei Huadong signed the
Exclusive Product License Agreement with the American listed company Arcutis Biotherapeutics,
Inc. (hereinafter referred to as “Arcutis”). According to the agreement, Zhongmei Huadong
obtained the exclusive license of the globally innovative Roflumilast external preparations
(including Roflumilast Cream ZORYVE and Roflumilast Foam ARQ-154) of Arcutis in Greater
China (including Chinese mainland, Hong Kong, Macau and Taiwan Province) and Southeast Asia
(Indonesia, Singapore, Philippines, Thailand, Myanmar, Brunei, Cambodia, Laos, Malaysia and
Vietnam), including rights for development, registration, production and commercialization.
Zhongmei Huadong will pay Arcutis a down payment of 30 million US dollars, a milestone
payment of development, registration and sales with a maximum of 64.25 million US dollars, and a
graded double-digit net sales commission. The introduction of ZORYVE cream and ARQ-154 will
further supplement the Company’s product lines in the field of autoimmune and inflammatory skin
diseases, and consolidate the its core competitiveness in the field of autoimmunity. Please refer to
the Announcement on Signing an Exclusive Licensing Agreement for Products by a Wholly-owned
Subsidiary (Announcement No.: 2023-061) disclosed by the Company on Cninfo
(http://www.Cninfo.com.cn) for details.
5. ESG of the Company during the reporting period
With regard to ESG, the Company has always adhered to the concept of sustainable
development. Setting up a special ESG Committee to coordinate the Company’s ESG work, the
Company integrates the core theory of ESG with the enterprise development strategy and daily
operation management, guides and makes innovation in various work with a scientific concept of
social responsibility, upholds the idea of green production, actively responds to the “carbon
neutrality and carbon peaking” goals, operates with integrity in strict accordance with laws, and
27
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
actively fulfills its social responsibilities. By virtue of its excellent ESG governance ability, the
Company won the AA rating for ESG by CNI Index of Shenzhen Stock Exchange and the A rating
for ESG of WIND, and was awarded the 16th Top 100 Chinese Listed Companies in ESG by
Securities Times, Panorama Network Excellent Social Responsibility Award, etc.
6. Awards during the reporting period
During the reporting period, as the Company’s comprehensive competitive strength, efficient
operation and governance, and value creation ability were recognized by the market, it won a
number of awards and honors: The Company was included in Fortune China 500 for the 14th time
and ranked 358th. It was selected in the list of “2022 Top 100 Pharmaceutical Industries in China”
of MENET, reelected top 10 among “2022 Top 100 Pharmaceutical Enterprises in China”, and
included in “2023 Top 100 Chinese Enterprises in Overall Strength of Pharmaceutical Research and
Development”, “2023 Top 100 Chinese Enterprises in Chemical Drugs Research and Development”
and “2023 Top 50 Chinese Enterprises in Biomedicine Research and Development” by YaoZH. In
terms of investor relations management, the Company won numerous awards, including the Gold
Award for Panoramic Investor Relations - “Outstanding IR Company”, “Outstanding IR Team”,
“Best Corporate Communication Award”, “Best New Media Operation Award”, and the 14th
Tianma Awards for Investor Relations of Chinese Listed Companies - “New Media Award”, etc.
(III) R&D situation
(1) Overall R&D situation
During the reporting period, being “Scientific Research-based and Patient-centered”, the
Company further devoted itself to the field of cancer and chronic disease treatment, continuously
increased the R&D input, kept enriching the layout of innovative medicine R&D, enhanced the
construction of innovative R&D ecology and technological platform, and actively advanced the
progress of clinical trials, with multiple major staged achievements made. As of the date of the
Report, the Company has a total of 82 pharmaceutical projects under development, including 51
innovative and biosimilar medicine projects. During the reporting period, the Company input
1.057 billion yuan in R&D in the pharmaceutical industry segment. Among them, 668 million
yuan were used as direct R&D expenditures, up 15.91% year on year. R&D tasks mainly include
the following:
1) The Company continued to practice the new medicine R&D mode combining independent
R&D + cooperative entrusted development + product License-in, track the latest international
mechanism of medicine action and target, as well as the progress of clinical application research,
28
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
speed up the layout of innovative medicines and introduction of innovative medicine projects at
home and abroad, clarify innovative, differentiated and iterative standards for initiation of
projects, and strengthen the capabilities of independent innovation and R&D;
2) With “clinical value, pharmaco-economic value and commercial value” as the starting
point, the Company laid out multiple categories of innovative products in fields of endocrinology,
autoimmunity and oncology;
3) Focusing on clinical superior varieties and specialized medicines, the Company
accelerated the R&D layout of high-tech barrier generic medicines and modified new medicines;
4) The Company established and fostered the industrial chain advantages of “APIs +
preparations” for generic medicines, developed technical improvement and innovation of external
preparations, and strengthened its market competitiveness;
5) The Company strengthened the comprehensive dynamic evaluation of varieties under
development, strengthened the management of imported projects, especially clinical projects,
accelerated the speed and quality of development of clinical projects, especially those under phase
III clinical trials, and sped up the launching of innovative medicines;
6) The Company built its ADC global R&D ecology for win-win cooperation by fostering
the Polypeptide differentiation innovative technology platform, immune disease antibody
technology platform, microbiology fermentation cytotoxin technology platform, and innovative
linker and coupling technology platform.
(2) Innovative R&D strategy
As for innovative medicines, the Company insisted on its differentiated R&D strategy with
the focus placed on unsatisfied clinical needs of global patients, and gave priority to the layout of
three key fields of fields of endocrinology, autoimmunity and oncology to become a leader in
these fields. To date, the Company has formed 46 innovative product lines, with half of these
products researched and developed independently. As its product lines are continuously enriched,
the Company has constantly expanded its innovative medicine field to the R&D of multiple types
of medicines including micromolecule medicines, polypeptides, ADCs, bispecific or multi-
specific antibody medicines, as well as the exploration towards innovative therapies for diseases
in the fields of endocrinology, autoimmunity and oncology.
29
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
(3) Progress of R&D of innovative medicines, innovative medical apparatuses and
biosimilar medicines
Oncology
The Company endeavored to build the world’s leading platform for R&D of innovative
cancer medicines and established more than 30 innovative antineoplastic medicines covering
targeted micromolecule medicines, ADCs, antibodies, PROTAC, etc. through discovery, screening
and verification of new targets in preliminary R&D of medicines.
The world’s first-in-class ADC drug, ELAHERE, mirvetuximab soravtansine-gynx (R&D
code: IMGN853, HDM2002), introduced by the Company from ImmunoGen in the U.S. has
achieved the preset main end point for phase III single-arm clinical trial in China, with its pre-
BLA submitted in March 2023. It is planned to submit the BLA in China in Q3 2023. It was
included in the priority review by CDE in July 2023. In the meantime, ELAHERE was approved
to be introduced in Hainan thanks to the “Pioneering in Pilot Zone” licensed medical apparatuses
policies in Hainan Bo’ao Lecheng International Medical Tourism Pilot Zone, which is expected to
help Chinese PROC patients with platinum-resistant ovarian epithelial cancer, fallopian tube
cancer or primary peritoneal cancer who are folate receptor α (FRα) positive in time. In the future,
the Company plans to participate in the international multi-center PSOC clinical research to
advance its application in front-line treatment of ovarian cancer and support to use ELAHERE
as the preferred medicine combination for treatment of ovarian cancer.
Mefatinib Tablet, the Company’s first-class new medicine, was included as the variety for
breakthrough treatment in May, which is used for treating advanced non-small cell lung cancer
with rare EGFR mutations. Another ongoing phase III clinical trial for advanced non-squamous
non-small cell lung cancer with EGFR-sensitive mutations has completed the phase III study of
PFS events in July 2023. It is planned to submit an application for launching within 2023.
HDM2005, an ADC product independently developed by the Company, has completed PCC
confirmation in Q1 2023 and IND development is now in progress. It is planned to apply for
clinical trial in within 2024.
In the second half of 2023, two types of independent innovative products for tumors will
receive PCC confirmation and enter the IND development.
30
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
Endocrinology
The Company has created the world leading innovative medicine R&D development
platform for diabetes with GLP-1 target as the core. To date, the Company has established eight
products of GLP-1 and related targets that cover oral medicines, injections and other dosage
forms, including long-acting and multi-target global innovative and biosimilar medicines. The
Company will keep exploring innovative projects related to GLP-1 targets, expanding its
coverage to such indications as weight loss, lipid reduction and NASH, and constantly develop
innovative medicines with higher bioavailability and more clinical advantages.
HDM1002 (micromolecule GLP-1 receptor stimulant), an innovative medicine for diabetic
mellitus that is developed by the Company independently, has obtained approvals in the U.S. and
China, with the administration of the first subject in the first in human (FIH) achieved in the
beginning of June 2023. The IND application for obesity in China was submitted in June 2023. To
date, there is no oral micromolecule GLP-1 receptor stimulant in the world. HDM1002 will
further enrich the Company’s product lines in the field of endocrine therapy, accelerate the
Company’s integration into the global innovative pharmaceutical industry, and further enhance its
comprehensive competitiveness.
HDM1005, a GLP-1R and GIPR long-acting polypeptide dual-target agonist independently
developed by the Company, has entered the research stage of IND. To date, the project is
smoothly advanced and it is expected to submit the IND application in early 2024.
DR10624, a GLP-1R/GCGR/FGF21R target multiple agonist developed by the Company’s
holding subsidiary Doer Biologics, completed its first subject administration in phase I Multiple
Ascending Dose (MAD) clinical trial for the treatment of obesity in New Zealand in July 2023.
DR10624’s IND application for weight management of overweight or obese people in China was
approved in July 2023, IND application for diabetes indication in China was submitted in June
2023, and IND application for hypertriglyceridemia indication in China was submitted in August
2023.
Liraglutide Injection has had its marketing authorization application for diabetes indications
approved by NMPA in March 2023, and its marketing authorization application for obese or
overweight applications was approved in July 2023.
Semaglutide Injection has now completed the phase I clinical trial and reached the
31
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
equivalence study end point, with its phase III clinical study launched.
Insulin Degludec Injection has now completed the phase I clinical trial and reached the
equivalence study end point, with its phase III clinical study launched.
Autoimmunity
The Company has had over 10 varieties of biomedicines and micromolecule innovative
products in the field of autoimmunity.
The marketing authorization application of HDM3001 (QX001S), a biological similar of
Ustekinumab (Stelara) for plaque psoriasis has been accepted by NMPA in August 2023.
The IND application of HDM3002 (PRV-3279), an innovative medicine used for the
treatment of systemic lupus erythematosus (SLE), has been approved by CDE in April 2023 and
has been formally included in IIa phase MRCT (PREVAIL-2).
Being listed as Overseas New Medicine in Urgent Need for Clinical Purpose (First Batch)
by CDE, ARCALYST, a global innovative product introduced from Kiniksa in the U.S., is used
for the treatment of Cryo-Pyrin-Associated Periodic Syndromes (CAPS). It is expected that its
BLA for this application will be formally submitted in China in 2023. Moreover, the Company
has submitted the Pre-BLA for recurrent pericarditis in China at the end of June 2023.
The Company developed multiple new target and biological mechanism immune disease
early projects, which are all smoothly advanced. In the second half of 2023, a type of independent
innovative product for autoimmunity will receive PCC confirmation and enter the IND
development.
Innovative pharmaceutical apparatuses
HD-NP-102 (Dynamic Monitoring System of Glomerular Filtration Rate and MB-102
Injection): The Dynamic Monitoring System of Glomerular Filtration Rate and MB-102 Injection
jointly developed by the Company and MediBeacon, Inc of the U.S. can continuously measure the
glomerular filtration rate (GFR) of patients with normal or impaired renal functions by non-
invasive monitoring of the fluorescence emitted by MB-102 through intravenous injection. In July
2022, NMPA formally accepted the pharmaceutical apparatus registration application for the
system and is now reviewing the application. The MB-102 injection (Relmapirazin) used in
conjunction with this system is a global innovative medicine that completed the enrollment of all
subjects for international multi-center phase III clinical trial in February 2023. The pre-NDA has
32
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
submitted in China in April 2023. The PMA has been submitted in the U.S. in June 2023, which
has been accepted by FDA in July 2023.
Pipeline Diagram of Main Innovative Medicines and Biosimilars as of the Date of the
Report.
33
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
(4) Others tasks regarding Innovation R&D
Rapidly expanding scientific research team
The company has set up a full-chain efficient and hardworking core R&D team with
international visions composed of 1,500 high-level developers of various levels, and has
established a relatively sound R&D management system that covers the whole process of
medicinal development from target research, early medicinal discovery, pre-clinical research,
clinical trials to new medicine registration and marketing.
The early R&D team carried out a lot of pre-researches on novel and cutting-edge targets,
systematically studied from such aspects as target mechanism, phenotypic analysis and indication
selection, and supported the selection of early development strategies with high-quality internal
data, in a bid to advance the Company’s two major strategies of innovation and
internationalization and keep pace with industrial development trend of advancement of targets.
Since 2023, the Company has implemented the early exploratory project mechanism, sought
gradual development and accelerated its innovation by piloting the cutting-edge targets and
building platforms for popular fields, and placed its focus on three key fields of endocrinology,
autoimmunity and oncology. The Company has launched 9 early exploratory projects in the first
half of 2023, expecting to develop the first-in-class or best innovative medicines of the same type.
The Company’s clinical R&D team has continued to explore the speed and coverage of
innovation and break through the differentiated bottleneck in innovation in accordance with the
orientation of high efficiency and high quality, endeavoring to achieve the leap-forward
development of diversified innovation in clinical R&D. The R&D team has charged and
supported clinical projects from such dimensions as clinical study, operation, registration and
pharmaco-vigilance. In 2023, the Company is expected to submit the formal marketing
authorization applications for at least 3 innovation projects.
Advanced technical platforms
The Company has built such medicinal R&D platforms as new target screening and
verification platform, ADC R&D platform, CADD/AIDD platform and PROTAC technology
platform, aiming at accelerating the promotion of numerous pipe lines with original innovation
(first-in-class, best-in-class) or differentiated/iterative development values. Over the past 3 years,
34
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
the Company has obtained 6 PCC modular cumulatively and had 9 clinical applications approved
with the support from these platforms.
Among them, AI drug discovery & design (CADD/AIDD) platform is a key orientation
currently valued by the Company, which strengthens the construction of computing power and
algorithm system and intelligently process the data generated and accumulated in combination
with the research progress of the industry. In the meantime, rich data on the properties of finished
medicines accumulated by the Company lays the foundation for continuous optimization and
iterative prediction model of the properties of finished medicines and greatly improves the R&D
progress of several projects at different stages. At present, the platform is also expanding its
application in the R&D of polypeptide, ADC, protein and nucleic acid medicines. To date, the
platform has submitted about 30 patent applications and got about 2,000 compounds.
Other innovation results as of the reporting period
1) Patent applications
The Company’s Innovative Medicine Global R&D Center attached great importance to the
protection of intellectual property rights, valued the management of intellectual property rights in
the whole life cycle of medicines and the formulation of patent strategies, and set up an
intellectual property BP for the early warning, declaration and retention of patents in and out of
China, thus improving the comprehensive competitiveness of its products. To date, the Center has
claimed a total of over 80 patent applications, including 21 formal and PCT patent applications
since its establishment. All these patents cover such aspects as structures, preparation processes,
applications and formulations of new medicines.
2) Academic publications
Since 2022, the innovative medicine team has published 9 innovative research results on
journals/conferences. In 2023, the innovative medicine team published 5 papers in the fields of
oncology and endocrinology at conferences or on journals, including KRAS G12D-PROTAC
research selected in the summary of 2023 WCLC (with an oral report made), oral GLP-1
micromolecule agonist HMD1002 selected in the summary of 2023 EASD (with an oral report
made), targeted HPK1 micromolecule inhibitor research selected in the summary of 2023 CSCO,
PROTAC research results targeting BTK published on RSC Medicinal Chemistry Journal, and
35
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
clinical study results of Mefatinib at the first-line treatment for NSCLC published on Cancer
Communications.
3) Governmental subsidies
To date, the Company’s Innovative Medicine Global R&D Center has obtained approvals
from the government for 12 projects (applications for 3 new projects submitted in 2023 and are
under review), with the certified subsidies of 27.25 million yuan. The Company won the honor of
“Pioneering Innovation Team” of Zhejiang Province in 2021 and obtained the fund under
Zhejiang Province’s Pioneer Scientific and Technology Program for two consecutive years in
2021 and 2022. Meanwhile, HDM1002 and some other programs were all awarded prizes for
scientific and technological projects at the provincial and/or municipal level. Mefatinib won the
fund from the “Special Program for High-quality Development of Bio-pharmaceutical Industry in
Hangzhou”. The Company’s Innovative Medicine Global R&D Center has kept advancing the
high efficiency and high quality work style of various team revolving around its scientific
innovation and internationalization strategy to attract more high-end talents, successfully
importing multiple “Hangzhou 115” overseas talents and experts.
(5) Progress of development of major generic medicines
The Company further clarified the focused and prioritized varieties of existing generic
medicines under development by regularly organizing dynamic evaluation and analysis. As of the
date of the Report, key varieties are as follows:
S/N Field Item Specification Latest Progress
Approved to be launched by NMPA
1 Endocrinology Canagliflozin Tablets 0.1g, 0.3g
in January 2023
Pioglitazone Hydrochloride Application for launching accepted
2 Endocrine and Metformin 15/850mg in June 2022 and supplementary
Hydrochloride Tablets materials submitted in March 2023.
Application for launching accepted
3 Immunity Tacrolimus Ointment 0.03%, 0.1% in April 2022 and supplementary
materials submitted in April 2023.
Application for launching submitted
4 Immunity Tacrolimus Granules 1mg
and accepted in January 2023.
Application for launching of 5mg
version submitted and accepted;
Tacrolimus Sustained-
5 Immunity 5mg, 1mg, 0.5mg Applications for launching of 1mg
release Capsules
and 0.5mg versions submitted and
accepted in February 2023.
Application for launching submitted
6 Oncology Olaparib Tablets 100mg, 150mg
and accepted in October 2022.
36
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
Process certification completed and
7 Oncology Ibrutinib Capsules 140mg
BE test in progress.
Supplementary materials have been
8 Angiocarpy Macitentan Tablets 10mg
submitted.
Application for launching accepted
9 Anti-infection Fusidic Acid Cream 15g: 0.3g
in May 2023.
Application for launching submitted
10 Easing pain Lornoxicam for Injection 8mg
in August 2023.
(6) Progress of international registration
The Company has actively conducted its international registration tasks. As of the date of the
Report, main progress is as follows:
S/N Field Item Remarks Latest Progress
Officially approved by India in June 2023.
Supplementary materials for registration in
1 Endocrinology Acarbose APIs
Taiwan, China submitted in April and June
2023.
Approved by FDA in the U.S. in April
2 Immunity Tacrolimus Capsules 0.5mg, 1mg, 5mg
2023.
DMF application submitted in the U.S. in
3 Oncology Exatecan Mesylate Intermediate
March 2023.
Approved to be registered in India
4 Anti-infection Mupirocin APIs
February 2023.
Supplementary materials for ANDA
Caspofungin Acetate
5 Anti-infection 50mg, 70mg application (the U.S.) submitted in May
for Injection
2022.
CEP application for Jiangdong Premise
approved by EDQM in May 2023.
6 Anti-infection Polymyxin B Sulfate APIs
Approved to be registered in India
February 2023.
Registration in Taiwan, China approved.
7 Anticoagulant Fondaparinux Sodium APIs DMF defect reply submitted in the U.S. in
April 2023.
2.5 mg/0.5 mL, 5 Supplementary materials for ANDA
Fondaparinux Sodium mg/0.4 mL, 7.5 application (the U.S.) submitted in August,
8 Anticoagulant
Injection mg/0.6 mL, 10 October and December 2022, and February
mg/0.8 mL and May 2023.
Traditional
Registration of premise in Canada
9 Chinese Bailing Capsule 0.5g
approved in May 2023.
Medicine
(7) Progress of consistency evaluation
As of the date of the Report, the progress of consistency evaluation on quality and efficacy
of Company’s generic medicines is as follows:
S/N Field Item Specification Latest Progress
The notification of approval for
supplementary application of
1 Immunity Tacrolimus Capsules 1mg, 0.5mg consistency evaluation for 1mg
specification obtained in July 2023.
Application for consistency
37
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
evaluation of 0.5mg version
submitted and accepted in February
2023.
The notification of approval for
Pantoprazole Sodium supplementary application of
2 Gastroenterology 40mg
Enteric Capsules consistency evaluation obtained in
May 2023.
Application for consistency
3 Angiocarpy Indobufen Tablets 0.2g evaluation submitted and accepted in
March 2023.
Application for consistency
20ml:60mg, evaluation submitted and accepted in
4 Angiocarpy Adenosine Injection
30ml:90mg October 2022, and supplementary
materials submitted in April 2023.
(8) Progress of registration and launching of aesthetic medicine products in China
S/N Type Product Designation Purpose Latest Progress
Collection of curative effect indexes of all
MaiLi Extreme
1 Injections Facial filling subjects for clinical trial in China
Hyaluronic acid
completed in August 2023.
Testing for registration in China
MaiLi Precise
2 Injections Facial filling completed and pre-clinical work under
Hyaluronic acid
preparation.
Enrollment of all subjects for clinical trial
3 Injections Ellansé-M Facial filling in China completed in March 2023 and
follow-up in progress.
Perfectha
4 Injections Diphasic hyaluronic Facial filling Preparing for registration in China.
acid
Lanluma V
5 Injections Facial filling Preparing for registration in China.
Poly-l-lactic Acid
Removing benign
Energy source Testing for registration in China and
6 Glacial Rx (F1) pigmented lesions
equipment preparation of technical data in progress.
of skin, etc.
Skin compactness, Testing for registration in China and
body and facial preparation of technical data for V20
Energy source V series products
7 shaping, skin completed, and registration application
equipment (V20, V30)
rejuvenation, expected to be submitted in Q3 2023.
depilation, etc. Registration of V30 in China in progress.
Commercial marketing achieved in
European, American and other key
aesthetic medicine markets successively in
Energy source Facial skin
8 Préime DermaFacial September 2022.
equipment management
Device attribute identification in progress
in China; matching cosmetics approved
for registration in December 2022.
Body and facial
Energy source Re-launching in China completed in June
9 Reaction shaping, skin
equipment 2023.
compactness
(9) Progress of patents
In recent years, the Company attached great importance to the protection of intellectual
property and the commercialization and application of achievements, and the number of patent
38
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
applications and authorization were steadily increased. Over the years, the Company applied for
1,204 patents at home and abroad, including 426 authorized invention patents. Hangzhou Zhongmei
Huadong Pharmaceutical Co., Ltd., the Company’s wholly-controlled subsidiary, is a national
intellectual property demonstration enterprise. In November 2014, it passed the external audit of
Zhongzhi (Beijing) Certification Co., Ltd., becoming one of the first 147 companies that passed the
standards implementation certification and successfully passed the supervision and re-examination
of the enterprise intellectual property management system in October 2022.
During the reporting period, application and renewal of patents of the Company were
progressed smoothly, with a total of 68 patent applications submitted, including 38 patents for
invention. A total of 52 patents were granted.
Increase during the reporting period Total quantity
Patent type Number of patents Number of patents Number of patents Number of patents
applied for (unit) received (unit) applied for (unit) received (unit)
Invention patent 38 22 969 426
Utility patent 30 25 201 175
Appearance design
0 5 34 30
patent
Total 68 52 1204 631
Note: Data in the above table represent the statistical patent information of main subsidiaries engaging in the
pharmaceutical industry, industrial microbiology and aesthetic medicine within the Company’s consolidated
statements.
II. Core competitiveness
1. Open innovative medicine R&D system and continuously improved innovation ability
The Company has always attached great importance to innovative R&D and maintained great
input in R&D. Being “Scientific Research-based and Patient-centered”, the Company has fostered a
sound independent innovation system for R&D of medicines that covers the whole process from
medicine discovery, pharmaceutical research, pre-clinical study and clinical study to industrial
production, and set up its Global New Medicine R&D Center after years of vigorous development,
with “clinical value, pharmaco-economic value and commercial value” as the starting point.
Focusing on three core therapeutic fields of oncology, endocrinology and autoimmunity, the
Company has established in-depth strategic cooperation with leading pharmaceutical enterprises in
and out of China through collaborative product development, equity investment or by other means,
successfully building its global R&D ecosystem via introduction, fusion and innovation. In recent
years, the Company kept expanding its differentiated in-depth layout in the field of ADC,
39
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
successively invested in Qyuns Therapeutics, an anti-body R&D and production company, Nuoling
Biomedical Technology (Beijing) Co., Ltd., an ADC linker and coupling technology company,
incubated Zhejiang Huida Biotech Co., Ltd. with full product lines for ADC drug toxin raw
materials, and held shares of Doer Biologics, a multi-antibody platform R&D company. Moreover,
the Company established cooperation with Heidelberg Pharma, a global emerging technology
company in the field of ADC based in Germany, on equity investment and products, and organically
integrating with its advanced ATAC (Antibody-Amanita Conjugate) technology platform. In the
future, the Company will keep strengthening the construction of innovative platform and integration
of resources, further expand the cooperation on new technology platforms based on the ADC Global
R&D Ecology of Huadong Medicine, and create a world-leading ADC independent R&D platform.
Moreover, the Company keeps developing and has fostered differentiated innovative product
lines that cover the full R&D cycle via independent R&D, external cooperation, license-in, etc. As
of the date of the Report, the Company has reserved 51 types of innovative and biosimilar
medicines under development, which cover oncology, endocrinology, autoimmunity and other fields.
All these merits effectively empower the continuous initiation and launching of innovative products,
offering impetuses for the medium- and long-term development.
2. Comprehensive ability in developing international businesses
Vigorously advancing its internationalization, the Company has further strengthened its
presence in global energy-source aesthetic medicine apparatuses market by acquiring 100% equity
of High Tech and Viora. Meanwhile, the Company has also established product or equity
cooperation with Akso, Kiniksa and Provention Bioin in the U.S., Heidelberg Pharma in Germany,
etc. to complement and enrich the interests of commercial development of innovative medicines in
and out of China. Efforts are made to facilitate the international registration of products, and all
chemical raw medicines launched have obtained authorized certifications from FDA or EU. Our
products such as Daptomycin for Injection, Acarbose Tablets and Pantoprazole Sodium for Injection
have been approved by FDA, while some high-end industrial microbiological raw products enjoy
strong international competitiveness. The Company never stops its pace in developing international
logistics and purchase supplies to foster international purchasing abilities, and has been a part of
global innovative medicine R&D industry chain by driving the constant improvement of its abilities
in CMO/CDMO businesses.
3. Diverse product lines for specialized and chronic diseases, and comprehensive
competitiveness in diabetes treatment and care
Specialized in specialized and chronic diseases, as well as special medicines for years, the
Company has fostered good brand effect and laid strong market foundation in such fields as chronic
40
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
nephrosis, transplantation immunity, internal secretion and digestive system, continuously keeping
in the forefront of similar products in China in terms of market share. The Company has
comprehensively laid out product lines of innovative and differentiated generic medicines for
clinical mainstream therapeutic targets of diabetes, with over 20 types of products under
development or put in commercial production. The Company has also achieved full coverage of
clinical first-line immune-suppressive medicines and subsequent products in the field of organ
transplantation. With the world’s first-in-class layout in three core therapeutic fields of oncology,
endocrinology and autoimmunity, the Company has fostered multiple global innovative medicine
layouts and R&D ecologies in the field of ADC medicines, forming differentiated advantages.
4. Comprehensive competitive advantages that cover multiple diseases in the field of
autoimmunity
In recent years, the Company has continuously made in-depth layout around the field of
autoimmunity, introduced the world’s leading innovative technologies and products, and kept
improving its own innovative R&D capabilities. To date, the Company has had over 10 varieties of
biomedicines and micromolecule innovative products in the field of autoimmunity. In the meantime,
the Company’s Innovative Medicine R&D Center developed multiple new target and biological
mechanism immune disease early projects, which are all smoothly advanced.
In the field of autoimmunity, the indications of the Company’s existing and under-development
products include transplant immunity, systemic lupus erythematosus, psoriasis, atopic dermatitis,
seborrheic dermatitis, recurrent pericarditis, Cryopyrin-Associated Periodic Syndromes and other
41
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
diseases, covering such diseases as skin, rheumatism, cardiovascular, respiratory, and
transplantation. The Company has become one of the pharmaceutical companies with
comprehensive coverage in the field of autoimmunity in China. The Company established its
external preparations R&D platform in the field of autoimmunity, steadily promoted the R&D
innovation for external and complex preparations in combination with actual project practices
platform, mainly the development of external liquores, ointments, gelling agents and creams, as
well as improvement of the development ability of in vitro release and transdermal experiment
method, ability in biochemical detection of biomedicine, level in impurity spectrum analysis and
structure confirmation of APIs. To date, its holding subsidiary Huadong Medicine (Xi’an) Bohua
Pharmaceutical Co., Ltd. has fostered three production lines for external preparations.
5. China’s leading professional pharmaceutical service team and extensive market
network
42
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
In the pharmaceutical industry segment, the Company has fostered a professional
pharmaceutical service and market development team. Coring at the clinical values and academic
promotion, the team vigorously promotes the marketing mode that features the online integration of
comprehensive hospitals, primary level medical institutions, retailing, third-party terminals and
Internet, and has gradually formed multi-channel effective coverage and strong competitive
advantages.
As for pharmaceutical business, the Company has made its presence in Zhejiang market for
years and boasts a complete business ecosystem with diverse categories of products and services,
forming comprehensive competitive advantages in market access and coverage. Keeping improving
its four core competencies of logistics, information, finance and operation, and offering such high-
end value-added services as policy affairs, the Company has established business partnership with
90% mainstream pharmaceutical enterprises in and out of China, and covered all public medical
institutions, key private medical institutions and retain pharmacies in Zhejiang Province, with a
leading market share in Zhejiang Province and forefront ranking in the industry for consecutive
years. In recent years, the Company has witnessed rapid development in innovative businesses such
as products agency and market development, characteristic massive health industry, third-party
medical logistics featuring cold chain and medical e-commerce and has formed complete cold chain
logistics service system and ability at a leading level in China.
6. High-end international aesthetic medicine product lines that cover noninvasive and
micro-invasive mainstream non-operative fields
The Company successfully made its presence in the aesthetic medicine industry by acquiring
Sinclair based in UK. Acquiring international energy-source aesthetic medicine apparatus
enterprises High Tech and Viora in 2021 and 2022 respectively, Sinclair was granted the global
distributorship (except for Germany and UK) of Préime Derma Facial Multi-functional facial skin
management platform of EMA Aesthetics, an Irish company, in May 2022. Covering all middle-
and high-end markets of non-operative aesthetic medicine injections and energy-source aesthetic
medicine apparatuses, the Company has now held global rights of multiple patented products in
such fields as facial and body filling, facial cleansing, body shaping, catgut embedding, and energy-
source apparatuses, and set up an international aesthetic medicine operation and BD team. The
Company further integrates its R&D resources and competencies focusing on global high-end
aesthetic medicine markets. The Company has successfully developed its international aesthetic
medicine businesses that organically combine R&D, manufacturing and marketing, and established
an international aesthetic medicine marketing network based on its six global R&D centers in UK,
the Netherlands, France, Switzerland, Spain and Israel, as well as Sinclair’s six global production
43
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
bases in the Netherlands, France, the U.S., Switzerland, Bulgaria and Israel, with its products sold
in over 80 countries and regions. To date, the Company has developed 36 types of international
high-end “noninvasive and micro-invasive” aesthetic medicine products that cover facial and body
filling, catgut embedding, skin management, body shaping, depilation, private repair and other non-
operative mainstream aesthetic medicine fields. Specifically, 24 types of these products have been
launched in and out of China, and the other 12 types are “first-in-class” products under
development. With comprehensive product clusters formed, the Company now ranks in the
forefront of the industry in terms of product quantity and coverage.
7. Comprehensively improving the international competitiveness of the industrial
microbiology segment based on solid R&D and industrial base
With profound industrial base thanks to over 40 years of development in the industrial
microbiology sector, the Company has successfully developed and manufactured multiple types of
microbiological medicines, and established the key technology system for R&D and production of
microbiological products, ranking in the forefront of the industry in terms of scale and technological
level of microbiological fermented products. Being market demand-oriented, R&D technology-
driven and industrial resource-coordinative in the industrial microbiology segment, the Company
has fostered differentiated product lines and solutions. Since the establishment of the Industrial
Microbiology Division, the Company has led the overall business development in the field of
industrial microbiology, and formed a complete independent management system in operation,
R&D, investment, human resources and marketing. In the industrial microbiology segment, the
Company has also established the R&D clusters with Industrial Microbiology of Zhongmei
Huadong, HIT Institute of Synthetic Biology, Huida Biotech, Hizyme Biotech and Perfect mRNA as
the core, and seven industrial bases in Hangzhou Xiangfuqiao, Qiantang New Area, Jiangsu Joyang
Laboratories, Magic Health, Twisun Hi-tech, Wuhu Huaren, and NAU Animal Pharmaceutical.
Moreover, the Company has set up the largest fermentation monomer plants in Zhejiang, formed the
industry-leading microbiological medicine production ability and high-level R&D capacity that
covers all stages of microbiological engineering technologies from strain construction, metabolic
regulation, enzymatic catalysis, synthetic modification to separation and purification, and built a
complete manufacturing system for R&D, pilot test, commercial production, engineering and public
system guarantee of microbiological projects.
In the industrial microbiology segment, the Company has initiated over 230 R&D projects,
including 36 projects for xRNA (including 127 subprojects), 44 projects for featured APIs&
intermediates, and 28 projects for massive health & biomaterials, animal health, etc. By the end of
June 2023, the Company had 121 patents in the field of industrial microbiology, and 88 patents
44
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
were under review. In terms of R&D, the Company’s industrial microbiology segment has been
committed to forming an efficient R&D team with high-quality talents as the core. To date, there are
over 300 R&D personnel, over 20% of whom have obtained their master and/or doctoral degrees.
8. Prudent and pragmatic operation style, and stable returns to shareholders
Valuing innovation in management, the Company has always endeavored to satisfy the
demands for market competition by improving the quality of its operation. As a result, the Company
has achieved long-term steady development thanks to its high-quality products, excellent
commercialization capability, compliant yet efficient marketing services, differentiated market
positioning, innovative R&D layout, and complete talent planning. Over the past 23 years since it
was listed, the Company has distributed dividends for 20 times with the cumulative amount of
5.593 billion yuan, which is well in excess of the 250 million yuan raised during IPO. The
Company brings shareholders consistent and steady returns on investment.
III. Main businesses
Overview
Refer to “I. Main Businesses of the Company during the Reporting Period”
Year-on-year Changes in Major Financial Data
Unit: yuan
Year-on-year
Current reporting
Same period last year percentage Reasons for changes
period
increase/decrease
Operating revenue 20,385,344,288.81 18,197,963,991.01 12.02%
Operating cost 13,917,418,061.11 12,243,374,078.15 13.67%
Sales expenses 3,083,786,005.03 3,032,965,177.95 1.68%
Administrative
721,477,862.62 572,048,249.55 26.12%
expenses
Mainly due to the
Financial expenses 55,848,182.30 5,447,966.20 925.12% increase in net interest
expenses
Income tax expenses 345,279,440.91 287,938,727.72 19.91%
R&D input 558,407,142.27 566,596,381.67 -1.45%
Mainly due to the
increase in revenue in
Net cash flow from
2,021,743,748.65 284,234,410.27 611.29% the current period and
operating activities
accelerated withdrawal
of fund
Mainly due to the
Net cash flow from
-577,687,027.42 -995,224,437.77 41.95% decrease in investment
investing activities
in the current period
Mainly due to the year-
Net cash flow from on-year increase in
-926,491,607.55 277,803,243.85 -433.51%
financing activities debt repayment in the
current period
45
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
Net increase of cash
526,515,832.72 -459,496,727.95 214.59%
and cash equivalents
Material changes in profit composition or profit sources during the reporting period
□ Applicable N/A
No material changes in profit composition or profit sources during the reporting period.
(1) Composition of operating revenue
Unit: yuan
Current reporting period Same period last year Year-on-year
Proportion in Proportion in percentage
Amount Amount increase/decrease
operating revenue operating revenue
Total operating
20,385,344,288.81 100% 18,197,963,991.01 100% 12.02%
revenue
By sector
Business 13,636,059,547.28 66.89% 12,227,544,864.77 67.19% 11.52%
Manufacturing 6,155,987,802.07 30.20% 5,728,897,548.63 31.48% 7.46%
Aesthetic medicine
1,224,069,602.01 6.00% 897,380,506.25 4.93% 36.40%
[Note: 1]
Including:
International 668,946,339.96 3.28% 530,599,252.48 2.92% 26.07%
aesthetic medicine
Aesthetic medicine
646,500,104.35 3.17% 413,184,704.69 2.27% 56.47%
in China
Offset (inter-
-506,685,654.27 -519,490,722.47
sectoral offset)
By product
By region
Domestic sales 19,679,447,121.24 96.54% 17,641,053,155.99 96.94% 11.55%
Overseas sales 705,897,167.57 3.46% 556,910,835.02 3.06% 26.75%
[Note 1] The domestic aesthetic medicine business includes the income from the self-operated products of Sinclair (Shanghai), the
income from the aesthetic medicine products of the Company’s pharmaceutical commercial agency and the income from the OTC
weight-loss products of the Company. The statistical specification of the semi-annual of 2023 is consistent with that of the semi-
annual of 2022.
The operating revenue or profit accounts for more than 10% of the total by industry, product, or region
Applicable □ N/A
Unit: yuan
Year-on-year Year-on-year Year-on-year
percentage percentage percentage
Operating Gross profit
Operating cost increase/decrea increase/decrea increase/decrea
revenue rate
se in operating se in operating se in gross
revenue cost profit rate
By sector
13,636,059,547 12,832,274,870
Business 5.89% 11.52% 12.74% -1.02%
.28 .44
6,155,987,802. 1,270,066,961.
Manufacturing 79.37% 7.46% 4.52% 0.58%
07 31
By product
By region
19,679,447,121 13,680,511,269
Domestic sales 30.48% 11.55% 13.37% -1.11%
.24 .29
46
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
Overseas sales 705,897,167.57 233,906,791.82 66.86% 26.75% 32.87% -1.53%
If the statistical specifications of the Company’s main business data have been adjusted during the reporting period, the
Company’s main business data of the latest period should be adjusted according to the specifications at the end of the reporting
period.
□ Applicable N/A
IV. Non-main businesses
Applicable □ N/A
Unit: yuan
Proportion in total
Amount Note on reasons Sustainable or not
profit
Mainly due to long-
term equity investment
Investment gains -136,885,042.56 -7.67%
gains measured at
equity method
Gains and losses from
-5,100,698.38 -0.29%
changes in fair value
Asset impairment
-3,175,583.57 -0.18%
losses
Non-operating revenue 2,972,826.61 0.17% No
Non-operating
16,298,554.80 0.91% No
expenses
Mainly due to the
confirmation of
Other income 34,813,373.70 1.95% No
government grants in
the current period
Gains on asset disposal 3,519,820.08 0.20% No
V. Assets and Liabilities
1. Major changes in asset composition
Unit: yuan
End of the current reporting period End of last year
Change of Note on major
Proportion in Proportion in proportion changes
Amount Amount
total assets total assets
4,393,835,953. 3,996,302,178.
Monetary funds 13.33% 12.81% 0.52%
54 41
Accounts 7,396,011,322. 7,198,746,788.
22.44% 23.08% -0.64%
receivable 70 59
4,600,017,100. 4,495,483,328.
Inventories 13.96% 14.41% -0.45%
80 54
Investment real
13,174,524.11 0.04% 13,648,240.14 0.04% 0.00%
estate
Long-term
1,554,304,930. 1,659,076,538.
equity 4.72% 5.32% -0.60%
05 78
investment
3,882,268,169. 3,981,653,265.
Fixed assets 11.78% 12.76% -0.98%
12 52
47
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
Construction in
995,490,666.09 3.02% 873,159,427.47 2.80% 0.22%
progress
Right-of-use
140,455,892.14 0.43% 166,505,297.17 0.53% -0.10%
assets
Short-term 1,052,194,176.
3.19% 947,516,383.37 3.04% 0.15%
borrowings 07
Contract
125,334,375.52 0.38% 146,488,489.07 0.47% -0.09%
liabilities
Mainly due to
Long-term 1,051,457,747. repayment of
746,918,081.65 2.27% 3.37% -1.10%
borrowings 44 debt in the
current period
Lease liabilities 92,232,272.51 0.28% 84,610,324.98 0.27% 0.01%
Other non- 1,320,687,263. 1,037,279,933.
4.01% 3.33% 0.68%
current assets 41 15
2. Information about main overseas assets
Applicable □ N/A
Proportion
Control Where
of overseas
measures to there are
Contents of Operation Earnings assets to
Reasons Asset size Location ensure significant
assets mode position the
assets impairment
Company’s
security risk
net assets
Approval
of
decisions
on major
matters and
daily
Sinclair financial Loss in the
Equity 2,264,625,3 United Independen
Pharma supervision current 11.22% No
acquisition 00 yuan Kingdom t auditing
Limited by the period
Board of
Directors,
and audit
by external
intermediar
ies
3. Assets and liabilities measured at fair value
Applicable □ N/A
Unit: yuan
Gain/loss Accumulat
Amount at Depreciatio
from fair e d fair Purchase Selling
the n reserves Amount at
value value amount in amount in Other
Item beginning withdrawn the end of
changes in changes the current the current changes
of the during the the period
the current recognized period period
period period
period in equity
Financial
48
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
assets
2.
-
Derivative 29,907,470. 24,806,772.
5,100,698.3
financial 68 30
8
assets
4. Other
equity
360,910,87 - 1,114,211.6 51,794,250. 2,051,811.6 409,848,69
instrument 4,145.32
6.41 808,768.81 6 00 5 1.27
investment
s
-
390,818,34 51,794,250. 2,856,435.1 434,655,46
Total 5,909,467.1 114,211.66 4,145.32
7.09 00 4 3.57
9
Financial
0.00 0.00
liabilities
Other changes
Changes in exchange rate
Whether there are significant changes in the main asset measurement attribute of the Company during the reporting period.
□Yes No
4. Limitation of asset rights at the end of the reporting period
Item Ending book value Reasons for limitation
Monetary funds 450,409,418.49 Certificate of deposit and cash deposit that cannot be withdrawn at any time
Intangible assets 52,246,350.00 Land use rights mortgaged for bank loans
Total 502,655,768.49
VI. Investment
1. Overview
Applicable □ N/A
Investment amount in the reporting Investment amount in the same period of
Percentage change
period (yuan) last year (yuan)
1,101,613,342.52 1,128,489,759.34 -2.38%
2. Significant equity investments acquired during the reporting period
Applicable □ N/A
Unit: yuan
Nam Progr Profit Invol
Discl Discl
e of Way Inves Share Term ess as Proje or ved
Main Fund Prod osure osure
inves of tment holdi Partn of of the cted loss in
busin sourc uct date index
ted inves amou ng er inves balan inco of litigat
ess e type (if (if
comp tment nt ratio tment ce me inves ion or
any) any)
any sheet tment not
49
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
date in the
curre
nt
perio
d
Paym
ent of
some
equit
R&D
y
,
transf
produ
er
Jiang ction
amou
su and Cninf
nt
NAU sales o
and -
Anim of (http:
Acqu 265,3 Equit equit 586,7 April
al anim 70.00 Long Equit //ww
isitio 33,30 y None y 13.83 No 20,
Phar al % term y w.cni
n 0.00 funds capit [Note 2023
mace drugs nfo.c
al ]
utical and om.c
incre
Co., healt n)
ase
Ltd. h
amou
care
nt
produ
accor
cts
ding
to the
agree
ment
Hang
zhou
Jianh
eng
Enter
prise
Hang
Mana
zhou
geme
Guos Ventu
nt
hunji re
Co., Fund
anhe capit
Ltd., regist
ng al Cninf
Hang ration
Ventu inves o
zhou not
re tment Newl (http:
40,00 Equit Indus comp Marc
Capit (inve y 19.05 Long Equit //ww
0,000 y trial leted 0.00 No h 28,
al stme establ % term y w.cni
.00 funds Inves and 2023
Partn nt in ished nfo.c
tment fund
ershi unlist om.c
Co., not
p ed n)
Ltd., contri
(Limi comp
Hang buted
ted anies
zhou
Partn only)
Taiku
ershi
n
p)
Equit
y
Inves
tment
Fund
Partn
50
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
ershi
p
(Limi
ted
Partn
ershi
p),
Betta
Phar
mace
utical
s Co.,
Ltd.,
Hang
zhou
West
Lake
Indus
trial
Fund
Co.,
Ltd.
305,3 -
Total -- -- 33,30 -- -- -- -- -- -- 586,7 -- -- --
0.00 13.83
Note: For the acquisition project of NAU Animal Pharmaceutical, non-operating special circumstances such as divestiture of
transaction-related assets and disposal of transaction-related expenses occurred in Q2 2023, which are main reasons for book loss
in the first half of 2023.
3. Significant non-equity investments in progress during the reporting period
Applicable □ N/A
Unit: yuan
Reaso
Cumul
Cumul ns for
ative
Invest ative not
Industr actual
ment incom meetin
Invest y invest
amoun e g the Disclo
ment involv ment Project Disclo
Way of t Project realize planne sure
in ed in amoun Fund ed sure
Item invest during progre d by d index
fixed the t by source incom date (if
ment the ss the end schedu (if
assets invest the end e any)
reporti of the le and any)
or not ment of the
ng reporti project
project reporti
period ng ed
ng
period incom
period
e
Huado
ng
Pharm
Medici Cninfo
aceutic
ne Self- 1,790, March (http://
al 7,826, Equity 98.80
Biome built Y 932,43 0.00 0.00 N/A 9, www.c
manuf 888.70 funds %
dical project 3.36 2017 ninfo.c
acturin
Scienc om.cn)
g
e and
Techn
51
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
ology
Park
Project
Phase
II
Huado
ng
Medici
ne Life
Scienc
Cninfo
e Pharm
Self- 61,553 330,32 April (http://
Industr aceutic Equity 90.68
built Y ,130.9 9,801. 0.00 0.00 N/A 21, www.c
ial al funds %
project 3 21 2021 ninfo.c
Park R&D
om.cn)
(Xiang
fu
south
plot)
project
69,380 2,121,
Total -- -- -- ,019.6 262,23 -- -- 0.00 0.00 -- -- --
3 4.57
4. Investment in financial assets
(1) Securities Investment
Applicable □ N/A
Unit: yuan
Gain/l Accu
oss mulat
Purch Sellin
Book from ed Gain/l
Accou ase g
value fair fair oss
Stock Initial nting amou amou Endin
Type at the value value during Accou
Stock abbre invest measu nt in nt in g Fund
of begin chang chang the nting
code viatio ment remen the the book source
stock ning es in es report item
n cost t curren curren value
of the the recog ing
model t t
period curren nized period
period period
t in
period equity
Dome Other
Fair
stic equity
20,20 value 8,064, - 1,475, 2,051, 5,208, Equit
and instru
RAPT RAPT 7,400. measu 797.8 804,6 616.7 0.00 811.6 0.00 362.7 y
overse ment
00 remen 6 23.49 5 5 2 funds
as invest
t
stock ments
20,20 8,064, - 1,475, 2,051, 5,208,
Total 7,400. -- 797.8 804,6 616.7 0.00 811.6 0.00 362.7 -- --
00 6 23.49 5 5 2
Note: Huadong Medicine Investment Holding (Hong Kong) Limited, a subsidiary of the Company, purchased 218,102 Series C-2
preferred shares of RAPT Therapeutics, Inc. in a total of 3 million US dollars in 2018. RAPT Therapeutics, Inc. was listed on
NASDAQ exchange on October 30, 2019 (stock code: RAPT). As of the end of the reporting period, Huadong Medicine
Investment Holding (Hong Kong) Limited holds 39,500 shares in RAPT after it reduced its stake, accounting for 0.115% of the
total shares of RAPT Therapeutics, Inc.
52
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
(2) Derivatives investment
Applicable □ N/A
Unit: Ten thousand yuan
Propo
rtion
of the
invest
ment
amou
nt at
Initia
Invest Purch Sellin the Actua
l Invest
Rela ment ase g Provis end of l
Name of Type deriv ment
ted amou amou amou ion of the gain/l
derivati of ative Com amou
part Termi nt at nt nt impair period oss
ves Associ deriva s mence nt at
y nation the during during ment in the during
investm ation tives inves ment the
trans date begin the the reserv net the
ent invest tmen date end of
actio ning report report e (if assets report
operator ment t the
n of the ing ing any) of the ing
amo period
period period period Comp period
unt
any at
the
end of
the
report
ing
period
Wholl
Sinclair y- Curre Januar -
2,990. 2,480.
Pharma owned No ncy 0.00 y 18, -- 0.00 0.00 0.00 0.12% 510.0
75 68
Limited subsid swap 2022 7
iary
-
2,990. 2,480.
Total 0.00 -- -- 0.00 0.00 0.00 0.12% 510.0
75 68
7
Capital source of derivatives
Equity or self-raised funds
investment
Litigation (if applicable) N/A
Date of announcement of the Board
of Directors on derivatives August 10, 2022
investment approval (if any)
Risks: 1. Market risks: The interest rate, exchange rate and other prices on the market may
fluctuate due to changed domestic and overseas economic policies and situations, thus
changing the price of financial derivative instruments and causing losses.
2. Liquidity risks: Transactions fail to be completed due to the market lacking liquidity
Note on the risk analysis and and counter-parties.
control measures for derivatives 3. Operational risks: Trading financial derivative instruments requires experts who can
holding during the reporting period deal with complexity, which may cause operational risks due to traders or managers
(including but not limited to market thinking there is an error or system failure and out of control.
risks, liquidity risks, credit risks, 4. Contractual risks: Contracts on financial derivative business expire, some of which
operational risks and legal risks) cannot be performed on time, and thus they are breached.
5. Legal risks: Relevant legal changes lead to a contract that is not in conformity with
local laws, so that the contract cannot be performed, or contractual terms are omitted and
unclear; or losses are caused to the Company due to the counter-party violating relevant
laws and regulations, and thus the contract cannot be performed as required.
53
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
Measures: The Company and its wholly-controlled subsidiaries avoid speculation and
arbitrage when trading financial derivatives, so that strict risk control will be employed
during the execution of contracts concerning financial derivatives trading.
1. The Company strictly abides by prudent investment principles, selects prudent
investment types, and makes investments within the amount approved by the Board of
Directors.
2. The Company carefully selects counter-parties for trading, and only trades
derivatives with financial institutions featuring robust operations, sound reputation and
business license for financial derivative trading. The Company may resort to external
professional investment and legal service institutions if necessary to provide consulting
services for the Company’s financial derivative trading, as well as scientific and precise
investment strategies and suggestions.
3. The Company has formulated the Management Rules for Securities Investment and
Derivative Trading, setting detailed rules on the management, supervision and information
closure related to the Company’s derivative trading principles, scope, decision-making
authority and capital use, which can effectively prevent investment risks. Besides, the
Company will strictly implement related management rules, assign special personnel to
follow up on the progress of financial derivative trading. For instance, relevant measures
shall be taken in time to control investment risks if there are risks that may affect the
Company’s capital safety The Company’s audit department is in charge of monitoring and
checking the execution of financial derivative trading and reporting to the Audit
Committee of the Board of Directors.
4. The Company’s audit department is in charge of monitoring and checking the
execution of financial derivative trading and reporting to the Audit Committee of the Board
of Directors.
In case of changing market prices or
fair values of invested derivatives
during the reporting period, the
Please refer to “Disclosure of fair value” in the “Financial Report” for details when the
analysis of the derivatives’ fair
derivatives are measured at fair value on the market.
values shall disclose the specific
methods adopted, relevant
assumptions and parameter settings.
Note on accounting policies and
specific principles of accounting
concerning derivatives during the
reporting period, and whether they N/A
change significantly when
compared with that in the previous
reporting period
The Company invests in derivatives for the avoidance of market fluctuation risks and
Specific opinions of independent hedging, which is closely associated with daily operation requirements. The Company has
directors on the Company’s formulated the Management Rules for Securities Investment and Derivative Trading and
investments in derivatives and risk enhanced trading risk management and control, which contributes to the avoidance and
control control of operational risks, improving the Company’s capability to withstand market risks.
No loss is caused to the Company and all shareholders.
5. Use of raised funds
□ Applicable N/A
No such case during the reporting period.
54
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
VII. Major assets and equity sales
1. Major assets sales
□ Applicable N/A
No such case during the reporting period.
2. Major equity sales
□ Applicable N/A
VIII. Analysis of controlling and shareholding companies
Applicable □ N/A
Main subsidiaries and the shareholding companies that have an impact on the Company’s net profit of more than 10%
Unit: yuan
Company Company Main Registered Operating Operating
Total assets Net assets Net profits
Name type business capital revenue Profits
Production
and
manageme
nt of
Traditional
Hangzhou
Chinese
Zhongmei
and
Huadong 872,308,13 14,501,992, 9,752,573,8 5,918,597,5 1,361,020,8 1,181,491,3
Subsidiary Western
Pharmaceut 0 385.70 49.66 84.28 37.61 52.18
raw
ical Co.,
medicines
Ltd.
and
preparation
s, and
health care
products
Acquisition and disposal of subsidiaries during the reporting period
Applicable □ N/A
Methods of acquisition and disposal of Impact on the overall production,
Company Name
subsidiaries during the reporting period operation and performance
Jiangsu NAU Animal Pharmaceutical Industrial platform of industrial
Equity acquisition, capital increase
Co., Ltd. microbiology
Expand the pharmaceutical business
Huadong Medicine Dongyang Co., Ltd. Equity acquisition
network coverage in Zhejiang Province
Technology innovation platform in the
Hangzhou Perfect mRNA Biotechnology
Newly established field of industrial microbiology and
Co., Ltd.
pharmaceuticals
Information of major shareholding companies
IX Structured entities controlled by the company
□ Applicable N/A
55
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
X. Risks and countermeasures
1. Industry policy and market operation risks
The healthy development of the pharmaceutical industry in China is inseparable from
China’s supervision over the pharmaceutical industry. In recent years, policies have been
continuously promoted, gradually standardized, normalized and systematized with the deepening
of reforms in the medical and health care field. The external factors such as geopolitics and
macroeconomic policies disturb the market and bring uncertainties to the pharmaceutical market
in China, which poses new challenges to the production cost and profitability of the
pharmaceutical industry. Besides, there is a risk of price reduction of new drug products.
Countermeasures: the Company will pays close attention to China’s pharmaceutical policies
and the industrial development trend, makes adjustments in time, increases investment in R&D,
integrates independent R&D with external introduction, accelerates the layout of innovative
varieties in the core treatment field, keeps enriching the product lines, and improves the core
competitiveness. In the meantime, the Company reduces the production & operation risks through
lean management, cost reduction, and benefit increase, and vigorously expands grassroots and
self-funded markets to enlarge the market coverage. Great efforts are made to explore the fields of
aesthetic medicine and industrial microbiology, constantly improve brand competitiveness, and
create new profit points.
2. Risk in new drug R&D
R&D of innovative drugs is a high-investment, high-risk, and long-term task. Generally, it
takes a long time for a new product to be launched from R&D to pre-clinical research, clinical
trials, application for registration, production approval, etc. It is always time-consuming and
affected by such factors as national policies, market factors, and regulatory approval. In addition,
the new drug R&D sets higher requirements for R&D personnel; the investment of manpower and
early R&D expenses will put some pressure on the Company to achieve its current business
objectives. Meanwhile, new medicines will be tested by the market demands after launching,
resulting in the return on R&D investment less than expected.
56
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
Countermeasures: the Company will continue to optimize the innovation mechanism,
constantly improve the scientific research, evaluation and decision-making system of new drugs,
and strengthen the establishment of close ties with well-known R&D institutions at home and
abroad. It will also focus on the core treatment field, continuously enrich and optimize the product
lines through independent initiation and external introduction, and continuously improve the
independent R&D strength to foster its own R&D ecosystem. The Company will continue to
increase its introduction of high-level scientific research talents, strengthen the training and
encouragement of internal core technicians, and cultivate a high-level innovative scientific
research team that can support the whole cycle of innovative drugs R&D.
3. Risk in exchange rate fluctuation
As the internationalization is further advanced, the Company increasingly develops
international cooperation and exchanges, expands the sales network of aesthetic medicine in the
world, and accelerates the development of its industrial microbiology segment, rising the
proportion of foreign currency settlement business. There is uncertainty in exchange rate
fluctuation affected by the complicated international political and economic situations. The
fluctuation in exchange rate has a far-reaching and lasting impact on the Company, i.e. bringing
good economic benefits but also affecting the cost and profit level. The fluctuation in exchange
rate will affect the price of the Company’s export products and cause exchange gains and losses to
the Company, thus directly affecting the Company’s assets, liabilities and income, further the
operation ability, debt repayment ability and profitability.
Countermeasures: the Company will pay close attention to the fluctuation in exchange rate,
adjust our business countermeasures in time according to its own situation, and resolve the
adverse effects; develop the exchange risk awareness, and improve the foreign exchange risk
management system; strengthen the training of financial personnel’s professional skills and risk
awareness, enhance the awareness of risk avoidance, and make good use of financial means to
avoid exchange rate risks.
4. Risk in investment and merger
57
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
Foreign investment is one of the important ways of enterprise development. In recent years,
the Company has continued to invest and do mergers and acquisitions in such fields as innovative
medicines, aesthetic medicine and industrial microbiology, so as to form goodwill and realize the
innovation and transformation development strategy. If the company acquired in the future faces
the risk of performance fluctuation, there may be a risk of goodwill impairment, adversely
affecting the Company’s current operation performance. At the same time, the post-investment
management and business integration of the target company also put forward higher requirements
for the management of the Company.
Countermeasures: The Company will strive to comprehensively improve our capabilities in
overall planning, management structure, financial management, overall operation and governance,
and business integration; strengthen the resource sharing and synergy of acquired subsidiaries;
regularly test the impairment of goodwill; and enhance comprehensive, scientific and timely post-
investment management.
XI. Registration form of receptions, including research, communication and interview,
during the reporting period
Main content
of discussion Index of basic
Reception Reception Reception Type of Reception
and information of the
date address method visitor object
information research
provided
Please refer to the
CICC, TF Huadong Record of Investor
Securities, Medicine & Relations Activities
Institutio
Conference Industrial CARsgen on January 17, 2023
January 17, n and
Room of the Others Securities, Therapeutics presented on the
2023 individu
Company CSC Commercializ websites of
al
Financial, ation Project irm.cninfo.com.cn
etc. Exchange and cninfo.com.cn
for details.
Please refer to the
Record of Investor
China
Relations Activities
Securities
Conference Investor on February 15 to
February 15 On-site Institutio Cooperation
Room of the communicati 16, 2023 presented
to 16, 2023 survey n , Zheshang
Company on on the websites of
Securities,
irm.cninfo.com.cn
etc.
and cninfo.com.cn
for details.
Institutio Kaiyuan Please refer to the
Conference Investor
May 2 to 3, On-site n and Securities, Record of Investor
Room of the communicati
2023 survey individu CCIC, GF Relations Activities
Company on
al Securities, on March 2 to 3,
58
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
etc. 2023 presented on
the websites of
irm.cninfo.com.cn
and cninfo.com.cn
for details.
Please refer to the
Record of Investor
2022 Annual
GF Relations Activities
Institutio Performance
Conference Securities, on April 14, 2023
April 14, Online n and Exchange
Room of the Haitong presented on the
2023 meeting individu Meeting of
Company Internationa websites of
al Huadong
l, CCIC, etc. irm.cninfo.com.cn
Medicine
and cninfo.com.cn
for details.
Please refer to the
Citic Record of Investor
2023 Q1
Securities, Relations Activities
Institutio Performance
Conference TF on April 21, 2023
April 21, Online n and Exchange
Room of the Securities, presented on the
2023 meeting individu Meeting of
Company Haitong websites of
al Huadong
Securities, irm.cninfo.com.cn
Medicine
etc. and cninfo.com.cn
for details.
Please refer to the
Record of Investor
Relations Activities
on May 8, 2023
Institutio Activities of
Conference CICC, Citic (Activities of
On-site n and Investors’
May 8, 2023 Room of the Securities, Investors’ Reception
survey individu Reception
Company etc. Day) presented on
al Day
the websites of
irm.cninfo.com.cn
and cninfo.com.cn
for details.
Please refer to the
Record of Investor
2022 Annual
Relations Activities
and 2023 Q1
Institutio Institution on May 12, 2023
Conference Online
May 12, Online n and and presented on the
Room of the Performance
2023 meeting individu individual websites of
Company Meeting of
al investors irm.cninfo.com.cn
Huadong
and cninfo.com.cn
Medicine
for details.
Please refer to the
Huatai Record of Investor
Securities, Relations Activities
June 13, June Conference China Life Investor on June 13, 15 and
On-site Institutio
15 and June Room of the Assets, communicati 16, 2023 presented
survey n
16, 2023 Company UBS on on the websites of
Securities, irm.cninfo.com.cn
etc. and cninfo.com.cn
for details.
59
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
Section IV. Corporate Governance
I. Annual and extraordinary general meetings held during the reporting period
1. Shareholders’ meetings in the reporting period
Proportion of
Sessions Meeting type Convene date Disclosure date Meeting resolution
investors present
Please refer to the
Announcement of
Resolutions of
2022 Annual
General Meeting
of Huadong
2022 Annual Annual general
61.65% May 8, 2023 May 8, 2023 Medicine
General Meeting meeting
(Announcement
No.: 2023-033) on
Cninfo
(http://www.Cninf
o.com.cn) for
details.
2. Extraordinary general meetings convened at the request of preference shareholders with resumed
voting rights:
□ Applicable N/A
II. Change of directors, supervisors and senior managers of the Company
Applicable □ N/A
Name Title Type Date Reasons
Additional Independent
Huang Jian Independent Director Elected May 8, 2023
Director
Retirement at Retirement at
Yang Lan Independent Director May 8, 2023
expiration of the term expiration of the term
Niu Zhanqi Director Retired June 21, 2023 Personal reasons
III. Profit distribution and share capital increase by capital reserve conversion during the
current reporting period
□ Applicable N/A
The Company does not plan to distribute cash dividends, no bonus share will be issued; and no capital reserve will be converted to
increase the share capital in the first half of 2023.
IV. Implementation of the Company’s equity incentive plan, employee stock ownership plan
or other employee incentive measures
Applicable □ N/A
60
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
1. Equity incentive
(1) On August 31, 2022, the Company convened the second meeting of the 10th Board of Directors and the
2nd meeting of the 10th Board of Supervisors, deliberating on and passing the Proposal on the Company’s 2022
Restricted Share Incentive Scheme (Draft) and Its Summary, the Proposal on Management Rules for the
Implementation and Assessment of the Company’s 2022 Restricted Share Incentive Scheme, the Proposal on the
Management Rules of the Company’s 2022 Restricted Share Incentive Scheme, and the Proposal on Applying to
the General Meeting for Authorizing the Board of Directors to Handle Equity Incentive-related Matters.
Independent directors expressed their independent opinions on whether this incentive scheme is conducive to the
sustainable development of the Company and whether there is any situation that harms the interests of the
Company and all shareholders. See the relevant announcement of the Company published on Cninfo
(http://www.Cninfo.com.cn) on August 10, 2022 for details.
(2) On August 10, the Company disclosed the Announcement on Independent Directors Publicly Soliciting
Proxy Voting Rights on Cninfo (www.cninfo.com.cn). Mr. Wang Ruwei, Independent Director of the Company,
commissioned by other independent directors publicly solicited proxy voting rights from all shareholders of the
Company on proposals related to the 2022 Restricted Share Incentive Scheme reviewed on the 1st extraordinary
general meeting in 2022 that was set to be convened on August 31, 2022.
(3) The Company announced publicly the list of the first batch of employees receiving the incentive from the
restricted share incentive scheme on the Company’s intra-net from August 15 to 25, 2022, which lasted for 10
days in total. As of the end of the announcement on August 25, 2022, the Board of Supervisors did not receive any
objection against these employees. On August 25, 2022, the Company convened a session of the Board of
Supervisors, during which the Verification Opinions and Announcement Note on the List of the First Batch of
Employees Receiving the Incentive from the Company’s 2022 Restricted Share Incentive Scheme was reviewed
and approved. On the same day, the Company disclosed the Board of Supervisors’ Verification Opinions and
Announcement Note on the List of the First Batch of Employees Receiving the Incentive from the Company’s 2022
Restricted Share Incentive Scheme and a related announcement on www.cninfo.com.cn.
(4) On August 31, 2022, the Company convened the first extraordinary general meeting in 2022. During the
meeting, the Proposal on the Company’s 2022 Restricted Share Incentive Scheme (Draft) and Its Summary, the
Proposal on Management Rules for the Implementation and Assessment of the Company’s 2022 Restricted Share
Incentive Scheme, the Proposal on the Management Rules of the Company’s 2022 Restricted Share Incentive
Scheme, and the Proposal on Applying to the General Meeting for Authorizing the Board of Directors to Handle
Equity Incentive-related Matters were deliberated on and approved. On the same day, the Company disclosed on
www.cninfo.com.cn the Self-Inspection Report on Insiders and Incentive Receivers of the 2022 Restricted Share
Incentive Scheme Purchasing and Selling the Company’s Shares and a related announcement. The incentive
scheme was approved in the Company’s first extraordinary general meeting in 2022, and the Board of Directors
was authorized to implement the restricted share incentive scheme and handle relevant matters according to laws
and regulations.
(5) On October 27, 2022, the Company convened the fourth session of the tenth Board of Directors and the
fifth session of the tenth Board of Supervisors. During these two sessions, the Proposal on Adjustments of the
61
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
Company’s 2022 Restricted Share Incentive Scheme, and the Proposal on Granting Restricted Shares to the First
Batch of Employees Receiving Incentive from the 2022 Restricted Share Incentive Scheme were deliberated on and
approved. The Company’s Board of Directors believed that conditions of the incentive scheme for granting
restricted shares were fulfilled, and the Board of Supervisors re-verified the list of incentive receivers on the first
grant date, and expressed opinions on the grant. The Company’s independent directors agreed on the above
proposals. Lawyers and independent financial advisers prepared related reports. On October 28, 2022, the
Company disclosed a related announcement on www.cninfo.com.cn.
(6) On November 9, 2022, the Company disclosed the Announcement on Completion of Registration of the
First Grant of the Restricted Share Incentive Scheme in 2022. The Company completed the registration of the first
grant of the restricted share incentive scheme in 2022, and the listing date of the granted restricted shares was
November 15, 2022.
(7) On July 12, 2023, the Company convened the twelfth session of the tenth Board of Directors and the
eighth session of the tenth Board of Supervisors. During these two sessions, the Proposal on Adjustments of the
Granted Price of the Company’s 2022 Restricted Share Incentive Scheme, and the Proposal on Granting Reserved
Restricted Shares to the First Batch of Employees Receiving Incentive from the 2022 Restricted Share Incentive
Scheme were deliberated on and approved. The Company’s Board of Directors believed that reserved conditions
of the incentive scheme for granting restricted shares were fulfilled, and the Board of Supervisors re-verified the
list of incentive receivers on the date of granting reserved shares, and expressed opinions on the grant. The
Company’s independent directors agreed on the above proposals. Lawyers and independent financial advisers
prepared related reports. On the same day, the Company disclosed a related announcement on
www.cninfo.com.cn.
2. Implementation of the employee stock ownership plan
□ Applicable N/A
3. Other employee incentives
□ Applicable N/A
62
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
Section V Environmental and Social Responsibilities
I. Major Environmental Protection Issues
Are the listed company and its subsidiaries belong to the key pollutant discharge units announced by the environmental protection
department
□Yes □No
Relevant policies and industry standards for environmental protection
Environmental Protection Law of the People’s Republic of China, Law of the People’s Republic of China on
Water Pollution Prevention and Control, Law of the People’s Republic of China on Atmospheric Pollution
Prevention and Control, Law of the People’s Republic of China on the Prevention and Control of Environmental
Pollution by Solid Waste, Law of the People’s Republic of China on the Prevention and Control of Ambient Noise
Pollution, Law of the People’s Republic of China on the Prevention and Control of Soil Pollution, Measures for
the Administration of Pollutant Discharge Permits, Emission Standard of Air Pollutants for Pharmaceutical
Industry (DB33/ 310005-2021), Discharge Standard of Pollutants for Bio-pharmaceutical Industry (DB 33/ 923-
2014), Emission Standard for Industrial Enterprises Noise at Boundary (GB 12348-2008), Standard for Pollution
Control on the Non-hazardous Industrial Solid Waste Storage and Landfill (GB 18599-2020), Standard for
Pollution Control on Hazardous Waste Storage (GB 18597-2023), Technical Specification for Setting
Identification Signs of Hazardous Waste (HJ 1276-2022), Integrated Wastewater Discharge Standard of Yellow
River Basin in Shaanxi Province (DB 61/ 224-2018), Emission Limits of Water and Air Pollutants for Bio-
pharmaceutical Industry (DB 32/ 3560-2019), Emission Standard of Air Pollutants for Pharmaceutical Industry
(DB 32/4042-2021), Emission Standard of Air Pollutants for Pharmaceutical Industry (GB 37823-2019),
Emission Standard of Volatile Organic Compounds for Chemical Industry (DB 32/3151-2016), Integrated
Emission Standard of Air Pollutants (DB 32/4041-2021), Standard for Fugitive Emission of Volatile Organic
Compounds (GB 37822-2019), Emission Standards for Odor Pollutants (GB 14554-93), Emission Limits of Water
and Air Pollutants for Bio-Pharmaceutical Industry (DB 32/ 3560-2019), Wastewater Quality Standards for
Discharge to Municipal Sewers (GB/T 31962-2015), Integrated Wastewater Discharge Standard (GB 8978-1996),
Discharge Standard of Water Pollutants for Pharmaceutical Industry - Chemical Synthesis Products Category
(GB 21904-2008), Discharge Standard of Pollutants for Bio-Pharmaceutical Industry (DB 31/373-2010),
Technical Methods for Making Local Emission Standards of Air Pollutants (GB13201-1991), etc.
Information on environmental protection-related administrative licensing
All the construction projects of the Company were declared, constructed and accepted strictly according to
the requirements, approved by EIA, and met the requirements for environmental impact assessment of
construction projects.
Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. re-applied for the Pollutant Emission Permit on
June 20, 2023, which is valid until June 19, 2028.
Hangzhou Zhongmei Huadong Pharmaceutical (Jiangdong) Co., Ltd. re-applied for the Pollutant Emission
Permit on March 4, 2023, which is valid until March 3, 2028. In addition, Hangzhou Zhongmei Huadong
63
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
Pharmaceutical (Jiangdong) Co., Ltd. has obtained the EIA approval of Product Transfer and Expansion of
Indobufen Tablets and Clarithromycin Tablets and Expansion and Transformation Project of Acarbose Chewable
Tablets on April 25, 2023, with the approval number of HHQ EIA Batch [2023] No. 28; obtained the EIA
approval of the Acceptance of EIA Registration Form for PulsecathiVAC2L API Product Construction Project on
July 18, 2023, with the approval number of HHQ EIA Batch [2023] No. 32.
The Pollutant Emission Permit of Huadong Medicine (Xi’an) Bohua Pharmaceutical Co., Ltd. is valid from
December 27, 2020 to December 26, 2025. In addition, Huadong Medicine (Xi’an) Bohua Pharmaceutical Co.,
Ltd. has obtained the EIA approval of the Transformation Project of Storage Tank Area of the Second Workshop
of APIs within the reporting period, with the approval number of WHYF (2023) No. 34.
The Pollutant Emission Permit of Jiangsu Joyang Laboratories is valid from February 28, 2022 to February
27, 2027.
The Pollutant Emission Permit of Wuhu Huaren Science and Technology Co., Ltd. is valid from February 26,
2021 to February 25, 2024.
Categ
Name
ory of Executiv
of main Discharg
Designation main Quantit Distribut e Approve Excessiv
and e Total
of Company and Discharg y of ion of pollutant d total e
particul concentr discharg
or partic e pattern discharg discharg discharg discharg discharg
ar ation/int es
Subsidiary ular e outlet e outlet e es e
polluta ensity
pollut standard
nts
ants
Main
Hangzhou
Entrance
Zhongmei Water Intermitt
pH Mogans
Huadong pollut ent 1 6.93 6-9 / / None
value han
Pharmaceuti ant discharge
Road,
cal Co., Ltd.
No.866
Main 3.26
Hangzhou
Entrance tons
Zhongmei Water Intermitt
Mogans 39.85mg (dischar
Huadong pollut COD ent 1 500mg/l 33.3 t/a None
han /l ged to
Pharmaceuti ant discharge
Road, environ
cal Co., Ltd.
No.866 ment)
Main 0.047
Hangzhou
Ammo Entrance tons
Zhongmei Water Intermitt
nia- Mogans (dischar
Huadong pollut ent 1 1.18mg/l 35mg/l 2.38 t/a None
nitroge han ged to
Pharmaceuti ant discharge
n Road, environ
cal Co., Ltd.
No.866 ment)
Within
Complia
the
Hangzhou nt
Hazard factory
Zhongmei Solid disposal
ous at 406.55
Huadong pollut by 2 / / / None
solid Mogans tons
Pharmaceuti ant entrusted
waste han
cal Co., Ltd. qualified
Road,
units
No.866
Hangzhou Complia Within
Solid General
Zhongmei nt the 74.7
pollut solid 2 / / / None
Huadong disposal factory tons
ant waste
Pharmaceuti by at
64
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
cal Co., Ltd. entrusted Mogans
qualified han
units Road,
No.866
Hangzhou Roof of
Zhongmei Air Organize Boiler
Nitric 28mg/m 50mg/m 1.021
Huadong pollut d 1 Room at 3 3 17.7 t/a None
oxide tons
Pharmaceuti ant discharge Building
cal Co., Ltd. 25
Hangzhou Roof of
Zhongmei Air Organize Boiler
Sulfur 20mg/m 0.151
Huadong pollut d 1 Room at 4mg/m3 3 / None
dioxide tons
Pharmaceuti ant discharge Building
cal Co., Ltd. 25
Hangzhou Roof of
Zhongmei Air Dust Organize Boiler
4.6mg/m 10mg/m 0.127
Huadong pollut and d 1 Room at 3 3 / None
tons
Pharmaceuti ant fume discharge Building
cal Co., Ltd. 25
Hangzhou
152.502 141.299
Zhongmei
0 tons
Huadong Continuo Phase II
Waste 100- tons(Nan (dischar
Pharmaceuti COD us 1 Factory 500mg/L None
water 350mg/L otube ged to
cal discharge Area
discharg environ
Jiangdong
e) ment)
Co., Ltd.
Hangzhou
7.066
Zhongmei 1.8687
Ammo tons
Huadong Continuo Phase II tons(Nan
Waste nia- 0- (dischar
Pharmaceuti us 1 Factory 35mg/L otube None
water nitroge 25mg/L ged to
cal discharge Area discharg
n environ
Jiangdong e)
ment)
Co., Ltd.
Hangzhou
Zhongmei Non-
Huadong methan Organize Phase II
Exhau 0- 1.6654 3.002
Pharmaceuti e d 1 Factory 60mg/L None
st gas 30mg/L tons tons
cal hydroc discharge Area
Jiangdong arbon
Co., Ltd.
Beside
Huadong National
Medicine Highway
Water Intermitt
(Xi’an) pH 310,
pollut ent 1 8.0 6-9 / / None
Bohua value Liuye
ant discharge
Pharmaceuti River,
cal Co., Ltd. Huayin
City
Beside
Huadong National
Medicin e Highway
Water Intermitt
(Xi’an) 310, 0.544
pollut COD ent 1 36.7mg/l 50mg/l 3 tons None
Bohua Liuye tons
ant discharge
Pharmaceuti River,
cal Co., Ltd. Huayin
City
Huadong Water Ammo Intermitt 1 Beside 0.418mg 8mg/l 0.005 0.48 None
65
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
Medicin e pollut nia- ent National /l tons tons
(Xi’an) ant nitroge discharge Highway
Bohua n 310,
Pharmaceuti Liuye
cal Co., Ltd. River,
Huayin
City
Beside
Huadong National
Medicine Highway
Water Total Intermitt
(Xi’an) 310, 0.167
pollut nitroge ent 1 11.5mg/l 15mg/l / None
Bohua Liuye tons
ant n discharge
Pharmaceuti River,
cal Co., Ltd. Huayin
City
Complia
Huadong
nt
Medicine Within
Solid Hazard disposal
(Xi’an) the 158.19
pollut ous by 3 / / / None
Bohua Compan tons
ant waste entrusted
Pharmaceuti y
qualified
cal Co., Ltd.
units
Huadong
Medicine Volatile
Air Organize
(Xi’an) organic APIs 60mg/m
pollut d 1 / 3 / / None
Bohua compo Plant 1
ant discharge
Pharmaceuti unds
cal Co., Ltd.
Huadong
Medicine Hydrog
Air Organize
(Xi’an) en APIs 30mg/m
pollut d 1 / 3 / / None
Bohua chlorid Plant 1
ant discharge
Pharmaceuti e
cal Co., Ltd.
Huadong
Medicine Ammo
Air Organize
(Xi’an) nia APIs 20mg/m
pollut d 1 / 3 / / None
Bohua (ammo Plant 1
ant discharge
Pharmaceuti nia)
cal Co., Ltd.
Huadong
Medicine Hydrog
Air Organize
(Xi’an) en APIs 30mg/m
pollut d 1 / 3 / / None
Bohua chlorid Plant 2
ant discharge
Pharmaceuti e
cal Co., Ltd.
Huadong
Medicine
Air Organize
(Xi’an) APIs 20mg/m
pollut PM d 1 / 3 / / None
Bohua Plant 2
ant discharge
Pharmaceuti
cal Co., Ltd.
Huadong
Ammo
Medicine Air Organize Sewage
nia 20mg/m
(Xi’an) pollut d 1 treatmen / 3 / / None
(ammo
Bohua ant discharge t station
nia)
Pharmaceuti
66
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
cal Co., Ltd.
Huadong
Medicine
Air Hydrog Organize Sewage
(Xi’an)
pollut en d 1 treatmen / 5mg/m3 / / None
Bohua
ant sulfide discharge t station
Pharmaceuti
cal Co., Ltd.
No. 9,
Jiangsu Water Intermitt
pH Haidu
Joyang pollut ent 1 8.4 6-9 / / None
value North
Laboratories ant discharge
Road
No. 9,
Jiangsu Water Intermitt
Haidu 12.19 22.401
Joyang pollut COD ent 1 329mg/l 500mg/l None
North tons t/a
Laboratories ant discharge
Road
Ammo No. 9,
Jiangsu Water Intermitt
nia- Haidu 0.238
Joyang pollut ent 1 6.44mg/l 35mg/l 1.156 t/a None
nitroge North tons
Laboratories ant discharge
n Road
No. 9,
Jiangsu Water Total Intermitt
Haidu 0.331
Joyang pollut nitroge ent 1 8.95mg/l 45mg/l 1.486 t/a None
North tons
Laboratories ant n discharge
Road
No. 9,
Jiangsu Water Total Intermitt
Haidu 0.03
Joyang pollut phosph ent 1 0.84mg/l 8mg/l 0.164 t/a None
North tons
Laboratories ant orus discharge
Road
Complia
nt
Hazard No. 9,
Jiangsu Solid disposal
ous Haidu 619.814 3148.7
Joyang pollut by / / / None
solid North tons t/a
Laboratories ant entrusted
waste Road
qualified
units
No. 9,
Jiangsu Air Organize 1.11
Haidu 2.28mg/ 60mg/N 42.7409
Joyang pollut PM d 3 t/semi- None
North m3 m3 t/a
Laboratories ant discharge annual
Road
Wuhu At the
Huaren Water Intermitt east gate
Science and pollut COD ent 1 of the 8mg/L 500mg/L 0.13t 0.2t No
Technology ant discharge factory
Co., Ltd. area
Wuhu At the
Ammo
Huaren Water Intermitt east gate
nia- 0.04mg/ 0.00050
Science and pollut ent 1 of the 45mg/L 0.018t No
nitroge L 5t
Technology ant discharge factory
n
Co., Ltd. area
Wuhu At the
Huaren Water Suspen Intermitt east gate
Science and pollut ded ent 1 of the 12mg/L 400mg/L 0.0214t / No
Technology ant solids discharge factory
Co., Ltd. area
Wuhu At the
Water Total Intermitt
Huaren east gate 9.95mg/
pollut nitroge ent 1 35mg/L 0.0172t / No
Science and of the L
ant n discharge
Technology factory
67
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
Co., Ltd. area
Wuhu At the
Huaren Water Total Intermitt east gate
0.00108
Science and pollut phosph ent 1 of the 0.05 1mg/L / No
6t
Technology ant orus discharge factory
Co., Ltd. area
Wuhu At the
Huaren Water Dichlor Intermitt east gate
0.001mg 0.00000
Science and pollut ometha ent 1 of the 0.3mg/L / No
/L 2t
Technology ant ne discharge factory
Co., Ltd. area
Wuhu At the
Huaren Water Intermitt east gate
PH
Science and pollut ent 1 of the 7.1mg/L 6-9 / / No
value
Technology ant discharge factory
Co., Ltd. area
Wuhu In the
Huaren Air Dichlor Organize middle
150
Science and pollut ometha d 1 of the / / / No
mg/Nm3
Technology ant ne discharge factory
Co., Ltd. area
Wuhu In the
Huaren Air Organize middle
Methyl 100
Science and pollut d 1 of the / / / No
alcohol mg/Nm3
Technology ant discharge factory
Co., Ltd. area
Wuhu In the
Huaren Air Organize middle
n- 80mg/N
Science and pollut d 1 of the / / / No
Ethane m3
Technology ant discharge factory
Co., Ltd. area
Wuhu In the
Volatile
Huaren Air Organize middle
organic 4.85mg/ 100
Science and pollut d 1 of the 0.093t 9t No
compo Nm3 mg/Nm3
Technology ant discharge factory
unds
Co., Ltd. area
Wuhu In the
Huaren Air Organize middle
Pyridin 71.1
Science and pollut d 1 of the / / / No
e mg/Nm3
Technology ant discharge factory
Co., Ltd. area
Wuhu In the
Huaren Air Organize middle
Ethyl 317.7
Science and pollut d 1 of the / / / No
alcohol mg/Nm3
Technology ant discharge factory
Co., Ltd. area
Wuhu In the
Hydrog
Huaren Air Organize middle
en 30mg/N
Science and pollut d 1 of the / / / No
chlorid m3
Technology ant discharge factory
e
Co., Ltd. area
Wuhu In the
Huaren Air Organize middle
Ethyl 150
Science and pollut d 1 of the / / / No
acetate mg/Nm3
Technology ant discharge factory
Co., Ltd. area
Wuhu Air Odor Unorgani / Around / 20mg/N / / No
68
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
Huaren pollut concent zed the m3
Science and ant ration discharge factory
Technology boundari
Co., Ltd. es
Wuhu Around
Huaren Air Unorgani the
Methyl 12mg/N
Science and pollut zed / factory / / / No
alcohol m3
Technology ant discharge boundari
Co., Ltd. es
Wuhu Around
Huaren Air Dichlor Unorgani the
1.5mg/N
Science and pollut ometha zed / factory / / / No
m3
Technology ant ne discharge boundari
Co., Ltd. es
Wuhu Around
Huaren Air Unorgani the
Ethyl 0.5mg/N
Science and pollut zed / factory / / / No
acetate m3
Technology ant discharge boundari
Co., Ltd. es
Wuhu Around
Huaren Air Unorgani the
n- 0.7
Science and pollut zed / factory / / / No
Hexane mg/Nm3
Technology ant discharge boundari
Co., Ltd. es
Wuhu Around
Hydrog
Huaren Air Unorgani the
en 0.2
Science and pollut zed / factory / / / No
chlorid mg/Nm3
Technology ant discharge boundari
e
Co., Ltd. es
Wuhu Around
Volatile
Huaren Air Unorgani the
organic 6mg/Nm
Science and pollut zed / factory / 3 / / No
compo
Technology ant discharge boundari
unds
Co., Ltd. es
Pollutant treatment
1. Pollutant treatment of Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd.
(1) Wastewater
Designation of pollution Treatment process Treatment capacity Time when put into operation Operation
prevention and control condition
facility
Wastewater treatment Originally 600 t/d,
Facultative + fluidized November 1993
system of old sewage and 800 t/d after technical Demolished
bed process Technical improvement in 2007
treatment station improvement
December 2001
Wastewater treatment Technical improvement in 2014
Facultative + CASS + (adding IC and steam flotation) Normal
system of new sewage 2,200 t/d
steam flotation operation
treatment station IC tower outage for demolition in
2022
(2) Exhaust gas
Designation of pollution Treatment process Treatment capacity Time when put into Operation
prevention and control (CMH) operation condition
facility
DA010 (35#-1) Secondary water spraying + surface cooling + 15000 2017
Demolished
activated carbon adsorption and desorption
69
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
DA011 (35#-2) Secondary water spraying 22000 2013 Demolished
DA012 (40#-2) Activated carbon + horizontal spraying 6000 2019 Demolished
DA013 (32#-1) Secondary alkaline water spraying 22000 2013 Demolished
DA014 (36#-1) Secondary clean water spraying + surface 27000 2017
Normal
cooling + low-temperature plasma + primary
operation
water spraying
DA015 (40#-1) Secondary clean water spraying 24200 / Demolished
DA016 (18#-1) Secondary water spraying + activated carbon + 30000 2022 Normal
primary spraying operation
DA017 (19#-1) Combustion tower / 2018 Demolished
DA018 (19#-2) Combustion tower / 2018 Demolished
DA019 (3#-1) Primary water spraying + photo-oxidation 20000+52000 2019 Normal
operation
DA020 (36#-2) Secondary water spraying + condensation + 10000 2019
Normal
photo-oxidation + activated carbon + inorganic
operation
nano-catalysis + water spraying
DA021 (16#-1) Primary water spraying + primary alkaline water 12000 2012
Demolished
spraying
DA022 (16#-2) Primary water spraying + primary vegetable oil 30000 2014
Demolished
water spraying
DA023 (27#-1) Condensation + primary alkaline water spraying 15000 2009
+ all-in-one machine + primary alkaline water Outage
spraying
DA024 (33#-1) Secondary alkaline water spraying + condensing 48000 2019
Demolished
tank + shared primary alkaline water spraying
DA025 (32#-2) Bag dust removal + high efficiency filter / 2017 Demolished
DA026 (34#-1) Secondary alkaline water spraying 54000 2008 Demolished
DA027 (7#-1) Secondary alkaline water spraying 26000 2015 Normal
operation
DA028 (6#-1) Primary clean water spraying 12200 2016 Normal
operation
DA029 (18#-2) Secondary alkaline water spraying + photo- 16000 2018
oxidation + activated carbon + primary alkaline Demolished
water spraying
DA030 (18#-3) Primary clean water spraying + primary alkaline 5000 2017 Normal
water spraying operation
DA031 (25#-2) Low nitrogen combustion + high altitude 8000 2009
emission
Low nitrogen Normal
transformation operation
completed in
December 2019
DA032 (25#-1) Low nitrogen combustion + high altitude 8000 2009
emission
Low nitrogen Normal
transformation operation
completed in
December 2019
DA033 (1#-1) Oil fume purifier / / Normal
operation
DA034 (27#-2) Secondary water spraying + activated carbon 15000 2011
Outage
adsorption and desorption
DA035 (27#-3) Photo-oxidation + primary alkaline water 22300 2016
Outage
spraying
70
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
DA036 (8#-1) Secondary water spraying 25000 2017 Normal
operation
DA037 (13#-1) Secondary water spraying + surface cooling + 25000 2017 Normal
activated carbon adsorption and desorption operation
DA038 (28#-1) Primary water spraying + photo-oxidation 22000 2011 Demolished
DA039 (28#-2) Primary water spraying + photo-oxidation 48000 2011 Demolished
DA040 (29#-1) Primary water spraying + primary alkaline water 22000 2011
Demolished
spraying
DA041 (33#-2) Primary water spraying 18600 2012 Demolished
DA042 (10#-1) Primary clean water spraying 20000 2016 Normal
operation
DA043 (15#-1) Primary alkaline water spraying + 25000 2018 Normal
photooxidation operation
DA044 (43#-1) Primary alkaline water spraying + primary water 45000 2014 Normal
spraying operation
DA045 (46#-1) Primary clean water spraying 3000 2015 Normal
operation
DA046 (46#-2) Primary clean water spraying 25000 2015 Normal
operation
DA047 (46#-3) Primary clean water spraying 30000 2015 Normal
operation
DA048 (23#-1) Secondary water spraying 7000 2019 Normal
operation
(3) Solid wastes
Designation of pollution Treatment process Treatment capacity Time when put into Operation condition
prevention and control operation
facility
Normative storage 160 tons March 2012 Normative storage, compliant
Hazardous waste warehouse disposal by entrusted
Normative storage 240 tons March 2010 qualified units
Normative storage 7 tons March 2010 Normative storage, compliant
General solid waste storage
disposal by entrusted
yard Normative storage 30 tons June 2004 qualified units
2. Pollutant treatment of Hangzhou Zhongmei Huadong Pharmaceutical (Jiangdong) Co., Ltd.
(1) Wastewater
Designation of pollution Treatment process Treatment capacity Time when put into Operation
prevention and control operation condition
facility
Phase I sewage treatment Primary sedimentation + EGSB + facultative + 1500 t/d March 2016 Normal
station aerobic + advanced treatment operation
Phase II sewage treatment EGSB + facultative + aerobic + advanced 8500 t/d July 2019 Normal
station treatment operation
(2) Exhaust gas
Designation of pollution Treatment capacity Time when put into
Treatment process Operation condition
prevention and control facility (CMH) operation
Exhaust gas from
Secondary alkaline spraying +
DA001 fermenting east 45000 May 2016 Normal operation
photo-catalytic oxidation
section
Exhaust gas from
Secondary alkaline spraying +
DA002 fermenting west 40000 May 2016 Normal operation
photo-catalytic oxidation
section
71
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
Exhaust gas from
DA003 Secondary alkaline spraying 80000 May 2016 Normal operation
drying north section
Exhaust gas from
DA004 sewage treatment Secondary alkaline spraying 50000 May 2016 Normal operation
station
Exhaust gas from
DA006 Primary alkaline spraying 10000 May 2016 Normal operation
batching section
Exhaust gas from
Primary alkaline spraying +
DA007 quality testing and 20000 May 2016 Normal operation
photo-catalytic oxidation
R&D
Exhaust gas from
DA008 Secondary alkaline spraying 80000 May 2016 Normal operation
drying south section
Exhaust gas from Secondary alkaline spraying +
DA010 40000 May 2017 Normal operation
plate-and-frame filter photo-catalytic oxidation
Exhaust gas from
DA011 Secondary alkaline spraying 20000 May 2017 Normal operation
drying cooling bin
Exhaust gas from
DA012 Primary alkaline spraying 20000 May 2016 Normal operation
drying 7m
Exhaust gas from
DA013 Primary alkaline spraying 20000 May 2016 Normal operation
drying 18m
Exhaust gas from Activated carbon + alkaline
DA014 Few June 2019 Normal operation
tank area spraying
Water spraying + RTO +
DA015 RTO exhaust gas 100000 June 2019 Normal operation
alkaline spraying
Exhaust gas from
DA016 Bag dust removal Few June 2019 Normal operation
Vogely preparation
DA017 MP exhaust gas Photo-catalytic oxidation 44000 June 2019 Normal operation
Exhaust gas from Alkaline spraying + photo-
DA018 super-resistant catalytic oxidation + water 20000 June 2019 Normal operation
fermentation spraying
DA019 X8 exhaust gas Acid spraying + water spraying 6000 June 2019 Normal operation
Alkaline spraying + photo-
Exhaust gas from
DA021 catalytic oxidation + water 30000 June 2019 Normal operation
quality testing
spraying
Exhaust gas from
Alkaline spraying + water
DA022 AK refining 10000 June 2019 Normal operation
spraying
hydrochloric acid
Exhaust gas I from Bag dust removal + water
DA023 Few June 2019 Normal operation
spray drying spraying
Exhaust gas from Alkaline spraying + photo-
DA024 AK fermenting north catalytic oxidation + water 90000 June 2019 Normal operation
section spraying
Exhaust gas from Alkaline spraying + photo-
DA025 AK fermenting south catalytic oxidation + water 90000 June 2019 Normal operation
section spraying
Exhaust gas from
Alkaline spraying + water
DA026 Phase II sewage 58000 June 2019 Normal operation
spraying
treatment station
Alkaline spraying + photo-
Exhaust gas from
DA027 catalytic oxidation + water 8000 June 2019 Normal operation
center control
spraying
Alkaline spraying + water
DA028 YT exhaust gas 4000 June 2019 Normal operation
spraying
Exhaust gas II from Bag dust removal + water
DA029 Few June 2019 Normal operation
spray drying spraying
Exhaust gas from
Alkaline spraying + water
DA030 AK refining ethyl 1000 June 2019 Normal operation
spraying
alcohol
72
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
Exhaust gas from
Condensation + Secondary
DA031 Bailing Tablets 20000 July 2022 Normal operation
water spraying
preparation
HDG solvent-
HDBL- Oxidation spraying + secondary
containing exhaust 2000 September 2022 Outage
FQ217 alkaline spraying
gas
HDBL- HDG odor exhaust Oxidation spraying + alkaline
20000 September 2022 Outage
FQ218 gas spraying
(3) Solid wastes
Designation of pollution Treatment process Treatment capacity Time when put into Operation condition
prevention and control operation
facility
Normative storage 10 tons March 2017 Normative storage, compliant
Hazardous waste warehouse disposal by entrusted
Normative storage 200 tons May 2021 qualified units
Normative storage 20 tons March 2016
Normative storage 15 tons March 2016 Normative storage, compliant
General solid waste storage
disposal by entrusted
yard Normative storage 40 tons July 2019 qualified units
Normative storage 30 tons July 2019
3. Pollutant treatment of Huadong Medicine (Xi ‘an) Bohua Pharmaceutical Co., Ltd.
(1) Wastewater
Designation of pollution
Time when put into
prevention and control Treatment process Treatment capacity Operation condition
operation
facility
Pretreatment + Fenton
Wastewater treatment
system + facultative +
system of sewage treatment 250 t/d July 2012 Normal operation
aerobic + MBR +
station
carbon filtration
(2) Exhaust gas
Designation of pollution prevention and control Time when put into
Treatment process Operation condition
facility operation
Alkaline solution
spraying + dry filter
Exhaust gas treatment equipment for APIs Plant 1 (filter cotton) + UV October 2020 Normal operation
photolysis + activated
carbon adsorption
Secondary alkaline
solution spraying +
Exhaust gas treatment equipment for APIs Plant 2 dry filter + UV November 2019 Normal operation
photolysis + activated
carbon
Exhaust gas treatment equipment for solid preparation Bag dust removal 2018 Normal operation
(3) Solid wastes
Designation of pollution
Time when put into
prevention and control Treatment process Storage capacity Operation condition
operation
facility
Normative storage, compliant
Hazardous waste repository Normative storage 60 tons January 2012 transfer and disposal by entrusted
qualified units
4. Pollutant treatment of Jiangsu Joyang Laboratories
(1) Wastewater
73
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
Designation of pollution
Time when put into
prevention and control Treatment process Treatment capacity Operation condition
operation
facility
Steam flotation tank + hydrolytic
Wastewater treatment
acidification + IC tower + UASB
system of sewage treatment 300 t/d December 2014 Normal operation
tank + A/O tank + O tank +
station
secondary sedimentation tank
(2) Exhaust gas
Designation of pollution prevention and Treatment Time when put Operation
Treatment process
control facility capacity (CMH) into operation condition
Primary water spraying + water-
gas separator + photo-catalytic
Exhaust gas treatment equipment for
oxidation + secondary activated 10000 2014 Normal operation
extracting section in Plant 101
carbon adsorption + 25m exhaust
pipe high altitude emission
Primary water spraying + water-
Exhaust gas treatment equipment for gas separator + secondary
20000 2019 Normal operation
fermentation section in Plant 101 activated carbon adsorption + 25m
exhaust pipe high altitude emission
Primary water spraying + water-
Exhaust gas treatment equipment for gas separator + secondary
22000 2017 Normal operation
drying section in Plant 101 activated carbon adsorption + 25m
exhaust pipe high altitude emission
Cyclone separator + primary water
Exhaust gas treatment equipment for
spray + 15m exhaust pipe high 5000 2014 Normal operation
batching section in Plant 101
altitude emission
Primary water spraying + water-
Exhaust gas treatment equipment for
gas separator + secondary
fermentation sections in Plants 75000 2021 Normal operation
activated carbon adsorption + 25m
104/107/108
exhaust pipe high altitude emission
Primary water spraying + water-
gas separator + photo-catalytic
Exhaust gas treatment equipment for
oxidation + secondary activated 10000 2015 Normal operation
extracting section in Plant 104
carbon adsorption + 25m exhaust
pipe high altitude emission
Cyclone separator + primary water
Exhaust gas treatment equipment for
spray + 15m exhaust pipe high 5000 2015 Normal operation
batching sections in Plants 104/107/108
altitude emission
Primary water spraying + water-
Exhaust gas treatment equipment for
gas separator + secondary 20000 2015 Normal operation
drying sections in Plants 104/107/108
activated carbon adsorption
Primary water spraying + water-
Exhaust gas treatment equipment for gas separator + photo-catalytic
pretreatment tank and hazardous waste oxidation + secondary activated 40000 2019 Normal operation
repository in Plant 103 and Plant 303 carbon adsorption + 25m exhaust
pipe high altitude emission
Primary water spraying + water-
gas separator + photo-catalytic
Exhaust gas treatment equipment for Plant
oxidation + secondary activated 10000 2015 Normal operation
106
carbon adsorption + 25m exhaust
pipe high altitude emission
Primary water spraying + water-
gas separator + photo-catalytic
Exhaust gas treatment equipment for
oxidation + secondary activated 20000 2019 Normal operation
extracting section in Plant 107
carbon adsorption + 25m exhaust
pipe high altitude emission
Primary water spraying + water-
gas separator + photo-catalytic
Exhaust gas treatment equipment for
oxidation + secondary activated 40000 2019 Normal operation
extracting section in Plant 108
carbon adsorption + 25m exhaust
pipe high altitude emission
Exhaust gas treatment equipment for Plant Primary water spraying +25m
20000 2019 Normal operation
109 exhaust pipe high altitude emission
74
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
Primary water spraying + water-
Exhaust gas treatment equipment for gas separator + photo-catalytic +
15000 2021 Normal operation
sewage treatment station 303 25m exhaust pipe high altitude
emission
Primary water spraying + water-
gas separator + photo-catalytic
Exhaust gas treatment equipment for Plant
oxidation + secondary activated 45000 2022 Normal operation
103
carbon adsorption + 25m exhaust
pipe high altitude emission
Exhaust gas treatment equipment in Spraying + activated carbon
25000 2023 Normal operation
laboratories adsorption
(3) Solid wastes
Designation of pollution
Time when put into
prevention and control Treatment process Treatment capacity Operation condition
operation
facility
Normative storage, compliant
Hazardous waste warehouse Normative storage 300 tons October 2020 disposal by entrusted
qualified units
Household garbage dumping Garbage disposal site in the
Normative storage 3 tons March 2015
site east of the city
5. Pollutant treatment by Wuhu Huaren Science and Technology Co., Ltd.
(1) Wastewater
Designation of pollution Treatment process Treatment capacity Time when put into Operation
prevention and control operation condition
facility
Sewage treatment station Chemical flocculation + bio-treatment 30t/d July 26, 2020 Normal
(2) Exhaust gas
Designation of pollution Treatment process Treatment capacity Time when put into Operation condition
prevention and control facility (CMH) operation
Organic exhaust gas treatment Activated carbon adsorption / 2016.11 Normal operation
facilities
(3) Solid wastes
Designation of pollution Treatment process Treatment capacity Time when put into Operation condition
prevention and control operation
facility
Disposal by qualified
Hazardous waste warehouse 20 July 15, 2022 Normal operation
units
Emergency plan for sudden environmental events
Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. has formulated, regularly modified and perfected the Emergency Plan
for Sudden Environmental Events as required, with the record No. of 330105-2021-003-M.
Hangzhou Zhongmei Huadong Pharmaceutical (Jiangdong) Co., Ltd. has modified and recorded the Emergency Plan for Sudden
Environmental Events in 2022, with the record No. of 330114-2022-069-M.
Huadong Medicine (Xi ‘an) Bohua Pharmaceutical Co., Ltd. has modified and perfected the Emergency Plan for Sudden
Environmental Events as required in 2021, and recorded the Plan in Weinan Ecological Environment Bureau, with the record No. of
610582-2021-090-L.
Jiangsu Joyang Laboratories has formulated the Emergency Plan for Sudden Environmental Events, which has been approved
and recorded in June 2021, with the record No. of 320924–2021-039-M.
Wuhu Huaren Science and Technology Co., Ltd. Has formulated and recorded the Emergency Plan for Sudden Environmental
Events, with the record No. of 340203-2022-018-L.
75
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
Investment in environmental governance and protection, and the relevant information on paying environmental protection
tax
Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. invested 1,290,000 yuan in environmental governance and protection,
and paid the environmental protection tax of 1,578.73 yuan.
Hangzhou Zhongmei Huadong Pharmaceutical (Jiangdong) Co., Ltd. is not required to pay environmental protection tax
according to relevant policies.
Huadong Medicine (Xi’an) Bohua Pharmaceutical Co., Ltd. invested 945,300 yuan in environmental governance and protection,
and paid the environmental protection tax of 833.21 yuan.
Jiangsu Joyang Laboratories invested about 3,400,000 yuan in environmental governance and protection in the first half of 2023.
Wuhu Huaren Science and Technology Co., Ltd. invested about 196,000 yuan in environmental governance and protection, and
paid the environmental protection tax of 146.72 yuan in the first half of 2023.
Environmental self-monitoring program
Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. has formulated the Pollution Source Self-monitoring Program,
registered the Program in the environmental protection department, and reported all the monitoring data as required.
Hangzhou Zhongmei Huadong Pharmaceutical (Jiangdong) Co., Ltd. has formulated the entrusted monitoring plan according to
the self-monitoring requirements in the Pollutant Emission Permit, and carried out daily, monthly, quarterly or annual entrusted
monitoring according to the monitoring plan.
Huadong Medicine (Xi ‘an) Bohua Pharmaceutical Co., Ltd. has formulated the Self-monitoring Program, registered the
Program in the environmental protection department, and reported the monitoring data as required.
Jiangsu Joyang Laboratories has formulated the Pollution Source Self-monitoring Program according to the relevant national
environmental protection requirements, and reported daily monitoring data as required.
Wuhu Huaren Science and Technology Co., Ltd. has formulated the entrusted monitoring plan according to the self-inspection
requirements in the Pollutant Emission Permit, and carried out daily, monthly, quarterly or annual entrusted monitoring according to
the monitoring plan.
Administrative penalties for environmental issues during the reporting period
No administrative penalties for environmental issues during the reporting period
Other environmental information to be disclosed
None
Measures taken to reduce carbon emissions during the reporting period and corresponding effects
Applicable □ N/A
Hangzhou Zhongmei Huadong Pharmaceutical (Jiangdong) Co., Ltd. continued to use biogas to generate electricity, reducing
the emissions of methane, hydrogen sulfide, and other pollutants, and continuously took lean measures in the plants to reduce
pollutant emissions, such as saving water and reducing consumption.
Jiangsu Joyang Laboratories made technical improvement for air-conditioning units and heat exchanger pipes and reduced direct
steam discharge by combing the Company’s steam use points, expecting to save 150 tons of standard coal every year. Moreover, it
adjusted the actual load and demand load by analyzing the power consumption of the Company, which saves the transformer
capacity fee of 45,000 kW every month.
Other environmental protection related information
None
76
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
II. Social Responsibilities
During the reporting period, the Company actively fulfilled its social responsibilities, quickly responded to
special situations, and established a complete set of emergency call plans. With the upstream and downstream
pharmaceutical supply chain partners gathered, the Company actively practiced the idea of “seizing time is to save
lives” to foster its own brands with social benefits.
The Company actively responded to the “Spring Breeze Action” with the theme of “Pooling Efforts of All
Walks of Life to Help People with Urgent Needs” launched by Hangzhou. Aiming to satisfy the people in need for
a better life, the “Spring Breeze Action” gathers pools the efforts of social forces to help the low-income groups
and people in need accurately, which plays an important role in promoting the improvement of people’s livelihood
and strengthening social governance.
77
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
Section VI. Important Matters
I. Commitments made by interested parties such as the Company’s de facto controller,
shareholders, related parties, acquirer(s), and the Company that are fulfilled during the
reporting period or unfulfilled by the end of the reporting period
□ Applicable N/A
The Company does not have commitments made by interested parties such as the Company’s de facto controller, shareholders,
related parties, acquirer(s), and the Company that are fulfilled during the reporting period or unfulfilled by the end of the reporting
period.
II. Controlling shareholders’ and related parties’ occupation of non-operating funds of the
listed companies
□ Applicable N/A
No such case during the reporting period.
III. External guarantees in violation of provisions
□ Applicable N/A
No such case during the reporting period.
IV. Employment and dismissal of accounting firms
Whether the semi-annual financial report has been audited?
□Yes No
The Company’s semi-annual report is not audited.
V. Explanation by the Board of Directors and the Board of Supervisors on the “nonstandard
audit report” of the accounting firm during the current reporting period
□ Applicable N/A
VI. Explanation by the Board of Directors on the “nonstandard audit report” in the first
half of 2023
□ Applicable N/A
VII. Bankruptcy reorganization
□ Applicable N/A
The Company does not have related matters of bankruptcy reorganization during the reporting period.
78
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
VIII. Contentious matters
Major litigations and arbitrations
□ Applicable N/A
The Company has no major litigations and arbitrations during the current reporting period.
Other litigations and arbitrations
Applicable □ N/A
Amount Litigation
Whether an Execution of
Basic of involved Litigation (arbitration)
estimated litigation Disclosure Disclosure
litigations (Ten (arbitration) adjudication
liability is (arbitration) date index (if any)
(arbitrations) thousand progress result and
formed judgments
yuan) impact
Some cases
Summary of have been
Some cases This
matters don’t executed; Do not meet
are under summary of
satisfy the some the
trials and litigation s
standards for adjudicated disclosure
5220.04 No some has no /
major cases are standards for
adjudications significant
litigations being major
have come impact on the
(arbitrations) executed; litigations
into force Company
(domestic) some are not
adjudicated.
Summary of
This
matters don’t Do not meet
summary of
satisfy the Cases are the
litigation s
standards for under trails disclosure
121.6 No Under trails has no /
major and are to be standards for
significant
litigations adjudicated major
impact on the
(arbitrations) litigation
Company
(overseas)
IX. Punishment and rectification
□ Applicable N/A
X. Integrity of the Company and its controlling shareholders and de facto controller
□ Applicable N/A
XI. Major related transactions
1. Transactions related to daily operations
Applicable □ N/A
Typ Conte Pricing Pri Relate Propo Appro Whet Settle Availa Disclo
e of nt of principles ce d rtion ved her it ment ble Disclo sure
Related Associ
rela relate for of transa in the transa excee metho marke sure index
party ation
ted d related rel ction amou ction ds the d of t date (if
tran transa transactio ate amou nt of amou appro relate prices any)
79
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
sact ction n d nt (ten simila nt (ten ved d of
ion tra thousa r thousa amou transa simila
ns nd transa nd nt ction r
act yuan) ctions yuan) transa
ion ctions
Market
Subsid price
iary of determin Cninf
Penglai Cash,
the Dru ed by the M o
Nuokan banke
Comp g Drug Company ark April (http:/
g 1,433. r’s Marke
any’s pur purch ’s related et 0.10% 3,300 No 14, /www
Pharmac 41 accept t price
contro cha ase transactio pri 2023 .Cninf
eutical ance
lling se n ce o.com
Co. Ltd. bill
shareh decision- .cn)
older making
process
Market
Subsid price
Changc
iary of determin Cninf
hun Cash,
the Dru ed by the M o
Leiyuns banke
Comp g Drug Company ark April (http:/
hang r’s Marke
any’s pur purch ’s related et 68.89 0.00% 0 Y 14, /www
Pharmac accept t price
contro cha ase transactio pri 2023 .Cninf
eutical ance
lling se n ce o.com
Co., bill
shareh decision- .cn)
Ltd.
older making
process
Market
price
Hangzh
determin Cninf
ou Joint Cash,
Dru ed by the M o
Jiuyuan ventur banke
g Drug Company ark April (http:/
Gene e of 3,942. r’s Marke
pur purch ’s related et 0.28% 7,600 No 14, /www
Enginee the 72 accept t price
cha ase transactio pri 2023 .Cninf
ring Comp ance
se n ce o.com
Co., any bill
decision- .cn)
Ltd.
making
process
Market
Grandph Subsid price
arma iary of determin Cninf
Cash,
Huangs the Dru ed by the M o
banke
hi Comp g Drug Company ark April (http:/
14,11 r’s Marke
Feiyun any’s pur purch ’s related et 7.77 0.00% No 14, /www
0 accept t price
Pharmac contro cha ase transactio pri 2023 .Cninf
ance
eutical lling se n ce o.com
bill
Co., shareh decision- .cn)
Ltd. older making
process
Subsid Market
Sichuan Cninf
iary of price Cash,
Yuanda Dru M o
the determin banke
Shuyang g Drug ark April (http:/
Comp ed by the r’s Marke
Pharmac pur purch et 1,539 0.11% 4,000 No 14, /www
any’s Company accept t price
eutical cha ase pri 2023 .Cninf
contro ’s related ance
Co., se ce o.com
lling transactio bill
Ltd. .cn)
shareh n
80
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
older decision-
making
process
Market
Subsid price
Changsh
iary of determin Cninf
u Cash,
the Dru ed by the M o
Leiyuns banke
Comp g Drug Company ark April (http:/
hang r’s Marke
any’s pur purch ’s related et 69.42 0.00% 0 Y 14, /www
Pharmac accept t price
contro cha ase transactio pri 2023 .Cninf
eutical ance
lling se n ce o.com
Co., bill
shareh decision- .cn)
Ltd.
older making
process
Market
Subsid price
iary of determin Cninf
Xi’an Cash,
the Dru ed by the M o
Yuanda banke
Comp g Drug Company ark April (http:/
Detian 148.6 r’s Marke
any’s pur purch ’s related et 0.01% 0 Y 14, /www
Pharmac 1 accept t price
contro cha ase transactio pri 2023 .Cninf
eutical ance
lling se n ce o.com
Co., Ltd bill
shareh decision- .cn)
older making
process
Market
Subsid price
iary of determin Cninf
Leiyuns Cash,
the Dru ed by the M o
hang banke
Comp g Drug Company ark April (http:/
Pharmac 1,252. r’s Marke
any’s pur purch ’s related et 0.09% 3,200 No 14, /www
eutical 35 accept t price
contro cha ase transactio pri 2023 .Cninf
Group ance
lling se n ce o.com
Co. Ltd. bill
shareh decision- .cn)
older making
process
Market
Subsid price
Hangzh iary of determin Cninf
Cash,
ou the Dru ed by the M o
banke
Grand Comp g Drug Company ark April (http:/
1,438. r’s Marke
Biologic any’s pur purch ’s related et 0.10% 2,800 No 14, /www
01 accept t price
Pharmac contro cha ase transactio pri 2023 .Cninf
ance
eutical lling se n ce o.com
bill
Inc. shareh decision- .cn)
older making
process
Market
Subsid price
Guangd
iary of determin Cninf
ong Cash,
the Dru ed by the M o
Leiyuns banke
Comp g Drug Company ark April (http:/
hang r’s Marke
any’s pur purch ’s related et 121.9 0.01% 0 Y 14, /www
Pharmac accept t price
contro cha ase transactio pri 2023 .Cninf
eutical ance
lling se n ce o.com
Co., bill
shareh decision- .cn)
Ltd.
older making
process
81
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
Market
Subsid price
Yunnan
iary of determin Cninf
Leiyuns Cash,
the Dru ed by the M o
hang banke
Comp g Drug Company ark April (http:/
Lixiang 948.6 r’s Marke
any’s pur purch ’s related et 0.07% 3,460 No 14, /www
Pharmac 5 accept t price
contro cha ase transactio pri 2023 .Cninf
eutical ance
lling se n ce o.com
Co., bill
shareh decision- .cn)
Ltd.
older making
process
Market
Subsid price
Shenyan
iary of determin Cninf
g Yaoda Cash,
the Dru ed by the M o
Leiyuns banke
Comp g Drug Company ark April (http:/
hang 272.9 r’s Marke
any’s pur purch ’s related et 0.02% 0 Y 14, /www
Pharmac 4 accept t price
contro cha ase transactio pri 2023 .Cninf
eutical ance
lling se n ce o.com
Co., bill
shareh decision- .cn)
Ltd.
older making
process
Market
Subsid price
Xi’an iary of determin Cninf
Cash,
Yuanda the Dru ed by the M o
banke
new Comp g Drug Company ark April (http:/
159.8 14,11 r’s Marke
Beilin any’s pur purch ’s related et 0.01% No 14, /www
5 0 accept t price
Pharmac contro cha ase transactio pri 2023 .Cninf
ance
eutical lling se n ce o.com
bill
Co., Ltd shareh decision- .cn)
older making
process
Market
Subsid price
Wuhan
iary of determin Cninf
Grand Cash,
the Dru ed by the M o
Pharmac banke
Comp g Drug Company ark April (http:/
eutical 1,276. 14,11 r’s Marke
any’s pur purch ’s related et 0.09% No 14, /www
Group 07 0 accept t price
contro cha ase transactio pri 2023 .Cninf
Sales ance
lling se n ce o.com
Co., bill
shareh decision- .cn)
Ltd.
older making
process
Market
Subsid price
iary of determin Cninf
Cash,
Grandph the Dru ed by the M o
banke
arma Comp g Drug Company ark April (http:/
3,443. 14,11 r’s Marke
(China) any’s pur purch ’s related et 0.25% No 14, /www
28 0 accept t price
Co., contro cha ase transactio pri 2023 .Cninf
ance
Ltd. lling se n ce o.com
bill
shareh decision- .cn)
older making
process
Beijing Subsid Dru Drug Market M Cash, April Cninf
2,165. 14,11 Marke
Grand iary of g purch price ark 0.16% No banke 14, o
98 0 t price
Johamu the pur ase determin et r’s 2023 (http:/
82
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
Pharmac Comp cha ed by the pri accept /www
eutical any’s se Company ce ance .Cninf
Co., contro ’s related bill o.com
Ltd. lling transactio .cn)
shareh n
older decision-
making
process
Market
Subsid price
Grand iary of determin Cninf
Cash,
Life the Dru ed by the M o
banke
Science Comp g Drug Company ark April (http:/
178.0 r’s Marke
(Chongq any’s pur purch ’s related et 0.01% 0 Y 14, /www
7 accept t price
ing) contro cha ase transactio pri 2023 .Cninf
ance
Co., lling se n ce o.com
bill
Ltd. shareh decision- .cn)
older making
process
Market
Subsid price
Anhui iary of determin Cninf
Cash,
Leiyuns the Dru ed by the M o
banke
hang Comp g Drug Company ark April (http:/
r’s Marke
pharmac any’s pur purch ’s related et 74.31 0.01% 0 Y 14, /www
accept t price
eutical contro cha ase transactio pri 2023 .Cninf
ance
Co., lling se n ce o.com
bill
Ltd. shareh decision- .cn)
older making
process
Market
Subsid price
iary of determin Cninf
Grand Cash,
the Dru ed by the M o
Life banke
Comp g Drug Company ark April (http:/
Science 532.5 r’s Marke
any’s pur purch ’s related et 0.04% 1,000 No 14, /www
(Wuhan) 7 accept t price
contro cha ase transactio pri 2023 .Cninf
Co., ance
lling se n ce o.com
Ltd. bill
shareh decision- .cn)
older making
process
Market
Subsid price
Liaonin
iary of determin Cninf
g Cash,
the Dru ed by the M o
Weiban banke
Comp g Drug Company ark April (http:/
g r’s Marke
any’s pur purch ’s related et 20.62 0.00% 0 Y 14, /www
Biophar accept t price
contro cha ase transactio pri 2023 .Cninf
maceuti ance
lling se n ce o.com
cal Co., bill
shareh decision- .cn)
Ltd.
older making
process
Grand Subsid Market Cash, Cninf
Dru M
Life iary of price banke o
g Drug ark April
Science the determin 982.4 r’s Marke (http:/
pur purch et 0.07% 830 Y 14,
(Liaonin Comp ed by the 4 accept t price /www
cha ase pri 2023
g) Co., any’s Company ance .Cninf
se ce
Ltd. contro ’s related bill o.com
83
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
lling transactio .cn)
shareh n
older decision-
making
process
Market
Beijing Subsid price
Pro
Yuanda iary of determin Cninf
pert Cash,
Chuang the Prope ed by the M o
y banke
xin Comp rty Company ark April (http:/
ma r’s Marke
Property any’s mana ’s related et 23.86 0.00% 0 Y 14, /www
nag accept t price
Manage contro geme transactio pri 2023 .Cninf
em ance
ment lling nt fee n ce o.com
ent bill
Co., shareh decision- .cn)
fee
Ltd. older making
process
Market
price
Hangzh
determin Cninf
ou Joint Pro Cash,
ed by the M o
Jiuyuan ventur ces Proce banke
Company ark April (http:/
Gene e of sin ssing r’s Marke
’s related et 812.5 0.06% 8,750 No 14, /www
Enginee the g charg accept t price
transactio pri 2023 .Cninf
ring Comp cha e ance
n ce o.com
Co., any rge bill
decision- .cn)
Ltd.
making
process
Market
price
Hangzh
Tec determin Cninf
ou Joint Cash,
hni ed by the M o
Jiuyuan ventur Techn banke
cal Company ark April (http:/
Gene e of ical r’s Marke
ser ’s related et 800 0.06% 8,750 No 14, /www
Enginee the servic accept t price
vic transactio pri 2023 .Cninf
ring Comp e fee ance
e n ce o.com
Co., any bill
fee decision- .cn)
Ltd.
making
process
Market
Subsid price
Grand iary of determin Cninf
Cash,
Bay the Co ed by the M o
banke
Hotel Comp nfer Confe Company ark April (http:/
r’s Marke
View any’s enc rence ’s related et 31.5 0.00% 0 Y 14, /www
accept t price
Chengd contro e fee transactio pri 2023 .Cninf
ance
u Co., lling fee n ce o.com
bill
Ltd. shareh decision- .cn)
older making
process
Subsid Market
Beijing
iary of price Cninf
Haiwan Cash,
the Co determin M o
Banshan banke
Comp nfer Confe ed by the ark April (http:/
Hotel r’s Marke
any’s enc rence Company et 7 0.00% 0 Y 14, /www
Manage accept t price
contro e fee ’s related pri 2023 .Cninf
ment ance
lling fee transactio ce o.com
Co., bill
shareh n .cn)
Ltd.
older decision-
84
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
making
process
Market
Subsid price
iary of determin Cninf
Leiyuns Cash,
the Me ed by the M o
hang banke
Comp dici Medic Company ark April (http:/
Pharmac r’s Marke
any’s ne ine ’s related et 28.72 0.00% 600 No 14, /www
eutical accept t price
contro sale sales transactio pri 2023 .Cninf
Group ance
lling s n ce o.com
Co. Ltd. bill
shareh decision- .cn)
older making
process
Market
Subsid price
Hangzh iary of determin Cninf
Cash,
ou the Me ed by the M o
banke
Grand Comp dici Medic Company ark April (http:/
r’s Marke
Biologic any’s ne ine ’s related et 81.08 0.00% 178 No 14, /www
accept t price
Pharmac contro sale sales transactio pri 2023 .Cninf
ance
eutical lling s n ce o.com
bill
Inc. shareh decision- .cn)
older making
process
Market
price
Hangzh
determin Cninf
ou Joint Cash,
Me ed by the M o
Jiuyuan ventur banke
dici Medic Company ark April (http:/
Gene e of 537.7 r’s Marke
ne ine ’s related et 0.03% 500 Y 14, /www
Enginee the 1 accept t price
sale sales transactio pri 2023 .Cninf
ring Comp ance
s n ce o.com
Co., any bill
decision- .cn)
Ltd.
making
process
Market
Subsid price
Guangd
iary of determin Cninf
ong Cash,
the Me ed by the M o
Leiyuns banke
Comp dici Medic Company ark April (http:/
hang 238.8 r’s Marke
any’s ne ine ’s related et 0.01% 0 Y 14, /www
Pharmac 4 accept t price
contro sale sales transactio pri 2023 .Cninf
eutical ance
lling s n ce o.com
Co., bill
shareh decision- .cn)
Ltd.
older making
process
Dru
Market
g
price
pro Drug
determin Cninf
Chongqi Joint duc produ Cash,
ed by the M o
ng Peg- ventur tion ction banke
Company ark April (http:/
Bio e of and and 223.6 r’s Marke
’s related et 0.01% 276 No 14, /www
Biophar the tec techni 2 accept t price
transactio pri 2023 .Cninf
m Co., Comp hni cal ance
n ce o.com
Ltd. any cal servic bill
decision- .cn)
ser es
making
vic
process
es
85
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
Market
Subsid price
iary of determin Cninf
Xi’an Ag Cash,
the ed by the M o
Yuanda ent banke
Comp Agent Company ark April (http:/
Detian ser r’s Marke
any’s servic ’s related et 93.58 0.00% 1,000 No 14, /www
Pharmac vic accept t price
contro e fee transactio pri 2023 .Cninf
eutical e ance
lling n ce o.com
Co., Ltd fee bill
shareh decision- .cn)
older making
process
Market
Subsid price
iary of determin Cninf
Penglai Ag Cash,
the ed by the M o
Nuokan ent banke
Comp Agent Company ark April (http:/
g ser r’s Marke
any’s servic ’s related et 61.92 0.00% 40 Y 14, /www
Pharmac vic accept t price
contro e fee transactio pri 2023 .Cninf
eutical e ance
lling n ce o.com
Co. Ltd. fee bill
shareh decision- .cn)
older making
process
Market
Subsid price
Beijing iary of Tec determin Cninf
Cash,
Grand the hni ed by the M o
Techn banke
Johamu Comp cal Company ark April (http:/
ical r’s Marke
Pharmac any’s ser ’s related et 79.08 0.00% 0 Y 14, /www
servic accept t price
eutical contro vic transactio pri 2023 .Cninf
e fee ance
Co., lling e n ce o.com
bill
Ltd. shareh fee decision- .cn)
older making
process
Market
Subsid price
iary of Tec determin Cninf
Cash,
Grandph the hni ed by the M o
Techn banke
arma Comp cal Company ark April (http:/
ical r’s Marke
(China) any’s ser ’s related et 0.75 0.00% 0 Y 14, /www
servic accept t price
Co., contro vic transactio pri 2023 .Cninf
e fee ance
Ltd. lling e n ce o.com
bill
shareh fee decision- .cn)
older making
process
Market
Subsid price
Hangzh iary of determin Cninf
Tec Cash,
ou the ed by the M o
hni Techn banke
Grand Comp Company ark April (http:/
cal ical r’s Marke
Biologic any’s ’s related et 4.34 0.00% 0 Y 14, /www
ser servic accept t price
Pharmac contro transactio pri 2023 .Cninf
vic es ance
eutical lling n ce o.com
es bill
Inc. shareh decision- .cn)
older making
process
Sichuan Subsid Tra Trans Market M Cash, April Cninf
Marke
Yuanda iary of nsp portati price ark 5.51 0.00% 400 No banke 14, o
t price
Shuyang the orta on determin et r’s 2023 (http:/
86
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
Pharmac Comp tion and ed by the pri accept /www
eutical any’s and wareh Company ce ance .Cninf
Co., contro war ousin ’s related bill o.com
Ltd. lling eho g transactio .cn)
shareh usi servic n
older ng es decision-
ser making
vic process
es
Market
price
Hangzh
determin Cninf
ou Joint Cash,
ed by the M o
Jiuyuan ventur Ho banke
House Company ark April (http:/
Gene e of use r’s Marke
leasin ’s related et 6.42 0.00% 6.42 No 14, /www
Enginee the leas accept t price
g transactio pri 2023 .Cninf
ring Comp ing ance
n ce o.com
Co., any bill
decision- .cn)
Ltd.
making
process
Market
Subsid price
iary of determin Cninf
Bering Cash,
the ed by the M o
Yanhuan Ho banke
Comp House Company ark April (http:/
g Real use r’s Marke
any’s leasin ’s related et 30.32 0.00% 0 Y 14, /www
Estate leas accept t price
contro g transactio pri 2023 .Cninf
Co., ing ance
lling n ce o.com
Ltd. bill
shareh decision- .cn)
older making
process
23,14 52,05
Total -- -- -- -- -- -- -- --
3.61 0.42
Details of bulk sales returns N/A
Actual performance during the
reporting period where the total
amount of daily related Actual amount occurred in daily transactions related to daily operations of the Company and
transactions is estimated by its subsidiaries did not exceed the annual estimate during the reporting period.
category for the current period (if
any)
Reasons for the large difference
between the transaction price and
N/A
the market reference price (if
applicable)
2. Related transactions involving the acquisition or selling assets and equity
□ Applicable N/A
No such case during the reporting period.
3. Related transactions of joint external investment
□ Applicable N/A
No such case during the reporting period.
87
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
4. Associated claim and debt transactions
□ Applicable N/A
No such case during the reporting period.
5. Transactions with financial companies who are related parties of the Company
□ Applicable N/A
No deposit, loan, credit or other financial business between the Company and the related financial companies
6. Transactions between the financial companies controlled by the Company and the related parties
□ Applicable N/A
No deposit, loan, credit or other financial business between the financial companies controlled by the Company and the related
parties.
7. Other major related transactions
□ Applicable N/A
No such case during the reporting period.
XII. Major contracts and their fulfillment
1. Entrustment, contracting and leasing
(1) Entrustment
□ Applicable N/A
No such case during the reporting period.
(2) Contracting
□ Applicable N/A
No such case during the reporting period.
(3) Leasing
□ Applicable N/A
No such case during the reporting period.
2. Important guarantees
Applicable □ N/A
Unit: Ten thousand yuan
External guarantees of the Company and its subsidiaries (excluding guarantees for subsidiaries)
Guarantee Disclosu Guaran Actual Actual Type of Collate Counter Period Fulfilled Guarante
d party re date tee Cap date of guarante guarantee ral (if guaranty of or not e for a
88
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
of the occurren ed any) (if any) guarante related
announc ce amount e party or
ement not
related
to the
guarante
e Cap
The Company’s guarantees for its subsidiaries
Disclosu
re date
of the Guarante
Actual Actual Period
announc Collate Counter e for a
Guarantee Guaran date of guarante Type of of Fulfilled
ement ral (if guaranty related
d party tee Cap occurren ed guarantee guarante or not
related any) (if any) party or
ce amount e
to the not
guarante
e Cap
Hangzhou
Zhongmei Joint and
Huadong April October several Annuall
85,000 8,561.45 No No
Pharmace 28, 2022 12, 2022 liability y
utical Co., guarantee
Ltd.
Hangzhou
Zhongmei Joint and
Huadong April January 17,419.4 several Annuall
85,000 No No
Pharmace 14, 2023 18, 2023 4 liability y
utical Co., guarantee
Ltd.
Hangzhou
Zhongmei Joint and
Huadong April January several Annuall
85,000 2,205.52 No No
Pharmace 14, 2023 30, 2023 liability y
utical Co., guarantee
Ltd.
Hangzhou
Zhongmei Joint and
Huadong April February several Annuall
85,000 2,466.02 No No
Pharmace 14, 2023 23, 2023 liability y
utical Co., guarantee
Ltd.
Hangzhou
Zhongmei Joint and
Huadong April February several Annuall
85,000 1,826.2 No No
Pharmace 14, 2023 24, 2023 liability y
utical Co., guarantee
Ltd.
Hangzhou
Zhongmei Joint and
Huadong April March 3, several Annuall
85,000 1,890.49 No No
Pharmace 14, 2023 2023 liability y
utical Co., guarantee
Ltd.
Hangzhou Joint and
Zhongmei April March several Annuall
85,000 10,000 No No
Huadong 14, 2023 22, 2023 liability y
Pharmace guarantee
89
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
utical Co.,
Ltd.
Hangzhou
Zhongmei Joint and
Huadong April March several Annuall
85,000 8,667.58 No No
Pharmace 14, 2023 24, 2023 liability y
utical Co., guarantee
Ltd.
Hangzhou
Zhongmei Joint and
Huadong April March several Annuall
85,000 1,098.71 No No
Pharmace 14, 2023 29, 2023 liability y
utical Co., guarantee
Ltd.
Hangzhou
Zhongmei Joint and
Huadong April April 25, several Annuall
85,000 17,229.4 No No
Pharmace 14, 2023 2023 liability y
utical Co., guarantee
Ltd.
Hangzhou
Zhongmei Joint and
Huadong April April 26, 11,227.0 several Annuall
85,000 No No
Pharmace 14, 2023 2023 1 liability y
utical Co., guarantee
Ltd.
Hangzhou
Zhongmei Joint and
Huadong April May 12, several Annuall
85,000 788.55 No No
Pharmace 14, 2023 2023 liability y
utical Co., guarantee
Ltd.
Hangzhou
Zhongmei Joint and
Huadong April May 26, several Annuall
85,000 8,904.02 No No
Pharmace 14, 2023 2023 liability y
utical Co., guarantee
Ltd.
Hangzhou
Zhongmei Joint and
Huadong April May 30, several Annuall
85,000 4,381.65 No No
Pharmace 14, 2023 2023 liability y
utical Co., guarantee
Ltd.
Hangzhou
Zhongmei Joint and
Huadong April June 16, several Annuall
85,000 3,127 No No
Pharmace 14, 2023 2023 liability y
utical Co., guarantee
Ltd.
Hangzhou
Zhongmei Joint and
Huadong April June 25, several Annuall
85,000 10,000 No No
Pharmace 14, 2023 2023 liability y
utical Co., guarantee
Ltd.
Hangzhou April 85,000 June 30, 6,234.09 Joint and Annuall No No
90
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
Zhongmei 14, 2023 2023 several y
Huadong liability
Pharmace guarantee
utical Co.,
Ltd.
Huadong
Medicine
Supply
Chain April Ten
20,000
Managem 19, 2019 years
ent
(Jinhua)
Co., Ltd.
Huadong
Medicine
(Xi’an)
April Annuall
Bohua 5,000
14, 2023 y
Pharmace
utical Co.,
Ltd.
Huadong
Medicine
April Annuall
Ningbo 16,000
14, 2023 y
Sales Co.,
Ltd.
Huadong Joint and
Medicine April April 20, several Annuall
15,000 4,275 No No
Huzhou 14, 2023 2023 liability y
Co., Ltd. guarantee
Huadong Joint and
Medicine April February several Annuall
19,000 100 No No
Shaoxing 14, 2023 13, 2023 liability y
Co., Ltd. guarantee
Huadong Joint and
Medicine April March several Annuall
19,000 7,000 No No
Shaoxing 14, 2023 31, 2023 liability y
Co., Ltd. guarantee
Huadong
Medicine
Joint and
(Hangzho
April April 13, several Annuall
u) 3,000 105.14 No No
14, 2023 2023 liability y
Biological
guarantee
Products
Co., Ltd.
Huadong
Medicine
Joint and
(Hangzho
April April 21, several Annuall
u) 3,000 184.02 No No
14, 2023 2023 liability y
Biological
guarantee
Products
Co., Ltd.
Huadong
Medicine Joint and
(Hangzho April April 27, several Annuall
3,000 37.45 No No
u) 14, 2023 2023 liability y
Biological guarantee
Products
91
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
Co., Ltd.
Huadong
Medicine
Joint and
(Hangzho
April May 19, several Annuall
u) 3,000 20.3 No No
14, 2023 2023 liability y
Biological
guarantee
Products
Co., Ltd.
Huadong
Medicine
Joint and
(Hangzho
April June 13, several Annuall
u) 3,000 293.6 No No
14, 2023 2023 liability y
Biological
guarantee
Products
Co., Ltd.
Huadong
Medicine
Joint and
(Hangzho
April June 16, several Annuall
u) 3,000 54 No No
14, 2023 2023 liability y
Biological
guarantee
Products
Co., Ltd.
Jiangsu
Joyang April Annuall
7,000
Laboratori 14, 2023 y
es
Huadong Joint and
Medicine April July 12, several Annuall
24,000 1,000 No No
Wenzhou 28, 2022 2022 liability y
Co., Ltd. guarantee
Huadong Joint and
Medicine April July 13, several Annuall
24,000 1,000 No No
Wenzhou 28, 2022 2022 liability y
Co., Ltd. guarantee
Huadong Joint and
Medicine April August several Annuall
24,000 1,000 No No
Wenzhou 28, 2022 4, 2022 liability y
Co., Ltd. guarantee
Huadong Joint and
Medicine April August several Annuall
24,000 1,000 No No
Wenzhou 28, 2022 5, 2022 liability y
Co., Ltd. guarantee
Huadong Joint and
Medicine April August several Annuall
24,000 1,000 No No
Wenzhou 28, 2022 24, 2022 liability y
Co., Ltd. guarantee
Huadong Joint and
Septemb
Medicine April several Annuall
24,000 er 13, 1,000 No No
Wenzhou 28, 2022 liability y
2022
Co., Ltd. guarantee
Huadong Joint and
Septemb
Medicine April several Annuall
24,000 er 15, 1,000 No No
Wenzhou 28, 2022 liability y
2022
Co., Ltd. guarantee
Huadong Joint and
April October Annuall
Medicine 24,000 1,000 several No No
28, 2022 14, 2022 y
Wenzhou liability
92
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
Co., Ltd. guarantee
Huadong Joint and
Medicine April October several Annuall
24,000 1,000 No No
Wenzhou 28, 2022 26, 2022 liability y
Co., Ltd. guarantee
Huadong Joint and
Novemb
Medicine April several Annuall
24,000 er 7, 1,000 No No
Wenzhou 28, 2022 liability y
2022
Co., Ltd. guarantee
Huadong Joint and
Novemb
Medicine April several Annuall
24,000 er 9, 1,000 No No
Wenzhou 28, 2022 liability y
2022
Co., Ltd. guarantee
Huadong Joint and
Decemb
Medicine April several Annuall
24,000 er 8, 1,000 No No
Wenzhou 28, 2022 liability y
2022
Co., Ltd. guarantee
Huadong Joint and
Decemb
Medicine April several Annuall
24,000 er 9, 1,000 No No
Wenzhou 28, 2022 liability y
2022
Co., Ltd. guarantee
Huadong Joint and
Medicine April January several Annuall
24,000 1,000 No No
Wenzhou 14, 2023 3, 2023 liability y
Co., Ltd. guarantee
Huadong Joint and
Medicine April January several Annuall
24,000 1,000 No No
Wenzhou 14, 2023 4, 2023 liability y
Co., Ltd. guarantee
Huadong Joint and
Medicine April January several Annuall
24,000 990 No No
Wenzhou 14, 2023 4, 2023 liability y
Co., Ltd. guarantee
Huadong Joint and
Medicine April April 6, several Annuall
24,000 1,000 No No
Wenzhou 14, 2023 2023 liability y
Co., Ltd. guarantee
Huadong Joint and
Medicine April April 7, several Annuall
24,000 1,000 No No
Wenzhou 14, 2023 2023 liability y
Co., Ltd. guarantee
Huadong Joint and
Medicine April April 18, several Annuall
24,000 1,000 No No
Wenzhou 14, 2023 2023 liability y
Co., Ltd. guarantee
Huadong Joint and
Medicine April April 21, several Annuall
24,000 1,210 No No
Wenzhou 14, 2023 2023 liability y
Co., Ltd. guarantee
Huadong Joint and
Medicine April May 25, several Annuall
24,000 140 No No
Wenzhou 14, 2023 2023 liability y
Co., Ltd. guarantee
Huadong Joint and
Medicine April June 21, several Annuall
24,000 616.78 No No
Wenzhou 14, 2023 2023 liability y
Co., Ltd. guarantee
93
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
Huadong Joint and
Medicine April June 27, several Annuall
24,000 35 No No
Wenzhou 14, 2023 2023 liability y
Co., Ltd. guarantee
Huadong Joint and
Medicine April April 7, several Annuall
15,000 6,000 No No
Lishui 14, 2023 2023 liability y
Co., Ltd. guarantee
Huadong
Medicine April Annuall
2,600
Daishan 14, 2023 y
Co., Ltd.
Huadong
Medicine
April Annuall
Cunde 9,900
14, 2023 y
(Zhoushan
) Co., Ltd.
Hangzhou
Zhongmei
Joint and
Huadong
April January several Annuall
Pharmace 40,000 307.44 No No
14, 2023 19, 2023 liability y
utical
guarantee
Jiangdong
Co., Ltd.
Hangzhou
Zhongmei
Joint and
Huadong
April March several Annuall
Pharmace 40,000 8,000 No No
14, 2023 27, 2023 liability y
utical
guarantee
Jiangdong
Co., Ltd.
Hangzhou
Joint and
Huadong
April May 26, several Annuall
Pharmacy 5,000 4,750 No No
14, 2023 2023 liability y
Chain Co.,
guarantee
Ltd.
Huadong Joint and
Medicine April April 23, several Annuall
15,000 3,990 No No
Jinhua 14, 2023 2023 liability y
Co., Ltd. guarantee
Anhui
Meihua
Hi-Tech April Annuall
3,500
Pharmace 14, 2023 y
utical Co.,
Ltd.
Hubei
Meiqi
April Annuall
Health 5,400
14, 2023 y
Technolog
y Co., Ltd.
Huadong
Pharmace
utical April Annuall
76,000
(Hong 14, 2023 y
Kong)
Investmen
94
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
t Holding
Co., Ltd.
Joint and
Sinclair Novemb
May 21, 10,971.8 several Three
Pharma er 23, 40,000 No No
2020 4 liability years
Limited 2018
guarantee
Joint and
Sinclair Novemb
July 30, several Three
Pharma er 23, 40,000 2,742.96 No No
2020 liability years
Limited 2018
guarantee
Joint and
Sinclair Novemb Novemb
several Three
Pharma er 23, 40,000 er 16, 1,828.64 No No
liability years
Limited 2018 2020
guarantee
Joint and
Sinclair Novemb
February several Three
Pharma er 23, 40,000 2,742.96 No No
4, 2021 liability years
Limited 2018
guarantee
Joint and
Sinclair Septemb
12,591. March several Three
Pharma er 17, 2,742.96 No No
15 30, 2021 liability years
Limited 2020
guarantee
Joint and
Sinclair Septemb
12,591. April 19, several Three
Pharma er 17, 3,657.28 No No
15 2021 liability years
Limited 2020
guarantee
Joint and
Sinclair Septemb
12,591. May 26, several Three
Pharma er 17, 3,657.28 No No
15 2021 liability years
Limited 2020
guarantee
Joint and
Sinclair Septemb
12,591. August several Three
Pharma er 17, 1,828.64 No No
15 11, 2021 liability years
Limited 2020
guarantee
Joint and
Sinclair Septemb Septemb
12,591. several Three
Pharma er 17, er 14, 1,828.64 No No
15 liability years
Limited 2020 2021
guarantee
Joint and
Sinclair
July 16, 38,305. January several Three
Pharma 39,741.9 No No
2021 3 13, 2022 liability years
Limited
guarantee
Joint and
Sinclair
March 14,845. April 8, several Three
Pharma 15,754.2 No No
16, 2021 8 2021 liability years
Limited
guarantee
Joint and
Sinclair Decemb
March 14,845. March several
Pharma 15,754.2 er 31, No No
16, 2021 8 17, 2021 liability
Limited 2024
guarantee
Sinclair
March 31,695. Three
Pharma
16, 2021 78 years
Limited
Sinclair
April Annuall
Pharma 58,600
28, 2022 y
Limited
Sinclair April 65,000 Annuall
95
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
Pharma 14, 2023 y
Limited
Total guarantee
Total guarantee cap
amount for
for subsidiaries
411,400 subsidiaries actually 150,574.42
approved during the
occurred during the
reporting period (Bl)
reporting period (B2)
Total approved Total actual guarantee
guarantee cap for balance for
subsidiaries at the end 736,438 subsidiaries at the end 275,387.37
of the reporting period of the reporting period
(B3) (B4)
Subsidiaries guarantee for subsidiaries
Disclosu
re date
of the Guarante
Actual Actual Period
announc Collate Counter e for a
Guarantee Guaran date of guarante Type of of Fulfilled
ement ral (if guaranty related
d party tee Cap occurren ed guarantee guarante or not
related any) (if any) party or
ce amount e
to the not
guarante
e Cap
Chongqin
g Peg-Bio April Annual
4,800 0 Y
Biopharm 14, 2023 ly
Co., Ltd.
Total guarantee
Total guarantee cap
amount for
for subsidiaries
4,800 subsidiaries actually
approved during the
occurred during the
reporting period (C1)
reporting period (C2)
Total approved Total actual guarantee
guarantee cap for balance for
subsidiaries at the end 4,800 subsidiaries at the end
of the reporting period of the reporting period
(C3) (C4)
Total amount of the Company’s guarantees (i.e. the sum of the above-mentioned 3 kinds of guarantees)
Total guarantees cap Total actual guarantee
approved during the amount during the
416,200 150,574.42
reporting period reporting period
(A1+B1+C1) (A2+B2+C2)
Total approved Total actual guarantee
guarantee cap at the balance at the end of
741,238 275,387.37
end of the reporting the reporting period
period (A3+B3+C3) (A4+B4+C4)
Proportion of the actual guarantee amount
14.10%
(i.e. A4+B4+C4) in the Company’s net assets
Among them:
Amount of debt guarantees provided directly
or indirectly for the entities with a liability to 128,993.28
asset ratio over 70% (E)
Total guarantee amount of the above-
128,993.28
mentioned three kinds of guarantees
96
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
(D+E+F)
Note on the specific circumstance if multiple methods are adopted for guarantees
N/A
3. Entrusted wealth management
□ Applicable N/A
No such case during the reporting period.
4. Other significant contracts
□ Applicable N/A
No other significant contract during the reporting period.
XIII. Other major events
□ Applicable N/A
No such case during the reporting period.
XIV. Major events of subsidiaries
Applicable □ N/A
As of the release of this report, major assets had been disposed in the liquidation of Huadong Ningbo
Medicine Co., Ltd. in the court. Some claims and accounts receivable are remained to be collected. The Company
has arranged special personnel for participation and actively promoted the subsequent liquidation work. It is
expected that this does not have any significant impact on the Company’s operating results.
97
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
Section VII. Share Change and Shareholders
I. Changes in shares
1. Table of changes in shares
Unit: Share
Before the change Change in the period (+/-) After the change
Shares
converted
New Bonus
Quantity Ratio from Others Sub-total Quantity Ratio
shares shares
capital
reserve
I. Shares
subject to
condition 4,268,300 0.24% 0 0 0 0 0 4,268,300 0.24%
al
restriction
1.
Shares
0 0.00% 0 0 0 0 0 0 0.00%
held by
the state
2.
Shares
held by
state- 0 0.00% 0 0 0 0 0 0 0.00%
owned
corporatio
ns
3.
Shares
held by
4,068,300 0.23% 0 0 0 0 0 4,068,300 0.23%
other
domestic
investors
Inclu
ding:
Shares
held by 0 0.00% 0 0 0 0 0 0 0.00%
domestic
corporatio
ns
Shar
es held by
domestic 4,068,300 0.23% 0 0 0 0 0 4,068,300 0.23%
natural
persons
4.
Shares
200,000 0.01% 0 0 0 0 0 200,000 0.01%
held by
overseas
98
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
investors
Inclu
ding:
Shares
held by 0 0.00% 0 0 0 0 0 0 0.00%
overseas
corporatio
ns
Shar
es held by
overseas 200,000 0.01% 0 0 0 0 0 200,000 0.01%
natural
persons
II. Shares
1,749,727 1,749,727
without 99.76% 0 0 0 0 0 99.76%
,048 ,048
restriction
1.
RMB 1,749,727 1,749,727
99.76% 0 0 0 0 0 99.76%
common ,048 ,048
shares
2.
Domestic
ally listed 0 0.00% 0 0 0 0 0 0 0.00%
foreign
shares
3.
Foreign
shares 0 0.00% 0 0 0 0 0 0 0.00%
listed
overseas
4.
0 0.00% 0 0 0 0 0 0 0.00%
Others
III. Total
1,753,995 1,753,995
number of 100.00% 0 0 0 0 0 100.00%
,348 ,348
shares
Reasons for the changes in share capital
□ Applicable N/A
Approval for changes in share capital
□ Applicable N/A
Transfer of shares
□ Applicable N/A
Progress of share repurchase
□ Applicable N/A
Progress of reducing repurchased shares through centralized bidding
□ Applicable N/A
Effects of changes in share capital on the basic earnings per share, diluted earnings per share for the most recent year and the most
recent period, the net assets per share attributable to the Company’s common shareholders and other financial indicators
□ Applicable N/A
Other disclosures the Company deems necessary or required by securities regulatory authorities
99
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
□ Applicable N/A
2. Changes in restricted shares
□ Applicable N/A
II. Issuance and listing of securities
□ Applicable N/A
III. Total number of shareholders and their shareholdings
Unit: Share
Total number of preference shareholders
Total number of common
with restoration of the voting rights at the
shareholders at the end of 74,378 0
end of the reporting period (if any) (see
the reporting period
Note 8)
Particulars about common shareholders with a shareholding ratio over 5% or the top 10 common shareholders
Total Pledged or frozen
Number of
common Number of
Changes in common
Name of shares not shares held
Nature of Shareholdi the shares held
Shareholde held at the without
shareholder ng ratio reporting with Status Quantity
r end of the trading
period trading
reporting restriction
restrictions
period
China Domestic
Grand non-state- 730,938,15 730,938,15 131,630,00
41.67% 0 0 Pledged
Enterprises, owned 7 7 0
Inc. corporation
Hangzhou
Huadong State-
288,000,00 288,000,00
Medicine owned 16.42% 0 0
0 0
Group Co., corporation
Ltd.
Hong Kong
Securities
Overseas
Clearing 3.27% 57,408,083 1,400,012 0 57,408,083
corporation
Company
Ltd.
Industrial
and
Commercia
l Bank of
China
Limited -
China- Others 2.74% 48,004,441 -1,311,800 0 48,004,441
Europe
Healthcare
Hybrid
Securities
Investment
Fund
China Domestic
1.26% 22,186,818 0 0 22,186,818
Securities non-state-
100
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
Finance owned
Co., corporation
China
Constructio
n Bank
Co., Ltd. -
ICBC
Credit Others 1.00% 17,500,000 -2,500,078 0 17,500,000
Suisse
Frontier
Medical
Equity
Fund
China
Constructio
n Bank
Corporatio
n - E Fund
Others 0.72% 12,565,632 5,530,600 0 12,565,632
CSI 300
Healthcare
Exchange
Traded
Fund
National
Social
Security Others 0.59% 10,380,842 0 0 10,380,842
Fund -
Profile 0
National
Social
Security Others 0.48% 8,500,000 2,500,000 0 8,500,000
Fund -
Profile 503
Industrial
and
Commercia
l Bank of
China
Limited -
China- Others 0.43% 7,461,104 -2,116,480 0 7,461,104
Europe
Healthcare
Innovation
Stock
Investment
Fund
Strategic investors or
general corporations
become the top 10
common shareholders due N/A
to the placement of new
shares (if any) (see Note
3)
Explanation on associated
relationships or concerted The Company does not know whether the above-mentioned shareholders are related parties or
actions among the above- whether they are acting-in- concert parties with one another.
mentioned shareholders
101
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
Description about above-
mentioned shareholders’
entrusting/being entrusted N/A
with and waiving voting
rights
Explanation of special
account for repurchase
among the top 10 N/A
shareholders (if any) (see
Note 11)
Shareholding of the top 10 common shareholders without trading restrictions
Type of shares
Number of common without restrictions held at the end of the
Name of Shareholder Type of
reporting period Quantity
shares
RMB
China Grand Enterprises, 730,938,15
730,938,157 common
Inc. 7
shares
RMB
Hangzhou Huadong 288,000,00
288,000,000 common
Medicine Group Co., Ltd. 0
shares
RMB
Hong Kong Securities
57,408,083 common 57,408,083
Clearing Company Ltd.
shares
Industrial and
Commercial Bank of
RMB
China Limited - China-
48,004,441 common 48,004,441
Europe Healthcare Hybrid
shares
Securities Investment
Fund
RMB
China Securities Finance
22,186,818 common 22,186,818
Co.,
shares
China Construction Bank
RMB
Co., Ltd. - ICBC Credit
17,500,000 common 17,500,000
Suisse Frontier Medical
shares
Equity Fund
China Construction Bank
RMB
Corporation - E Fund CSI
12,565,632 common 12,565,632
300 Healthcare Exchange
shares
Traded Fund
RMB
National Social Security
10,380,842 common 10,380,842
Fund - Profile 0
shares
RMB
National Social Security
8,500,000 common 8,500,000
Fund - Profile 503
shares
Industrial and
Commercial Bank of
RMB
China Limited - China-
7,461,104 common 7,461,104
Europe Healthcare
shares
Innovation Stock
Investment Fund
Description for affiliated
The Company does not know whether the above-mentioned shareholders are related parties or
relationship or concerted
whether they are acting-in- concert parties with one another.
action among the top 10
102
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
shareholders holding
common shares without
trading restrictions and
between the top 10
shareholders holding
common shares without
trading restrictions and the
top 10 shareholders
Description of the
participation in margin
At the end of the reporting period, the Company had no shareholders holding its shares through
trading business of the top
margin trading and securities lending accounts among the top 10 common shareholders.
10 common shareholders
(if any) (see Note 4)
Whether the Company’s Top 10 common shareholders or the Top 10 common shareholders without trading restriction have carried
out any agreement to repurchase transaction during the reporting period
□Yes No
The Company’s top 10 common shareholders or the top 10 common shareholders without trading restrictions have not carried out
any agreement to repurchase transaction during the reporting period.
IV. Changes in shareholding of directors, supervisors and senior management members
□ Applicable N/A
The shareholding of directors, supervisors and senior management of the Company has not changed during the reporting period.
Please refer to the 2022 Annual Report for details.
V. Changes in holding shareholders or the de facto controller
Change of the controlling shareholder during the reporting period
□ Applicable N/A
No such case during the reporting period.
Change of the de facto controller during the reporting period
□ Applicable N/A
No such case during the reporting period.
103
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
Section VIII. Information on Preferred Shares
□ Applicable N/A
No such case during the reporting period.
104
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
Section IX. Information on Bonds
□ Applicable N/A
105
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
Section X. Financial Report
I. Audit report
Whether the semi-annual report has been audited?
□Yes No
The Company’s semi-annual financial report is not audited.
II. Financial statements
The unit of statements in the financial notes is: yuan.
1. Consolidated balance sheet
Prepared by: Huadong Medicine Co., Ltd.
June 30, 2023
Unit: yuan
Item June 30, 2023 January 01, 2023
Current assets:
Monetary funds 4,393,835,953.54 3,996,302,178.41
Settlement reserve
Lending funds
Trading financial assets
Derivative financial assets 24,806,772.30 29,907,470.68
Notes receivable 8,424,980.99
Accounts receivable 7,396,011,322.70 7,198,746,788.59
Receivables financing 1,343,534,867.76 1,002,511,208.21
Prepayments 362,087,140.00 500,083,953.14
Premiums receivable
Reinsurance accounts receivable
Reinsurance contract reserve
receivable
Other receivables 553,681,604.74 283,710,955.63
Include: Interest receivable
Dividend receivable 223,747.65 223,747.65
Financial assets purchased for resale
Inventories 4,600,017,100.80 4,495,483,328.54
Contract assets
Assets held for sale
Other non-current assets expiring
within one year
Other non-current assets 54,881,711.01 52,692,618.78
Total current assets 18,728,856,472.85 17,567,863,482.97
106
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
Non-current assets:
Loans and prepayments issuance
Debt investment
Other debt investments
Long-term receivables
Long-term equity investment 1,554,304,930.05 1,659,076,538.78
Other equity instrument investments 409,848,691.27 360,910,876.41
Other non-current financial assets
Investment real estate 13,174,524.11 13,648,240.14
Fixed assets 3,882,268,169.12 3,981,653,265.52
Construction in progress 995,490,666.09 873,159,427.47
Productive biological assets
Oil and gas assets
Right-of-use assets 140,455,892.14 166,505,297.17
Intangible assets 2,336,097,668.47 2,280,064,207.30
Development expenditure 774,096,145.13 641,354,586.80
Goodwill 2,587,351,458.30 2,441,387,413.59
Long-term deferred expenses 20,981,527.19 16,457,278.57
Deferred income tax assets 192,386,807.93 152,842,858.97
Other non-current assets 1,320,687,263.41 1,037,279,933.15
Total non-current assets 14,227,143,743.21 13,624,339,923.87
Total Assets 32,956,000,216.06 31,192,203,406.84
Current liabilities:
Short-term borrowings 1,052,194,176.07 947,516,383.37
Borrowing from the central bank
Borrowing from other banks and other
financial institutions
Trading financial liabilities 8,970,278.04 14,841,896.97
Derivative financial liabilities
Notes payable 1,728,257,564.68 1,029,409,686.81
Accounts payable 4,717,793,829.40 4,873,029,466.44
Advances from customers 1,869,073.27 1,154,243.42
Contract liabilities 125,334,375.52 146,488,489.07
Financial assets sold for repurchase
Deposits from customers and due from
banks
Receipts for buying and selling
securities as proxy
Receipts for underwriting securities as
proxy
Employee benefits payable 215,063,488.67 256,883,423.68
Taxes payable 335,297,295.69 429,457,804.81
Other payables 2,810,793,780.14 2,290,407,022.05
107
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
Include: Interests payable
Dividend payable 224,219.60 14,924,219.60
Handling fees and commissions
payable
Reinsurance accounts payable
Liabilities held for sale
Other non-current liabilities due
349,680,396.42 147,835,514.81
within one year
Other current liabilities 12,763,947.51 15,788,164.30
Total current liabilities 11,358,018,205.41 10,152,812,095.73
Non-current liabilities:
Insurance policy reserve
Long-term borrowings 746,918,081.65 1,051,457,747.44
Bonds payable
Include: Preferred stock
Perpetual bond
Lease liabilities 92,232,272.51 84,610,324.98
Long-term payables 91,008,860.30 287,497,209.49
Long-term employee remuneration
payable
Estimated liabilities 41,068,049.26 37,925,549.41
Deferred income 176,825,542.10 126,123,512.71
Deferred income tax liabilities 193,669,206.28 202,084,083.93
Other non-current liabilities 73,251,500.00 73,251,500.00
Total non-current liabilities 1,414,973,512.10 1,862,949,927.96
Total liabilities 12,772,991,717.51 12,015,762,023.69
Owners’ Equity:
Share capital 1,753,995,348.00 1,753,995,348.00
Other equity instruments
Include: Preferred stock
Perpetual bond
Capital reserves 2,407,928,799.63 2,377,887,246.39
Less: Treasury stock 104,645,000.00 104,645,000.00
Other comprehensive income -91,570,465.50 -88,552,636.42
Special reserves
Surplus reserves 1,151,441,705.28 1,151,213,039.48
General risk reserve
Undistributed profit 14,415,245,210.75 13,488,021,239.94
Total owners’ equity attributable to
19,532,395,598.16 18,577,919,237.39
owner of the Company
Minority interests 650,612,900.39 598,522,145.76
Total owners’ equity 20,183,008,498.55 19,176,441,383.15
Total liabilities & owners’ equity 32,956,000,216.06 31,192,203,406.84
Legal representative: Lv Liang Person in charge of accounting: Lv Liang Person in charge of the Accounting Department: Qiu
Renbo
108
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
2. Balance sheet of the parent company
Unit: yuan
Item June 30, 2023 January 01, 2023
Current assets:
Monetary funds 3,035,047,307.02 2,486,399,844.96
Trading financial assets
Derivative financial assets
Notes receivable 8,424,980.99
Accounts receivable 4,080,636,027.16 4,224,944,294.54
Receivables financing 439,506,917.27 157,097,728.09
Prepayments 99,551,906.14 271,448,367.52
Other receivables 1,782,359,340.53 1,065,267,397.05
Include: Interest receivable
Dividend receivable 400,000,000.00
Inventories 2,438,626,619.48 2,391,038,707.33
Contract assets
Assets held for sale
Other non-current assets expiring
within one year
Other non-current assets 417,032.05
Total current assets 11,876,145,149.65 10,604,621,320.48
Non-current assets:
Debt investment
Other debt investments
Long-term receivables
Long-term equity investment 5,862,418,196.29 5,473,824,934.24
Other equity instrument investments 10,100,870.56 10,100,870.56
Other non-current financial assets
Investment real estate 6,959,994.94 7,193,111.26
Fixed assets 138,895,929.52 144,023,222.94
Construction in progress 530,156.96 824,024.88
Productive biological assets
Oil and gas assets
Right-of-use assets 2,084,255.60 3,631,025.07
Intangible assets 174,300,679.26 188,198,218.40
Development expenditure
Goodwill
Long-term deferred expenses 77,379.81
Deferred income tax assets 58,469,297.94 49,729,544.62
Other non-current assets 259,185,602.33 346,564,596.26
Total non-current assets 6,512,944,983.40 6,224,166,928.04
Total Assets 18,389,090,133.05 16,828,788,248.52
109
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
Current liabilities:
Short-term borrowings 500,086,610.91 431,081,029.52
Trading financial liabilities
Derivative financial liabilities
Notes payable 829,240,274.76 629,281,486.95
Accounts payable 3,605,728,508.22 3,373,959,848.93
Advances from customers
Contract liabilities 37,810,455.50 46,097,912.05
Employee benefits payable 3,937,885.92 10,063,669.60
Taxes payable 40,329,748.32 86,458,570.85
Other payables 1,348,814,904.68 949,611,806.93
Include: Interests payable
Dividend payable 224,219.60 224,219.60
Liabilities held for sale
Other non-current liabilities due
31,393,500.00 33,427,007.32
within one year
Other current liabilities 4,889,117.73 5,830,680.38
Total current liabilities 6,402,231,006.04 5,565,812,012.53
Non-current liabilities:
Long-term borrowings
Bonds payable
Include: Preferred stock
Perpetual bond
Lease liabilities 49,984.66 59,030.94
Long-term payables
Long-term employee benefits payable
Estimated liabilities
Deferred income 34,284,223.65 35,567,161.11
Deferred income tax liabilities
Other non-current liabilities 73,251,500.00 73,251,500.00
Total non-current liabilities 107,585,708.31 108,877,692.05
Total liabilities 6,509,816,714.35 5,674,689,704.58
Owners’ Equity:
Share capital 1,753,995,348.00 1,753,995,348.00
Other equity instruments
Include: Preferred stock
Perpetual bond
Capital reserves 2,302,867,706.56 2,276,383,543.02
Less: Treasury stock 104,645,000.00 104,645,000.00
Other comprehensive income -129,129.44 -129,129.44
Special reserves
Surplus reserves 1,229,068,798.92 1,229,068,798.92
Undistributed profit 6,698,115,694.66 5,999,424,983.44
Total owners’ equity 11,879,273,418.70 11,154,098,543.94
Total liabilities & owners’ equity 18,389,090,133.05 16,828,788,248.52
110
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
3. Consolidated income statement
Unit: yuan
Item Semi-Annual 2023 Semi-Annual 2022
I. Total operating revenue 20,385,344,288.81 18,197,963,991.01
Including: Operating revenue 20,385,344,288.81 18,197,963,991.01
Interests income
Premiums earned
Handling fees and
commissions received
II. Total operating cost 18,443,622,876.24 16,516,515,436.25
Including: Operating cost 13,917,418,061.11 12,243,374,078.15
Interest expenses
Handling fees and
commissions paid
Surrender value
Net payment of insurance
claims
Net appropriation of policy
reserve
Policy dividends paid
Reinsurance expenses
Business taxes and surcharges 106,685,622.91 96,083,582.73
Sales expenses 3,083,786,005.03 3,032,965,177.95
Administrative expenses 721,477,862.62 572,048,249.55
R&D expenses 558,407,142.27 566,596,381.67
Financial expenses 55,848,182.30 5,447,966.20
Including: Interests expenses 55,401,149.67 41,795,243.41
Interests income 33,022,555.87 49,960,917.39
Add: Other income 34,813,373.70 81,653,430.69
Investment income (Losses are
-136,885,042.56 -53,479,017.66
indicated by “-”)
Including: Investment gains
(losses) in associated enterprise and -120,429,152.98 -43,145,347.52
joint-venture enterprise
Gains on the
derecognition of financial assets
measured at amortized cost
Gains on exchange (Losses are
indicated by “-”)
Gains on net exposure hedging
(Losses are indicated by “-”)
Gains from changes in fair values
-5,100,698.38
(Losses are indicated by “-”)
Credit impairment losses (Losses
-36,432,398.31 -71,965,559.59
are indicated by “-”)
111
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
Impairment gains (losses) of
-3,175,583.57 0.00
assets (Losses are indicated by “-”)
Asset disposal income (Losses
3,519,820.08 8,506,580.12
are indicated by “-”)
III. Operating profit (Losses are
1,798,460,883.53 1,646,163,988.32
indicated by “-”)
Add: Non-operating revenue 2,972,826.61 4,341,628.44
Less: Non-operating expenses 16,298,554.80 8,661,496.73
IV. Total profit (Total losses are indicated
1,785,135,155.34 1,641,844,120.03
by “-”)
Less: Income tax expense 345,279,440.91 287,938,727.72
V. Net profit (Net losses are indicated by
1,439,855,714.43 1,353,905,392.31
“”)
(I) Classification by business
continuity
1. Net profit from continuing
operations (Net losses are indicated by “- 1,439,855,714.43 1,353,905,392.31
”)
2. Net profit at terminational
operation (Net losses are indicated by “-
”)
(II) Classification by attribution of
ownership
1. Net profit attributable to
shareholders of the parent company (Net 1,433,824,629.56 1,340,570,484.98
losses are indicated by “-”)
2. Profit or loss attributable to
minority shareholders (Net losses are 6,031,084.87 13,334,907.33
indicated by “-”)
VI. Other comprehensive income, net of
-8,889,448.01 -98,252,733.94
income tax
Other comprehensive income
attributable to owners of the parent -8,889,448.01 -98,252,733.94
company, net of tax
(I) Other comprehensive income
that cannot be reclassified into -808,768.81 -7,023,104.32
gains/losses
1. Changes in re-measurement on
the defined benefit plan
2. Other comprehensive income
that cannot be reclassified into
gains/losses under equity method
3. Changes in fair value of other
-808,768.81 -7,023,104.32
equity instrument investments
4. Changes in fair value of credit
risk of the enterprise
5. Others
(II) Other comprehensive income to
-8,080,679.20 -91,229,629.62
be reclassified into gains/losses
1. Other comprehensive income
that can be reclassified into gains/losses
under equity method
2. Changes in fair value of other
debt investments
3. Amount of financial assets
112
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
reclassified into other comprehensive
income
4. Credit impairment reserve of
other debt investments
5. Cash flow hedging reserve
6. Exchange differences from
translation of foreign currency financial -8,080,679.20 -91,229,629.62
statements
7. Others
Net amount after tax of other
comprehensive income attributable to
minority shareholders
VII. Total comprehensive income 1,430,966,266.42 1,255,652,658.37
Total comprehensive income
attributable to owners of the parent 1,424,935,181.55 1,242,317,751.04
company
Total comprehensive income
6,031,084.87 13,334,907.33
attributable to minority shareholders
VIII. Earnings per share (EPS):
(I) Basic EPS 0.8194 0.7661
(II) Diluted EPS 0.8190 0.7661
As for business merger under the same control in the current period, the net profit generated by the merged party before was yuan,
and that generated during the previous period was yuan.
Legal representative: Lv Liang Person in charge of accounting: Lv Liang Person in charge of the Accounting Department: Qiu
Renbo
4. Income statement of the parent company
Unit: yuan
Item Semi-Annual 2023 Semi-Annual 2022
I. Total operating revenue 11,079,388,260.41 9,908,981,203.23
Less: Total operating cost 10,420,679,546.07 9,247,554,807.79
Business taxes and surcharges 12,616,117.10 14,000,999.79
Sales expenses 207,782,464.30 227,664,922.41
Administrative expenses 96,229,619.65 82,342,556.23
R&D expenses
Financial expenses 4,055,926.11 -396,898.80
Including: Interests expenses 21,720,831.46 27,507,061.68
Interests income 23,053,892.55 32,303,808.77
Add: Other income 2,284,938.08 12,314,150.33
Investment income (Losses are
1,023,821,754.37 1,013,355,132.27
indicated by “-”)
Including: Investment gains
(losses) in associated enterprise and -10,790,429.82 -7,439,207.20
joint-venture enterprise
Gains on the
derecognition of financial assets
measured at amortized cost (Losses are
indicated by “-”)
Gains on net exposure hedging
113
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
(Losses are indicated by “-”)
Gains from changes in fair values
(Losses are indicated by “-”)
Credit impairment losses (Losses
-54,688,951.13 -91,642,566.80
are indicated by “-”)
Impairment gains (losses) of
assets (Losses are indicated by “-”)
Asset disposal income (Losses
3,543,591.91 7,341,180.70
are indicated by “-”)
II. Operating profit (Losses are indicated
1,312,985,920.41 1,279,182,712.31
by “-”)
Add: Non-operating revenue 17,440.99 669,874.31
Less: Non-operating expenses 1,518,858.46 3,286,049.77
III. Total profit (Total losses are indicated
1,311,484,502.94 1,276,566,536.85
by “-”)
Less: Income tax expense 104,135,140.80 88,593,758.11
IV. Net profit (Net losses are indicated by
1,207,349,362.14 1,187,972,778.74
“”)
(I) Net profit from continuous
operations (Net losses are indicated by “- 1,207,349,362.14 1,187,972,778.74
”)
(II) Net profit from discontinued
operations (Net losses are indicated by
“”)
V. Other comprehensive income, net of
income tax
(I) Other comprehensive income
that cannot be reclassified into
gains/losses
1. Changes in re-measurement on
the defined benefit plan
2. Other comprehensive income
that cannot be reclassified into
gains/losses under equity method
3. Changes in fair value of other
equity instrument investments
4. Changes in fair value of credit
risk of the enterprise
5. Others
(II) Other comprehensive income to
be reclassified into gains/losses
1. Other comprehensive income
that can be reclassified into gains/losses
under equity method
2. Changes in fair value of other
debt investments
3. Amount of financial assets
reclassified into other comprehensive
income
4. Credit impairment reserve of
other debt investments
5. Cash flow hedging reserve
6. Exchange differences from
translation of foreign currency financial
114
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
statements
7. Others
VI. Total comprehensive income 1,207,349,362.14 1,187,972,778.74
VII. Earnings per share (EPS):
(I) Basic EPS
(II) Diluted EPS
5. Consolidated cash flow statement
Unit: yuan
Item Semi-Annual 2023 Semi-Annual 2022
I. Cash flows from operating activities:
Cash received from the sale of goods
22,512,508,261.51 18,859,480,723.70
and the rendering of services
Net increase in customer deposits and
due from banks
Net increase in borrowing from the
central bank
Net increase in borrowing from other
financial institutions
Cash from the premium of the original
insurance policy
Net cash from reinsurance
Net increase in deposits and
investment of the insured
Cash from interests, handling fees and
commissions
Net increase in borrowing from other
banks and other financial institutions
Net increase in funds for repurchase
Net cash received for buying and
selling securities as proxy
Receipts of tax refund 13,105,796.43 11,410,179.66
Other cash receipts in relation to
253,862,517.46 264,979,395.43
operating activities
Cash inflows from operating activities 22,779,476,575.40 19,135,870,298.79
Cash payments for goods purchased
14,322,943,161.95 12,623,103,224.34
and services received
Net increase in customer loans and
prepayments
Net increase in deposits of central
bank and due from banks
Cash payments for original insurance
claims
Net increase in lending funds to other
banks and other financial institutions
Cash payments for interests, handling
fees and commissions
Cash payments for policy dividends
Cash payments to and on behalf of
1,739,212,838.99 1,600,540,802.72
employees
Payments of various types of taxes 1,395,137,423.20 1,824,842,188.89
115
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
Other cash payments in relation to
3,300,439,402.61 2,803,149,672.57
operating activities
Cash outflows for operating activities 20,757,732,826.75 18,851,635,888.52
Net cash flow from operating activities 2,021,743,748.65 284,234,410.27
II. Cash flows from investing activities
Cash receipts from recovery of
investments
Cash receipts from investment income 76,500,000.00 900,000.00
Net cash receipts from disposal of
fixed assets, intangible assets and other 5,336,825.17 8,138,807.00
long-term assets
Net cash from disposal of subsidiaries
and other business units
Other cash receipts in relation to
148,464,580.63 0.00
investing activities
Cash inflows from investing activities 230,301,405.80 9,038,807.00
Cash payments for purchase and
construction of fixed assets, intangible 597,637,675.13 603,911,034.60
assets and other long-term assets
Cash payments for investment 52,794,250.00 29,400,000.00
Net increase in pledge loans 0.00
Net cash paid for acquisition of
130,057,945.49 270,952,210.17
subsidiaries and other business units
Other cash payments in relation to
27,498,562.60 100,000,000.00
investing activities
Sub-total of cash outflows of investment
807,988,433.22 1,004,263,244.77
activities
Net cash flow from investing activities -577,687,027.42 -995,224,437.77
III. Cash flows from financing activities:
Cash receipts from absorbing
30,000,000.00
investments
Including: Cash receipts from capital
contributions from minority owners of 30,000,000.00
subsidiaries
Cash receipts from borrowing 2,148,865,020.50 2,750,601,977.68
Other cash receipts in relation to
457,402,316.71 248,207,838.55
financing activities
Cash inflows from financing activities 2,606,267,337.21 3,028,809,816.23
Cash repayments of borrowings 2,557,868,542.48 2,144,574,467.10
Cash payments for distribution of
dividends or profits or settlement of 618,612,489.40 585,723,656.08
interest expenses
Including: Dividends and profits paid
13,328,000.00 1,960,000.00
by subsidiaries to minority shareholders
Other cash payments in relation to
356,277,912.88 20,708,449.20
financing activities
Cash outflows for financing activities 3,532,758,944.76 2,751,006,572.38
Net cash flow from financing activities -926,491,607.55 277,803,243.85
IV Effect of foreign exchange rate
8,950,719.04 -26,309,944.30
changes on Cash and Cash Equivalents
V. Net increase in cash and cash
526,515,832.72 -459,496,727.95
equivalents
Add: Opening balance of cash and
3,416,910,702.33 3,580,140,638.17
cash equivalents
VI. Closing balance of cash and cash
3,943,426,535.05 3,120,643,910.22
equivalents
116
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
6. Cash flow statement of the parent company
Unit: yuan
Item Semi-Annual 2023 Semi-Annual 2022
I. Cash flows from operating activities:
Cash received from the sale of goods
12,114,913,125.10 9,993,053,097.54
and the rendering of services
Receipts of tax refund
Other cash receipts in relation to
347,415,767.25 322,420,601.02
operating activities
Cash inflows from operating activities 12,462,328,892.35 10,315,473,698.56
Cash payments for goods purchased
11,092,284,263.73 9,590,776,506.25
and services received
Cash payments to and on behalf of
142,869,496.55 157,221,560.98
employees
Payments of various types of taxes 195,302,704.64 436,406,580.06
Other cash payments in relation to
460,908,694.29 257,469,024.63
operating activities
Cash outflows for operating activities 11,891,365,159.21 10,441,873,671.92
Net cash flow from operating activities 570,963,733.14 -126,399,973.36
II. Cash flows from investing activities
Cash receipts from recovery of
50,059,838.75
investments
Cash receipts from investment income 676,500,000.00 0.00
Net cash receipts from disposal of
fixed assets, intangible assets and other 5,172,908.53 5,936,300.00
long-term assets
Net cash from disposal of subsidiaries
and other business units
Other cash receipts in relation to
334,071,068.06 245,102,300.59
investing activities
Cash inflows from investing activities 1,015,743,976.59 301,098,439.34
Cash payments for purchase and
construction of fixed assets, intangible 13,018,410.49 3,052,228.94
assets and other long-term assets
Cash payments for investment 360,565,000.00 36,400,000.00
Net cash paid for acquisition of
10,000,000.00
subsidiaries and other business units
Other cash payments in relation to
385,407,000.00 433,741,844.00
investing activities
Sub-total of cash outflows of investment
768,990,410.49 473,194,072.94
activities
Net cash flow from investing activities 246,753,566.10 -172,095,633.60
III. Cash flows from financing activities:
Cash receipts from absorbing
investments
Cash receipts from borrowing 1,771,457,855.10 1,146,017,508.00
Other cash receipts in relation to
2,410,893,781.55 1,109,442,166.67
financing activities
Cash inflows from financing activities 4,182,351,636.65 2,255,459,674.67
Cash repayments of borrowings 1,722,457,855.10 1,255,017,310.01
Cash payments for distribution of
dividends or profits or settlement of 573,738,738.44 567,035,703.19
interest expenses
Other cash payments in relation to
1,950,457,429.10 983,212,333.68
financing activities
Cash outflows for financing activities 4,246,654,022.64 2,805,265,346.88
117
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
Net cash flow from financing activities -64,302,385.99 -549,805,672.21
IV Effect of foreign exchange rate
-138,375.85
changes on Cash and Cash Equivalents
V. Net increase in cash and cash
753,276,537.40 -848,301,279.17
equivalents
Add: Opening balance of cash and
2,029,798,269.62 1,919,097,181.16
cash equivalents
VI. Closing balance of cash and cash
2,783,074,807.02 1,070,795,901.99
equivalents
7. Consolidated statement of changes in owners’ equity
Amount in the current period
Unit: yuan
Semi-Annual 2023
Owners’ equity attributable to the parent company
Other equity Oth Tota
instruments Less er Und l
Gen Min
Item Shar Capi : com Spe Surp istri ority own
Perp eral
e Min tal Trea preh cial lus bute Oth Sub- inter ers’
etua risk
capi ority Oth rese sury ensi rese rese d ers total ests equi
l rese
tal inter ers rves stoc ve rves rves prof ty
bon rve
est k inco it
d me
- 13,4 18,5 19,1
I. Balance at 1,75 2,37 104, 1,15 598,
88,5 88,0 77,9 76,4
the end of 3,99 7,88 645, 1,21 522,
52,6 21,2 19,2 41,3
the period of 5,34 7,24 000. 3,03 145.
36.4 39.9 37.3 83.1
the prior year 8.00 6.39 00 9.48 76
2 4 9 5
Add:
Changes in
accounting
policies
Err
or correction
in the prior
periods
Co
nsolidation
of enterprises
under
common
control
Ot
hers
II. Balance at
- 13,4 18,5 19,1
the 1,75 2,37 104, 1,15 598,
88,5 88,0 77,9 76,4
beginning of 3,99 7,88 645, 1,21 522,
52,6 21,2 19,2 41,3
the period of 5,34 7,24 000. 3,03 145.
36.4 39.9 37.3 83.1
the current 8.00 6.39 00 9.48 76
2 4 9 5
year
III. Amount 30,0 - 228, 927, 954, 52,0 1,00
of change in 41,5 3,01 665. 223, 476, 90,7 6,56
118
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
the current 53.2 7,82 80 970. 360. 54.6 7,11
period 4 9.08 81 77 3 5.40
(Decreases
are indicated
by “")
- 1,43 1,43 1,43
(I) Total 6,03
3,01 3,82 0,80 6,83
comprehensi 1,08
7,82 4,62 6,80 7,88
ve income 4.87
9.08 9.56 0.48 5.35
Capital
19,7 19,7 47,9 67,7
contributed
48,6 48,6 89,7 38,3
by owners
39.5 39.5 27.8 67.4
and capital
8 8 6 4
decreases
1. Common 47,8 47,8
shares 69,7 69,7
invested by 70.1 70.1
owners 0 0
2. Capital
invested by
holders of
other equity
instruments
3. Amount of
share-based 19,7 19,7 19,8
119,
payment 48,6 48,6 68,5
957.
included in 39.5 39.5 97.3
76
owners’ 8 8 4
equity
4. Others
- - -
-
508, 508, 510,
Profit 1,96
658, 658, 618,
distribution 0,00
650. 650. 650.
0.00
92 92 92
1.
Withdrawal
of surplus
reserve
2. Provision
of general
risk reserve
- - -
3. -
508, 508, 510,
Distribution 1,96
658, 658, 618,
to owners (or 0,00
650. 650. 650.
shareholders) 0.00
92 92 92
4. Others
Internal
228, 2,05 2,28 2,28
conversion
665. 7,99 6,65 6,65
of owners’
80 2.17 7.97 7.97
equity
1. Capital (or
share capital)
119
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
increase
from capital
reserve
conversion
2. Capital (or
share capital)
increase
from surplus
reserve
conversion
3. Recovery
of losses by
surplus
reserve
4. Retained
earnings
from transfer
of changes in
the defined
benefit plan
5. Retained
earnings
228, 2,05 2,28 2,28
from transfer
665. 7,99 6,65 6,65
of other
80 2.17 7.97 7.97
comprehensi
ve income
6. Others
Special
reserve
1.
Withdrawal
in the current
period
2. Use in the
current
period
10,2 10,2 10,3
29,9
92,9 92,9 22,8
(VI) Others 41.9
13.6 13.6 55.5
0
6 6 6
- 14,4 19,5 20,1
IV. Balance 1,75 2,40 104, 1,15 650,
91,5 15,2 32,3 83,0
at the end of 3,99 7,92 645, 1,44 612,
70,4 45,2 95,5 08,4
the current 5,34 8,79 000. 1,70 900.
65.5 10.7 98.1 98.5
period 8.00 9.63 00 5.28 39
0 5 6 5
Amount in the prior year
Unit: yuan
Semi-Annual 2022
Owners’ equity attributable to the parent company Tota
Min
Item Other equity l
Shar Capi Less Oth Spe Surp Gen Und ority
instruments Oth Sub- own
e tal : er cial lus eral istri inter
ers total ers’
capi rese Trea com rese rese risk bute ests
Min Perp Oth equi
120
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
tal ority etua ers rves sury preh rves rves rese d ty
inter l stoc ensi rve prof
est bon k ve it
d inco
me
- 11,6 16,5 16,9
I. Balance at 1,74 2,22 1,02 361,
47,7 25,7 79,3 41,3
the end of 9,80 9,86 1,67 944,
0.00 68,2 0.00 94,0 74,3 19,0
the period of 9,54 8,31 0,68 682.
25.8 01.4 23.0 05.6
the prior year 8.00 2.11 7.31 60
0 6 8 8
Add:
Changes in
accounting
policies
Err
or correction
in the prior
periods
Co
nsolidation
of enterprises
under
common
control
Ot
hers
II. Balance at
- 11,6 16,5 16,9
the 1,74 2,22 1,02 361,
47,7 25,7 79,3 41,3
beginning of 9,80 9,86 1,67 944,
0.00 68,2 0.00 0.00 94,0 74,3 19,0
the period of 9,54 8,31 0,68 682.
25.8 01.4 23.0 05.6
the current 8.00 2.11 7.31 60
0 6 8 8
year
III. Amount
of change in -
34,3 833, 769, 43,3 812,
the current 98,2
42,6 125, 215, 34,9 550,
period 0.00 0.00 52,7 0.00 0.00 0.00
90.6 716. 672. 07.3 580.
(Decreases 33.9
8 06 80 3 13
are indicated 4
by “")
-
1,34 1,24 13,3 1,25
(I) Total 98,2
0,57 2,31 34,9 5,65
comprehensi 52,7
0,48 7,75 07.3 2,65
ve income 33.9
4.98 1.04 3 8.37
4
Capital
30,0 30,0
contributed
00,0 00,0
by owners
00.0 00.0
and capital
0 0
decreases
1. Common 30,0 30,0
shares 00,0 00,0
invested by 00.0 00.0
owners 0 0
2. Capital
121
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
invested by
holders of
other equity
instruments
3. Amount of
share-based
payment
included in
owners’
equity
4. Others
- - -
507, 507, 507,
Profit
444, 444, 0.00 444,
distribution
768. 768. 768.
92 92 92
1.
Withdrawal
0.00 0.00
of surplus
reserve
2. Provision
of general 0.00
risk reserve
- - -
3.
507, 507, 507,
Distribution
444, 444, 444,
to owners (or
768. 768. 768.
shareholders)
92 92 92
4. Others
Internal
conversion
of owners’
equity
1. Capital (or
share capital)
increase
from capital
reserve
conversion
2. Capital (or
share capital)
increase
from surplus
reserve
conversion
3. Recovery
of losses by
surplus
reserve
4. Retained
earnings
from transfer
of changes in
the defined
122
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
benefit plan
5. Retained
earnings
from transfer
of other
comprehensi
ve income
6. Others
Special
reserve
1.
Withdrawal
in the current
period
2. Use in the
current
period
34,3 34,3 34,3
42,6 42,6 42,6
(VI) Others
90.6 90.6 90.6
8 8 8
- 12,4 17,3 17,7
IV. Balance 1,74 2,26 1,02 405,
146, 58,9 48,5 53,8
at the end of 9,80 4,21 1,67 279,
0.00 020, 0.00 0.00 19,7 89,9 69,5
the current 9,54 1,00 0,68 589.
959. 17.5 95.8 85.8
period 8.00 2.79 7.31 93
74 2 8 1
8. Statement of changes in owners’ equity of the parent company
Amount in the current period
Unit: yuan
Semi-Annual 2023
Other equity instruments Other
Capita Less: compr Specia Surplu Undist Total
Item Share Minor l Treasu ehensi l s ribute owner
Perpet Others
capital ity reserv ry ve reserv reserv d s’
ual Others
interes es stock incom es es profit equity
bond
t e
I. Balance at
1,753, 2,276, 104,6 - 1,229, 5,999, 11,154
the end of
995,3 383,5 45,00 129,1 068,7 424,9 ,098,5
the period of
48.00 43.02 0.00 29.44 98.92 83.44 43.94
the prior year
Add:
Changes in
accounting
policies
Err
or correction
in the prior
periods
Ot
hers
123
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
II. Balance at
the
1,753, 2,276, 104,6 - 1,229, 5,999, 11,154
beginning of
995,3 383,5 45,00 129,1 068,7 424,9 ,098,5
the period of
48.00 43.02 0.00 29.44 98.92 83.44 43.94
the current
year
III. Amount
of change in
the current 26,48 698,6 725,1
period 4,163. 90,71 74,87
(Decreases 54 1.22 4.76
are indicated
by “")
(I) Total 1,207, 1,207,
comprehensi 349,3 349,3
ve income 62.14 62.14
Capital
contributed 19,86 19,86
by owners 8,597. 8,597.
and capital 33 33
decreases
1. Common
shares
invested by
owners
2. Capital
invested by
holders of
other equity
instruments
3. Amount of
share-based
19,86 19,86
payment
8,597. 8,597.
included in
33 33
owners’
equity
4. Others
- -
Profit 508,6 508,6
distribution 58,65 58,65
0.92 0.92
1.
Withdrawal
of surplus
reserve
2. - -
Distribution 508,6 508,6
to owners (or 58,65 58,65
shareholders) 0.92 0.92
3. Others
Internal
conversion
of owners’
124
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
equity
1. Capital (or
share capital)
increase
from capital
reserve
conversion
2. Capital (or
share capital)
increase
from surplus
reserve
conversion
3. Recovery
of losses by
surplus
reserve
4. Retained
earnings
from transfer
of changes in
the defined
benefit plan
5. Retained
earnings
from transfer
of other
comprehensi
ve income
6. Others
Special
reserve
1.
Withdrawal
in the current
period
2. Use in the
current
period
6,615, 6,615,
(VI) Others 566.2 566.2
1 1
IV. Balance
1,753, 2,302, 104,6 - 1,229, 6,698, 11,879
at the end of
995,3 867,7 45,00 129,1 068,7 115,6 ,273,4
the current
48.00 06.56 0.00 29.44 98.92 94.66 18.70
period
Amount in the prior year
Unit: yuan
Semi-Annual 2022
Other equity instruments Capita Less: Other Specia Surplu Undist Total
Item Share
Minor Perpet l Treasu compr l s ribute Others owner
capital Others
ity ual reserv ry ehensi reserv reserv d s’
125
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
interes bond es stock ve es es profit equity
t incom
e
I. Balance at 10,35
1,749, 2,168, - 1,099, 5,340,
the end of 8,646,
809,5 451,5 0.00 129,1 526,4 988,5
the period of 976.2
48.00 28.01 29.44 46.75 82.88
the prior year 0
Add:
Changes in
0.00
accounting
policies
Err
or correction
0.00
in the prior
periods
Ot
0.00
hers
II. Balance at
the 10,35
1,749, 2,168, - 1,099, 5,340,
beginning of 8,646,
809,5 451,5 0.00 129,1 526,4 988,5
the period of 976.2
48.00 28.01 29.44 46.75 82.88
the current 0
year
III. Amount
of change in
the current 680,5 680,5
period 28,00 28,00
(Decreases 9.83 9.83
are indicated
by “-")
(I) Total 1,187, 1,187,
comprehensi 972,7 972,7
ve income 78.75 78.75
Capital
contributed
by owners
and capital
decreases
1. Common
shares
invested by
owners
2. Capital
invested by
holders of
other equity
instruments
3. Amount of
share-based
payment
included in
owners’
equity
126
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
4. Others
- -
Profit 507,4 507,4
distribution 44,76 44,76
8.92 8.92
1.
Withdrawal
0.00
of surplus
reserve
2. - -
Distribution 507,4 507,4
to owners (or 44,76 44,76
shareholders) 8.92 8.92
3. Others
Internal
conversion
of owners’
equity
1. Capital (or
share capital)
increase
from capital
reserve
conversion
2. Capital (or
share capital)
increase
from surplus
reserve
conversion
3. Recovery
of losses by
surplus
reserve
4. Retained
earnings
from transfer
of changes in
the defined
benefit plan
5. Retained
earnings
from transfer
of other
comprehensi
ve income
6. Others
Special
reserve
1.
Withdrawal
in the current
period
127
2023 Semi-Annual Report of Huadong Medicine Co., Ltd.
2. Use in the
current
period
(VI) Others 0.00
IV. Balance
1,749, 2,168, - 1,099, 6,021, 11,039
at the end of
809,5 451,5 129,1 526,4 516,5 ,174,9
the current
48.00 28.01 29.44 46.75 92.71 86.03
period
Huadong Medicine Co., Ltd.
Chairman of the Board: Lv Liang
August 16, 2023
128