The First Quarterly Report 2020 of Huadong Medicine Co., Ltd.
Huadong Medicine Co., Ltd.
The First Quarterly Report 2020
April 2020
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The First Quarterly Report 2020 of Huadong Medicine Co., Ltd.
Section I Important Declaration
The Board of Directors, Board of Supervisors, directors, supervisors and senior
management of Huadong Medicine Co., Ltd. (hereinafter referred to as the
“Company”) hereby guarantee that the information presented in this 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.
All directors have attended the board of directors meeting to review this
quarterly report.
Lyu Liang, the Company’s legal representative and the officer in charge of
accounting, and Qiu Renbo, head of accounting department (accounting
supervisor) hereby declare and guarantee that the financial statements in this
quarterly report are authentic, accurate and complete.
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.
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The First Quarterly Report 2020 of Huadong Medicine Co., Ltd.
Section II Company Profile
I. Key Accounting Data and Financial Indicators
Whether the Company needs to perform retroactive adjustment or restatement of previous accounting data
□ Yes √ No
Change of the current
The current reporting period Same period last year reporting period over the
same period last year
Operating revenue (yuan) 8,598,069,911.29 9,705,148,188.21 -11.41%
Net profit attributable to shareholders of
1,147,278,457.64 907,244,647.77 26.46%
listed companies (yuan)
Net profit attributable to shareholders of
listed companies after deducting 856,930,262.10 856,031,343.59 0.11%
non-recurring gains/losses (yuan)
Net cash flow from operating activities
218,779,623.89 -433,890,841.71 150.42%
(yuan)
Basic earnings per share (yuan/share) 0.6557 0.5185 26.46%
Diluted earnings per share (yuan/share) 0.6557 0.5185 26.46%
Weighted average return on equity (ROE) 8.89% 8.35% 0.54%
Change of the end of the
End of the current reporting
End of last year current reporting period
period
over the end of last year
Total assets (yuan) 23,527,736,775.30 21,463,974,146.63 9.62%
Net assets attributable to shareholders of
13,482,042,877.17 12,309,477,308.00 9.53%
listed companies (yuan)
Total share capital of the Company as of the trading day before disclosure:
Total share capital of the Company as of the trading day before
1,749,809,548
disclosure (share):
Fully diluted earnings per share calculated using the latest share capital
Dividends paid on preferred shares 0.00
Fully diluted earnings per share calculated using the latest
0.6557
share capital (yuan/share)
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The First Quarterly Report 2020 of Huadong Medicine Co., Ltd.
Items and amounts of non-recurring gains/losses
√ Applicable □ N/A
Unit: RMB yuan
Amount (from the beginning
Item of the year to the end of the Note
reporting period)
Mainly due to the transfer of
market distribution rights of
Gains/losses on disposal of non-current assets (including the related products in Western
306,108,982.13
written-off part of the accrued assets impairment reserve) Europe by Sinclair, a wholly
owned subsidiary of the
Company in the UK
Government grants included in current gains/losses (excluding
those closely related to operating activities, or regular government 20,044,478.23
grants)
Other non-operating income or expenditure -5,345,565.75
Less: Amount affected by income 31,742,841.97
Amount affected by minority interest (after tax) -1,283,142.90
Total 290,348,195.54 --
If the Company recognizes an item as a non-recurring gain/loss based on the “Interpretation Announcement on Information
Disclosure Criteria for Public Companies No. 1 – Non-Recurring Profit/Loss” or recognizes an item satisfying the definition of
non-recurring profit/loss in the announcement as a recurring profit/loss, reasons should be specified.
□ Applicable √ N/A
No such case during the reporting period.
II. Total number of shareholders at the end of the reporting period and information of top 10
shareholders
1. Total number of shareholders of common shares and number of shareholders of preferred shares with
voting rights restored, as well as information about top 10 shareholders
Unit: share
Total number of shareholders of
Total number of shareholders of
preferred shares whose voting rights
common shares at the end of the 127,673 0
have been restored at the end of the
reporting period
reporting period (if any)
Information about top 10 shareholders
Number of shares Pledged or frozen
Shareholding Number of shares
Name Nature held with sale
ratio held Status Number
restrictions
中国远大集团有 Domestic 41.77% 730,938,157 0 Pledged 247,963,999
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The First Quarterly Report 2020 of Huadong Medicine Co., Ltd.
限责任公司 non-state-owned
( China Grand legal person
Enterprises, Inc. )
杭州华东医药集
团有限公司
( Hangzhou State-owned legal
16.46% 288,000,000 0
Huadong person
Medicine Group
Co., Ltd. )
香港中央结算有
限公司
( Hong Kong Overseas legal
2.47% 43,297,248 0
Securities person
Clearing
Company Ltd. )
中国证券金融股
份有限公司
( China Securities Other 1.27% 22,186,818 0
Finance Co.,
Ltd. )
全国社保基金一
零六组合
( National Social Other 1.26% 22,095,713 0
Security Fund
Portfolio 106 )
泰康资产管理有
限责任公司－积
极配置投资产品
Taikang Asset
Management Co., Other 0.93% 16,298,609 0
Ltd. – active
allocation of
investment
products
泰康人寿保险有
限责任公司－投
连－积极成长
( Taikang Life
Other 0.63% 11,108,211 0
Insurance Co.,
Ltd. – Unit-linked
– Proactive
growth )
#易建东 Domestic natural
0.57% 10,006,080 0
( #Yi Jiandong ) person
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The First Quarterly Report 2020 of Huadong Medicine Co., Ltd.
基本养老保险基
金一五零四一组
合
（ Basic
Other 0.44% 7,623,568 0
Endowment
Insurance Fund
Portfolio
15041 ）
国泰君安证券资
管-光大银行-国
泰君安君得明混
合型集合资产管
理计划
（ Guotai Junan
Securities Asset
Management – Other 0.41% 7,200,000 0
China Everbright
Bank – Guotai
Junan Jundeming
Hybrid Collective
Assets
Management
Plan ）
Shares held by the top 10 shareholders of Non- restricted shares
Type of shares
Name Number of shares held without sale restrictions
Type Number
RMB common
China Grand Enterprises, Inc. 730,938,157 730,938,157
shares
Hangzhou Huadong Medicine RMB common
288,000,000 288,000,000
Group Co., Ltd. shares
Hong Kong Securities Clearing RMB common
43,297,248 43,297,248
Company Ltd. shares
RMB common
China Securities Finance Co., Ltd. 22,186,818 22,186,818
shares
National Social Security Fund RMB common
22,095,713 22,095,713
Portfolio 106 shares
Taikang Asset Management Co.,
RMB common
Ltd. – active allocation of 16,298,609 16,298,609
shares
investment products
Taikang Life Insurance Co., Ltd. – RMB common
11,108,211 11,108,211
Unit-linked – Proactive growth shares
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The First Quarterly Report 2020 of Huadong Medicine Co., Ltd.
RMB common
# Yi Jiandong 10,006,080 10,006,080
shares
Basic Endowment Insurance Fund RMB common
7,623,568 7,623,568
Portfolio 15041 shares
Guotai Junan Securities Asset
Management – China Everbright
RMB common
Bank – Guotai Junan Jundeming 7,200,000 7,200,000
shares
Hybrid Collective Assets
Management Plan
Notes on relations and concerted
The Company does not know whether the shareholders mentioned above are related parties
actions among the shareholders
with each other or whether they are acting-in-concert parties with each other.
mentioned above
Notes on financing and securities
At the end of the current reporting period, Yi Jiandong, the eighth shareholder of the
loan conducted by top 10
Company, held 10,006,080 shares of the Company through financing and securities loan.
shareholders (if any)
Does any of the Company’s top 10 shareholders of common shares or top 10 shareholders without sale restrictions on common shares
conduct any agreed repurchase transaction during the reporting period?
□ Yes √ No
No such case during the reporting period.
2. Total number of shareholders of preferred shares and information about top 10 shareholders of
preferred shares
□ Applicable √ N/A
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The First Quarterly Report 2020 of Huadong Medicine Co., Ltd.
Section III Substantial Matters
I. Changes in key financial data and financial indicators during the reporting period and their
causes
√ Applicable □ N/A
Unit: RMB yuan
Balance sheet item End of the period Beginning of the Change rate Notes on cause of changes
period
Accounts receivable financing 1,281,939,687.52 683,884,625.14 87.45% Mainly due to the increase of notes collection in the
current period
Long-term equity investments 324,944,910.36 222,595,018.54 45.98% Mainly due to 100 million yuan of additional fund
to Peg-Bio Biopharm Co., Ltd (Chongqing) in the
current period
Advance receipts 41,219,252.83 254,888,911.30 -83.83% Mainly due to the decrease of advance receipts of
medicine sales
Taxes and fees payable 758,947,157.69 532,802,157.61 42.44% Mainly due to the increase of value-added tax and
income tax in the current period
Other payables 2,042,401,059.01 1,365,152,290.99 49.61% Mainly due to the increase in temporary receipts
payable
Income statement item Amount of the Amount of the Change rate Notes on cause of changes
current period previous period
R&D expenses 263,330,349.34 157,466,270.46 67.23% Mainly due to the increase of R&D investment in
the current period
Financial expenses 15,759,648.63 31,261,376.41 -49.59% Mainly due to the increase of deposit interest in the
current period
Gains on assets disposal 306,269,024.44 66,519,528.98 360.42% Mainly due to the transfer of market distribution
rights of related products in Western Europe by
Sinclair, a wholly owned subsidiary of the
Company in the UK
Other income 20,044,478.23 3,421,536.71 485.83% Mainly due to the year-on-year increase of
government grants in the current period
Non-operating expenditure 8,912,738.92 4,175,197.47 113.46% Mainly due to the increase of donations
Non-controlling profit and loss 6,147,332.28 30,575,585.30 -79.89% Mainly due to the decrease of net profits of
non-wholly owned subsidiaries in the current period
Cash flow statement item Amount of the Amount of the Change rate Notes on cause of changes
current period previous period
Net cash flows from operating 218,779,623.89 -433,890,841.71 150.42% Mainly due to the increase of repayment and the
activities decrease of purchase payment in the current period
Net cash flows from investing -21,112,417.22 -438,440,235.76 95.18% Mainly due to the transfer of market distribution
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The First Quarterly Report 2020 of Huadong Medicine Co., Ltd.
activities rights of related products in Western Europe by
Sinclair, a wholly owned subsidiary of the
Company in the UK
Net cash flows from financing 110,977,513.38 244,161,977.11 54.55% Mainly due to the year-on-year decrease of loans
activities obtained in the current period
II. Progress and influence of significant events, and explanatory notes of corresponding solutions
□ Applicable √ N/A
Implementation progress of share repurchase
□ Applicable √ N/A
Progress in the implementation of reducing repurchased shares by centralized price bidding
□ Applicable √ N/A
III. Unfulfilled and overdue commitments from the related committed parties such as the
Company’s actual controller, shareholders, related parties, acquirer(s), and the Company
during the reporting period
□ Applicable √ N/A
No such case during the reporting period.
IV. Securities investment
√ Applicable □ N/A
Unit: RMB yuan
Profit
Accumu
Book and loss Gain/l
lative
Account value at from Purchase Selling oss Book
fair
Stock Initial ing the fair amount amount during value at
Type of Stock value Account Capital
for investm measure beginni value in the in the the the end
stock code changes ing item source
short ent cost ment ng of changes current current reporti of the
included
model the in the period period ng period
in
period current period
equity
period
Other
Domestic Fair equity
-1,372
and 20,207, value 42,009, -1,372,7 20,429, 40,636, instrum Own
RAPT RAPT 0.00 0.00 ,747.7
overseas 400.00 measure 254.79 47.73 107.06 507.06 ents funds
3
stock ment investm
ent
Other securities investment
0.00 -- -- --
held at the end of the
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The First Quarterly Report 2020 of Huadong Medicine Co., Ltd.
period
-1,372
20,207, 42,009, -1,372,7 20,429, 40,636,
Total -- 0.00 0.00 ,747.7 -- --
400.00 254.79 47.73 107.06 507.06
3
Date of announcement of
the board of directors on
securities investment
approval
Date of announcement of
the board of shareholders
on securities investment
approval (if any)
Notes: Huadong Medicine Investment Holding (Hong Kong) Limited, a subsidiary of the Company, subscribed for the C-2 series
preferred shares of FLX Bio (now RAPT Therapeutics, Inc.) for USD 3 million in 2019. FLX Bio was listed on the NASDAQ Stock
Exchange (stock code: RAPT) in October 2019. Huadong Medicine Investment Holding (Hong Kong) Limited holds 218,102 shares,
or 0.91% of its total shares.
V. Entrusted financial management
□ Applicable √ N/A
No such case during the reporting period.
VI. Derivatives investment
□ Applicable √ N/A
No such case during the reporting period.
VII. Registration form of receptions, including research, communication and interview,
undertaken during the reporting period
√ Applicable □ N/A
Index of basic information of the
Date Method Type of caller
research
Please refer to the “000963 Huadong
Medicine communication with investors
Institutional and individual
January 19, 2020 Communication by phone Activity: January 20, 2020” presented on
investors
the websites of http://rs.p5w.net/ and
cninfo.com.cn for details.
VIII. Illegal provision of guarantees for external parties
□ Applicable √ N/A
No such case during the reporting period.
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The First Quarterly Report 2020 of Huadong Medicine Co., Ltd.
IX. The Company’s funds used by the controlling shareholder or its related parties for
non-operating purposes
□ Applicable √ N/A
No such case during the reporting period.
X. Overview of the Company’s operations from January to March, 2020
During the reporting period, the numbers of visits and prescriptions in domestic hospitals were
greatly reduced due to the COVID-19 outbreak; however, patients’ overall demand for the core
products of Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd. (hereinafter referred to as
“Zhongmei Huadong”), a wholly owned subsidiary of the Company, remained stable. Zhongmei
Huadong continued to develop well in the out-of-hospital, grass-roots and retail markets, and its
business performance continued to grow, achieving operating income (consolidated) of 3.619
billion yuan, with a year-on-year growth of 9.61%, and net profit of 854 million yuan, with a
year-on-year growth of 11.14%.
During the COVID-19 outbreak in China, the amount of medicines, consumables and medical
devices purchased by medical institutions dropped significantly, which had a significant impact on
the Company’s pharmaceutical commerce. In the reporting period, the growth rate of the
Company’s pharmaceutical commerce income has decreased by about 18% year on year. However,
the Company made efforts to improve its operations through a variety of measures to keep its
operating profit stable.
The outbreak and spread of COVID-19 at home and abroad have had a significant impact on the
operation of aesthetic medicine institutions. In the reporting period, the Company’s domestic and
oversea aesthetic medicine business income and net profit both decreased significantly compared
with the same period last year due to the sharp decline in periodic demand, which has a
corresponding impact on the Company’s overall net profit. The demand for aesthetic medicine is
not urgent, but it is rigid to some extent. At present, there is less domestic consumption of aesthetic
medicine; the continuation of the outbreak and its subsequent impact on the Company’s
international aesthetic medicine business remain to be seen. The Company expects consumer
demand for aesthetic medicine to recover after the outbreak ends.
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The First Quarterly Report 2020 of Huadong Medicine Co., Ltd.
Since the outbreak, the Company has actively carried out related work to fight against the virus. As
an emergency equipment reserve unit of Zhejiang Province and Hangzhou, the Company was in
charge of laborious material distribution, efficiently implemented the allocation and distribution
task of Zhejiang Economy and Information Technology Department, worked day and night, sent the
anti-epidemic medicine and equipment to the forefront, and provided reliable material support for
epidemic prevention and control. The Company has taken the initiative to fulfill its social
responsibility and donated drugs and related materials to the front-line medical personnel and the
health commissions at all levels with a cumulative value of more than 20 million yuan. After the full
resumption of production and work, the Company actively endeavored to gradually restore
normalcy to all its work.
During the reporting period, the Company continued to promote R&D in all aspects, and the R&D
expenses of the pharmaceutical manufacturing amounted to 260.31 million yuan, with a
year-on-year growth of 69.04%. The application for registration of Zhongmei Huadong Metformin
Hydrochloride and Empagliflozin Tablets was submitted to and accepted by the National Medical
Products Administration. The phase I clinical trial of Liraglutide Injection (indications for weight
loss) has been completed and all preparations for the phase III trial have been completed. The phase
III clinical trial is expected to begin in the second quarter of this year.
During the reporting period, Zhongmei Huadong invested 150 million yuan to increase its
shareholding in Peg-Bio Biopharm Co., Ltd. (Chongqing) by acquiring minority shareholders’
equity; the shareholding ratio was raised to 39.8%, and Zhongmei Huadong remained the second
largest shareholder (as of the disclosure date of this reporting period, it has actually contributed 130
million yuan). In the future, the Company will deepen cooperation with Peg-Bio Biopharm Co., Ltd.
(Chongqing) in the R&D of biosimilars and innovative biopharmaceuticals, industrial layout and
other aspects. With the help of PEGylation platform and high-efficiency polypeptide tandem
expression platform technology of Peg-Bio Biopharm Co., Ltd. (Chongqing) with proprietary
intellectual property rights, the Company will accelerate the technical improvement and project
reserve in biomedicine.
During the reporting period, the Acarbose Tablets of Zhongmei Huadong failed to win the bid in the
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The First Quarterly Report 2020 of Huadong Medicine Co., Ltd.
second national centralized drug purchase due to the price, which brought new challenges to the
future development of the Company’s acarbose products. The Company will comprehensively
conduct market analysis and planning, and actively develop the sales of Acarbose Tablets in the
markets other than centralized purchase (including grass-roots and community markets, private
hospitals and OTC markets). Meanwhile, it will expand the promotion of Acarbose Chewable
Tablets in large and medium-sized hospitals in China through market differentiation.
Sinclair, a wholly owned subsidiary of the Company in the UK, has actively enriched product
channels and optimized the structure: (1) During the reporting period, it reached an agreement with
Galderma, a world-renowned Swiss dermatological pharmaceutical company, on the transfer of
market distribution rights for Sculptra (poly-L-lactic acid microsphere) products in Western Europe
and has completed the transaction. According to the agreement, the specific information of the
transaction is regarded as trade secret, and the Company has the confidentiality obligation under the
condition of non-mandatory disclosure. The transaction brought Sinclair gains from assets disposal
of approximately GBP 30.65 million (after tax), which had a positive impact on Sinclair’s net profit,
balance sheet structure, cash flow and the Company’s net profit in consolidated statements in the
reporting period; (2) During the reporting period, Sinclair and Kylane Laboratoires, a Swiss
professional R&D company in the field of aesthetic medicine, formally signed an agreement based
on the cooperation intention reached earlier; Sinclair obtained the exclusive global license for
Kylane Laboratoires’ MaiLi series new lidocaine hyaluronic acid fillers (hyaluronic acid). The
MaiLi series products are aimed at the high-end market. The lidocaine components in the MaiLi
series reduce the pain of injection and greatly improve the comfort of use. The MaiLi series
products can be applied to different parts of the face with differentiated formulation, providing
consumers with an overall solution of cosmetic facial fillings, which can last for 12~18 months after
injection. This series is expected to become the core products of the Company’s aesthetic medicine
business. The products are expected to obtain the CE certification in Europe and be successively
launched in every country this year.
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The First Quarterly Report 2020 of Huadong Medicine Co., Ltd.
Section IV Financial Statements
I. Financial Statements
1. Consolidated balance sheet
Prepared by Huadong Medicine Co., Ltd.
March 31, 2020
Unit: RMB yuan
Item March 31, 2020 December 31, 2019
Current assets:
Monetary funds 2,705,353,661.31 2,402,730,395.39
Settlement reserve
Lending to other banks and other
financial institutions
Financial assets for trade
Derivative financial assets
Notes receivable
Accounts receivable 7,096,262,043.82 6,092,305,184.47
Accounts receivable financing 1,281,939,687.52 683,884,625.14
Advance payments 332,283,548.35 363,246,612.94
Premiums receivable
Reinsurance accounts receivable
Reinsurance contract reserve
receivable
Other receivables 75,749,112.24 92,201,271.22
Including: Interests receivable
Dividends receivable 815,965.44 815,965.44
Financial assets purchased for
resale
Inventories 4,036,053,414.00 4,038,975,496.93
Contract assets
Assets held for sale
Non-current assets due within one
year
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The First Quarterly Report 2020 of Huadong Medicine Co., Ltd.
Other current assets 71,686,499.81 62,526,471.96
Total current assets 15,599,327,967.05 13,735,870,058.05
Non-current assets:
Loans and prepayments issuance
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments 324,944,910.36 222,595,018.54
Other equity instrument
240,302,964.32 241,675,712.05
investments
Other non-current financial assets
Real estate properties for
21,470,209.97 21,701,908.75
investment
Fixed assets 2,176,447,708.09 2,175,216,842.65
Constructions in progress 1,959,751,440.53 1,829,808,233.19
Biological assets for production
Oil & gas assets
Right-of-use assets
Intangible assets 1,371,393,017.31 1,454,900,160.45
Development expenditures
Goodwill 1,469,617,262.10 1,469,617,262.10
Long-term unamortized expenses 11,474,753.47 12,289,677.31
Deferred income tax assets 116,157,614.49 116,157,614.47
Other non-current assets 236,848,927.61 184,141,659.07
Total non-current assets 7,928,408,808.25 7,728,104,088.58
Total assets 23,527,736,775.30 21,463,974,146.63
Current liabilities:
Short-term borrowing 805,041,426.38 655,549,973.27
Borrowing from the Central bank
Borrowing from other banks and
other financial institutions
Financial liabilities for trade
Derivative financial liabilities
Notes payable 680,294,256.61 613,374,356.61
Accounts payable 3,782,012,016.18 3,789,054,234.58
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The First Quarterly Report 2020 of Huadong Medicine Co., Ltd.
Advance receipts 41,219,252.83 254,888,911.30
Contract liabilities
Financial assets sold for
repurchase
Absorbing deposits and due from
banks
Receipts for buying and selling
securities as proxy
Receipts for underwriting
securities as proxy
Employee benefits payable 150,113,044.38 132,584,982.71
Taxes and fees payable 758,947,157.69 532,802,157.61
Other payables 2,042,401,058.99 1,365,152,290.99
Including: Interests payable
Dividends payable 224,219.60 224,219.60
Handling fees and commissions
payable
Reinsurance accounts payable
Liabilities held for sale
Non-current liabilities due within
1,063,535,474.95 1,053,231,727.73
one year
Other current liabilities
Total current liabilities 9,323,563,688.01 8,396,638,634.80
Non-current liabilities:
Insurance contract reserve
Long-term borrowing
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables 34,857,575.89 48,080,030.00
Long-term employee benefits
payable
Provision 50,739,356.15 52,066,643.01
Deferred gains 61,826,236.03 60,960,255.68
Deferred income tax liabilities 38,231,709.58 39,604,343.27
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The First Quarterly Report 2020 of Huadong Medicine Co., Ltd.
Other non-current liabilities
Total non-current liabilities 185,654,877.65 200,711,271.96
Total liabilities 9,509,218,565.66 8,597,349,906.76
Ownership interest:
Share capital 1,749,809,548.00 1,749,809,548.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserve 2,157,862,037.14 2,158,080,661.07
Less: Treasury shares
Other comprehensive income 48,298,224.27 22,792,488.80
Special reserve
Surplus reserve 710,359,967.51 710,359,967.51
General risk reserve
Undistributed profit 8,815,713,100.25 7,668,434,642.62
Total ownership interest attributable to
13,482,042,877.17 12,309,477,308.00
the parent company
Minority interest 536,475,332.47 557,146,931.87
Total ownership interest 14,018,518,209.64 12,866,624,239.87
Total liabilities & ownership interest 23,527,736,775.30 21,463,974,146.63
Legal representative: Lyu Liang
Officer in charge of accounting: Lyu Liang
Head of accounting department : Qiu Renbo
2. Balance sheet of the parent company
Unit: RMB yuan
Item March 31, 2020 December 31, 2019
Current assets:
Monetary funds 1,163,618,887.92 893,939,724.56
Financial assets for trade
Derivative financial assets
Notes receivable
Accounts receivable 3,896,212,553.19 3,601,796,850.84
Accounts receivable financing 414,618,169.64 102,285,661.94
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The First Quarterly Report 2020 of Huadong Medicine Co., Ltd.
Advance payments 90,938,710.63 183,776,687.98
Other receivables 1,158,557,203.10 857,127,207.17
Including: Interests receivable
Dividends receivable 400,000,000.00
Inventories 1,780,183,507.56 1,726,815,773.41
Contract assets
Assets held for sale
Non-current assets due within one
year
Other current assets 18,206,486.26 4,529,331.87
Total current assets 8,522,335,518.30 7,370,271,237.77
Non-current assets:
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments 4,812,052,039.45 4,809,521,228.65
Other equity instrument
92,108,957.26 92,108,957.26
investments
Other non-current financial assets
Real estate properties for
8,475,251.02 8,591,809.18
investment
Fixed assets 146,014,043.26 144,102,366.02
Constructions in progress 15,970,543.05 15,728,406.26
Biological assets for production
Oil & gas assets
Right-of-use assets
Intangible assets 44,090,063.16 45,226,361.12
Development expenditures
Goodwill
Long-term unamortized expenses 893,242.36 975,689.14
Deferred income tax assets 48,849,165.52 48,849,165.52
Other non-current assets 8,076,419.28 8,076,419.28
Total non-current assets 5,176,529,724.36 5,173,180,402.43
Total assets 13,698,865,242.66 12,543,451,640.20
Current liabilities:
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The First Quarterly Report 2020 of Huadong Medicine Co., Ltd.
Short-term borrowing 250,182,163.24 55,000,000.80
Financial liabilities for trade
Derivative financial liabilities
Notes payable 251,797,671.37 81,036,745.94
Accounts payable 2,303,300,252.85 2,469,675,798.54
Advance receipts 44,293,704.23 52,914,932.34
Contract liabilities
Employee benefits payable 4,716,249.36 3,203,215.95
Taxes and fees payable 37,342,228.23 32,881,935.68
Other payables 409,339,976.29 638,551,969.04
Including: Interests payable
Dividends payable 224,219.60 224,219.60
Liabilities held for sale
Non-current liabilities due within
1,040,399,054.43 1,028,002,952.88
one year
Other current liabilities
Total current liabilities 4,341,371,300.00 4,361,267,551.17
Non-current liabilities:
Long-term borrowing
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables
Long-term employee
compensation payable
Estimated liabilities
Deferred gains 42,623,317.14 43,264,785.87
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities 42,623,317.14 43,264,785.87
Total liabilities 4,383,994,617.14 4,404,532,337.04
Ownership interest:
Share capital 1,749,809,548.00 1,749,809,548.00
Other equity instruments
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The First Quarterly Report 2020 of Huadong Medicine Co., Ltd.
Including: Preferred shares
Perpetual bonds
Capital reserve 2,168,451,528.01 2,168,451,528.01
Less: Treasury shares
Other comprehensive income 847,526.06 847,526.06
Special reserve
Surplus reserve 788,215,726.95 788,215,726.95
Undistributed profit 4,607,546,296.50 3,431,594,974.14
Total ownership interest 9,314,870,625.52 8,138,919,303.16
Total liabilities & ownership interest 13,698,865,242.66 12,543,451,640.20
3. Consolidated income statement
Unit: RMB yuan
Item Amount incurred during the current period Amount incurred during the previous period
I. Total operating income 8,598,069,911.29 9,705,148,188.21
Including: Operating income 8,598,069,911.29 9,705,148,188.21
Interests received
Premiums earned
Handling fees and
commissions received
II. Total operating cost 7,564,443,071.57 8,644,836,746.18
Including: Operating cost 5,095,658,368.85 6,323,022,089.39
Interests paid
Handling fees and
commissions paid
Surrender value
Net payment of insurance
claims
Net appropriation of policy
reserve
Policy dividends paid
Reinsurance expenses
Taxes and surcharges 56,323,252.14 67,692,820.71
Selling expenses 1,936,667,262.56 1,858,882,516.36
Administrative expenses 196,704,190.05 206,511,672.85
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The First Quarterly Report 2020 of Huadong Medicine Co., Ltd.
R&D expenses 263,330,349.34 157,466,270.46
Financial expenses 15,759,648.63 31,261,376.41
Including: Interests paid 26,067,525.96 29,093,368.24
Interests received 13,915,252.93 5,700,539.51
Add: Other gains 20,044,478.23 3,421,536.71
Investment gains (Losses are
-1,256,335.99 -3,643,248.51
indicated by “-”)
Including: Investment gains
2,349,891.83 1,200,000.00
from associates and joint ventures
Gains from 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 on changes in fair value
(Losses are indicated by “-”)
Credit impairment loss (Losses
are indicated by “-”)
Assets impairment loss (Losses
are indicated by “-”)
Gains on assets disposal
306,269,024.44 66,519,528.98
(Losses are indicated by “-”)
III. Operating profit (Losses are indicated
1,358,684,006.40 1,126,609,259.21
by “-”)
Add: Non-operating income 3,389,386.17 2,542,382.25
Less: Non-operating expenditure 8,912,738.92 4,175,197.47
IV. Total profit (Total losses are
1,353,160,653.65 1,124,976,443.99
indicated by “-”)
Less: Income tax expenses 199,734,863.73 187,156,210.92
V. Net profit (Net losses are indicated by
1,153,425,789.92 937,820,233.07
“-”)
(I) Categorized by the continuity of
operations
1. Net profit from continued
operations (Net deficit is indicated by 1,153,425,789.92 937,820,233.07
“-”)
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The First Quarterly Report 2020 of Huadong Medicine Co., Ltd.
2. Net profit from discontinued
operations (Net deficit is indicated by
“-”)
(II) Categorized by attribution of the
ownership
1. Net profit attributable to owners
1,147,278,457.64 907,244,647.77
of the parent company
2. Gains/losses of minority
6,147,332.28 30,575,585.30
shareholders
VI. Net amount after tax of other
25,505,735.47 -32,032,857.46
comprehensive income
Net amount after tax of other
comprehensive income attributable to 25,505,735.47 -32,032,857.46
owners of the parent company
(I) Other comprehensive income that
-1,372,747.73
cannot be reclassified into gains/losses
1. Changes in
remeasurement 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
-1,372,747.73
other equity instrument investments
4. Changes in fair value of
credit risk of the enterprise
5. Others
(II) Other comprehensive income to
26,878,483.20 -32,032,857.46
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
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The First Quarterly Report 2020 of Huadong Medicine Co., Ltd.
5. Cash flow hedging reserve
6. Exchange differences arise
from translation of foreign currency 26,878,483.20 -32,032,857.46
financial statements
7. Others
Net amount after tax of other
comprehensive income attributable to
minority shareholders
VII. Total comprehensive income 1,178,931,525.39 905,787,375.61
Total comprehensive income
attributable to owners of the parent 1,172,784,193.11 875,211,790.31
company
Total comprehensive income
6,147,332.28 30,575,585.30
attributable to minority shareholders
VIII. Earnings per share (EPS):
(I) Basic EPS 0.6557 0.5185
(II) Diluted EPS 0.6557 0.5185
As for enterprise merger under the same control in the current period, the net profit generated by the merged party before the merger
is 0 yuan, and that generated during the previous period is 0 yuan.
Legal representative: Lyu Liang
Officer in charge of accounting: Lyu Liang
Head of accounting department : Qiu Renbo
4. Income statement of the parent company
Unit: RMB yuan
Item Amount incurred during the current period Amount incurred during the previous period
I. Operating income 3,694,664,751.43 4,750,751,718.90
Less: Operating cost 3,497,138,685.81 4,519,692,455.89
Taxes and surcharges 1,742,409.45 6,135,847.99
Selling expenses 91,950,292.45 109,542,301.79
Administrative expenses 34,825,269.77 27,006,339.53
R&D expenses
Financial expenses 14,360,429.84 20,870,555.66
Including: Interests paid 21,895,125.22 21,396,244.01
Interests received 5,644,762.49 1,609,862.67
Add: Other gains 5,462,052.44 1,910,068.73
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The First Quarterly Report 2020 of Huadong Medicine Co., Ltd.
Investment gains (Losses are
1,132,672,992.82 857,083,782.05
indicated by “-”)
Including: Investment gains
from associates and joint ventures
Income from the
derecognition of financial assets
measured at amortized cost (Losses are
indicated by “-”)
Gains on net exposure
hedging (Losses are indicated by “-”)
Gains on changes in fair value
(Losses are indicated by “-”)
Credit impairment loss
(Losses are indicated by “-”)
Assets impairment loss
(Losses are indicated by “-”)
Gains on assets disposal
-7,754.30 66,516,649.00
(Losses are indicated by “-”)
II. Operating profit (Losses are
1,192,774,955.04 993,014,717.82
indicated by “-”)
Add: Non-operating income 2,525,818.53 2,316,802.22
Less: Non-operating expenditure 2,532,343.76 3,052,321.97
III. Total profit (Total losses are
1,192,768,429.81 992,279,198.07
indicated by “-”)
Less: Income tax expenses 16,817,107.45 35,560,862.02
IV. Net profit (Net losses are indicated
1,175,951,322.36 956,718,336.05
by “-”)
(I) Net profit from continued
operations (Net losses are indicated by 1,175,951,322.36 956,718,336.05
“-”)
(II) Net profit from discontinued
operations (Net deficit is indicated by
“-”)
V. Net amount after tax of other
comprehensive income
(I) Other comprehensive income
that cannot be reclassified into
gains/losses
1. Changes in
remeasurement on the defined benefit
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The First Quarterly Report 2020 of Huadong Medicine Co., Ltd.
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
arise from translation of foreign
currency financial statements
7. Others
VI. Total comprehensive income 1,175,951,322.36 956,718,336.05
VII. Earnings per share (EPS):
(I) Basic EPS
(II) Diluted EPS
5. Consolidated cash flow statement
Unit: RMB yuan
Item Amount incurred during the current period Amount incurred during the previous period
I. Cash flows from operating activities:
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The First Quarterly Report 2020 of Huadong Medicine Co., Ltd.
Cash from the sale of goods and
7,665,300,254.21 8,187,663,071.84
provision 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
Tax refund received 1,138,819.80
Other cash receipts in relation to
362,756,808.71 154,228,462.86
operating activities
Total cash inflows from operating
8,029,195,882.72 8,341,891,534.70
activities
Cash payments for goods and
5,172,908,493.72 6,321,052,081.64
services
Net increase in customer loans and
prepayments
Net increase in deposits of central
bank and due from banks
Cash for payment of original
insurance claims
Net increase in lending to other
banks and other financial institutions
Cash for payment of interests,
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The First Quarterly Report 2020 of Huadong Medicine Co., Ltd.
handling fees and commissions
Cash for payment of policy
dividends
Cash payments to and for
579,438,808.77 435,270,367.30
employees
Payment of taxes and fees 453,422,088.98 501,157,690.76
Other cash payments in relation to
1,604,646,867.36 1,518,302,236.71
operating activities
Total cash outflows for operating
7,810,416,258.83 8,775,782,376.41
activities
Net cash flows from operating activities 218,779,623.89 -433,890,841.71
II. Cash flows from investing activities
Cash from recovery of investments
Cash from investment gains
Net cash from disposal of fixed
assets, intangible assets and other 345,902,424.29 49,385.41
long-term assets
Net cash from disposal of
subsidiaries and other business units
Other cash receipts in relation to
30,000,000.00
investing activities
Total cash inflows from investing
345,902,424.29 30,049,385.41
activities
Cash payments for purchase and
construction of fixed assets, intangible 267,014,841.51 311,215,321.17
assets and other long-term assets
Cash payments for investment 100,000,000.00 30,150,000.00
Net increase in pledge loans
Net cash paid for acquisition of
7,000,000.00
subsidiaries and other business units
Other cash payments in relation to
120,124,300.00
investing activities
Total cash outflows for investing
367,014,841.51 468,489,621.17
activities
Net cash flows from investing activities -21,112,417.22 -438,440,235.76
III. Cash flows from financing
activities:
Cash from absorbing investments 9,800,000.00
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The First Quarterly Report 2020 of Huadong Medicine Co., Ltd.
Including: Cash from absorption of
minority shareholders’ investments by
subsidiaries
Cash from borrowing 684,996,551.61 813,097,755.69
Other cash receipts in relation to
4,000,000.00
financing activities
Total cash inflows from financing
684,996,551.61 826,897,755.69
activities
Cash for repayment of debt 536,798,734.58 540,192,394.20
Cash payments for dividends,
34,425,592.85 42,543,384.38
profits or interests
Including: Payment of dividends
and profits by subsidiaries to minority 24,500,000.00 14,112,000.00
shareholders
Other cash payments in relation to
2,794,710.80
financing activities
Total cash outflows for financing
574,019,038.23 582,735,778.58
activities
Net cash flows from financing activities 110,977,513.38 244,161,977.11
IV. Influence of exchange rate
fluctuations on cash and cash 7,174,858.69 -33,095,996.77
equivalents
V. Net increase in cash and cash
315,819,578.74 -661,265,097.13
equivalents
Add: Balance of cash and cash
equivalents at the beginning of the 2,231,771,546.50 2,398,709,506.06
period
VI. Balance of cash and cash
2,547,591,125.24 1,737,444,408.93
equivalents at the end of the period
6. Cash flow statement of the parent company
Unit: RMB yuan
Item Amount incurred during the current period Amount incurred during the previous period
I. Cash flow from operating activities:
Cash from the sale of goods and
3,511,097,388.40 3,725,034,236.17
provision of services
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The First Quarterly Report 2020 of Huadong Medicine Co., Ltd.
Tax refunds received
Other cash receipts in relation to
222,397,124.86 75,012,263.27
operating activities
Total cash inflows from operating
3,733,494,513.26 3,800,046,499.44
activities
Cash payments for goods and
3,830,179,895.19 4,874,314,937.78
services
Cash payments to and for
74,881,392.11 59,381,893.15
employees
Payment of taxes and fees 31,131,815.13 59,734,079.75
Other cash payments in relation to
99,668,377.06 5,520,387.64
operating activities
Total cash outflow under operating
4,035,861,479.49 4,998,951,298.32
activities
Net cash flow from operating activities -302,366,966.23 -1,198,904,798.88
II. Cash flows from investing activities:
Cash from recovery of investments
Cash from investment gains 175,500,000.00 250,000,000.00
Net cash from disposal of fixed
assets, intangible assets and other 35,000.00 12,525.00
long-term assets
Net cash from disposal of
subsidiaries and other business units
Other cash receipts in relation to
217,902,741.44 40,000,000.00
investing activities
Total cash inflows from investing
393,437,741.44 290,012,525.00
activities
Cash payments for purchase and
construction of fixed assets, intangible 3,423,339.18 22,140,302.23
assets and other long-term assets
Cash payments for investment 2,530,810.80 204,814,300.00
Net cash paid for acquisition of
7,000,000.00
subsidiaries and other business units
Other cash payments in relation to
160,000,000.00 142,900,000.00
investing activities
Total cash outflows for investing
165,954,149.98 376,854,602.23
activities
Net cash flows from investing activities 227,483,591.46 -86,842,077.23
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The First Quarterly Report 2020 of Huadong Medicine Co., Ltd.
III. Cash flows from financing
activities:
Cash from absorbing investments
Cash from borrowing 310,202,546.78 630,487,956.25
Other cash receipts in relation to
218,391,068.03 45,000,000.00
financing activities
Total cash inflows from financing
528,593,614.81 675,487,956.25
activities
Cash for repayment of debt 115,202,547.58 339,022,441.10
Cash payments for dividends,
3,495,155.18 11,409,844.26
profits or interest
Other cash payments in relation to
67,321,291.66
financing activities
Total cash outflows for financing
186,018,994.42 350,432,285.36
activities
Net cash flows from financing activities 342,574,620.39 325,055,670.89
IV. Influence of exchange rate
fluctuations on cash and cash 1,987,917.74 -858,503.05
equivalents
V. Net increase in cash and cash
269,679,163.36 -961,549,708.27
equivalents
Add: Balance of cash and cash
equivalents at the beginning of the 893,929,724.56 1,384,560,116.18
period
VI. Balance of cash and cash
1,163,608,887.92 423,010,407.91
equivalents at the end of the period
II. Notes on adjustments of financial statements
1. Adjustments of financial statements for the first time at the beginning of the year due to adoption of new
income standards or new lease standards since 2020
□ Applicable √ N/A
2. Notes on retrospective adjustments on comparative data in the previous period due to adoption of new
income standards and new lease standards since 2020
□ Applicable √ N/A
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The First Quarterly Report 2020 of Huadong Medicine Co., Ltd.
III. Audit report
Has the first quarterly report been audited?
□ Yes √ No
The first quarterly report has not been audited.
Huadong Medicine Co., Ltd.
Chairman of the Board: Lyu Liang
April 30, 2020
31
