2020 Third Quarterly Report of Huadong Medicine Co., Ltd.
Huadong Medicine Co., Ltd.
2020 Third Quarterly Report
October 2020
1
2020 Third Quarterly Report of Huadong Medicine Co., Ltd.
Section I Important Notes
The Board of Directors, the Supervisory Committee as well as all the directors,
supervisors and senior management staff of Huadong Medicine Co., Ltd. (the
“Company”) hereby confirm that the information presented in this report is true,
accurate and complete, free from false records, misleading statements or
material omissions, and will undertake legal liabilities individually and jointly.
All directors have attended the board meeting to review this quarterly report.
Lyu Liang, the Company’s legal representative and the in-charge of accounting,
and Qiu Renbo, head of accounting department (accounting supervisor) hereby
declare the financial statements in this report are true, accurate and complete.
According to , if the
announcements of the listed companies are in different languages, it is ensured
the content of the versions are the same. In case of discrepancy, the original
version in Chinese shall prevail.
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2020 Third Quarterly Report of Huadong Medicine Co., Ltd.
Section II Company Profile
I. Key accounting data and financial indicators
Whether the Company needs to perform a retroactive adjustment or restatement of the previous accounting data
□ Yes √ No
End of the current reporting End of last year Change (%)
period
Total assets (RMB) 24,419,510,307.69 21,463,974,146.63 13.77%
Net assets attributable to 14,231,521,922.12 12,309,477,308.00 15.61%
shareholders of the Company
(RMB)
The current Year-on-year Change (%) End of the current Year-on-year (%)
reporting period reporting period
Operating revenue (RMB) 8,839,942,450.31 -5.75% 25,500,876,607.95 -7.70%
Net profits attributable to 660,281,883.53 7.04% 2,391,466,604.78 8.06%
shareholders of the Company
(RMB)
Net profits attributable to 624,184,921.23 3.05% 2,030,908,894.33 -2.36%
shareholders of the Company
excluding non-recurring profit or
loss (RMB)
Net cash flows from operating 646,271,689.37 1,299.22% 1,901,814,356.66 109.21%
activities (RMB)
Basic earnings per share (RMB per 0.3773 7.04% 1.3667 8.06%
share)
Diluted earnings per share (RMB 0.3773 7.04% 1.3667 8.06%
per share)
Weighted average Return on 4.75% -0.69% 17.69% -2.45%
Equity (ROE)
Non-recurring profit or loss items and amounts
√ Applicable □ N/A
Unit: RMB
Items Amount Notes
Profit or loss from disposal of non-current assets (including 303,785,522.75 Mainly due to the transfer of market
write-back of provision for impairment) distribution rights of related
products in Western Europe by
Sinclair, a wholly owned subsidiary
of the Company in the UK.
Government grant included in profit or loss (excluding those 123,759,645.82 Mainly due to the recognition of
closely related to operating activities, or regular government government subsidy by the
grants) subsidiaries.
Other non-operating revenue or expenditures -9,427,936.85
Less: Effects of income tax 42,986,623.36
Effected of non-controlling interests (after tax) 14,572,897.91
Total 360,557,710.45 --
Reasons are explained if the Company classifies an item as a non-recurring profit or loss in accordance to the < Explanatory
Announcement on
Information Disclosure for Companies Offering Their Securities to the Public No. 1 - Non-Recurring Profit or Loss> or classifies
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2020 Third Quarterly Report of Huadong Medicine Co., Ltd.
any non-recurring profit or loss item mentioned in the said announcement as a recurring profit or loss itemed.
□ Applicable √ N/A
No such cases for the reporting period.
II. Total numbe r of shareholders and shareholdings of the top ten shareholders as at the end
of the reporting period
1. Total number of shareholders of ordinary shares and preference shares with resumed voting rights, and
the shareholding of the top ten shareholders
Unit: Share
Total number of shareholders of 136,875 Total number of shareholders 0
ordinary shares at the end of the of preference shares with
reporting period resumed voting rights at the
end of the reporting period (if
any)
Information about top 10 shareholders
Name of shareholders Nature Shareholding Number of Number of Pledged or frozen shares
percentage shares held restricted shares
Status Number
(%) held
中国远大集团有限责任公司 (China Domestic 41.77% 730,938,157 0 Pledged 259,114,000
Grand Enterprises, Inc.) non-state-owned
corporation
杭州华东医药集团有限公司 State-owned 16.46% 288,000,000 0
(Hangzhou Huadong Medicine Group corporation
Co., Ltd.)
香港中央结算有限公司 (Hong Foreign 2.13% 37,325,767 0
Kong Securities Clearing Company corporation
Ltd.*)
全国社保基金一零六组合 Other 1.59% 27,797,163 0
(National Social Security Fund
Portfolio 106)
中国证券金融股份有限公司 (China Other 1.27% 22,186,818 0
Securities Finance Co., Ltd. *)
基本养老保险基金一五零四一组合 Other 0.44% 7,623,568 0
（Basic Endowment Insurance Fund
Portfolio 15041）
基本养老保险基金八零七组合 0.29% 5,133,343 0
Other
(Basic Endowment Insurance Fund
Portfolio 807)
中国银行股份有限公司－嘉实 3 年 Other 0.24% 4,266,168 0
封闭运作战略配售灵活配置混合型
证券投资基金（LOF）
(Bank of China Co., Ltd. ) –Harvest
3-year closed operation strategic
placement Flexible Allocation hybrid
Securities Investment Fund (LOF)
嘉实基金－建设银行－中国人寿－ Other 0.24% 4,262,147 0
中国人寿委托嘉实基金股票型组合
(Harvest Fund - China Construction
Bank - China Life - China Life
Entrusted harvest Fund equity
portfolio)
#Chen Shaoming Domestic 0.23% 4,043,000 0
The English names are for identification purpose only.
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2020 Third Quarterly Report of Huadong Medicine Co., Ltd.
individual
Top ten non-restricted shareholders
Name of shareholders Number of non-restricted shared held Type of shares
Type Number
China Grand Enterprises, Inc. 730,938,157 RMB ordinary 730,938,157
shares
Hangzhou Huadong Medicine Group 288,000,000 RMB ordinary 288,000,000
Co., Ltd. shares
Hong Kong Securities Clearing 37,325,767 RMB ordinary 37,325,767
Company Ltd. shares
National Social Security Fund 27,797,163 RMB ordinary 27,797,163
Portfolio 106 shares
China Securities Fina nce Co., Ltd. 22,186,818 RMB ordinary 22,186,818
shares
Basic Endowment Insurance Fund 7,623,568 RMB ordinary 7,623,568
Portfolio 15041 shares
Basic Endowment Insurance Fund 5,133,343 RMB ordinary 5,133,343
Portfolio 807 shares
Bank of China Co., Ltd. –Harvest 4,266,168 RMB ordinary 4,266,168
3-year closed operation strategic shares
placement Flexible Allocation hybrid
Securities Investment Fund (LOF)
Harvest Fund - China Construction 4,262,147 RMB ordinary 4,262,147
Bank - China Life - China Life shares
Entrusted Harvest Fund equity
portfolio
#Chen Shaoming 4,043,000 RMB ordinary 4,043,000
shares
Explanation on relationship and The Company does not know whether the above shareholders are related parties with each
concerted actions among above other or whether they are acting-in-concert parties with each other.
shareholders
Explanation on margin trading of top At the end of the current reporting period, Chen Shaoming, the tenth shareholder of the
ten shareholders (if any) Company, held 3,980,000 shares through credit guarantee security account.
Whether any agreed repurchase transactions were entered into during the reporting period by the top ten ordinary shareholders and
top ten non-restricted ordinary shareholders?
□ Yes √ No
No such cases during the reporting period.
2. Total number of preference shareholders and shareholding of top ten preference shareholders
□ Applicable √ N/A
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2020 Third Quarterly Report of Huadong Medicine Co., Ltd.
Section III Significant Events
I. Details of changes in major financial data and financial indicators during the reporting
period
√ Applicable □ N/A
Unit: RMB
Balance sheet items End of the period Beginning of Change Reasons for the change
the period
Other receivables 202,604,242.37 92,201,271.22 119.75% Mainly due to the increase of temporary payment
and deposits.
Other current assets 30,970,609.30 62,526,471.96 -50.47% Mainly due to the decrease of input VAT.
Long-term equity investments 618,012,071.25 222,595,018.54 177.64% The subsidiary Zhongmei Huadong increased
equity investment in Qyuns Therapeutics and
Chongqing Peg-Bio.
Other non-current assets 516,158,254.42 184,141,659.07 180.30% Mainly due to the increase of advance payment for
purchase of equipment and intangible assets.
Short-term borrowings 1,368,007,785.51 655,549,973.27 108.68% Mainly due to the increase of bank loan for the
repayment of the corporate bonds.
Advances received 16,956,179.73 254,888,911.30 -93.35% Mainly due to the decrease of advanced receipt of
medicine sales.
Other payables 2,001,768,855.34 1,365,152,290.9 46.63% Mainly due to the increase of temporary receipts
9 payable.
Non-current liabilities due 20,391,924.90 1,053,231,727.7 -98.06% Mainly due to repayment of corporate bonds.
3
within one year
Income statement items Current period Comparative Change Reasons for the change
cumulative period
Financial expenses 16,523,165.79 89,340,120.69 -81.51% Mainly due to on the decrease of interest-bearing
liabilities and the cost of financing.
Gains on asset disposal 304,146,257.99 114,347,426.77 165.98% 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.
Investment income -20,950,134.64 -11,732,842.99 -78.56% Mainly due to the decrease of short-term investment
gain and net profit generated by associates.
Non-operating income 16,504,085.99 9,904,357.05 66.63% Mainly due to the write-off of payables.
Cash flow statement items Current period Preceding Change rate Notes on changes
cumulative period
comparative
Net cash flows from operating 1,901,814,356.66 909,038,245.96 109.21% Mainly due to the decrease of payments for
activities procurement.
Net cash flows from investing 349,442,817.74 44,373,345.73 687.51% Mainly due to the transfer of market distribution
activities rights of related products in Western Europe by
Sinclair, a wholly owned subsidiary of the
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2020 Third Quarterly Report of Huadong Medicine Co., Ltd.
Company in the UK.
II. Progress, impact and solutions of significant events
□ Applicable √ N/A
Progress of share repurchase
□ Applicable √ N/A
Progress of repurchased share reduction through centralized price bidding
□ Applicable √ N/A
III. Unfulfilled and overdue commitme nts of the Company’s actual controller, shareholders,
related parties, acquirer(s), and the Company and other committed parties during the
reporting period
□ Applicable √ N/A
No such cases during the reporting period.
IV. Financial asset investment
1. Security investments
√ Applicable □ N/A
Unit: RMB
Type of Stock Stock Initial Account Book Profit or Accumu Purchase Disposal Gain/ Book Account Funding
security code abbrevi investm ing value at loss lative s during during loss value at ing item source
ation ent cost measure the from fair the the during the end
ment beginni fair value period period the of the
method ng of value changes period period
the changes charged
period in the to
current equity
period
Domestic RAPT RAPT 20,207, Fair 42,009, 5,817,2 5,817,2 0.00 0.00 5,817, 47,826, Other Own
and 400.00 value 254.79 90.26 90.26 290.26 545.05 equity funds
overseas measure instrum
stock ment ents
investm
ent
Total 20,207, -- 42,009, 5,817,2 5,817,2 0.00 0.00 5,817, 47,826, -- --
400.00 254.79 90.26 90.26 290.26 545.05
Date of announcement of
the board of directors on
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2020 Third Quarterly Report of Huadong Medicine Co., Ltd.
securities investment
approval
Date of announcement of
the shareholders’ general
meeting on securities
investment approval (if
any)
Notes: Huadong Medicine Investment Holding (Hong Kong) Limited, a subsidiary of the Company, subscribed the C-2 series
preference 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) on 30 October 2019. Huadong Medicine Investment Holding (Hong Kong) Limited holds 0.89% of its
total shares.
2. Derivative investments
□ Applicable √ N/A
No such cases during the reporting period.
V. Progress of investment projects financed with raised funds
□ Applicable √ N/A
No such cases during the reporting period.
VI. Forecast of 2020 annual business performance
□ Applicable √ N/A
A warning and explanation of the reason for a prediction that the cumulative net profit from the beginning of the year to the end of
the next reporting period may be a loss or a significant change compared with the corresponding period of prior year.
VII. Major contracts in daily operations
□ Applicable √ N/A
VIII. Entrusted wealth management
□ Applicable √ N/A
No such cases during the current reporting period.
IX. External guarantees against rules and regulations
□ Applicable √ N/A
No such cases during the current reporting period.
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2020 Third Quarterly Report of Huadong Medicine Co., Ltd.
X. Occupation of the Company’s funds by the controlling shareholder or its related parties
for non-operating purposes
□ Applicable √ N/A
No such cases during the reporting period.
XI. Registration form for research, communication and interview activities during the
reporting period
√ Applicable □ N/A
Time of Location Method of Type of Index of basic information of the research
reception object
reception reception
th
Jan 19 , Corporate Conference Institutional Please refer to the <000963 Huadong Medicine Research Activity:
2020 Headquarter call investors January 19th , 2020> presented on the websites of
irm.cninfo.com.cn and cninfo.com.cn for details.
conference room
th
Apr 30 , Corporate Conference Institutional Please refer to the presented on the websites of irm.cninfo.com.cn and
2020 Headquarter call investors
cninfo.com.cn for details.
conference room
Jun 5th , Corporate On-site Institutional Please refer to the presented on the websites of irm.cninfo.com.cn and
cninfo.com.cn for details.
conference room
th
Aug 28 , Corporate Conference Institutional Please refer to the presented on the websites of irm.cninfo.com.cn and
2020 Headquarter call investors
cninfo.com.cn for details.
conference room
nd
Sept 2 , Corporate Conference Institutional Please refer to the presented on the websites of irm.cninfo.com.cn and
cninfo.com.cn for details.
conference room
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2020 Third Quarterly Report of Huadong Medicine Co., Ltd.
XII. Overview of the Company’s operations from January to September 2020
1、Operation
During the reporting period, the Company generated an operating revenue of RMB 25.501
billion, representing a year-on-year (“YoY”) decrease of 7.7%; the net profit attributable to the
shareholders amounted to RMB 2.391 billion, representing a YoY increase of 8.06%; the net profits
attributable to the shareholders excluding non-recurring profit was RMB 2.031 billion, down 2.36%
YoY, and the net cash flow from operating activities was RMB 1.902 billion, up 109.21% YoY. In
the third quarter, the company maintained a good momentum of development in pharmaceutical
manufacturing, pharmaceutical business and aesthetic medicine business with steadier growth
compared to the second quarter of the year.
During the reporting period, the core subsidiary Zhongmei Huadong achieved an operating
revenue of RMB 8.81 billion, with a YoY growth of 5.01%, and a net profit of RMB 1.939 billion,
an increase of 4.68% compared to previous year. The operating income in the third quarter
increased by 1.4% to RMB 2.726 billion, an 10.6% increase compared to the second quarter of this
year. The net profit during the reporting period was RMB 560 million, with a YoY growth of 3.9%.
Not only pioglitazone metformin tablets, acarbose chewable tablets, indolbufen tablets and other
products in the field of diabetes realized a growth to a certain extent, but also the transplantation
immune products and Belling capsules maintained a steady growth. Due to the failure in National
Volume-Based Procurement and the fluctuations in market price, the sales revenue of Acarbose
tablets declined during the period. However, through market exploitation outside hospitals, the sales
decline has been controlled. The Company would continuously increase market coverage to
maintain the same or higher annual sales volume of Acarbose tablets compared with last year.
Huadong Commercial Company actively enriched its products line and improved its operating
efficiency to gradually offset the impact of COVID-19. Its business showed a steady recovery in the
third quarter with its operating revenue of RMB 16.134 billion during the reporting period. Amount
of RMB 5.921 billion was generated in the third quarter, an increase of 9.84% compared with the
second quarter of this year. Huadong Medicine Supply Chain Management (Hangzhou) Co., LTD
（hereinafter referred to as ‘HMSCM’）, a wholly owned subsidiary has gained the qualification
to launch the cold chain distribution business. In term of vaccine distribution business, HMSCM
was the first one passing the special vaccine inspection arranged by Zhejiang Drug Administration
and successfully owning the qualifications to develop a vaccine distribution business. According to
the distribution instructions of COVID-19 vaccine in the immunization program of Zhejiang CDC,
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2020 Third Quarterly Report of Huadong Medicine Co., Ltd.
the first batch of COVID-19 vaccine distribution tasks for 10 provincial hospitals have been
completed by HMSCM during the period.
The third quarter witnessed an improvement in the aesthetic business, and the global business
was gradually recovering. Huadong Ningbo has reversed a decrease tide from COVID-19, with
revenue approaching the same period last year and net profit rising by 13% from a year earlier. Due
to the pandemic, Sinclair suffered a decrease in revenue and had a net operating loss while
excluding the profit from the disposal of assets. However, the third quarter has seen a clear rebound
in revenue from the second quarter, with a reduction in losses.
2、Research and development (R&D)
During the reporting period, the Company increased investment in R&D with a cumulative
R&D cost of RMB 690 million, and a number of products under research progressed as scheduled.
The Company also continues to focus on the three core fields, namely oncology, endocrinology and
autoimmunity, constantly enriching its innovative product pipeline.
1）Oncology
During the reporting period, Zhongmei Huadong introduced Mirvetuximab Soravtansine
(hereinafter referred to as "MIRV"), a phase III clinical research product from ImmunoGen of the
United States, and obtained its exclusive development and commercialization rights in Greater
China (including Mainland China, Hong Kong, Macau and Taiwan). MIRV is the world's first ADC
drug candidate for folate receptor alpha (FRα)-positive ovarian cancer, and its R&D progress is
currently the fastest among ADC drugs for FRα-positive ovarian cancer. This cooperation with one
of the world's most famous ADC companies is the beginning of the Company's full entry into the
field of oncology innovative drugs.
In future, the Company will increase layout in the ADC oncology field, and continue to
develop ADC products for different cancers based on unmet clinical needs. Relying on the
Company's existing biotechnology R&D platform and in collaboration with ImmunoGen, one of the
world's leading R&D companies, Company will strengthen and deepen the product innovation chain
and industrial ecological chain, and ultimately achieve the international layout of Huadong
Medicine in the field of oncology. (For details, please refer to the announcement No. 2020-042
issued by the Company)
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2020 Third Quarterly Report of Huadong Medicine Co., Ltd.
2）Diabetes
After completing the second capital increase of Chongqing Peg-Bio, the two parties formally
signed an agreement on the cooperative development and commercialization of Semaglutide
products under research to accelerate the two parties’ cooperation and development process of
macromolecular biopharmaceuticals. This cooperation will further enrich the Company's major
product pipeline in the diabetes field, create synergy with existing products under research, and
consolidate the market leading position in the field of diabetes medication in China. The Company
is also synchronously promoting the industrialization process of developing products and
introducing new drugs. The Company has started the construction of an internationally leading
diabetes macromolecular drug production base on the reserved project land for the second phase of
Company’s Jiangdong project in Hangzhou Qiantang New District, to lay a solid foundation for the
company's future development of domestic and international markets for macromolecular drugs in
the field of diabetes. Please refer to the announcement No. 2020-045 issued by the Company for
details.
Under the dual influence of collective-bidding for medicine purchase and Covid-19,
pioglitazone-metformin tablets and acarbose chewable tablets in the Company's diabetes field have
maintained rapid growth. Company strives for Acarbose tablets’ annual sales volume to be no lower
than the level of last year by exploring the market outside the hospital ts and increasing market
coverage. The Company has a number of first-line clinical diabetes products on the market. For
research products, compound DPP-4 inhibitors, compound SGLT-2 inhibitors and liraglutide
injections are expected to be launched in 2021-2022; Semaglutide is planned to initiate clinical
registration applications in 2021. The Company has been focusing on the R&D and production of
diabetes drugs for many years, and the production quality tends to the international leading level,
with a wealth of product pipelines. In the future, the Company will enter a new period of growth in
this field by virtue of Company’s well-developed market reputation and excellent brand promotion
ability.
3）Autoimmunity
During the reporting period, Zhongmei Huadong invested RMB 370 million in the equity
investment of Qyuns Therapeutics Co., Ltd ( Qyuns Therapeutics) and acquired 20.56% ownership,
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2020 Third Quarterly Report of Huadong Medicine Co., Ltd.
becoming its second largest shareholder. At the same time, the two parties have signed an
agreement on product cooperation development and commercialization for QX001S (A biological
analogue of the original drug StelaraUstekinumab, used for the treatment of psoriasis and Crohn's
disease, etc.) under development by Qyuns Therapeutics in mainland China. By reaching equity and
product cooperation with Qyuns Therapeutics, the Company’s macromolecular innovation drug
layout in the immune field will further develop. The two parties will carry out more extensive and
in-depth cooperation discussions on Qyuns Therapeutics’ products under development in the future,
so as to create good cooperation conditions for Huadong Medicine to gradually enter the R&D
pipeline of monoclonal antibody products in the biopharmaceutical field. Please refer to the
announcement No. 2020-032 issued by the Company for details.
3、international aesthetic business
Since the beginning of the year, the Company’s internationalization strategy in the medical
aesthetics sector has continued to advance rapidly, it has reached agreements in product cooperation
and equity investment with a few renowned companies. In March, Sinclair completed the deal with
Galderma, a well-known Swiss dermatology pharmaceutical company for the transfer of the right of
Sculptra (poly-L-lactic acid microspheres) in western European, which brought about GBP 30.65
million (after-tax) disposal gain to Sinclair. Sinclair also signed an agreement with Kylane
Laboratories, a Switzerland-based aesthetic R&D company, to obtain the global exclusive license of
its hyaluronic acid filler MaiLi (with Lidocaine). In August 2020, the Company signed a strategic
cooperation agreement with Jetema, a Korean listed company, and obtained the exclusive right of its
BoNT-A product in China, which further completed the product pipeline, marking a solid step
forward for the globalization of Huadong’s aesthetic business. In October, Sinclair and Kylane
signed equity investment and strategic products co-development agreement. Sinclair paid EUR 6
million to obtain 20% shareholding in Kylane, becoming its third largest shareholder. In addition,
every year Sinclair would pay a certain amount of money to Kylane to support its R&D activities.
In return, Sinclair would have right to obtain the IP and global rights of its two products, which
were applied in the field of facial and body filler. Sinclair would also have the rights of first
negotiation of Kylane’s future products. Please refer to Company Notice No. 2020-040 for details.
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2020 Third Quarterly Report of Huadong Medicine Co., Ltd.
The Company aesthetic business adopts the strategy of operating globally and creating a dual
circulation development pattern. The company gives full play to the advantage of a huge domestic
market and introduces world-class high technological products to domestic market so that a new
development pattern will gradually be created whereby domestic and foreign markets can boost
each other. The company is committed to making Sinclair a world-class aesthetic enterprise,
creating a new space for future development.
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2020 Third Quarterly Report of Huadong Medicine Co., Ltd.
Section IV Financial Statements
I. Financial statements
1. Consolidated balance sheet as at September 30th, 2020
Prepared by: Huadong Medicine Co., Ltd.
Unit: RMB
th st
Items September 30 , 2020 December 31 , 2019
Current assets:
Cash and bank balances 2,564,103,286.11 2,402,730,395.39
Settlement funds
Loans to other banks
Held-for-trading financial assets
Derivative financial assets
Notes receivable
Accounts receivable 7,788,224,106.35 6,092,305,184.47
Receivables financing 844,379,317.86 683,884,625.14
Advances paid 420,197,609.65 363,246,612.94
Premiums receivable
Reinsurance accounts receivable
Reinsurance reserve receivable
Other receivables 202,604,242.37 92,201,271.22
Including: Interest receivable
Dividend receivable 815,965.44 815,965.44
Financial assets under reverse repo
Inventories 3,914,403,627.95 4,038,975,496.93
Contract assets
Assets as held for sale
Non-current assets due within one year
Other current assets 30,970,609.30 62,526,471.96
Total current assets 15,764,882,799.59 13,735,870,058.05
Non-current assets:
Loans and advances paid
Debt investments
Other debt investments
Long-term receivable
Long-term equity investments 618,012,071.25 222,595,018.54
Other equity instrument investments 247,493,002.31 241,675,712.05
Other non-current financial assets
Investment property 20,282,214.51 21,701,908.75
Fixed assets 2,118,694,009.27 2,175,216,842.65
Construction in progress 2,075,689,332.92 1,829,808,233.19
Productive biological assets
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2020 Third Quarterly Report of Huadong Medicine Co., Ltd.
Items September 30th, 2020 December 31st, 2019
Oil & gas assets
Use right assets
Intangible assets 1,448,544,346.51 1,454,900,160.45
Development expenditures
Goodwill 1,469,617,262.10 1,469,617,262.10
Long-term prepayments 9,143,178.94 12,289,677.31
Deferred tax assets 130,993,835.87 116,157,614.47
Other non-current assets 516,158,254.42 184,141,659.07
Total non-current assets 8,654,627,508.10 7,728,104,088.58
Total assets 24,419,510,307.69 21,463,974,146.63
Current liabilities:
Short-term borrowings 1,368,007,785.51 655,549,973.27
Central bank loans
Loans from other banks
Held-for-trading financial liabilities
Derivative financial liabilities
Notes payable 523,746,625.31 613,374,356.61
Accounts payable 4,478,910,238.07 3,789,054,234.58
Advances received 16,956,179.73 254,888,911.30
Contract liabilities 117,764,737.01
Financial liabilities under repo
Absorbing deposit and interbank deposit
Deposit for agency security transaction
Deposit for agency security underwriting
Employee benefits payable 197,127,989.20 132,584,982.71
Taxes and rates payable 529,525,987.66 532,802,157.61
Other payables 2,001,768,855.34 1,365,152,290.99
Including: Interest payable
Dividend payable 1,344,219.60 224,219.60
Handling fee and commission payable
Reinsurance accounts payable
Liabilities classified as held for sale
Non-current liabilities due within one year 20,391,924.90 1,053,231,727.73
Other current liabilities
Total current liabilities 9,254,200,322.73 8,396,638,634.80
Non-current liabilities:
Insurance policy reserve
Long-term borrowings 172,017,849.07
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities
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2020 Third Quarterly Report of Huadong Medicine Co., Ltd.
Items September 30th, 2020 December 31st, 2019
Long-term payables 34,741,313.24 48,080,030.00
Long-term employee benefits payable
Provisions 51,235,349.77 52,066,643.01
Deferred income 56,933,194.48 60,960,255.68
Deferred tax liabilities 45,296,252.83 39,604,343.27
Other non-current liabilities
Total non-current liabilities 360,223,959.39 200,711,271.96
Total liabilities 9,614,424,282.12 8,597,349,906.76
Equity:
Share capital 1,749,809,548.00 1,749,809,548.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserve 2,157,580,835.94 2,158,080,661.07
Less: Treasury shares
Other comprehensive income 43,816,996.72 22,792,488.80
Special reserve
Surplus reserve 710,359,967.51 710,359,967.51
General risk reserve
Undistributed profit 9,569,954,573.95 7,668,434,642.62
Total equity attributable to the parent company 14,231,521,922.12 12,309,477,308.00
Non-controlling interest 573,564,103.45 557,146,931.87
Total equity 14,805,086,025.57 12,866,624,239.87
Total liabilities & equity 24,419,510,307.69 21,463,974,146.63
Lyu Liang Lyu Liang Qiu Renbo
Legal representative Officer in charge of accounting Head of accounting department
17
2020 Third Quarterly Report of Huadong Medicine Co., Ltd.
2. Parent company balance sheet as at September 30th, 2020
Unit: RMB
Items September 30th, 2020 December 31st, 2019
Current assets:
Cash and bank balances 1,603,798,436.33 893,939,724.56
Held-for-trading financial assets
Derivative financial assets
Notes receivable
Accounts receivable 4,377,451,856.37 3,601,796,850.84
Receivables financing 400,739,395.45 102,285,661.94
Advances paid 81,403,264.00 183,776,687.98
Other receivables 682,877,958.92 857,127,207.17
Including: Interest receivable
Dividend receivable 1,680,000.00
Inventories 1,758,827,867.91 1,726,815,773.41
Contract assets
Assets classified as held for sale
Non-current assets due within one year
Other current assets 13,631,809.53 4,529,331.87
Total current assets 8,918,730,588.51 7,370,271,237.77
Non-current assets:
Debt investments
Other debt investments
Long-term receivable
Long-term equity investments 4,884,084,300.65 4,809,521,228.65
Other equity instrument investments 92,108,957.26 92,108,957.26
Other non-current financial assets
Investment property 8,242,134.70 8,591,809.18
Fixed assets 146,126,172.21 144,102,366.02
Construction in progress 25,741,196.03 15,728,406.26
Productive biological assets
Oil & gas assets
Use right assets
Intangible assets 43,891,539.11 45,226,361.12
Development expenditures
Goodwill
Long-term prepayments 728,348.83 975,689.14
Deferred tax assets 48,924,184.37 48,849,165.52
Other non-current assets 8,076,419.28 8,076,419.28
Total non-current assets 5,257,923,252.44 5,173,180,402.43
Total assets 14,176,653,840.95 12,543,451,640.20
Current liabilities:
18
2020 Third Quarterly Report of Huadong Medicine Co., Ltd.
Items September 30th, 2020 December 31st, 2019
Short-term borrowings 931,302,898.45 55,000,000.80
Held-for-trading financial liabilities
Derivative financial liabilities
Notes payable 290,315,007.83 81,036,745.94
Accounts payable 2,973,649,632.66 2,469,675,798.54
Advances received 5,817,872.21 52,914,932.34
Contract liabilities 44,752,863.16
Employee benefits payable 5,159,635.77 3,203,215.95
Taxes and rates payable 142,504,734.60 32,881,935.68
Other payables 676,839,244.46 638,551,969.04
Including: Interest payable
Dividend payable 224,219.60 224,219.60
Liabilities as held for sale
Non-current liabilities due within one year 1,028,002,952.88
Other current liabilities
Total current liabilities 5,070,341,889.14 4,361,267,551.17
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables
Long-term employee benefits payable
Provisions
Deferred income 41,340,379.68 43,264,785.87
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities 41,340,379.68 43,264,785.87
Total liabilities 5,111,682,268.82 4,404,532,337.04
Equity:
Share capital 1,749,809,548.00 1,749,809,548.00
Other equity instruments
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 4,357,647,243.11 3,431,594,974.14
Total equity 9,064,971,572.13 8,138,919,303.16
19
2020 Third Quarterly Report of Huadong Medicine Co., Ltd.
Items September 30th, 2020 December 31st, 2019
Total liabilities & equity 14,176,653,840.95 12,543,451,640.20
3. Consolidated income statement for the three months ended September 30th, 2020
Unit: RMB
Amount incurred during the Amount incurred during the
Items
current period previous period
I. Total operating revenue 8,839,942,450.31 9,379,217,601.89
Including: Operating revenue 8,839,942,450.31 9,379,217,601.89
Interest income
Premium earned
Revenue from handling charges and commission
II. Total operating cost 8,049,749,935.10 8,612,685,353.51
Including: Operating cost 6,030,257,066.00 6,530,011,823.86
Interest expenses
Handling charges and commission expenditures
Surrender value
Net payment of insurance claims
Net provision of insurance policy reserve
Premium bonus expenditures
Reinsurance expenses
Taxes and surcharges 47,047,870.35 38,178,625.13
Selling expenses 1,494,570,477.50 1,519,078,821.04
Administrative expenses 268,670,484.20 246,637,621.16
R&D expenses 210,211,944.06 243,558,122.30
Financial expenses -1,007,907.01 35,220,340.02
Including: Interest expenses 12,313,621.11 33,998,258.85
Interest income 22,215,487.08 6,638,774.53
Add: Other income 30,726,790.34 14,508,606.35
Investment income (or less: losses) -10,947,970.74 -5,573,707.03
Including: Investment income from associates and joint -5,851,687.53 706,857.54
ventures
Gains from the derecognition of financial assets measured at
amortized cost
Gains on foreign exchange (or less: losses)
Gains on net exposure to hedging risk (or less: losses)
Gains on changes in fair value (or less: losses)
Credit impairment loss ( less: losses)
Assets impairment loss ( less: losses)
Gains on asset disposal (or less: losses) 2,980,000.81 3,151,854.72
III. Operating profit (or less: losses) 812,951,335.62 778,619,002.42
Add: Non-operating revenue 6,313,790.19 5,741,109.69
Less: Non-operating expenditures 6,245,193.02 8,842,809.50
IV. Profit before tax (or less: total loss) 813,019,932.79 775,517,302.61
20
2020 Third Quarterly Report of Huadong Medicine Co., Ltd.
Amount incurred during the Amount incurred during the
Items
current period previous period
Less: Income tax 127,915,709.89 134,060,752.36
V. Net profit (or less: net loss) 685,104,222.90 641,456,550.25
(I) Categorized by the continuity of operations
1. Net profit from continuing operations (or less: net loss) 685,104,222.90 641,456,550.25
2. Net profit from discontinued operations (or less: net loss)
(II) Categorized by the portion of equity ownership
1. Net profit attributable to owners of parent company 660,281,883.53 616,830,635.77
2. Net profit attributable to non-controlling shareholders 24,822,339.37 24,625,914.48
VI. Other comprehensive income after tax -17,724,830.31 5,120,322.24
Items attributable to the owners of the parent company -17,724,830.31 5,120,322.24
(I) Not to be reclassified subsequently to profit or loss 5,599,380.87
1.Changes in remeasurement on the net defined benefit plan
2. Items under equity method that will not be reclassified to
profit or loss
3. Changes in fair value of other equity instrument 5,599,380.87
investments
4. Changes in fair value of own credit risk
5. Others
(II) To be reclassified subsequently to profit or loss -23,324,211.18 5,120,322.24
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. Provision for credit impairment of other debt investments
5.Cash flow hedging reserve
6. Exchange differences arise from translation of foreign -23,324,211.18 5,120,322.24
currency financial statements
7. Others
Items attributable to non-controlling shareholders
VII. Total comprehensive income 667,379,392.59 646,576,872.49
Items attributable to the owners of the parent company 642,557,053.22 621,950,958.01
Items attributable to non-controlling shareholders 24,822,339.37 24,625,914.48
VIII. Earnings per share (EPS):
(I) Basic EPS 0.3773 0.3525
(II) Diluted EPS 0.3773 0.3525
Lyu Liang Lyu Liang Qiu Renbo
Legal representative Officer in charge of accounting Head of accounting department
21
2020 Third Quarterly Report of Huadong Medicine Co., Ltd.
4. Parent company income statement for the three months ended September 30th, 2020
Unit: RMB
Amount incurred during the Amount incurred during the
Items
current period previous period
I. Operating revenue 4,607,441,402.20 5,182,126,633.77
Less: Operating cost 4,366,431,693.60 4,978,946,269.84
Taxes and surcharges 5,268,972.67 1,967,436.65
Selling expenses 97,572,966.90 88,177,037.72
Administrative expenses 31,720,797.46 28,005,562.61
R&D expenses 0.00
Financial expenses -6,807,435.28 22,606,668.04
Including: Interest expenses 12,200,806.96 25,985,617.43
Interest income 18,205,578.99 3,655,651.88
Add: Other income 3,177,179.06 1,200,268.73
Investment income (or less: losses) 8,733,465.58 20,009,420.27
Including: Investment income from associates and joint
ventures
Gains from the derecognition of financial assets measured at
amortized cost
Gains on net exposure to hedging risk (or less: losses)
Gains on changes in fair value (or less: losses)
Credit impairment loss (less: losses)
Assets impairment loss (less: losses)
Gains on asset disposal (or less: losses) 4,930.77 3,296,727.00
II. Operating profit (or less: losses) 125,169,982.26 86,930,074.91
Add: Non-operating revenue 872.72 3,131,226.80
Less: Non-operating expenditures 24,123.71 1,248,362.78
III. Profit before tax (or less: total loss) 125,146,731.27 88,812,938.93
Less: Income tax 30,866,682.81 17,289,210.53
IV. Net profit (or less: net loss) 94,280,048.46 71,523,728.40
(I) Net profit from continuing operations (or less: net loss) 94,280,048.46 71,523,728.40
(II) Net profit from discontinued operations (or less: net loss)
V. Other comprehensive income after tax
(I) Not to be reclassified subsequently to profit or loss
1.Changes in remeasurement on the net defined benefit plan
2. Items under equity method that will not be reclassified to
profit or loss
3. Changes in fair value of other equity instrument
investments
4. Changes in fair value of own credit risk
5. Others
(II) To be reclassified subsequently to profit or loss
1. 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
22
2020 Third Quarterly Report of Huadong Medicine Co., Ltd.
Amount incurred during the Amount incurred during the
Items
current period previous period
4. Provision for credit impairment 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 94,280,048.46 71,523,728.40
VII. Earnings per share (EPS):
(I) Basic EPS
(II) Diluted EPS
5. Consolidated income statement for the nine months ended September 30 th, 2020
Unit: RMB
Amount incurred during the Amount incurred during the
Items
current period previous period
I. Total operating revenue 25,500,876,607.95 27,627,885,218.87
Including: Operating revenue 25,500,876,607.95 27,627,885,218.87
Interest income
Premium earned
Revenue from handling charges and commission
II. Total operating cost 22,945,770,445.69 24,984,635,658.84
Including: Operating cost 16,652,650,721.53 18,693,219,439.56
Interest expenses
Handling charges and commission expenditures
Surrender value
Net payment of insurance claims
Net provision of insurance policy reserve
Premium bonus expenditures
Reinsurance expenses
Taxes and surcharges 148,487,687.03 143,747,259.50
Selling expenses 4,663,177,848.52 4,572,806,352.64
Administrative expenses 775,033,097.55 773,295,251.59
R&D expenses 689,897,925.27 712,227,234.86
Financial expenses 16,523,165.79 89,340,120.69
Including: Interest expenses 59,381,737.63 100,246,565.68
Interest income 52,891,384.64 26,477,339.86
Add: Other income 123,759,645.82 100,578,832.37
Investment income (or less: losses) -20,950,134.64 -11,732,842.99
Including: Investment income from associates and joint -9,025,650.76 8,763,938.51
ventures
Gains from the derecognition of financial assets measured at
amortized cost
Gains on foreign exchange (or less: losses)
Gains on net exposure to hedging risk (or less: losses)
23
2020 Third Quarterly Report of Huadong Medicine Co., Ltd.
Amount incurred during the Amount incurred during the
Items
current period previous period
Gains on changes in fair value (or less: losses)
Credit impairment loss (less: losses) -29,841,283.63 -64,662,855.38
Assets impairment loss (less: losses) 4,216,269.24
Gains on asset disposal (or less: losses) 304,146,257.99 114,347,426.77
III. Operating profit (or less: losses) 2,932,220,647.80 2,785,996,390.04
Add: Non-operating revenue 16,504,085.99 9,904,357.05
Less: Non-operating expenditures 26,367,259.87 25,280,163.60
IV. Profit before tax (or less: total loss) 2,922,357,473.92 2,770,620,583.49
Less: Income tax 462,041,510.71 465,973,627.74
V. Net profit (or less: net loss) 2,460,315,963.21 2,304,646,955.75
(I) Categorized by the continuity of operations
1. Net profit from continuing operations (or less: net loss) 2,460,315,963.21 2,304,646,955.75
2. Net profit from discontinued operations (or less: net loss)
(II) Categorized by the portion of equity ownership
1. Net profit attributable to owners of parent company 2,391,466,604.78 2,213,114,054.08
2. Net profit attributable to non-controlling shareholders 68,849,358.43 91,532,901.67
VI. Other comprehensive income after tax 21,024,507.92 -2,398,004.37
Items attributable to the owners of the parent company 21,024,507.92 -2,398,004.37
(I) Not to be reclassified subsequently to profit or loss 5,817,290.26
1.Changes in remeasurement on the net defined benefit plan
2. Items under equity method that will not be reclassified to
profit or loss
3. Changes in fair value of other equity instrument 5,817,290.26
investments
4. Changes in fair value of own credit risk
5. Others
(II) To be reclassified subsequently to profit or loss 15,207,217.66 -2,398,004.37
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. Provision for credit impairment of other debt investments
5.Cash flow hedging reserve
6. Exchange differences arise from translation of foreign 15,207,217.66 -2,398,004.37
currency financial statements
7. Others
Items attributable to non-controlling shareholders
VII. Total comprehensive income 2,481,340,471.13 2,302,248,951.38
Items attributable to the owners of the parent company 2,412,491,112.70 2,210,716,049.71
Items attributable to non-controlling shareholders 68,849,358.43 91,532,901.67
VIII. Earnings per share (EPS):
(I) Basic EPS 1.3667 1.2648
(II) Diluted EPS 1.3667 1.2648
24
2020 Third Quarterly Report of Huadong Medicine Co., Ltd.
Lyu Liang Lyu Liang Qiu Renbo
Legal representative Officer in charge of accounting Head of accounting department
6. Parent company income statement for the nine months ended September 30 th, 2020
Unit: RMB
Amount incurred during the Amount incurred during the
Items
current period previous period
I. Operating revenue 12,524,155,787.68 14,392,526,732.46
Less: Operating cost 11,832,645,980.78 13,648,150,345.97
Taxes and surcharges 17,516,737.10 11,915,143.04
Selling expenses 274,326,909.83 291,307,268.26
Administrative expenses 101,587,315.46 91,903,249.87
R&D expenses
Financial expenses 10,625,855.13 47,730,859.54
Including: Interest expenses 50,099,348.96 65,869,669.49
Interest income 37,642,861.40 19,423,488.79
Add: Other income 13,219,874.83 3,975,252.18
Investment income (or less: losses) 1,176,246,567.15 872,157,276.84
Including: Investment income from associates and joint
ventures
Gains from the derecognition of financial assets measured at
amortized cost
Gains on net exposure to hedging risk (or less: losses)
Gains on changes in fair value (or less: losses)
Credit impairment loss (less: losses) 25,531,116.40 -62,996,903.82
Assets impairment loss (less: losses)
Gains on asset disposal (or less: losses) -1,625.56 114,481,393.83
II. Operating profit (or less: losses) 1,502,448,922.20 1,229,136,884.81
Add: Non-operating revenue 4,903,192.05 6,333,924.40
Less: Non-operating expenditures 6,705,472.84 5,584,454.90
III. Profit before tax (or less: total loss) 1,500,646,641.41 1,229,886,354.31
Less: Income tax 84,647,699.00 105,280,681.41
IV. Net profit (or less: net loss) 1,415,998,942.41 1,124,605,672.90
(I) Net profit from continuing operations (or less: net loss) 1,415,998,942.41 1,124,605,672.90
(II) Net profit from discontinued operations (or less: net loss)
V. Other comprehensive income after tax
(I) Not to be reclassified subsequently to profit or loss
1.Changes in remeasurement on the net defined benefit plan
2. Items under equity method that will not be reclassified to
profit or loss
3. Changes in fair value of other equity instrument
investments
4. Changes in fair value of own credit risk
5. Others
(II) To be reclassified subsequently to profit or loss
25
2020 Third Quarterly Report of Huadong Medicine Co., Ltd.
Amount incurred during the Amount incurred during the
Items
current period previous period
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. Provision for credit impairment 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 1,415,998,942.41 1,124,605,672.90
VII. Earnings per share (EPS):
(I) Basic EPS
(II) Diluted EPS
7. Consolidated cash flow statement for the nine months ended September 30th, 2020
Unit: RMB
Amount incurred during the Amount incurred during the
Items
current period previous period
I. Cash flows from operating activities:
Cash receipts from sale of goods or rendering of services 26,358,487,943.05 27,974,289,685.61
Net increase of client deposit and interbank deposit
Net increase of central bank loans
Net increase of loans from other financial institutions
Cash receipts from original insurance contract premium
Net cash receipts from reinsurance
Net increase of policy-holder deposit and investment
Cash receipts from interest, handling charges and
commission
Net increase of loans from others
Net increase of repurchase
Net cash receipts from agency security transaction
Receipts of tax refund 17,066,804.84 3,509,309.91
Other cash receipts related to operating activities 862,918,296.18 910,566,277.20
Subtotal of cash inflows from operating activities 27,238,473,044.07 28,888,365,272.72
Cash payments for goods purchased and services received 17,188,966,687.14 19,475,142,964.99
Net increase of loans and advances to clients
Net increase of central bank deposit and interbank deposit
Cash payments for insurance indemnities of original
insurance contracts
Net increase of loans to others
Cash payments for interest, handling charges and
commission
Cash payments for policy bonus
Cash paid to and on behalf of employees 1,623,091,615.04 1,392,446,790.07
26
2020 Third Quarterly Report of Huadong Medicine Co., Ltd.
Amount incurred during the Amount incurred during the
Items
current period previous period
Cash payments for taxes and rates 1,795,768,635.77 1,721,105,543.87
Other cash payments related to operating activities 4,728,831,749.46 5,390,631,727.85
Subtotal of cash outflows from operating activities 25,336,658,687.41 27,979,327,026.78
Net cash flows from operating activities 1,901,814,356.66 909,038,245.94
II. Cash flows from investing activities:
Cash receipts from withdrawal of investments
Cash receipts from investment income 900,000.00 900,000.00
Net cash receipts from the disposal of fixed assets, intangible 349,442,817.74 44,373,345.73
assets and other long-term assets
Net cash receipts from the disposal of subsidiaries & other
business units
Other cash receipts related to investing activities
Subtotal of cash inflows from investing activities 350,342,817.74 45,273,345.73
Cash payments for the acquisition of fixed assets, intangible 864,848,688.33 892,858,638.47
assets and other long-term assets
Cash payments for investments 405,535,000.00 256,944,900.00
Net increase of pledged borrowings
Net cash payments for the acquisition of subsidiaries & other 1,199,793.01
business units
Other cash payments related to investing activities 53,505,038.76
Subtotal of cash outflows from investing activities 1,270,383,688.33 1,204,508,370.24
Net cash flows from investing activities -920,040,870.59 -1,159,235,024.51
III. Cash flows from financing activities:
Cash receipts from absorbing investments 9,800,000.00
Including: Cash received by subsidiaries from
non-controlling shareholders as investments
Cash receipts from borrowings 2,044,165,545.94 1,564,929,901.12
Other cash receipts related to financing activities 340,000,000.00 4,000,000.00
Subtotal of cash inflows from financing activities 2,384,165,545.94 1,578,729,901.12
Cash payments for the repayment of borrowings 2,161,566,863.78 1,522,743,554.14
Cash payments for distribution of dividends or profits and for 612,515,321.94 658,094,315.61
interest expenses
Including: Cash paid by subsidiaries to non-controlling 49,000,000.00 50,512,000.00
shareholders as dividend or profit
Other cash payments related to financing activities 357,318,045.74 18,080,734.99
Subtotal of cash outflows from financing activities 3,131,400,231.46 2,198,918,604.74
Net cash flows from financing activities -747,234,685.52 -620,188,703.62
IV. Effect of foreign exchange rate changes on cash & cash 4,496,816.65 -7,776,333.09
equivalents
V. Net increase in cash and cash equivalents 239,035,617.20 -878,161,815.28
Add: Opening balance of cash and cash equivalents 2,231,771,546.50 2,398,709,506.06
VI. Closing balance of cash and cash equivalents 2,470,807,163.70 1,520,547,690.78
27
2020 Third Quarterly Report of Huadong Medicine Co., Ltd.
8. Parent company cash flow statement for the nine months ended September 30 th, 2020
Unit: RMB
Amount incurred during the Amount incurred during the
Items
current period previous period
I. Cash flows from operating activities:
Cash receipts from sale of goods and rendering of services 12,935,662,538.65 14,477,219,497.23
Receipts of tax refund
Other cash receipts related to operating activities 714,162,920.94 874,387,153.77
Subtotal of cash inflows from operating activities 13,649,825,459.59 15,351,606,651.00
Cash payments for goods purchased and services received 12,426,006,273.13 14,681,841,784.49
Cash paid to and on behalf of employees 161,360,230.08 116,707,767.78
Cash payments for taxes and rates 135,414,309.46 233,069,793.79
Other cash payments related to operating activities 667,058,317.34 843,853,594.57
Subtotal of cash outflows from operating activities 13,389,839,130.01 15,875,472,940.63
Net cash flows from operating activities 259,986,329.58 -523,866,289.63
II. Cash flows from investing activities:
Cash receipts from withdrawal of investments
Cash receipts from investment income 601,000,000.00 432,512,000.00
Net cash receipts from the disposal of fixed assets, intangible 61,021.65 43,344,599.85
assets and other long-term assets
Net cash receipts from the disposal of subsidiaries & other
business units
Other cash receipts related to investing activities 904,005,896.98 491,900,000.00
Subtotal of cash inflows from investing activities 1,505,066,918.63 967,756,599.85
Cash payments for the acquisition of fixed assets, intangible 24,712,423.82 30,322,745.47
assets and other long-term assets
Cash payments for investments 74,563,072.00 245,607,400.00
Net cash payments for the acquisition of subsidiaries & other
business units
Other cash payments related to investing activities 661,640,800.00 736,750,000.00
Subtotal of cash outflows from investing activities 760,916,295.82 1,012,680,145.47
Net cash flows from investing activities 744,150,622.81 -44,923,545.62
III. Cash flows from financing activities:
Cash receipts from absorbing investments
Cash receipts from borrowings 1,290,940,316.60 701,857,401.68
Other cash receipts related to financing activities 810,000,000.00 576,500,000.00
Subtotal of cash inflows from financing activities 2,100,940,316.60 1,278,357,401.68
Cash payments for the repayment of borrowings 1,415,944,581.11 674,787,776.40
Cash payments for distribution of dividends or profits and for 549,330,898.00 556,049,101.48
interest expenses
Other cash payments related to financing activities 439,430,995.85 92,000,000.00
Subtotal of cash outflows from financing activities 2,404,706,474.96 1,322,836,877.88
Net cash flows from financing activities -303,766,158.36 -44,479,476.20
IV. Effect of foreign exchange rate changes on cash and cash 1,987,917.74 106,466.60
equivalents
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2020 Third Quarterly Report of Huadong Medicine Co., Ltd.
Amount incurred during the Amount incurred during the
Items
current period previous period
V. Net increase in cash and cash equivalents 702,358,711.77 -613,162,844.85
Add: Opening balance of cash and cash equivalents 893,929,724.56 1,384,560,116.18
VI. Closing balance of cash and cash equivalents 1,596,288,436.33 771,397,271.33
II. Adjustments to financial statements
1. Adjustments to the comparative data in the financial statements at the beginning of the year due to the
first adoption of the new accounting standards governing revenue and leases since 2020
√ Applicable □ N/A
Whether to adjust the balance sheet accounts at the beginning of the year
√ Applicable □ N/A
Consolidated Balance Sheet
Unit: RMB
st st
Items December 31 , 2019 January 1 , 2020 Adjustments
Current assets:
Cash and bank balances 2,402,730,395.39 2,402,730,395.39
Settlement funds
Loans to other banks
Held-for-trading financial assets
Derivative financial assets
Notes receivable
Accounts receivable 6,092,305,184.47 2,402,730,395.39
Receivables financing 683,884,625.14 683,884,625.14
Advances paid 363,246,612.94 363,246,612.94
Premiums receivable
Reinsurance accounts receivable
Reinsurance reserve receivable
Other receivables 92,201,271.22 92,201,271.22
Including: Interest receivable
Dividend receivable 815,965.44 815,965.44
Financial assets under reverse repo
Inventories 4,038,975,496.93 4,038,975,496.93
Contract assets
Assets as held for sale
Non-current assets due within one year
Other current assets 62,526,471.96 62,526,471.96
Total current assets 13,735,870,058.05 13,735,870,058.05
Non-current assets:
Loans and advances paid
Debt investments
29
2020 Third Quarterly Report of Huadong Medicine Co., Ltd.
Items December 31st, 2019 January 1st, 2020 Adjustments
Other debt investments
Long-term receivable
Long-term equity investments 222,595,018.54 222,595,018.54
Other equity instrument investments 241,675,712.05 222,595,018.54
Other non-current financial assets
Investment property 21,701,908.75 21,701,908.75
Fixed assets 2,175,216,842.65 2,175,216,842.65
Construction in progress 1,829,808,233.19 1,829,808,233.19
Productive biological assets
Oil & gas assets
Use right assets
Intangible assets 1,454,900,160.45 1,454,900,160.45
Development expenditures
Goodwill 1,469,617,262.10 1,469,617,262.10
Long-term prepayments 12,289,677.31 12,289,677.31
Deferred tax assets 116,157,614.47 116,157,614.47
Other non-current assets 184,141,659.07 184,141,659.07
Total non-current assets 7,728,104,088.58 7,728,104,088.58
Total assets 21,463,974,146.63 21,463,974,146.63
Current liabilities:
Short-term borrowings 655,549,973.27 655,549,973.27
Central bank loans
Loans from other banks
Held-for-trading financial liabilities
Derivative financial liabilities
Notes payable 613,374,356.61 613,374,356.61
Accounts payable 3,789,054,234.58 3,789,054,234.58
Advances received 254,888,911.30 30,272,668.58 -224,616,242.72
Contract liabilities 224,616,242.72 224,616,242.72
Financial liabilities under repo
Absorbing deposit and interbank deposit
Deposit for agency security transaction
Deposit for agency security underwriting
Employee benefits payable 132,584,982.71 132,584,982.71
Taxes and rates payable 532,802,157.61 532,802,157.61
Other payables 1,365,152,290.99 1,365,152,290.99
Including: Interest payable
Dividend payable 224,219.60 224,219.60
Handling fee and commission payable
Reinsurance accounts payable
Liabilities classified as held for sale
Non-current liabilities due within one year 1,053,231,727.73 1,053,231,727.73
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2020 Third Quarterly Report of Huadong Medicine Co., Ltd.
Items December 31st, 2019 January 1st, 2020 Adjustments
Other current liabilities
Total current liabilities 8,396,638,634.80 8,396,638,634.80
Non-current liabilities:
Insurance policy reserve
Long-term borrowings
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables 48,080,030.00 48,080,030.00
Long-term employee benefits payable
Provisions 52,066,643.01 52,066,643.01
Deferred income 60,960,255.68 60,960,255.68
Deferred tax liabilities 39,604,343.27 39,604,343.27
Other non-current liabilities
Total non-current liabilities 200,711,271.96 200,711,271.96
Total liabilities 8,597,349,906.76 8,597,349,906.76
Equity:
Share capital 1,749,809,548.00 1,749,809,548.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserve 2,158,080,661.07 2,158,080,661.07
Less: Treasury shares
Other comprehensive income 22,792,488.80 22,792,488.80
Special reserve
Surplus reserve 710,359,967.51 710,359,967.51
General risk reserve
Undistributed profit 7,668,434,642.62 7,668,434,642.62
Total equity attributable to the parent company 12,309,477,308.00 12,309,477,308.00
Non-controlling interest 557,146,931.87 557,146,931.87
Total equity 12,866,624,239.87 557,146,931.87
Total liabilities & equity 21,463,974,146.63 21,463,974,146.63
Balance Sheet of the Parent Company
Unit: RMB
Items December 31st, 2019 January 1st, 2020 Adjustments
Current assets:
Cash and bank balances 893,939,724.56 893,939,724.56
Held-for-trading financial assets
31
2020 Third Quarterly Report of Huadong Medicine Co., Ltd.
Items December 31st, 2019 January 1st, 2020 Adjustments
Derivative financial assets
Notes receivable
Accounts receivable 3,601,796,850.84 3,601,796,850.84
Receivables financing 102,285,661.94 102,285,661.94
Advances paid 183,776,687.98 183,776,687.98
Other receivables 857,127,207.17 857,127,207.17
Including: Interest receivable
Dividend receivable
Inventories 1,726,815,773.41 1,726,815,773.41
Contract assets
Assets classified as held for sale
Non-current assets due within one year
Other current assets 4,529,331.87 4,529,331.87
Total current assets 7,370,271,237.77 7,370,271,237.77
Non-current assets:
Debt investments
Other debt investments
Long-term receivable
Long-term equity investments 4,809,521,228.65 4,809,521,228.65
Other equity instrument investments 92,108,957.26 92,108,957.26
Other non-current financial assets
Investment property 8,591,809.18 8,591,809.18
Fixed assets 144,102,366.02 144,102,366.02
Construction in progress 15,728,406.26 15,728,406.26
Productive biological assets
Oil & gas assets
Use right assets
Intangible assets 45,226,361.12 45,226,361.12
Development expenditures
Goodwill
Long-term prepayments 975,689.14 975,689.14
Deferred 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 5,173,180,402.43 5,173,180,402.43
Total assets 12,543,451,640.20 12,543,451,640.20
Current liabilities:
Short-term borrowings 55,000,000.80 55,000,000.80
Held-for-trading financial liabilities
Derivative financial liabilities
Notes payable 81,036,745.94 81,036,745.94
Accounts payable 2,469,675,798.54 2,469,675,798.54
Advances received 52,914,932.34 6,087,558.59 -46,827,373.75
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2020 Third Quarterly Report of Huadong Medicine Co., Ltd.
Items December 31st, 2019 January 1st, 2020 Adjustments
Contract liabilities 46,827,373.75 46,827,373.75
Employee benefits payable 3,203,215.95 3,203,215.95
Taxes and rates payable 32,881,935.68 32,881,935.68
Other payables 638,551,969.04 638,551,969.04
Including: Interest payable
Dividend payable 224,219.60 224,219.60
Liabilities as held for sale
Non-current liabilities due within one year 1,028,002,952.88 1,028,002,952.88
Other current liabilities
Total current liabilities 4,361,267,551.17 4,361,267,551.17
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables
Long-term employee benefits payable
Provisions
Deferred income 43,264,785.87 43,264,785.87
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities 43,264,785.87 43,264,785.87
Total liabilities 4,404,532,337.04 4,404,532,337.04
Equity:
Share capital 1,749,809,548.00 1,749,809,548.00
Other equity instruments
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
Special reserve 847,526.06
Surplus reserve 788,215,726.95 788,215,726.95
Undistributed profit 3,431,594,974.14 3,431,594,974.14
Total equity 8,138,919,303.16 8,138,919,303.16
Total liabilities & equity 12,543,451,640.20 12,543,451,640.20
2. Reason for the retrospective adjustments to the prior comparative data due to the first adoption of the
new accounting standards governing revenue and leases since 2020
□ Applicable √ N/A
33
2020 Third Quarterly Report of Huadong Medicine Co., Ltd.
III. Auditors’ report
Has the third quarterly report been audited?
□ Yes √ No
The third quarterly report has not been audited.
Huadong Medicine Co., Ltd.
Chairman of the Board: Lyu Liang
October 27th, 2020
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