Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
Huadong Medicine Co., Ltd.
Semi-Annual Report 2022
August 2022
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Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
Section I. Important Declaration, Contents and Definitions
The Board of Directors, Board of Supervisors, directors, supervisors
and senior management of Huadong Medicine Co., Ltd. (hereinafter
referred to as the “Company”) hereby guarantee that the information
presented in this half year report is authentic, accurate and complete and
free of any false records, misleading statements or material omissions,
and shall undertake individual and joint legal liabilities.
Lv Liang, the Company’s legal representative and the officer in
charge of accounting, and Qiu Renbo, head of accounting department
(accounting supervisor) hereby declare and guarantee that the financial
statements in this half year report are authentic, accurate and complete.
All directors have attended the Board of Directors meeting to review
this half year report.
The future plans, development strategies and other forward-looking
statements in this half year report shall not be considered as substantial
commitment of the Company to investor. Investors and related parties
should maintain sufficient risk awareness, and should understand the
difference between plans, forecasts and promises.
The risks the Company faces in operation including industry policy
and market operation risk, new drug R&D risk, exchange rate
fluctuation risk and goodwill impairment risk , etc. For details, refer to
“X. Risks and Countermeasures” in “Section III. Discussion and Analysis
of the Management”. We thank all investors for paying attention to the
Company’s operations, and we hope that you can be aware of investment
risks.
The company does not plan to distribute cash dividends, no bonus
share will be issued; and no capital reserve will be converted to increase
the share capital.
According to “Stock Listing Rules of the Shenzhen Stock Exchange”,
if listed companies have both Chinese or other language version of public
notice, they should ensure the content of both versions are the same. In
the case of discrepancy, the original version in Chinese shall prevail.
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Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
Contents
Section I. Important Declaration, Contents and Definitions...................................... 2
Contents .................................................................................................................................................... 3
Definitions ............................................................................................................................................... 5
Section II. Company Profile and Key Financial Indicators ....................................... 7
Section III. Discussion and Analysis of the Management..........................................10
Section IV. Corporate Governance ..........................................................................................57
Section V. Environmental and Social Responsibility....................................................60
Section VI. Important Matters ....................................................................................................72
Section VII. Share Change and Shareholders....................................................................92
Section VIII. Preferred Shares..................................................................................................100
Section IX. Information about Bonds ..................................................................................101
Section X. Financial Report .......................................................................................................102
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Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
Contents of Reference File
I. Financial statements signed and stamped by the legal representative, the person in
charge of accounting work and the head of accounting institution (accounting manager).
II. The original of all Company’s documents publicly disclosed in the press designated by
CSRC during the reporting period and the original of announcements.
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Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
Definitions
Term refers to Definition
CSRC refers to China Securities Regulatory Commission
SSE refers to Shenzhen Stock Exchange
Huadong Medicine/the Company/our Company refers to Huadong Medicine Co., Ltd.
CGE refers to China Grand Enterprises, Inc.
Huadong Medicine Group refers to Hangzhou Huadong Medicine Group Co., Ltd.
Zhongmei Huadong refers to Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd.
Jiangdong Company refers to Hangzhou Zhongmei Huadong Pharmaceutical Jiangdong Co., Ltd.
Jiuyang Bio refers to Jiangsu Jiuyang Biopharm Co., Ltd.
Xi’an Bohua refers to Huadong Medicine (Xi’an) Bohua Pharmaceutical Co., Ltd.
Jiuyuan Gene refers to Hangzhou Jiuyuan Gene Engineering Co., Ltd.
Doer Biologics refers to Zhejiang Doer Biologics Co., Ltd.
Huadong Ningbo Company refers to Huadong Ningbo Medicine Co., Ltd.
Chongqing Peg-Bio refers to Chongqing Peg-Bio Biopharm Co., Ltd.
Qyuns Therapeutics refers to Qyuns Therapeutics Co., Ltd.
Nuoling Bio refers to Nuoling Biomedical technology (Beijing) Co., Ltd.
Shanghai Grand Industrial and Financial Investment Management
Grand Chanrong refers to
Co., Ltd.
Hangzhou Gaotou refers to Hangzhou Hi-Tech Venture Capital Management Co., Ltd.
Grand Huachuang refers to Beijing Grand Huachuang Investment Co., Ltd.
Hangzhou Heda refers to Hangzhou Heda Industrial Fund Investment Co., Ltd.
Pharmaceutical Industry Fund/Fuguang Hangzhou Fuguang Hongxin Equity Investment Partnership
refers to
Hongxin (Limited Partnership)
Meihua Hi-Tech refers to Anhui Meihua Hi-Tech Pharmaceutical Co., Ltd.
Meiqi Health refers to Hubei Meiqi Health Technology Co., Ltd.
Angel refers to Hubei Angel Bioengineering Group Co., Ltd.
Takeda refers to Takeda Pharmaceuticals Company Ltd.
Sinclair refers to Sinclair Pharma Limited
vTv refers to vTv Therapeutics LLC
R2 refers to R2 Technologies,Inc.
MediBeacon refers to MediBeacon Inc.
ImmunoGen refers to ImmunoGen, Inc.
Provention Bio refers to Provention Bio, Inc.
RAPT refers to RAPT Therapeutics,Inc.
Kylane refers to Kylane Laboratoires SA
High Tech refers to High Technology Products, S.L.U.
Exscientia refers to Exscientia Ltd.
Heidelberg Pharma refers to Heidelberg Pharma AG
Kiniksa refers to Kiniksa Pharmaceuticals (UK), Ltd.
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Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
KiOmed refers to KiOmed Pharma SA
Daewon refers to Daewon Pharmaceutical Co., Ltd.
AKSO refers to AKSO Biopharmaceutical, Inc.
Ashvattha refers to Ashvattha Therapeutic, Inc.
SCOHIA refers to SCOHIA PHARMA, Inc.
EMAAesthetics refers to EMA Aesthetics Limited
Julphar refers to Gulf Pharmaceutical Industries PJSC(JULPHAR)
GMP refers to Good Manufacturing Practice
cGMP refers to Current Good Manufacture Practices
GSP refers to Good Supply Practice
BE refers to Bioequivalence
Center for Drug Evaluation (of National Medical Products
CDE refers to
Administration)
MAH refers to Marketing Authorization Holder
FDA refers to (U.S.) Food and Drug Administration
NMPA refers to National Medical Products Administration
NHSA refers to National Healthcare Security Administration
NDA refers to New Drug Application
ANDA refers to Abbreviated New Drug Application (or Generic Drug Application)
International Council for Harmonisation (of Technical Requirements
ICH refers to
for Pharmaceuticals for Human Use)
IND refers to Investigational New Drug
PK/PD refers to pharmacokinetics/pharmacodynamics
CMC refers to Chemistry, Manufacturing and Control
CMO refers to Contract Manufacturing Organization
CDMO refers to Contract Development and Manufacturing Organization
QA refers to Quality Assurance (department)
ADC refers to Antibody-Drug Conjugates
EBD refers to Energy Based Device
BD refers to Business Development
EBITDA refers to Earnings Before Interest, Taxes, Depreciation and Amortization
EHS refers to Environment, Health, Safety
MRCT refers to International Multi-center Clinical Trial
OTC refers to Over The Counter
refers to Drugs that require medical prescriptions issued by physicians to be
Prescription Drugs
bought and used
refers to Catalogue of Drugs for Basic National Medical
Catalogue of Drugs for Insurance（2021）
Insurance/Employment Injury Insurance/Birth Insurance（2021）
Reporting Period refers to From January 1, 2022 to June 30, 2022
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Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
Section II. Company Profile and Key Financial Indicators
I. Company information
Stock name (abbreviation) Huadong Medicine Stock code 000963
Stock listed on Shenzhen Stock Exchange
Company name in Chinese 华东医药股份有限公司
Company name in Chinese
华东医药
(abbreviation, if any)
Company name in English (if
HUADONG MEDICINE CO., LTD
any)
Company name in English
HUADONG MEDICINE
(abbreviation, if any)
Legal representative Lv Liang
II. Contact persons and contact information
Secretary of the Board of Directors Securities Affairs Representative
Name Chen Bo /
Contact address 866 Moganshan Road, Hangzhou /
Tel. 0571-89903300 /
Fax 0571-89903300 /
Email address hz000963@126.com /
III. Other information
1. Company’s contact information
Whether there is any change in the Company’s registered address, office address, zip code, company website or company
email address during the reporting period.
□ Applicable √ N/A
There is no change in the Company’s registered address, office address, zip code, company website or company email
address during the reporting period. For details, please refer to 2021 Annual Report.
2. Information disclosure and place of the report
Whether there is alteration in information disclosure and place of the report during the reporting period.
□ Applicable √ N/A
The media selected by the Company for information disclosure, the website designated by CSRC for publication of the
half year report, and the location of preparation of the Company’s half year report have not changed during the reporting
period. For details, please refer to the 2021 Annual Report.
3.Other information
Changes of other related materials
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Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
□Applicable Not applicable
IV. Key accounting data and financial indicators
Whether the Company needs to perform a retroactive adjustment or restatement of previous accounting data
□Yes √No
Change of the current
Current reporting period Same period last year reporting period over the
same period last year(%)
Operating revenue (yuan) 18,197,963,991.01 17,179,437,902.61 5.93%
Net profit attributable to shareholders of
1,340,570,484.98 1,300,346,324.85 3.09%
listed companies (yuan)
Net profit attributable to shareholders of
listed companies after deducting non- 1,271,839,179.63 1,193,980,887.18 6.52%
recurring gains/losses (yuan)
Net cash flow from operating activities
284,234,410.27 1,738,512,372.11 -83.65%
(yuan)
Basic earnings per share (yuan/share) 0.7661 0.7431 3.10%
Diluted earnings per share (yuan/share) 0.7661 0.7431 3.10%
Weighted average return on equity (ROE) 7.79% 8.54% -0.75%
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) 28,760,972,695.55 26,996,403,366.69 6.54%
Net assets attributable to shareholders of
17,348,589,995.88 16,579,374,323.08 4.64%
listed companies (yuan)
Share capital of the Company as of the trading day before disclosure
Share capital of the Company as of the trading day before 1,749,809,548.00
disclosure (share)
Fully diluted earnings per share calculated on the basis of the latest Share capital
Dividends paid on preferred shares 0.00
Perpetual bond interest paid (yuan) 0.00
Fully diluted earnings per share calculated on the basis of the 0.7661
latest Share capital (yuan/share)
V. Differences in accounting data under domestic and overseas accounting standards
1. Differences in net profit and net assets disclosed in financial statements under international and
Chinese accounting standards
□ Applicable √ N/A
There are no differences in net profit and net assets disclosed in financial statements under international and Chinese
accounting standards.
2. Differences in net profit and net assets disclosed in financial statements under overseas and
Chinese accounting standards
□ Applicable √ N/A
There are no differences in net profit and net assets disclosed in financial statements under overseas and Chinese
accounting standards.
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Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
VI. Items and amounts of non-recurring gains/losses
√ Applicable □ N/A
Unit: RMB yuan
Item Amount Note
Gains/losses on disposal of non-current assets (including
the written-off part of the accrued assets impairment 8,869,764.03
reserve)
Tax refund and reduction with ultra vires examination and
approval or without official approval documents 2,460,133.93
Government grants included in current gains/losses Mainly due to the
(excluding those closely related to daily business operation confirmation of
and distributed constantly in accordance with certain 79,193,296.76 government grants by
standard quota or quantity in line with national policies subsidiaries in the current
and regulations) period.
Other non-operating revenue or expenditure expect above-
-4,584,744.04
mentioned items
Minus: Amount affected by income tax 15,093,154.00
Amount affected by rights and interests of minority
2,113,991.33
stakeholders (after tax)
Total 68,731,305.35
Details of other items of gains/losses meet the definition of non-recurring gains/losses:
□ Applicable √ N/A
There are no other profit and loss items in line with the definition of non-recurring gains and losses in the Company.
Explanation for recognizing an item listed as a non-recurring gain/loss in the “Interpretative Announcement No. 1 on
Information Disclosure Criteria for Public Companies – Non-Recurring Profit/Loss” as a recurring gain/loss
□Applicable √ N/A
Explanation for recognizing an item listed as a non-recurring gain/loss in the “Interpretative Announcement No. 1 on
Information Disclosure Criteria for Public Companies – Non-Recurring Profit/Loss” as a recurring gain/loss.
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Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
Section III. Discussion and Analysis of the Management
I. Main business of the company during the reporting period
1. Main business of the company
Huangdong Medicine Co., Ltd (hereinafter referred to as the “Company”) (Stock
Code: 000963), founded in 1993, is headquartered in Hangzhou, Zhejiang Province. It was
listed on the Shenzhen Stock Exchange in December 1999. After more than 20 years of
development, the Company’s business has covered the entire pharmaceutical industrial
chain. With dominance in the pharmaceutical sector, the Company also expands its
aesthetic medicine and industrial microbial business, making the Company a large-scale
comprehensive pharmaceutical listed company integrating pharmaceutical R&D,
manufacturing and distribution.
With the pharmaceutical industry deeply engaged in the R&D, manufacturing and
sales of specialty medicine, chronic disease medicine and special medicine, the Company
has formed a complete pharmaceutical manufacturing and quality research system, as well
as a core product pipeline focusing on the fields of chronic kidney disease, transplantation
immunity, endocrinology and digestive system, and it has a number of first-line clinical
medicine with market advantages in China. At the same time, the Company focuses on the
R&D of innovative medicine and the generic medicine with high-tech barriers in the three
core treatment fields of oncology, endocrine and autoimmunity through independent
development, external introduction and project cooperation. The Company continuously
carry out international product registration, international certification, and consistency
assessment, and continuously to achieve results. It has established an international-oriented
pharmaceutical industry system, and has maintained healthy R&D and product cooperation
relationship with many international innovative and R&D enterprises.
The pharmaceutical business of the Company has four business segments, namely,
Chinese and Western medicine, medical devices, medicinal ginseng, and health industry,
covering general pharmaceutical merchandising, pharmaceutical retail, third-party
pharmaceutical goods flow characterized by a cold chain, pharmaceutical e-commerce,
hospital value-added services and characteristic large health industry. Besides, the
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Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
Company further develops the field of product agency and market expansion. The
traditional Chinese medicine industry has built a whole industrial chain from base planting
to decoction piece processing, automatic decoction and functional products, so as to
provide customers with comprehensive solutions.
Committed to the strategy of "global operation layout and double-cycle operation and
development", the aesthetic medical business of the Company has more than 30 products
in the non-invasive + minimally invasive aesthetic medical fields with a forward-looking
layout and international vision, including more than 20 products listed at home and abroad,
and more than 10 global innovative products under research. The product portfolio covers
non-surgical mainstream aesthetic medical fields such as facial filling, facial cleaning,
thread lifting, skin care management, body shaping, hair removal, and private part repair.
A comprehensive product cluster has been formed, and the number of products and
coverage areas have been at the forefront of the industry. Sinclair, a wholly owned
subsidiary, is the Company’s global aesthetic medical operation platform. Headquartered
in the United Kingdom, it has manufacturing bases in the Netherlands, France, the United
States, Switzerland and Bulgaria. Sinclair promotes and sells products such as long-acting
microspheres for injection, hyaluronic acid and facial lifting in the global market, and
explores and develops the business of energy-based devices for aesthetic medicine in the
global market through High Tech and Viora, the Company’s wholly owned subsidiaries.
The aesthetic medical segment also includes Sinclair (Shanghai) the Company’s wholly
owned operation and sales subsidiary in the Chinese market, and R2 in the United States
and kylane in Switzerland, the Company’s overseas technology R&D subsidiaries.
The Company has been deeply engaged in the field of industrial microbial for more
than 40 years. With a profound industrial foundation and transformation capacity, the
Company has successfully developed and produced a variety of microbial medicine and
built a key technology system for R&D and manufacturing of microbial products. The scale
and technical level of existing microbial fermentation products features an industry-leading
level. The Company has three microbial R&D platforms in Zhongmei Huadong, Huida
Biotech and Huiyi Biotech, five industrial bases of Hangzhou Xiangfu Qiao industrial base,
Qiantang New District industrial base, Jiangsu Jiuyang industrial base, Meiqi Health
industrial base and Meihua Hi-tech industrial base, and the largest fermentation monomer
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Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
workshop in Zhejiang Province and the industry-leading capacity in microbial medicine
manufacturing. The R&D capability covers all stages of microbial engineering technology,
such as strain cultivation, metabolic control, separation and purification, enzyme catalysis,
synthesis and modification, and has established a complete manufacturing system for
microbial project R&D, pilot test, commercial manufacturing, engineering and public
system support. At present, the Company has more than 100 R&D projects in the industrial
microbial field.
2. Overview of the Company’s operations during the reporting period
In the first half of 2022, under the complex situation of intensified international
geopolitical landscape conflicts, rising global stagflation risk and repeated outbreak of
global COVID-19 pandemic, China’s economy faces increased risks and uncertainties.
Although the uncertainty of the external environment and the partial outbreak of the
pandemic have brought obvious pressure on the domestic macro-economic development,
through the effective pandemic prevention and control combined with the simultaneous
implementation of a series of practical and effective measures for economic and social
development, the domestic pandemic prevention and control has achieved positive results,
and various economic stabilization policies and measures have made positive progress. The
overall situation is stable and positive, and China’s economy has further demonstrated
strong development resilience with a very hard-won mid-year report card.
During the Reporting Period, in the face of various pressures and challenges such as
the complex and changeable external environment, frequent outbreak of domestic
pandemic and declining market demand, the Company actively implemented the spirit of
the annual work conference, promoted development and stability through fights, and
coordinated the pandemic prevention and control with various transformation and
innovation tasks. Meanwhile, as unswervingly taking the recovery of growth as the core
target, the Company paid close attention to the work style, and actively promoted the steady
progress of manufacturing and operation, thus achieving sound operating results, realizing
a growth under complex and difficult environment, and successfully completing the
business targets of the first half of 2022. During the Reporting Period, the Company
realized an operating income of RMB18,198 million, a year-on-year increase of 5.93% (a
year-on-year increase of 0.4% in the first quarter); it realized the net profit net of non-
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Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
recurring gains and losses attributable to shareholders of the listed company of RMB1,272
million, a year-on-year increase of 6.52% (a year-on-year increase of 0.4% in the first
quarter); if the calculation is based on the same standard as charging off the previous year’s
annual report of Huadong Ningbo Company, the Company’s holding subsidiary, the
Company’s operating income during the Reporting Period increased by 9.56% year-on-
year, and the net profit net of non-recurring gains and losses attributable to shareholders of
the listed company increased by 8.5% year-on-year. The overall operation of the Company
shows a sustained and steady growth trend. (Note: Huadong Ningbo Company, which has
been closed and liquidated in the Reporting Period, realized an operating income of
RMB569 million in the previous Reporting Period, including an operating income of
RMB380 million from aesthetic medical agency business, and a net profit attributable to
the Company’s consolidated statements of RMB25.67 million.)
In the second quarter of 2022, the Company overcame various unfavorable factors
and achieved growth in the pharmaceutical industry, pharmaceutical business, aesthetic
medical business and industrial microbial business. The Company realized a total operating
income of RMB9,265 million, a year-on-year increase of 11.86%; it realized the net profit
net of non-recurring gains and losses attributable to shareholders of the listed company of
RMB573 million, a year-on-year increase of 15.06%.
Specific operation of each business segment during the Reporting Period:
1. The pharmaceutical industry recovered steadily, and the R&D and innovation
continuously accelerated
During the Reporting Period, closely focused on the Company’s strategic goals and
annual business plans, Zhongmei Huadong, the Company’s core subsidiary, carried out
various tasks, withstood the pressure from all aspects, actively overcome the difficulties in
the Volume-Based Procurement program, the price reduction in medical insurance
negotiation and the pandemic in the first half of 2022, and continuously maintained a stable
and positive trend in manufacturing and operation. In the second quarter, the sales of core
products kept increasing, becoming the core driving force for the Company’s overall
performance growth. In the Reporting Period, Zhongmei Huadong realized an operating
income of RMB5.5 billion, a year-on-year increase of 1.4%; it realized the net profit net of
non-recurring gains and losses of RMB1.06 billion, a year-on-year decrease of 4.3% (a
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Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
year-on-year decrease of 13.41% in the first quarter), and the net profit net of non-recurring
gains and losses attributable to the parent company of RMB1,064 million, a year-on-year
decrease of 3.7%, which was significantly narrowed compared with the first quarter.
Specifically, the operating income in the second quarter was RMB2.71 billion, a year-
on-year increase of 16.2%; the net profit attributable to the parent company was RMB540
million, a year-on-year increase of 16.5%, and the net profit net of non-recurring gains and
losses attributable to the parent company was RMB490 million, a year-on-year increase of
12%. The downward trend has been reversed, and the performance has begun to gradually
increase. During the Reporting Period, the Company continuously increased investment,
accelerated the promotion of R&D, innovation and clinical registration, achieving positive
progress. For details, please refer to the corresponding contents of R&D.
During the Reporting Period, the Company’s manufacturing system continuously
created new operation modes, developed an open manufacturing system, realized the
integrated management of the manufacturing system, and deeply promoted the extensive
lean manufacturing and full cost management of all employees. Besides, the Company
continuously carried out technological innovation, reduced energy consumption, and
improved manufacturing efficiency and per capita labor efficiency while ensuring market
supply. In addition, the Company strengthened the of quality compliance management and
GMP normalized management, actively promoted the internationalization process, and
continuously carried out the international registration and certification of products. During
the Reporting Period, Zhongmei Huadong’s Pantoprazole Sodium for Injection, which had
been approved by the US FDA, was exported to the US market, marking an important
achievement of the Company’s preparation product internationalization.
During the Reporting Period, the Pharmaceutical Service Company of Zhongmei
Huadong actively improved the pharmaceutical service capability in an all-round way
through fine management. On the premise of constantly improving market access and
professional promotion capability and stabilizing the basic hospital market, the company
actively extended to the outside market, deeply explored the potential of the outside and
online markets, and continuously built multi-dimensional marketing ability. The company
optimized the talent training mechanism and created a team of pharmaceutical service
talents. By strengthening talent training and external introduction, the company
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Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
continuously strengthened the development of county and grass-roots markets in various
provinces and cities, paid close attention to the coverage of grass-roots terminals, focused
on the blank market and hospital development, and built a grass-roots benchmark hospital.
Besides, the company also launched an academic activity management system, actively
cooperated with the Company’s Internet hospitals to promote the digital transformation of
marketing and optimize the external promotion service system, so as to promote the
continuous deepening of transformation of the pharmaceutical service company.
In June 2022, Acarbose Tablets (50 mg) and Pantoprazole Sodium for Injection (40
mg) from Zhongmei Huadong were successfully selected in the renewed contract of 44
consecutive varieties of the Volume-Based Procurement program carried out by the
medicine alliance consisted of 13 provinces including Henan Province. The results of
contract renewal of the Volume-Based Procurement program have been implemented in
the provinces of the alliance since July 2022.
In July 2022, Zhongmei Huadong and Xi’an Bohua participated in the bidding of the
seventh batch of the Volume-Based Procurement program by the Joint Procurement Office
organized by the state. The Mycophenolate Mofetil Capsules and Pioglitazone
Hydrochloride Tablets of Zhongmei Huadong and the Ornidazole Tablets of Xi’an Bohua
participated in the bidding and were successfully qualified to win the bid. The seventh
batch of the Volume-Based Procurement program results is expected to be implemented
from November 2022.
2. The industrial microbial business maintained a sound development
momentum, continuously injecting new energy of R&D
During the Reporting Period, although the Company’s industrial microbial segment
was affected by the domestic pandemic, which led to the delay in the performance of some
sales contracts, the overall revenue of the segment continuously maintained a sound
development trend, a year-on-year increase of 31%, driven by the rapid growth of the
Company’s anti-infection and pharmaceutical intermediate raw material products in
overseas markets.
As the operation platform of the Company’s large health business in the industrial
microbial field, the green manufacturing project on functional health products invested by
Meiqi is about to start construction. At the same time of the project construction, the
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Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
entrusted manufacturing and sales of vitamin K2, Ectoin and other products have been
completed. In addition, Meiqi’s R&D project with sufficient technical reserves will make
full use of Angel’s domestic and international product registration capabilities in the field
of food and large health to accelerate the manufacturing layout and the building of business
promotion system, to accelerate the market development process of Meiqi.
Meihua Hi-tech (formerly Huachang High-tech), a wholly-owned acquired subsidiary,
was formally put into trial manufacturing at the end of April. Currently, it is undertaking
the manufacturing of nucleoside products and integrating the manufacturing of internal
API transfer. In the future, Meihua Hi-tech will become a brand-new industrialized
platform in the industrial microbial field. Taking nucleoside products as the core and
considering the layout of the Company’s upstream and downstream industrial chains, it
will create an industrialized base for special functional chemicals, pharmaceutical API and
high-end intermediates that meet international standards.
As an innovative R&D platform for the Company’s industrial microbial industry, the
holding subsidiary Huida Biotech continuously promoted product R&D and made positive
progress. In terms of the R&D and commercialization of ADC payloads, it has provided
CDMO services for ADC payloads, linkers and related products to more than 100
customers worldwide. Since its founded in 2020, Huida Biotech has established a good
reputation and brand image in the industry by virtue of its own advantages. Specifically,
Exatecan Mesylate and DM1 successively obtained the US DMF registration number in
January 2022 and July 2022, respectively.
In May 2022, the Company invested in a wholly-owned subsidiary, Huiyi Biotech,
which has a strong level of synthetic biology technology. Through the gene construction
and transformation of high-efficiency engineering strains such as yeast, Escherichia coli
and Bacillus subtilis, Huida Biotech has realized the wide application of biotechnology in
pharmaceutical engineering, fine chemicals, new biological materials and other fields.
Huiyi Biotech has a microbial cell plant construction platform, a biological enzyme
screening and evolution platform, and a fermentation and product separation and
purification platform. It has built an enzyme library resource including all seven major
enzyme systems. Besides, its business includes the R&D of industrial enzyme preparation,
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Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
the R&D of fermentation process optimization technology, and the R&D of bio-based
material technology.
In July 2022, the Company’s wholly-owned subsidiary Zhongmei Huadong, the
Gongshu Government in Hangzhou and Zhejiang University of technology jointly
established the Huadong Institute of Synthetic Biology Industry Technology (hereinafter
referred to as the "Institute"), which will focus on the four fields of nutrition and
pharmaceutical chemicals, aesthetic medical biology, biomaterials and health substitutes
based on synthetic biology technology. Meanwhile, the Institute insists on serving the
strategic needs of the national "bio-economy", and takes as breakthroughs the new
mechanism of intelligent biological manufacturing and industrial revolutionary technical
issues, while carrying out technological innovation research and industrial transformation
research around intelligent biological manufacturing with the help of artificial intelligence,
big data and intelligent automation equipment. The Institute is in the Huadong Medical
Life Science Industrial Park (the Company’s Xiangfu Qiao plant), and Zheng Yuguo, an
academician of the Chinese Academy of Engineering, is the president. Synthetic biology
is one of the core technologies that the Company relies on for the aesthetic medical
development. Through linkage, sharing and integration, the pioneer cooperation between
"government, industry and university in research and application" will accelerate the
transformation of innovative projects, which is expected to help build a new cluster of
biological manufacturing industry and give the Company a new impetus for industrial
microbial innovation.
3. The innovation business of pharmaceutical business was steadily promoted,
and all work was expanded smoothly
During the Reporting Period, the Company’s pharmaceutical business continuously
explored Zhejiang market, expanded the market outside the hospital market, and
accelerated the development of agency business. During the Reporting Period, the
operating income was RMB12,211 million, a year-on-year increase of 8.95%, and the
accumulated net profit was RMB198 million, a year-on-year increase of 16.52%.
In terms of pharmaceutical business, the Company thoroughly implemented the policy
of "everything for creating value". In terms of traditional business, the Company was
continuously deeply rooted in the Zhejiang market. In terms of innovative business, the
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Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
Company focused on such fields as product agency, third-party logistics, pharmaceutical
e-commerce, and characteristic large health. The Company adhered to consolidating the
hospital market, expanding the market outside the hospital market, strengthening the
innovative business, steadily improving the operation quality, profitability and operation
efficiency. The overall business has returned to the normal state before the pandemic.
Adhering to the concept of "providing the best services", the traditional business won
a reputation from the industry and customers with good services. The market share in the
hospital market continuously maintained a leading position in Zhejiang Province, and the
market outside the hospital market continuously grew rapidly. The hospital market focused
on key indicators such as new product introduction, hospital share, order fulfillment rate,
and actively cooperated in reform measures such as the Volume-Based Procurement and
distribution, and medical insurance with dual channels, so as to transform value-added
services such as policy affairs and pharmaceutical management into productivity; the
market focused on the introduction of new products through the joint procurement and
sales, strengthened the assessment on the introduction of new listed innovative medicine,
and ensured the account opening rate; the market would rationally undertake the Volume-
Based Procurement business and adjust the strategy in time; the market optimized variety
structure and expanded high potential varieties; the market cooperated with upstream
manufacturers to do a good job in new hospital access; with the help of the distribution
channels of the subsidiaries, the medicinal ginseng business improved the sales network of
Chinese herbal decoction pieces in the whole province, with the personnel and business
downward and a reliance on the expanded agent decoction of the automatic assembly line;
the traditional distribution of medical devices and product agency were carried out
simultaneously to continuously improve the market share of hospitals in various regions.
With a focus on creating new Huadong retail, the market outside the hospital market relied
on the advantages of "platform + product + network", expanded service scope, focused on
the development of stores in hospitals, near hospitals and DTP stores, optimized
community stores, improved the introduction of varieties, and did a good job in undertaking
outflow prescriptions.
In terms of innovative business, the Company developed beyond Zhejiang, reshaped
core competitiveness and brought new income generating opportunities. The Company
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Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
integrated internal and external resources, strengthened pharmaceutical e-commerce,
upgraded "Huadong Pharmaceutical Business Network" by "B2B + B2C", actively
operated self-operated flagship stores on various mainstream e-commerce platforms,
expanded online sales, and provided a platform for expanding the market outside the
hospital market; the Company created a gold brand of "medical cold chain", focused on
professional medical logistics represented by high-end products such as "growth hormone
and HPV vaccine", and improved the scale of three-party services; the Company focused
on specialty special medicine and devices, enriched agent varieties and pipelines, and
constantly improved profitability.
By expanding the value-added service boundary for upstream and downstream
customers, the innovative business connected with the Company’s overall strategy of
"extending from medical care to aesthetic medicine and large health", explored rich
business forms, and cultivated new pillars of future profits. In terms of the specialized
three-party pharmaceutical cold chain, the Company had an insight into the market demand
for high-end products such as "growth hormone and HPV vaccine", made layout in advance,
faced the challenges and grasped opportunities brought by the pandemic, and paid equal
attention to developing innovative business and fulfilling social responsibilities. In the first
half of 2022, the number of customers increased from 49 in the same period of last year to
56, and the three-party logistics revenue increased by 25.56% year-on-year, of which the
cold chain revenue increased by 31.66% year-on-year. The number of customers, business
scale and growth rate were far ahead in the province. The business has built a three-in-one
core competitiveness of high skilled talent team, core assets such as cold storage and
refrigerated vehicles, and applied cold chain technology innovation, creating a gold brand
of "Huadong Cold Chain".
The business expanded the boundary of value-added services. First, it actively
followed the general trend of the medical collectivization development, provided a
comprehensive menu-based pharmaceutical service plan, deepened the integrated
development with medical institutions, and cooperated in the "transformation of old
hospitals and construction of new hospitals" of the medical group, starting from the
optimization of the hospital supply chain. Second, it actively followed the development
strategy and product pipeline update of the upstream pharmaceutical industry, and carried
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Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
out various types of project cooperation. The business and its upstream and downstream
customers focused on their core fields through specialization and scale efficiency, and
evolved from the cooperation in the pharmaceutical supply chain to the integration of the
pharmaceutical value chain. The business connected with the Company’s overall strategy,
empowered the pharmaceutical industry in the fields of regional logistics, policy affairs,
and market access, gave play to the overall force to help the Company’s overall business
development.
The business continuously practiced social responsibility, actively overcame the
impact of partial pandemics, fully supported the supply of anti-pandemic drugs and
equipment, and guarded the transportation lifeline at critical moments. Through the three
pharmaceutical logistics centers of North Zhejiang (Hangzhou), South Zhejiang (Wenzhou)
and Central Zhejiang (Jinhua), multi-inventory coordination and multi-warehouse linkage
were realized to share information and further optimize the inventory and distribution of
medical devices during the pandemic prevention and control period; storage and
transportation resources were integrated, and decentralized management was transformed
into centralized and transparent new operation service mode, achieving the goal of
shortening transportation time and saving storage space. With the normalized of the
pandemic situation, the Company, relying on the rapid response and linkage practice of
business and management, and the strong supply chain guarantee system of the
pharmaceutical business, has opened a new path to deal with emergencies, which further
highlights the advantages of multi warehouse linkage and seamless linkage across regions
and the "coordination" of the provincial business during the pandemic period.
4. The overall operating income of the aesthetic medical business grew rapidly,
and the domestic market continuously improved
During the Reporting Period, the Company’s domestic and foreign aesthetic medical
business continuously implemented the domestic and international double-cycle
development strategy, and maintained rapid development year on year. The Company’s
aesthetic medical segment realized a total operating income of RMB897 million (charging
off internal offset factors), a year-on-year increase of 130.25% according to the comparable
standard (charging off Huadong Ningbo Company). Sinclair, a wholly-owned subsidiary
in the UK, firmly leveraged the favorable background of the continuous recovery of the
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overseas aesthetic medical consumer market, made efforts to overcome the impact of
adverse factors such as the global high inflation that exceeded expectations, and actively
enabled the business expansion through the integration of injection business and EBD
business. The business expansion was smooth, and sales in overseas markets continuously
achieved good growth. Specifically, the injection business in the Asia Pacific market, and
the EBD business in the American market continuously grew rapidly. During the Reporting
Period, Sinclair achieved a consolidated operating income of GBP63.25 million
(approximately RMB531 million), a year-on-year increase of 104.3%, and realized an
EBITDA of GBP11.84 million, both of which set the best level in Sinclair’s history. In the
second half of the year, it is expected that with the continuous development of the global
market, Sinclair will continuously maintain a rapid growth trend as a whole.
In addition, in February 2022, Sinclair completed the acquisition of 100% equity of
Viora, an energy based medical device company, and formally incorporated it into the
Company’s consolidated statements. Viora has an advanced product portfolio using laser,
intense pulsed light, radio frequency, high-pressure jet and microdermabrasion
technologies. Reaction, V series (V10, V20 and V30), EnerJet and Pristine, and
Infusion had been listed overseas. Specifically, Reaction obtained the registration
certificate of Class III medical devices from the National Medical Products Administration
(NMPA) in 2015. Viora’s products can form effective complementarity with the
Company’s existing energy-based device lines in the aesthetic medical field, realizing the
full layout of the Company’s energy-based device product variety. After the acquisition,
High Tech also actively expanded the US market through the channel resources
accumulated by Viora. Based on this acquisition, the Company also put forward the product
concept of "V Women Tech" by focusing on women’s professional medical care with
leading medical technology.
In May 2022, Sinclair signed a product exclusive license agreement with Irish EMA
Aesthetics to obtain the global distribution rights of Préime DermaFacial, an energy-based
device (EBD) with multi-functional intelligent facial skin management, except Germany
and the United Kingdom. Developed by European skin experts, Préime DermaFacial is a
new multi-functional facial skin management platform integrating five advanced
technologies: Spiral vacuum, microdermabrasion, microcurrent, radio frequency and
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ultrasound. It can be used for facial cleaning, exfoliation, moisturizing, rejuvenating and
nourishing skin to create a smooth and compact skin for beauty seekers. The introduction
of this product fills the gap in the Company’s EBD product pipeline for facial cleaning in
aesthetic medical field, and further enriches the Company’s EBD product portfolio. Préime
DermaFacial will be commercialized in the third quarter of 2022 in Europe, America and
other major global medical Aesthetics markets. At present, with a certain amount of
customer intention orders accumulated, it is planned to be listed in China in 2023. At that
time, the product will form an effective synergy with Glacial Spa and Reaction products,
which will bring new impetus to the growth of the Company’s domestic aesthetic medical
EBD business.
During the Reporting Period, Sinclair (Shanghai), a wholly-owned subsidiary of the
Company in China, insisted on compliance operation and development, continued to carry
out brand construction, and constantly improved its competitive advantage. From January
to June 2022, Sinclair (Shanghai) realized an operating income of RMB271 million, and
its profitability continuously improved, exceeding the income contribution of Huadong
Ningbo Company’s aesthetic medical business to the Company’s profit in the same period
last year. Sinclair (Shanghai) has become an important growth engine of the Company’s
aesthetic medical business. In the second quarter, although the business expansion of
Sinclair (Shanghai) was affected by the pandemic in many places in China, Sinclair
Aesthetic constantly expanded its market influence by continuously improving the online
+ offline medical education and training service system, creating an efficient direct
aesthetic medical sales team, and strengthening channel coverage and terminal service
capabilities. Since May, the operation of Sinclair (Shanghai) has been recovering and rising
month by month. As a high-end product in the global renewable filling field, since it was
launched in the Chinese market, the Company’s Ellansé product has steadily occupied the
front-end of the industry with a good reputation of rigorous aesthetic medical academic
research and training, rich overseas market safety and efficacy verification, and its market
coverage and brand awareness have been continuously improved. At present, the number
of contracted cooperative hospitals has exceeded 500, the number of trained and certified
doctors has exceeded 900, and the layout of five designated injection training bases for
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domestic certified doctors has been completed. The market development achievements
have been constantly displayed.
In addition, Sinclair (Shanghai) took many measures to protect the life, health and
safety of beauty seekers and help the development of industry norms as the top priority of
its work. Since Ellansé product was launched in the Chinese market, the Company have
adhered to the professional cold chain transportation of the whole process of the product
to fundamentally ensure the product quality. The Company fulfilled its responsibility of
being a leader in the regenerative aesthetic medical field, and passed strict professional
training and certification to empower institutions and products. The Company has selected
regular aesthetic medical institutions nationwide for cooperation and certification, and held
many training and certification meetings for injection doctors to ensure that beauty seekers
enjoy a formal, professional and reassuring experience in every process. The Company
adhered to the bottom line of compliance, insisted on the purpose of "reassuring experience
in seeking beauty", and actively carried out the action of "protecting the rights of Ellansé
products" and launch Ellansé official code scanning verification system. The Company
also cooperated deeply with Chinese Association of Plastics and Aesthetics, and took the
lead in responding to and joining the "two certificates and one code" genuine product
alliance. Through publishing cooperation blacklists, administrative reports and other forms,
the Company cooperated with the industrial and commercial departments with the most
resolute attitude to crack down on illegal business activities in the market, regulate the
market operation order, and fully safeguard the legitimate rights and interests of beauty
seekers.
In the second half of the year, the Company believes that under the background of the
long-term positive development trend of the aesthetic medical industry in China and the
continuous growth of the aesthetic medical consumption demand, with the comprehensive
control of the partial pandemic in China and the rebound of the consumer market, offline
aesthetic medical institutions will gradually return to normal operation, the aesthetic
medical consumption demand delayed by the pandemic will be gradually released, and the
number of consumption is expected to recover. The aesthetic medical teams of the
Company is confident that they will continue to work hard in the second half of the year,
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achieve better results than the first half of the year, and complete the set annual
performance goals.
5. Other matters
During the Reporting Period, the Company and its wholly-owned subsidiaries
Zhongmei Huadong and Huadong Pharmaceutical (Hong Kong) Investment Holding Co.,
Ltd. signed the Equity Investment Agreement and the Product Exclusive License
Agreement with Heidelberg Pharma AG (hereinafter referred to as "Heidelberg Pharma"),
a German listed company, and its shareholders’ representatives. Up to now, the
Bundesanstalt fü Finanzdienstleistungsaufsicht (BaFin) has approved and exempted the
Company’s acquisition of Heidelberg Pharma through the public offer; the Company has
also obtained the No Objection Certificate of the Bundesministerium fü Wirtschaft und
Klimaschutz (BMWK) on this transaction; the relevant overseas investment approval or
filing of this transaction in China has been completed.
During the Reporting Period, the Board of Directors and the Board of Supervisors of
the Company successfully completed the new term and appointed a new Senior
Management after the deliberation and approval of the General Meeting of Shareholders.
The core management team and management backbone of the Company remain basically
stable, and at the same time, the talents suitable for the Company’s development needs
continuously increase. Under the leadership of Lv Liang, Chairman of the Company, the
new leadership team of the Company will make concerted efforts to unswervingly deepen
reform and innovation, unswervingly move towards the Company’s established strategic
targets and continue to lead the Company’s sustainable, stable and high-quality
development in the critical period when challenges and opportunities coexist.
Since its listing, the Company has actively performed its social responsibilities and
returned to shareholders. In 2022, it has always adhered to the concept of stable, sustainable
and scientific dividends. In June 2022, it completed the 2021 equity distribution,
distributing cash dividends of RMB2.9 (tax included) to all shareholders for every ten
shares, and distributing cash dividends totaling RMB507 million. In the 22 years since its
listing, the Company has distributed dividends 19 times, with a cumulative dividend
amount of RMB5,084 million, far exceeding the RMB250 million raised during the IPO,
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Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
and bringing sustained and stable investment returns to the majority of shareholders
supporting the Company’s development.
iii. R&D
(1) Overall status of R&D
In pursuit of the corporate philosophy of "putting scientific research and patients first",
the Company invests more in R&D to enrich the R&D pipeline of innovative drugs. As at
the issuance of this Report, there are 86 pharmaceutical projects under development of
which 43 involve innovative products and biosimilars. Specifically, four products are in
Phase III clinical trial and another four in Phase II clinical trial. During the Reporting
Period, the Company’s R&D expenditure in the pharmaceutical industry stood at RMB580
million, up 34.1% year on year over the first half of 2021 among which RMB540 million
was for R&D expenses. The R&D mainly includes the following aspects:
1) By practicing the R&D model of new drugs of "independent R&D + cooperative
and entrusted development + license-in", the Company followed up the latest drug
mechanisms, targets and progress of clinical application studies internationally. In addition,
it sped up the layout of innovative drugs and license-in of domestic and overseas innovative
drug projects, having initiated numerous potential innovative drugs;
2) With "clinical value, pharmacoeconomic value and commercial value" as the
starting point, innovative products were launched focusing on endocrine, autoimmunity
and oncology during the Reporting Period;
3) Focused on clinical superior varieties and special drugs for specialty, the Company
accelerated the R&D of generic medicine with high-tech barriers and modified new drugs;
4) The Company enhanced its processes and quality of APIs and preparations and
developed new preparations for online products, thus cutting cost and raising the market
competitiveness;
5) The integrated and dynamic assessment of varieties under development was
toughened. By prioritizing projects under development and allocating R&D resources, the
Company ensured the focus on the R&D pace of varieties under development to the best;
6) Through overall planning for the differentiated, innovative and technological
platform for polypeptide and technological platforms for antibodies to immunological
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diseases, microbial fermentation cytotoxin and for innovative linkers and conjugate, the
Company sought cooperation and win-win results to build a global ADC R&D ecosystem.
(2) Development and planning for innovative drugs
Focused on existing treatment fields covered, the Company has developed a strategic
plan of innovative drugs for future development in the next five years. The plan defines the
major initiation orientation and volumes of innovative projects, and proposes to initiate and
reserve innovative varieties (including innovative drugs, modified new drugs and
innovative medical equipment), no less than 15 a year during the planning period. During
the Reporting Period, the Company sped up the pace of clinical studies on innovative drugs
under development and major biosimilar varieties to seek early approval for launching. It
explored and learned the advanced R&D system construction of innovative drugs
internationally to refine and adjust its overall R&D system framework. Through high-level
R&D talent introduction, the Company set up an R&D team covering the R&D lifecycle
of innovative drugs, and improved the functional modules for the R&D of innovative
projects to reach the target for those projects of the strategic plan.
In terms of the ADC field particularly, the Company further expanded its
differentiated layout. It invested in Qyuns Therapeutics, an antibody R&D and production
company, and Nuoling Bio, a company specialized in ADC linkers and conjugate
techniques, incubated Huida Biotech which owns the whole product line of ADC payloads,
and controls Doer Biologics, a multi-antibody platform R&D company. It carried out
equity investment and product cooperation with Heidelberg Pharma, a global emerging
technology company in the ADC field. In the future, the Company will support the
establishment of innovative platforms and integrate resources to form a unique global ADC
R&D ecosystem and gradually build a differentiated and independent ADC R&D platform.
It plans to develop at least ten ADC innovative products and actively promote clinical
registration and studies within three years.
Also, the R&D center of innovative drugs taking value creation as the core and
"advantaged, differentiated and source-oriented innovation" as the major direction will: 1)
Transfer the orientation from external M&A to independent innovation + external
introduction driven by dual engines to create a new innovative R&D ecosystem; 2) Clarify
the mechanism for initiation targets for differentiated innovation, track the information of
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Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
competing products during the whole process of items, and initiate at least 15 innovative
R&D projects to foster a cutting-edge, differentiated and innovative pipeline; 3) Establish
a global strategic and collaborative R&D ecosystem centering on the Company, produce a
group of PCC/IND results with advantages and high druggability, and declare
NDA/Biologics License Application ("BLA") and enable innovative drugs and products to
go to the market; and 4) Cultivate a high-level R&D team championing the R&D lifecycle
of innovative drugs, strengthen the establishment of a technological platform with
independent intellectual property right and high barriers such as proteolysis targeting
chimera (PROTAC), molecular glue, ADC and other new technologies, and incubate
multiple value items on the basis of platforms.
(3) Major efforts in independent R&D innovation
The R&D center of innovative drugs has established a technological platform for non-
clinical studies, a platform for computer aided design and a technological platform for
chemical synthesis, which provided strong technological support for incubating new
projects. In the early period, the R&D team has selected over 1,000 potential
pharmaceutical molecules with in-vitro activity (including small molecules of chemical
medicine and large molecules of biological medicine), mainly distributed in the treatment
fields for endocrine, autoimmunity and oncology. To be specific, HDM1002 is an
innovative drug project in the PCC phase through independent R&D by the Company with
the global independent intellectual property right, marking that the Company’s
independent R&D has entered a new phase. As at now, six projects have been initiated in
the early period of 2022. Among the independent R&D items, there are 14 items started in
the early and PCC phases and two pre-clinical items. Specifically, remarkable phased
achievements have been made among those innovative projects including the first-in-class
("FIC") and best-in-class ("BIC") ones. In terms of the Company, the R&D center of
innovative drugs has filed over 60 patent applications in total including more than ten
official and PCT applications.
Moreover, in 2021, the Company clinched the honor of "leading innovative team" by
the Zhejiang Province, and was sponsored by the province’s "leading pioneer" scientific
and technological project to espouse the establishment of Huadong Medicine Joint Funds
of the Zhejiang Provincial Natural Science Foundation of China for innovative
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development. Meanwhile, the HDM1002 and TTP273 items received rewards from
provincial and municipal scientific and technological projects.
(4) Progress of clinical studies on major innovative drugs, innovative medical
equipment and biosimilars
As at the issuance of the Report, the Company’s R&D progress of multiple items of
innovative drugs, innovative medical equipment and biosimilars is as follows:
Endocrine
HDM1002: The GLP-1 receptor agonist, formed from small molecules which is
independently developed by the Company is projected to be delivered for Pre-IND
applications both in China and the United States in the second half of 2022.
HDM1003 (SCO-094): This product, jointly developed by the Company and Japan’s
SCOHIA PHARMA, Inc. is leveraged as the dual agonists at GLP-1R and GIPR targets
for treating Type-2 diabetes, obesity and nonalcoholic steatohepatitis ("NASH").
Furthermore, Phase I clinical trials are carried out for this product in the United Kingdom,
and feedback has been procured domestically after the delivered Pre-IND application.
DR10624: The multi-agonist, at the GLP-1R/GCGR/FGF21R targets under
development by the holding subsidiary Doer Biologics can treat Type-2 diabetes, obesity
and metabolic syndromes. In April 2022, DR10624 was approved for Phase I clinical trials
in New Zealand and administered for the first subject in June.
Liraglutide Injection: The GLP-1 receptor agonist, the marketing authorization
application for diabetes indication was accepted by the NMPA in September 2021. The
injection is at the stage of supplementary studies, expected to be approved by the end of
2022. The marketing authorization application for obesity or overweight indication was
accepted in July 2022.
Semaglutide Injection: The GLP-1 receptor agonist, received the IND approval in
June 2022.
Insulin Degludec Injection: Its IND application was accepted in July 2022.
Ranibizumab Injection: In terms of Phase III clinical trials, the enrollment of the first
subject was completed in March 2022.
Oncology
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HDM2002 (Mirvetuximab): The ADC drug under development targeting positive
ovarian cancer with folate receptor alpha ("FRα") for the first time globally is utilized for
treating the platinum-resistant ovarian cancer with high expression of FRα. In May 2022,
ImmunoGen, Inc., the Company’s cooperative party, announced that US FDA had accepted
and filed the BLA of this product. The application has been granted Priority Review
designation and FDA has set a Prescription Drug User Fee Act (PDUFA) action date of
November 28, 2022. The BLA is based on the results of pivotal single-arm SORAYA
clinical trial. Apart from the SORAYA trial, the multi-regional randomized controlled
Phase III study MIRASOL is conducted. ImmunoGen expects to release the top-line data
of this study at the beginning of 2023. In terms of this product’s Phase I clinical trials in
China for Pharmacokinetics, the enrollment of all subjects was completed in July 2022.
The Company submitted the Pre-BLA to the CDE in July 2022.
Mefatinib tablet: This drug is for advanced non-small-cell lung cancer. The overall
enrollment of Phase III clinical subjects was accomplished, and the NDA application will
be conducted after the end of Phase III clinical trials during the second quarter of 2023.
DR30303: The product under development by the holding subsidiary Doer Biologics
targets Claudin 18.2 and can treat solid tumors. In January 2022, an IND approval was
received and in May 2022, the enrollment and administration of Phase I clinical trial for
the first subject were completed.
HDM2003 (AB002): This product is the dual-target fusion protein targeting PD-
L1/L2 and IL15, jointly developed by the Company and US AKSO for solid tumors. Pre-
clinical studies of this product are currently underway.
HDP-101: This product is an ATAC (Antibody Targeted Amanitin Conjugate)
targeting B-cell maturation antigen (BCMA). Heidelberg Pharma, the Company’s
cooperative party is performing Phase I/IIa clinical trial overseas for relapsed/refractory
multiple myeloma regarding this product. Additionally, HDP-101 was administered for the
first subject on February 15, 2022.
HDP-103: This product is an ATAC targeting the prostate-specific membrane
antigen (PSMA). Heidelberg Pharma in Germany, the Company’s cooperative party, is
conducting pre-clinical studies on this product with the targeted indication as metastatic
castration-resistant prostate cancer (mCRPC).
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Autoimmunity
ARCALYST (Rilonacept): The recombinant dimer fusion protein, can block the
transmission of IL-1α and IL-1β signals. In February 2022, the Company signed a
cooperative agreement with Kiniksa on introducing this product. Continually,
ARCALYST was approved in the United States in 2008, 2020 and 2021 for treating
cryopyrin-associated periodic syndromes (CAPS), deficiency of IL-1 receptor antagonist
(DIRA) and recurrent pericarditis. Also, ARCALYST was included by the CDE into the
List of Overseas New Drugs for Urgent Clinical Needs (Group 1) for CAPS. The Company
filed a Pre-BLA to the CDE for the product’s CAPS indication in July 2022, and plans to
deliver the BLA application domestically in the second half of 2022.
Mavrilimumab: This product is the fully humanized monoclonal antibody targeting
GM-CSFRα. Kiniksa, the Company’s cooperative party, is preparing the Phase II clinical
trial overseas for GM-CSF-related cardiovascular diseases.
HDM3002 (PRV-3279): This product can treat systemic lupus erythematosus (SLE)
and prevent or lower the immunogenicity of gene therapy. Provention Bio, the Company’s
US cooperative party, is launching the Phase IIa clinical trial for SLE indication of this
product in the United States and Hong Kong, China.
HDM5001 (OP-101): This product is under development jointly by the Company and
Ashvattha Therapeutic, Inc., the joint-stock company in the United States, for treating the
hyperinflammation in hospitalized adult patients with severe COVID-19. The product is
currently undergoing Phase II clinical trial in the United States.
HDM3001 (QX001S): As the biosimilar of Stelara, this product is under
development jointly by the Company and Qyuns Therapeutics, for treating adult patients
with moderate to severe plaque psoriasis. Its Phase III clinical trial has completed the
enrollment of all subjects ahead of schedule in February 2022.
Innovative medical equipment
HD-NP-102 [Transdermal Glomerular Filtration Rate Measurement System and
MB102]: This product is jointly developed by the Company and MediBeacon, Inc. in the
United States. This system based on the changes in fluorescence over time issued by
exogenous tracers for non-invasive monitoring, can continuously measure the GFR of
patients with normal or impaired renal functions. In July 2022, the registration application
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for medical equipment of this system was accepted by the NMPA and will enter the
accreditation phase. MB-102 injection (Relmapirazin) which works together with this
system is the FIC drug, whose application of Phase III MRCT was approved by the NMPA
in May 2021 and the trial will be simultaneously conducted in China and the United States
in the second half of 2022.
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R&D Pipeline for Major Innovative Drugs and Biosimilars as at the Date of
Issuance of this Report
(5) Major R&D progress of the varieties of generic medicine
The Company by regular dynamic assessment and sorting for existing generic
medicine under development, specified the varieties that shall be focused and promoted
preferentially. As at the issuance of this Report, the progress of major varieties is as follows:
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Treatment
No. Project Name Specification Latest Progress
Fields
Supplementary materials were
1 Endocrine Canagliflozin Tablets 0.1 g, 0.3 g submitted, and is expected to
be approved in 2022
Sitagliptin Phosphate Review progress is being
2 Endocrine and Metformin 50/850 mg followed up, and is expected to
Hydrochloride Tablets be approved in 2022
Pioglitazone
Hydrochloride and The application was submitted,
3 Endocrine 15/850 mg
Metformin and processed in June 2022
Hydrochloride Tablets
The application was submitted,
4 Immunity Tacrolimus Ointment 0.03%, 0.1%
and processed in April 2022
The BE trial has been
completed, and application is
5 Immunity Tacrolimus Granules 1 mg
expected to be submitted in
2022
Supplementary materials were
Sorafenib Tosylate
6 Oncology 0.2 g submitted, and is expected to
Tablets
be approved in 2022
7 Oncology Olaparib Tablets 150 mg BE trial stage
8 Oncology Ibrutinib Capsules 140 mg Pilot scale study stage
Cardiovascular Supplementary materials were
9 Macitentan Tablets 10 mg
diseases submitted
(6) Progress of international registration
During the Reporting Period, the Company conducted proactive international
registration with the major progress as follows:
Progress during the Reporting
No. Fields Project Name Notes
Period
Supplementary materials were
1 Endocrine Acarbose Tablets APIs submitted for the registration in
India in May 2022
The US DMF application of newly
2 Immunity Tacrolimus APIs added places was submitted in
January 2022
Supplementary materials were
0.5 mg, 1 mg, 5
3 Immunity Tacrolimus Capsules submitted for the US ANDA
mg
application in April 2022
The US DMF application was
4 Oncology Exatecan Mesylate Intermediate
submitted in January 2022
The US DMF application of newly
Anti-
5 Daptomycin APIs added places was submitted in
infection
January 2022
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Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
Supplementary materials were
Anti-
6 Mupirocin Calcium APIs submitted for the US DMF
infection
application in March 2022
Supplementary materials were
Anti-
7 Mupirocin APIs submitted for the registration in
infection
India in April 2022
Supplementary materials were
Anti- Caspofungin Acetate
8 50 mg, 70 mg submitted for the US ANDA
infection for Injection
application in May 2022
(7) Progress of consistency assessment
During the Reporting Period, the progress of the consistency evaluation of generic
drug for the Company is as follows:
Treatment Progress during the Reporting
No. Project Name Specification
Fields Period
In January 2022, the
Paracetamol and Tramadol 325 mg: 37.5 application for consistency
1 Analgesia
Hydrochloride Tablets mg evaluation were submitted
and accepted
In June 2022, the application
2 Immunity Tacrolimus capsule 1 mg for consistency evaluation
were submitted and accepted
In June 2022, the application
Pantoprazole sodium
3 Digestion 40 mg for consistency evaluation
enteric-coated capsule
were submitted and accepted
(8) Progress of Patents
Because the Company has protected its intellectual property right and transferred and
applied the results in recent years, the volumes of patent application and authorization have
climbed steadily. Over the years, the patent applications both at home and abroad have
amounted to approximately 650 pieces of which 290 are authorized invention patents.
Zhongmei Huadong, the wholly owned subsidiary, is a national intellectual property
demonstration enterprise. In November 2014, it passed the external audit by Zhongzhi
(Beijing) Certification Co., Ltd., becoming one of the 147 enterprises as the first group
obtaining the standard implementation certification. In October 2021, it passed the review
under supervision of intellectual property right standard implementation for businesses.
During the Reporting Period, the Company’s patent application and maintenance were
rolled out. A total of 23 applications were submitted in terms of Zhongmei Huadong, the
wholly owned subsidiary. Among them, 18 were invention patents (PCT applied for nine
patents and Taiwan, China for one), and five received the domestic authorization.
(9) R&D and registration of aesthetic medicine products
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Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
No. Category Product Name Purpose Latest Progress
Efforts related to domestic
1 Injection Perfectha Facial filling
registration are underway
Domestic clinical trials are
underway which were approved by
the independent R&D institution
2 Injection Maili Extreme Facial filling
regarding ethics in July, and the
enrollment of the first subject will be
completed in August as envisaged
It is predicted that in August,
domestic registration inspection will
3 Injection Ellansé-M Facial filling
reach the end, and the initiation
related to clinical trials is underway
As for domestic clinical trials, part
Silhouette Mid-facial of the subjects have been enrolled,
4 Thread lifting
Instalift lifting and the follow-ups at time nodes are
in progress
Removal of
benign
Energy based Domestic registration inspection are
5 Glacial Rx (F1) pigmentary
device underway
lesions of the
skin
Fat reduction
Energy based Domestic registration inspection are
6 Cooltech Define and body
device underway
shaping
Energy based Domestic registration inspection are
7 Primelase Hair removal
device underway
Skin firming,
body and facial
It is predicted that in September,
Energy based V product line shaping, skin
8 domestic registration inspection will
device (V20, V30) rejuvenation
be initiated
and hair
removal
Scar
rehabilitation, It is predicted that in September,
Energy based
9 EnerJet facial lifting domestic registration inspection will
device
and dermal be initiated
thickening
Energy based Préime Facial skin Equipment classification are
10
device DermaFacial management underway domestically
Registration of changes in domestic
Body and
agents and foreign factory address is
Energy based facial shaping
11 Reaction in progress, and the product will re-
device and skin
enter the Chinese market in Q1 2023
firming
as envisaged
iv. The Company’s BD cooperation
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Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
In June 2022, the Company’s wholly owned subsidiary Zhongmei Huadong reached
strategic collaboration with Julphar. In addition, the Company authorized Julphar to
develop and produce and acquire the commercial rights and interests of Liraglutide
Injection for diabetes and weight losses in 17 countries including the UAE, Saudi Arabia,
Egypt, Kuwait, Oman, Bahrain and other countries in the Middle East and North Africa.
Liraglutide Injection is the Company’s second product authorized overseas after TTP273,
which marks the international recognition again for the strength and R&D innovative
capabilities of diabetes. This transaction has represented the Company’s capacity for
commercial cooperation, and marked a milestone in global pharmaceutical R&D
innovation, both of which lay a solid foundation for expanding the overseas market.
In February 2022, the Company’s wholly owned subsidiary Zhongmei Huadong
signed an exclusive license agreement on products with Kiniksa, also a wholly owned one
of Kiniksa Pharmaceuticals, Co., Ltd. (Nasdaq: KNSA). Zhongmei Huadong procured the
exclusive license in 24 Asia-Pacific countries and regions including China, South Korea,
Australia and New Zealand (excluding Japan) involving the development, registration and
commercial interests and rights of the two global innovative products. The two products
are ARCALYST and Mavrilimumab in autoimmunity of Kiniksa. Continually,
ARCALYST was approved in the United States in 2008, 2020 and 2021 for treating CAPS,
DIRA and recurrent pericarditis, with sound clinical feedback given. Up to now, this
product is the first and only drug approved by the US FDA for recurrent pericarditis
applicable to the group aged 12 and above. Also, ARCALYST was included by the CDE
into the List of Overseas New Drugs for Urgent Clinical Needs (Group 1) for CAPS. This
license-in of FIC biological medicine is expected to accelerate to meet the clinical needs
domestically of patients with autoimmune and rare diseases, and demonstrates the results
of the Company expediting international innovation and deepening the layout of immune
products.
In February 2022, the Company signed an exclusive License Agreement on Products
and Equity Investment Agreement with its wholly owned subsidiary Zhongmei Huadong,
Huadong Medicine Investment Holding (Hong Kong) Limited and the listing company in
Germany Heidelberg Pharma and its shareholders. Through its wholly owned subsidiary
Huadong Medicine Investment Holding (Hong Kong) Limited, the Company subscribed
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Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
Heidelberg Pharma’s additional stocks issued publicly, with the ultimate percentage of
equity interest acquired being 35%. For this percentage, the Company becomes the second
largest shareholder. Zhongmei Huadong received the exclusive license including the
development and commercial interests and rights of HDP-101 and HDP-103 under
development of Heidelberg Pharma in 20 Asian countries and regions, for instance,
Chinese mainland, Hong Kong and Macao Special Administrative Regions in China,
Taiwan, China, South Korea and Singapore. In addition to that, Zhongmei Huadong will
procure the exclusive Opt-in of Heidelberg Pharma’s another two products under
development namely HDP-102 and HDP-104, as well as the rights of first negotiation
(ROFN) for two additional products in development subsequently. With the proprietary
ATAC technological platform, Heidelberg Pharma is the first to develop Amanitin
payload and its derivatives for treating cancers globally. Amanitin, the only known RNA
polymerase II inhibitor in the world, is of a novel mechanism of action. Upon this
cooperation, the Company has integrated its ADC R&D technological accumulations with
the advanced and proprietary ATAC technological platform of Heidelberg Pharma to
enrich the global ADC R&D ecosystem.
In February 2022, the Company’s wholly owned subsidiary Zhongmei Huadong
signed a exclusive strategic collaboration agreement with AKSO on the clinical
development and commercial interests and rights of AB002 under development in the Asia-
Pacific region (excluding Japan). AB002, as the dual-target fusion protein under pre-
clinical development targeting PD-L1/L2 and IL15, can inhibit immune checkpoints and
activate natural killer cells (NK cells) for solid tumors. The Company believes that the
distinctive mechanism of AB002 has enormous potential in the immunotherapy of cancer
and this cooperation has also enriched the Company’s innovative pipeline for oncology
products.
In January 2022, the Company’s wholly owned subsidiary Zhongmei Huadong signed
an exclusive marketing agreement with Beijing Shenogen Pharma Group Co., Ltd.’s
(hereinafter referred to as "Shenogen") wholly owned subsidiaries Hainan Shenogen and
Beijing Shenogen. The purpose is to gain the exclusive right of marketing of the national
FIC drug, the "Icaritin Soft Capsules", for small-molecule immune regulation for treating
advanced hepatocellular carcinoma in 27 provinces of Chinese mainland. The Company
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Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
has a complete pharmaceutical service system and a wide range of market resources in the
pharmaceutical industry, and this cooperation is just an affirmation of the Company's
commercialization ability in the local market, which helps create a win-win and
cooperative model for complementary advantages and coordinated development mutually,
and is expected to heighten the market competitiveness in the oncology field. The first
group of prescriptions for Icaritin Soft Capsules was given at the hospitals of Beijing and
Shanghai in May 2022. This marks that the Icaritin Soft Capsules, China’s original small-
molecule immunomodulator and the global FIC drug with global independent intellectual
property right, officially benefits the patients with liver cancer in the country.
II. Analysis of core competitiveness
1. Open innovative drug R&D System and continuous improvement of
innovation capability
The Company highly values innovation and R&D and maintains a high proportion of
R&D investment. Upholding the "scientific research-based, patient-centered" philosophy,
it strives to create clinical value, medicine economics value and commerce value. After
years of development, it has established a relatively complete independent innovation
system for drug R&D covering drug discovery, pharmaceutical research, pre-clinical
research, clinical research and industrialization, and established a global new drug R&D
center.
The Company’s innovation and R&D focuses on three core treatment areas, including
endocrinology, oncology and autoimmunity. By ways of cooperative drug development
and equity investment, it carried out in-depth strategic cooperation with leading
pharmaceutical companies both in and outside China, and created a global R&D ecosystem
through introduction, integration and innovation. In particular, in terms of the ADC field,
the Company further expanded differential layout. It invested in Qyuns Therapeutics, an
antibody R&D and production company, and Nuoling Bio, a company specialized in ADC
linker and conjugate techniques, incubated Zhejiang Huida Biotech Co., Ltd. (Huida
Biotech) which owns the whole product line of ADC payloads, and controlled Doer
Biologics, a multi-antibody platform R&D company. It carried out equity investment and
product cooperation with Heidelberg Pharma, a global emerging technology company in
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Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
the ADC field, to form a unique ADC global R&D ecosystem, gradually build a
differentiating ADC independent R&D platform, and strengthen and improve
antineoplastic product innovation chain and ADC ecological chain. In the next three years,
it plans to develop at least 10 ADC innovative products and actively promote the
registration work and clinical studies.
Through independent R&D, cooperation, license-in and other measures, the Company
continuously developed and formed differentiating innovative product pipelines covering
the lifecycle of R&D. As at the releasing of this report, the Company has nearly 43
innovative drugs and biosimilars under research, among which four are in the phase III of
clinical trial and four are in phase II, covering endocrinology, oncology and autoimmunity
and other areas, so as to effectively guarantee the positive momentum of the clinical and
launch progress of innovative products, thereby providing new drivers for medium-and
long-term development.
2. Comprehensive capability in international business development
The Company actively promoted the internationalization process. By acquiring 100%
equity of Viora, the Company deepened its global aesthetic layout in the energy based
aesthetic device market. Through strategic and equity cooperation with a number of
American companies, including Akso and Kiniksa, and a German company Heidelberg
Pharma, etc., it supplemented and enriched the rights of commercial development of
innovative drugs both at home and abroad. It accelerated the international registration of
products. All online chemical APIs passed the market certification of FDA, EU and other
authorities. Daptomycin for Injection, Acarbose Tablets and Pantoprazole Sodium for
Injection were all approved by FDA, and some high-end industrial microorganism
ingredients were empowered with strong competitiveness in the international market. It
also actively developed international logistics and procurement suppliers to make its
procurement capability keep in line with the international standard. It pushed CMO/CDMO
business to go global and has been integrated into the global innovative drugs R&D
industrial chain.
3. Diversified product pipelines for specialty diseases and chronic diseases, and
comprehensive competitive advantage of diabetes treatment
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Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
Over the years, the Company has been deeply engaged in specialty medications,
chronic disease medications, and medications for special purposes and built a favor brand
effect and strong market base in the treatment of chronic kidney diseases, transplantation
and immunity, endocrinology, digestive system and so on. The market share of these
products continuously takes the lead in the domestic market. Focusing on the targets of
mainstream clinical treatment of diabetes, the Company has formed a comprehensive
layout of product pipelines of innovative drugs and differentiating generic medicine. At
present, it has more than 20 commercialized products and products under development. In
organ transplantation, it realized the full coverage of clinical first-line immunosuppressive
agents and developed multi-tiered follow-up products. It developed first-in-class drugs in
all three core treatment fields of oncology, endocrine and autoimmunity. As for
antineoplastic ADC drugs, it has established the layout of multiple global innovative drugs
and an R&D ecosystem, forming differentiating advantages. At present, a total of 26 core
products on the market were listed in the Catalog of Medicines Covered by National Basic
Medical Insurance, Work-Related Injury Insurance and Maternity Insurance (2021).
4. Leading professional pharmaceutical care team and extensive market network
in China
In terms of the pharmaceutical industry, the Company owns a professional
Pharmaceutical Care (PC) and market development team consisting of 6000 employees.
Centering on clinical value and academic promotion, it promoted a marketing model
integrating comprehensive hospitals, medical institutions at the primary level, retail, the
third terminal and the Internet, so as to gradually increase the coverage through multiple
channels, thus obtaining good competitive advantages.
Having developed in Zhejiang province for many years, the Company’s
pharmaceutical commerce owns complete business activities and diversified products, and
enjoys comprehensive competitive advantages in market access and network coverage. It
constantly improves its four core capabilities including logistics, information, finance and
operation, offering high-end value-added services such as policy affairs. In addition, it has
established cooperative ties with 90% of mainstream pharmaceutical enterprises at home
and abroad, and realized the full coverage of public medical institutions, major private
health care and retail pharmacies in Zhejiang province. Its market share takes the lead in
40
Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
Zhejiang province, and industry ranking stands at the forefront for many years in a row. In
recent years, the Company has witnessed a rapid development of its innovative businesses
such as product agency and market expansion, characteristic comprehensive health
industry, third-party pharmaceutical logistics featured by cold chain, and pharmaceutical
e-commerce. It has built a sound service system and professional ability of cold chain
logistics distribution, which takes the lead in China.
5. High-end international aesthetic medicine product pipelines covering main
minimally invasive and non-invasive non-surgeries
The Company’s strategic plan in aesthetic medicine started in 2018, when it acquired
Sinclair, a Britain-based company. Sinclair acquired High Tech and Viora that are
specialized in energy based aesthetic devices in 2021 and 2022, respectively. In May 2022,
it obtained the global distribution rights, except in Germany and the UK, for the energy
based device of Préime DermaFacial of EMA Aesthetics, an Irish company. Based on these
efforts, the Company has achieved full coverage of non-surgical aesthetic medicine
injection products and energy based devices in medium- and high-end markets. It owns the
global rights in a number of patented products in the fields of facial filler, body shaping,
thread lift, energy based device, etc., and has an international operation and BD team of
aesthetic medicine. Focusing on the global high-end aesthetic medicine market, the
Company has formed an international aesthetic medicine business network covering R&D,
manufacturing and marketing, and built a global aesthetic medicine marketing network by
further integrating R&D resources and capabilities, and relying on four global R&D centers,
including Sinclair (UK), High Tech (Spain), R2 (USA) and Kylane (Switzerland), as well
as Sinclair’s five global production bases in the Netherlands, France, the United States,
Switzerland and Bulgaria. At present, the Company’s products were sold in more than 80
countries and regions around the world. The Company owns 36 high-end minimally
invasive and non-invasive products of aesthetic medicine, among which 21 are on the
market inside and outside China, and 15 are international innovative products under
research. The product portfolio covers mainstream non-surgical aesthetic medicine sectors
such as facial fillers, thread lift, skin management, body shaping, hair removal, and
cosmetic gynecology, forming an integrated product cluster with the number and scope of
products at the forefront of the industry.
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Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
6. Rooted in the strong R&D and industry base and systematically explored the
new blue sea of industrial microbiology
The Company has been engaged in the industrial microbial field for more than 40
years with a profound industrial foundation. It has successfully developed and
manufactured a variety of microbial drugs and built a system of key technology for
microbial products R&D and production. The scale and technology of existing
microorganism fermented products are at the forefront of the industry. It established three
microorganism R&D bases: Zhongmei Huadong, Huida Biotech and Huiyi Biotech, five
industrial bases including Hangzhou Xiangfu Qiao industrial base, Qiantang New District
industrial base, Jiangsu Jiuyang industrial base, Meiqi Health industrial base and Meihua
Hi-tech industrial base, the largest ferment singleton workshop in Zhejiang province as
well as the leading microbial drugs production capability. Its R&D capability covers the
whole stage of microbial engineering, such as bacteria construction, metabolic control,
separation and purification, enzyme catalysis and synthesis and modification. It has formed
a complete manufacturing system covering microbiology R&D, pilot test, commercial
production, engineering and utility system guarantee. The Company has a total of 54 R&D
projects in the industrial microbial field, including 7 special functional chemicals projects,
31 API and high-end medicine intermediate projects, 12 mega health and aesthetic
medicine ingredients projects and four biomaterials and other projects. Among them, 5 out
of special functional chemicals projects are series projects divided into more than 80 sub-
projects, and 3 out of API and high-end medicine intermediate projects are series projects
divided into more than 10 sub-projects. The total number of all projects exceeded 100. The
Company established an industrial microbiology department that has organized structure
and operates independently. The department is equipped with a first-class industrial
microbiology technical team including 361 researchers, among which 17 hold Ph.D.
degrees, and 21% of the researchers have master’s degrees or doctor’s degrees.
7. Prudent and pragmatic business style and stable shareholder returns
The Company pays attention to management innovation and strives to meet the
demand arising from market competition by improving management quality. High-quality
products, excellent commercialization ability, compliance and efficient marketing services,
differentiating market positioning, innovative R&D layout, outstanding talent planning are
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Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
the engine for the Company’s long-term stable development. Over the 22 years since it was
listed, the Company distributes dividends 19 times with a total amount of RMB5,084
million, far exceeding the RMB250 million raised in IPO, and was able to bring sustained
and stable investment returns to shareholders.
III. Analysis of main business
Please refer to the relevant content of "I. Main business of the company during the reporting period".
Year-on-year changes in major financial data
Unit: RMB yuan
Year-on-year percentage
Current reporting period Same period last year Cause of changes
increase/decrease
Operating revenue 18,197,963,991.01 17,179,437,902.61 5.93%
Operating cost 12,243,374,078.15 11,589,419,896.59 5.64%
Selling expenses 3,032,965,177.95 2,978,753,751.45 1.82%
Administrative expenses 572,048,249.55 534,683,411.33 6.99%
Mainly due to the
increase in interest
Financial expenses 5,447,966.20 9,789,580.87 -44.35%
income in the current
period
Income tax expenses 287,938,727.72 240,728,486.55 19.61%
R&D investment 566,596,381.67 437,556,684.96 29.49%
Mainly due to the year-
on-year decrease in sales
Net cash flows from receipts and government
operating activities 284,234,410.27 1,738,512,372.11 -83.65%
grants, and the increase in
deposits paid and R&D
expenses
Net cash flows from
investing activities -995,224,437.77 -1,297,044,289.24 23.27%
Mainly due to the
Net cash flows from increase in interest-
277,803,243.85 -366,906,114.30 175.72%
financing activities bearing liabilities in the
current period
Net increase in cash and
-459,496,727.95 74,138,062.91 -719.79%
cash equivalents
Significant changes in the company's profit composition or source of profit during the reporting period
□ Applicable √ N/A
There was no major change in the company's profit composition or source of profit during the reporting period.
Composition of operating revenue
Unit: RMB yuan
The current reporting period Same period last year Year-on-year
Proportion in Proportion in percentage
Amount Amount increase/decrease
operating revenue operating revenue
Total operating 18,197,963,991.01 100% 17,179,437,902.61 100% 5.93%
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Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
revenue
By sector
Business 12,227,544,864.77 67.19% 11,765,327,916.99 68.48% 3.93%
Manufacturing 5,728,897,548.63 31.48% 5,599,557,312.42 32.59% 2.31%
aesthetic medicine 389,749,005.02[Note
897,380,506.25 4.93% 3.29% 130.25%
[Note 1] 2]
Including:
International 530,599,252.48 2.92% 276,081,206.58 1.61% 92.19%
aesthetic medicine
Domestic aesthetic
413,184,704.69 2.27% 113,667,798.44 0.66% 263.50%
medicine
Offset (inter-sectoral
-519,490,722.47 -461,528,533.38
offset)
By product
By region
Domestic sales 17,641,053,155.99 96.94% 16,879,853,037.00 98.26% 4.51%
Overseas sales 556,910,835.02 3.06% 299,584,865.61 1.74% 85.89%
[Note1] The domestic aesthetic medicine business includes the income from the self-operated products of Sinclair
(Shanghai), the income from the aesthetic medicine products of the Company’s pharmaceutical commercial agency and
the income from the OTC weight-loss products of the Company, and excluding the income from the aesthetic medicine
products of the holding subsidiary, Huadong Ningbo Company. The statistical criteria of 2022 semi-annual report is the
same as that of 2021.
[Note 2] In the first half of 2021, the Company’s revenue from aesthetic medicine business (including Huadong Ningbo)
totaled RMB565 million
Sectors, products or regions that account for more than 10% of the Company’s operating revenue or operating profit
√ Applicable □ N/A
Unit: RMB yuan
Year-on-year Year-on-year
Year-on-year
percentage percentage
Operating percentage
Operating cost Gross profit rate increase/decrease increase/decrease
revenue increase/decrease
in operating in gross profit
in operating cost
revenue rate
By sector
12,227,544,864.7 11,381,893,006.3
Business 6.92% 3.93% 4.45% -0.46%
7 1
Manufacturing 5,728,897,548.63 1,215,156,442.07 78.79% 2.31% 13.62% -2.11%
By product
By region
17,641,053,155.9 12,067,330,884.8
Domestic sales 31.60% 4.51% 5.07% -0.36%
9 7
Overseas sales 556,910,835.02 176,043,193.28 68.39% 85.89% 69.07% 3.15%
If the statistical specifications of the Company’s main business data have been adjusted during the reporting period, the
Company’s main business data of the most recent period should be adjusted according to the specifications at the end of
the reporting period.
□ Applicable √ N/A
Explanation of the reason why the relevant data has changed by more than 30% year-on-year.
√ Applicable □N/A
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Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
Amount at the Amount at the
Balance Sheet End of This Beginning of This Change Reason for Change
Reporting Period Reporting Period
Accounts receivable Mainly due to the increase in the proportion of bank
802,248,535.33 509,190,888.54 57.55%
for financing clearing in the current period
Mainly due to the increase in receivables and
Other receivables 387,568,284.05 223,707,267.30 73.25%
suspense payments in the current period
Other non-current Mainly due to the increase in payments for product
1,301,733,649.28 911,062,879.83 42.88%
assets introduction in the current period
Mainly due to the repayment of borrowings in the
Short-term borrowing 858,688,755.97 1,237,843,228.13 -30.63%
current period
Mainly due to the increase in notes for payment in
Notes payable 884,312,495.21 671,964,504.00 31.60%
the current period
Mainly due to the recognition of revenue from
Contract liabilities 59,102,591.78 118,341,141.48 -50.06%
partial opening receipts of goods in advance
Mainly due to the increase in taxes paid in the
Taxes payable 551,787,831.96 1,029,610,563.41 -46.41%
current period
Mainly due to the increase in borrowings in the
Long-term borrowing 1,299,388,765.81 139,178,905.04 833.61%
current period
Mainly due to the reduction of contract liabilities
Other current liabilities 6,854,102.03 11,386,267.11 -39.80% with corresponding taxes transferred to other
current liabilities
Amount of Amount of the
Income Statement Change Reason for Change
Current Period Previous Period
Mainly due to the increase in interest income in the
Financial expenses 5,447,966.20 9,789,580.87 -44.35%
current period
Mainly due to the decrease in government grants
Other income 81,653,430.69 137,364,653.52 -40.56%
obtained in the current period
Gains on assets Mainly due to the sale of real properties in the
8,506,580.12 182,307.80 4566.05%
disposal current period
Non-operating Mainly due to the increase in donation in the
8,661,496.73 6,126,908.04 41.37%
expenses current period
Profit or loss Mainly due to Huadong Ningbo Company no
attributable to minority 13,334,907.33 42,161,491.00 -68.37% longer included in the scope of consolidation in the
shareholders current period
Amount of Amount of the
Cash Flow Statement Change Reason for Change
Current Period Previous Period
Mainly due to the year-on-year decrease in sales
Net cash flows from receipts and government grants, and the increase in
284,234,410.27 1,738,512,372.11 -83.65%
operating activities deposit payment and R&D expenses in the current
period
Net cash flows from Mainly due to the increase in interest-bearing
277,803,243.85 -366,906,114.30 175.72%
financing activities liabilities in the current period
IV. Analysis of non-main business
√ Applicable □ N/A
Unit: RMB yuan
Proportion in total
Amount Note on reasons Sustainable or not
profit
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Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
Investment income -53,479,017.66 -3.26%
Asset impairment
-71,965,559.59 -4.38%
losses
Non-operating
4,341,628.44 0.26% No
income
Non-operating
8,661,496.73 0.53% No
expenses
Mainly due to the
Other income 81,653,430.69 4.97% confirmation of government No
grants in the current period
Gains on asset
8,506,580.12 0.52%
disposal
V. Analysis of assets and liabilities
1. Major changes in asset composition
Unit: RMB yuan
End of the current reporting
End of last year
period
Change of
Proportion Proportion proportion Note on major changes
Amount in total Amount in total
assets assets
Mainly due to the year-on-year
decrease in net cash flows from
Monetary funds 3,682,953,466.77 12.81% 4,032,424,555.22 14.94% -2.13%
operating activities in the current
period
Accounts Mainly due to the increase in accounts
7,454,064,290.97 25.92% 6,430,482,175.97 23.82% 2.10%
receivable receivable within the payment period
Contract assets 0.00
Inventories 4,004,905,504.14 13.92% 3,974,549,648.96 14.72% -0.80%
Real estate
properties for 14,088,049.32 0.05% 14,569,533.94 0.05% 0.00%
investment
Long-term equity
1,005,658,952.83 3.50% 984,927,398.68 3.65% -0.15%
investments
Fixed assets 3,006,669,793.91 10.45% 3,077,227,759.84 11.40% -0.95%
Constructions in
progress 1,756,500,881.94 6.11% 1,582,125,201.25 5.86% 0.25%
Right-of-use
assets 126,894,326.47 0.44% 153,724,197.81 0.57% -0.13%
Short-term Mainly due to the repayment of
858,688,755.97 2.99% 1,237,843,228.13 4.59% -1.60%
borrowing borrowings in the current period
Contract
59,102,591.78 0.21% 118,341,141.48 0.44% -0.23%
liabilities
Long-term Mainly due to the increase in
borrowing 1,299,388,765.81 4.52% 139,178,905.04 0.52% 4.00%
borrowings in the current period
Lease liability 70,263,650.58 0.24% 80,889,403.39 0.30% -0.06%
46
Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
2. Major overseas assets
√ Applicable □ N/A
Assets size Proportion of Whether
Control
Specific overseas there are any
Reason for (Ten Operating measures to
content of Location Profit or loss assets in the significant
formation thousand mode ensure assets
assets Company’s impairment
yuan) safety
net assets risks
Control of
the Board of
Directors and
examination
& approval
of major
decisions;
Sinclair
Acquisition Independent daily Loss during
Pharma 197309.82 UK 11.11% No
of equity accounting supervision the period
Limited
of financial
matters;
entrusting
external
intermediarie
s to conduct
audits
3. Assets and liabilities measured at fair value
√ Applicable □ N/A
Unit: RMB yuan
Amou
Impairmen
Cumulative nt
Change in fair t accrued
changes in fair purcha Amount sold Closing
Item Opening balance value for the during the Other Changes
value included sed in in this period balance
current period current
in equity this
period
period
Financial
Assets
4. Investment
in other
257,815,844.68 -7,023,104.32 250,792,740.36
equity
instruments
Total of the
257,815,844.68 -7,023,104.32 250,792,740.36
above
Financial
0.00 0.00
Liabilities
Other changes
During the reporting period, whether the company’s main asset measurement attributes have changed significantly
□ Yes √ No
4. Limitation of asset rights at the end of the reporting period
Item Amount at the end of the period Reason for limitation
Cash in bank Certificate of time deposit, deposit
530,491,334.21 certificate pledge, etc.
47
Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
Other monetary funds 31,818,222.34 Cash deposit
Total 562,309,556.55
VI. Investment
1. Overview
√ Applicable □ N/A
Investment amount in the reporting period Investment amount in the same period of
Percentage change
(yuan) last year (yuan)
1,128,489,759.34 1,485,053,641.17 -24.01%
2. Significant equity investments acquired during the reporting period
√ Applicable □ N/A
Unit: RMB yuan
Profit or
Progre
loss of
Term ss as of Involve Disclos
Name Main Way of Invest Shareh Project investm Disclosu
Capital Partner of Product the d in ure
of busines invest ment olding ed ent in re date
source (s) invest type balanc litigatio index
investee s ment amount ratio income the (if any)
ment e sheet n or not (if any)
current
date
period
Anhui Pharma Equity
Meihua ceutical invest cninfo
Hi-tech and 108,00 ment - Decemb (http://
Acquisi 100.00 Equity Long- Equity
Pharma chemic 0,000.0 / has 2,074,95 No er www.cn
tion % fund term interest 29,2021 info.co
ceutical al 0 been 9.66
Co., manufa comple m.cn)
Ltd. cturing ted
The
Equity
Invest
ment
Agree
ment
Equity has
Capital cninfo
Heidelb R&D of fund/ been
injectio 735,88 Februar (http://
erg oncolog Externa Long- Equity reache
n + 2,000.0 35.00% / 0.00 No y www.cn
Pharma yADC l term interest d and 28,2022 info.co
acquisit 0[Note]
AG drug financi the m.cn)
ion
ng invest
ment
funds
have
not
been
paid
Total 843,88 -
-- -- -- -- -- -- -- -- 0.00 -- -- --
2,000.0 2,074,95
48
Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
0 9.66
Note: Conversion is based on the central parity of the Euro to RMB exchange rate on June 30, 2022, which is 7.0084
3. Significant non-equity investments in progress during the reporting period
√Applicable □N/A
Unit: RMB yuan
Cumulat
Reasons
ive Cumula
for not
Investme actual tive
Industry meeting
Investme nt investme income
involved the Disclos
Way of nt in amount nt Project Projecte realized Disclos
in the Capital planned ure
Project name investme fixed during amount progres d by the ure date
investme source schedul index
nt assets or the by the s income end of (if any)
nt e and (if any)
not reporting end of the
project projecte
period the reportin
d
reporting g period
income
period
Huadong
Medicine
Pharmac http://w
Biomedical
Self-built eutical 13,642,8 1,767,20 Own March ww.cni
Science and Yes 99.00% 0.00 0.00 N/A
project manufac 43.54 8,616.22 funds 9, 2017 nfo.com
Technology
turing .cn
Park Project
Phase II
Huadong
Medicine Life
http://w
Science Pharmac April
Self-built 57,645,1 138,488, Own ww.cni
Industrial Park Yes eutical 60.00% 0.00 0.00 N/A 21,
project 69.13 957.10 funds nfo.com
(on the south R&D 2021
.cn
side of
Xiangfu)
71,288,0 1,905,69
Total -- -- -- -- -- 0.00 0.00 -- -- --
12.67 7,573.32
4. Investment in financial assets
(1) Securities Investment
√ Applicable □ N/A
Gain/los Accumu
Book
s from lative Purchas
Account value at Selling Gain/los Book
fair fair e
Stock Initial ing the amount s during value at
Type of Stock value value amount Account Capital
abbrevia investm measure beginni in the the the end
stock code changes changes in the ing item source
tion ent cost ment ng of current reportin of the
in the included current
model the period g period period
current in period
period
period equity
Other
Domesti 20,207, Fair - equity
c and 400.00 value 14,461, 7,438,6 instrum Own
RAPT RAPT 7,023,1
overseas measure 751.62 47.30 ent funds
stock ment 04.32 investm
ent
Total 20,207, -- 14,461, - 0.00 0.00 0.00 0.00 7,438,6 -- --
49
Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
400.00 751.62 7,023,1 47.30
04.32
Date of announcement of
the Board of Directors on
N/A
securities investment
approval
Date of announcement of
the Board of Shareholders
N/A
on securities investment
approval (if any)
Note: In 2018, Huadong Medicine Investment Holding (Hong Kong) Co., Ltd., a subsidiary of the Company, invested
USD 3 million to purchase 218,102 preferred shares of RAPT Therapeutics, Inc. in C-2 series. RAPT Therapeutics, Inc.
(stock code: RAPT) was listed on the NASDAQ Stock Exchange on October 30, 2019. Up to now, Huadong Medicine
Investment Holding (Hong Kong) Co., Ltd. holds 60,500 RAPT shares after reducing some of its shares, accounting for
0.204% of the total shares of RAPT Therapeutics, Inc.
(2) Derivatives investment
√Applicable □N/A
Unit: RMB ten thousand yuan
Propo
rtion
of
Invest
ment
Amou Amou
Amou nt at nt of
Purch Sellin
Name nt of the Actua
Relati ase g
of Relate Type Impai End l
onshi Initial Amou Amou
Deriv d- of Begin rment Endin of the Profit
p of Invest nt nt
atives party Deriv Start End ning Allow g Period or
Relate ment during during
Invest Trans atives Date Date Amou ance Amou to the Loss
d Amou the the
ment action Invest nt Withd nt Comp during
Partie nt Repor Repor
Opera or Not ment rawn any’s the
s ting ting
tors (If Net Repor
Period Period
Any) Assets ting
at the Period
End
of the
Repor
ting
Period
Forwa
Finan rd
cial excha 26,64 26,64 149.3
N/A No 0.00 0.00 0.00 0.00%
institu nge 4.10 4.10 8
tions contra
ct
26,64 26,64 149.3
Total 0.00 -- -- 0.00 0.00 0.00%
4.10 4.10 8
Capital source of derivatives Equity fund
50
Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
investment
Litigation involved (if applicable) No
Disclosure date of announcement
of the Board of Directors for
July 16,2021
approval of derivatives investment
(if any)
1. The Company has strictly abided by the principle of prudent investment, selected sound
investment types and invested within the limits approved by the Board of Directors.
2. The Company has strictly screened counterparties by carrying out derivatives transactions
only with banks and other financial institutions that are sound in operation, have good credit
standing and are qualified to operate financial derivatives trading business. If necessary, the
Company would invite external professional investment and legal affairs services and other
Description of risk analysis and institutions to provide consulting services for the Company’s financial derivatives
control measures for derivatives transactions and provide scientific and rigorous investment strategies and recommendations.
positions during the reporting 3. The Company has formulated the Management System of Securities Investment and
period (including but not limited to Derivatives Trading, which provides the principles, scope, decision-making authority,
market risk, liquidity risk, credit management and supervision of fund use, information disclosure and other aspects of the
risk, operational risk, and legal company’s financial derivatives trading, to effectively prevent investment risks. Meanwhile,
risk) the Company will implement the relevant management system and assign personnel to track
the progress of financial derivatives trading. In case of any risk that may affect the safety of
the Company’s funds, corresponding measures will be taken in a timely manner to control
investment risks.
4. The Company's audit department is responsible for supervising and inspecting the
implementation of financial derivatives trading and reporting to the audit committee of the
Board of directors of on a regular basis.
For changes in market prices or fair
value of invested derivatives during
the reporting period, and the
analysis of the fair value of
N/A
derivatives, the Company should
disclose the specific methods used,
relevant assumptions and
parameter setting
Statement on whether the
accounting policies and specific
accounting principles of the
There is no significant change in accounting policies and specific accounting principles of the
Company’s derivatives in the
Company’s derivatives in the reporting period compared with the previous period.
reporting period have changed
significantly compared with the
previous period
The financial derivatives business conducted by the Company and its wholly-owned
subsidiaries is conducive to reducing exchange gains or losses, lowering financial costs,
improving the ability to cope with interest rate and exchange rate fluctuation risks and
Special opinions by independent enhancing financial soundness, which is in line with the Company’s operation and
directors on the Company’s development needs and overall interests. With the Management System of Securities
derivatives investment and risk Investment and Derivatives Trading, investment risks can be effectively controlled. The
control Board of Directors has fully communicated on this matter, concluding that the decision-
making procedures are legal and compliant, the internal control procedures are sound, and
there are no cases harming the interests of the Company and all shareholders, especially the
minority shareholders.
51
Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
5. Use of raised funds
□ Applicable √ N/A
No such case during the reporting period.
VII. Major assets and equity sales
1. Major assets sales
□ Applicable √ N/A
No such case during the reporting period.
2. Major equity sales
□ Applicable √ N/A
VIII. Analysis of wholly-partially owned and shareholding companies
√ Applicable □ N/A
Main subsidiaries and the shareholding companies that have an impact on the Company’s net profit of more than 10%
Unit: RMB yuan
Company Company Registered Operating Operating
Main business Total assets Net assets Net profit
name type capital revenue profit
Production and
management
Hangzhou of Traditional
Zhongmei Chinese and
12,245,405,3 8,258,452,70 5,501,967,29 1,279,673, 1,115,287,544.
Huadong Subsidiary Western raw 872,308,130
Pharmaceutic medicines and 87.68 4.92 5.92 400.46 00
al Co., Ltd. preparations,
and health care
products
Acquisition and disposal of subsidiaries during the reporting period
√ Applicable □ N/A
Methods of acquisition and disposal of Impact on the overall production, operation
Name of company
subsidiaries during the reporting period and performance
International business development of
Viora limited Acquisition energy source aesthetic medicine products
for the Company
Anhui Meihua Hi-Tech Pharmaceutical Industrial microbial industrialization
Acquisition
Co., Ltd. platform
Industrial microbial synthetic biology
Hangzhou Huiyi Biotechnology Co., Ltd. Newly established
technology platform
IX. Structured entities controlled by the Company
□ Applicable √ N/A
52
Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
X. Risks and Countermeasures
1.Industry policies and market operating risk
The national regulation on the pharmaceutical industry has a profound impact on the
development of the domestic industry. In recent years, the reform in the field of health care
has been promoted, and relevant policies have been implemented in a more standardized,
regular and systematic way. This, coupled with the impact of the normalization of COVID-
19 pandemic, has created uncertainty in the domestic pharmaceutical market. With the
further advancement of policies such as the Volume-Based Procurement program and
medical insurance negotiations, the pharmaceutical industry is facing challenges in terms
of production costs and profitability while new drug products are at the risk of lower prices.
Countermeasures: The Company will pay close attention to the national medical
policies and industry development trends, invest more in R&D, combine independent R&D
with external introduction, accelerate the layout of innovative varieties around the core
treatment field, enrich product lines, so as to improve core competitiveness. At the same
time, production and operational risks can be reduced through lean management, cost
reduction and efficiency improvement The Company will vigorously expand the basic and
self-funded markets to strive for more market share. Apart from that, the Company will
focus on the field of aesthetic medicine and industrial microbiology, to make the brand
more competitive and create new growth points.
2. The risk of R&D for new drug
R&D of innovative drug requires high investment and long-term efforts with high
risks. A new product from R&D to launch, needs to go through pre-clinical research,
clinical trials, registration, approved production and other procedures, often taking a long
time, and being affected by national policies, market factors, regulatory approval and other
factors. In addition, the investment in manpower and preliminary R&D costs will put
pressure on the Company to achieve its current operating objectives, and the new drug will
also face market demand testing after its launch, which may result in less than expected
return on R&D investment.
Countermeasures: The Company will continue to increase investment in drug R&D,
optimize the innovation mechanism, improve the scientific new drug research and
evaluation and decision-making system, and strengthen the establishment of close ties with
53
Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
well-known R&D institutions at home and abroad; it will focus on the core treatment field,
continue to enrich and optimize the product line through independent project and external
introduction, and constantly boost the independent R&D level to create the R&D
ecosystem; it will continue to intensify efforts to bring in high-level science and technology
talents, and enhance the training and motivation for internal key technicians, to build a
scientific research team covering the whole cycle of new drug R&D.
3. Risks of fluctuations in exchange rates
In recent years, the proportion of the Company’s foreign currency settlement business
is increasing as its internationalization process has been continuously promoted,
international cooperation and exchanges have been continuously increased, and the sales
network of its aesthetic medicine products covers across the world. There are uncertainties
in exchange difference influenced by the complex international political and economic
situation and factors such as the Russian-Ukraine war. Changes in exchange rates have far-
reaching and lasting effects on the Company, which may bring good economic benefits or
serious economic risks. Exchange rate fluctuations will affect the prices of the Company’s
exports, and will also cause exchange gains or losses, directly affecting its assets, liabilities
and earnings, and further affecting its operating capacity, solvency and profitability.
Countermeasures: The company will pay close attention to changes in exchange rates,
adjust its business policies in a timely manner according to its own situation to eliminate
the adverse impact; it will establish awareness of exchange rate risk prevention and refine
the exchange risk management system; at the same time, it will strengthen the training of
professional skills and risk awareness of financial personnel, enhance the awareness of risk
avoidance and make good use of financial means to avoid exchange rate risks.
4. The risk of goodwill impairment
In recent years, in order to realize the Company’s innovative transformation
development strategy, it has increased investment and M&A activities around innovative
drugs and aesthetic medicine field, resulting in goodwill. The Company has no impairment
of goodwill as assessed in the regular goodwill impairment tests. If the operating conditions
of the Company to be acquired fluctuate in the future, there may be a risk of goodwill
impairment, which will have a negative impact on the its current operating performance.
Countermeasures:
54
Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
The company will strive to comprehensively improve its overall planning ability in
business planning, management structure and financial management, enhance resource
sharing and synergy with overseas subsidiaries such as Sinclair, a global aesthetic medicine
operating platform, to improve its business integration capabilities of integrated operations
and governance.
XI. Registration form of receptions, including research, communication and
interview, undertaken during the reporting period
Main content
of discussion Index of basic
Reception Reception Type of Reception
Reception Method and information of the
Date Address visitor object
information research
provided
Company Please refer to
conference Huadong “Huadong Medicine:
room Medicine record of investor
industrial relations activities:
Huatai
January Institution, January 5,2022”
Online meeting Securities, microbiolog
5,2022 individual presented on the
etc. y topic websites of
communicat irm.cninfo.com.cn
ion and cninfo.com.cn
for details.
Company Please refer to
conference “Huadong Medicine:
room record of investor
Industrial
Investor relations activities:
Securities,
January Communication by January 7.10,2022”
Institution Horizon communicat
7.10,2022 phone presented on the
Insights, ion websites of
etc.
irm.cninfo.com.cn
and cninfo.com.cn
for details.
Company Institution, Huadong
conference individual Medicine
room Please refer to
aesthetic
“Huadong Medicine:
medicine record of investor
topic relations activities:
February Zheshang exchange February 9,2022”
9,2022
Online meeting presented on the
Fund, etc and
interpretatio websites of
irm.cninfo.com.cn
n of
and cninfo.com.cn
overseas for details.
EBD
transaction
Company Institution, Please refer to
conference individual Exchange “Huadong Medicine:
Industrial
March 1,2022 room Securities ,
on the latest record of investor
Online meeting
etc. innovative relations activities:
BD project March 1,2022”
presented on the
55
Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
for Huadong websites of
Medicine irm.cninfo.com.cn
and cninfo.com.cn
for details.
Company Institution, Interpretatio
conference individual Please refer to
n of results
room “Huadong Medicine:
of 2021 record of investor
Annual relations activities:
Huatai
Communication by Report and April 28, 2022”
April 28, 2022 Securities,
phone First Quater presented on the
etc.
Report of websites of
irm.cninfo.com.cn
2022 for
and cninfo.com.cn
Huadong for details.
Medicine
Company Institution, Explanation
conference individual Please refer to
of results of
room “Huadong Medicine:
2021 record of investor
Annual relations activities:
Public Report and May 13, 2022”
May 13, 2022 Online meeting
investors First Quater presented on the
Report of websites of
irm.cninfo.com.cn
2022 for
and cninfo.com.cn
Huadong for details.
Medicine
Company Institution, Please refer to
conference individual “Huadong Medicine:
room record of investor
JP Activities relations activities:
Field research Morgan on investor June 1, 2022”
June 1, 2022
, online meeting Group, reception presented on the
etc day websites of
irm.cninfo.com.cn
and cninfo.com.cn
for details.
56
Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
Section IV. Corporate Governance
I. Annual General Meeting and Extraordinary General Meetings convened during
the reporting period
1. Annual General Meeting convened during the current reporting period
Proportion of
Meeting Nature participating Convened Date Disclosure Date Disclosure Index
investors
2021 Annual General Annual General No. 2022-041;
Meeting of Meeting of 60.99% June 1, 2022 June 1, 2022
Shareholders Shareholders www.cninfo.com.cn
2. Extraordinary general meetings convened at the request of preferred shareholders with
resumed voting rights
□ Applicable √ N/A
II. Change of directors, supervisors and senior managers
√ Applicable □ N/A
Name Title Category Date Reason
General election of the
Lv Liang Chairman Election June 01, 2022
Board of Directors
June 01, 2022 General election of the
Kang Wei Director Election
Board of Directors
June 01, 2022 General election of the
Niu Zhanqi Director Election
Board of Directors
June 01, 2022 General election of the
Zhu Feipeng Director Election
Board of Directors
June 01, 2022 General election of the
Ye Bo Director Election
Board of Directors
June 01, 2022 General election of the
Zhu Liang Director Election
Board of Directors
Resignation after June 01, 2022 Resignation after
Jin Xuhu Director
expiration of term expiration of term
June 01, 2022 General election of the
Gao Xiangdong Independent Director Election
Board of Directors
June 01, 2022 General election of the
Wang Ruwei Independent Director Election
Board of Directors
June 01, 2022 General election of the
Yang Lan Independent Director Election
Board of Directors
Zhong Xiaoming Independent Director Resignation after June 01, 2022 Resignation after
57
Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
expiration of term expiration of term
Resignation after June 01, 2022 Resignation after
Yang Jun Independent Director
expiration of term expiration of term
June 01, 2022 Election of the Board of
Bai Xinhua Supervisor Election
Supervisors
June 01, 2022 Election of the Board of
Zhou Yanwu Supervisor Election
Supervisors
Supervisor June 01, 2022 Election of the Board of
Qin Yun Election
Supervisors
Supervisor June 01, 2022 Election of the Board of
Dong Jiqin Election
Supervisors
Supervisor June 01, 2022 Election of the Board of
Xu Zhifeng Election
Supervisors
Supervisor June 01, 2022 Election of the Board of
Zhu Yinhua Election
Supervisors
Supervisor Resignation after June 01, 2022 Resignation after
Liu Chengwei
expiration of term expiration of term
Supervisor Resignation after June 01, 2022 Resignation after
Hu Baozhen
expiration of term expiration of term
Supervisor Resignation after June 01, 2022 Resignation after
He Rufen
expiration of term expiration of term
General June 01, 2022 Appointment of the
Lv Liang Appointment
Manager(CEO) Board of Directors
Deputy General June 01, 2022 Appointment of the
Wu Hui Manager Appointment
Board of Directors
Deputy General June 01, 2022 Appointment of the
Zhu Li Manager Appointment
Board of Directors
Deputy General June 01, 2022 Appointment of the
Zhang Jianfei Manager Appointment
Board of Directors
Deputy General Resignation after June 01, 2022 Resignation after
Zhou Shunhua Manager expiration of term expiration of term
Board Secretary June 01, 2022 Appointment of the
Chen Bo Appointment
Board of Directors
Person in Charge of June 01, 2022 Appointment of the
Qiu Renbo Finance Appointment
Board of Directors
III. Profit distribution and capitalization of capital reserves plan or proposal for the
current reporting period
□ Applicable √ N/A
The Company did not plan to distribute cash dividends, send bonus shares, or convert capital reserve into share capital
during the first half of the year.
58
Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
IV. The implementation of Equity Incentive Plan, Employee Stock Incentive Plan, or
other incentive plans
□ Applicable √ N/A
No such case during the reporting period.
59
Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
Section V. Environmental and Social Responsibility
I. Significant environmental problems
Whether the Company and its subsidiaries are the key pollutant discharging units announced by the environmental
protection authorities
√ Yes □No
Name of the Name of Number of Distribution Concentrati Discharge Approved
Discharge Total Excessive
company or major discharge of discharge on of standard of total
type discharge discharge
subsidiary pollutants outlets outlets discharge pollutants discharge
Hangzhou
Front gate,
Zhongmei Water
Intermittent 866
Huadong pollutant: 1 7.44 6-9 / / None
discharge Moganshan
Pharmaceuti PH value
Road
cal Co., Ltd.
Hangzhou
Front gate,
Zhongmei Water
Intermittent 866 33.3
Huadong pollutant:: 1 35.79mg/l 500mg/l 7.53 tons None
discharge Moganshan tons/year
Pharmaceuti COD
Road
cal Co., Ltd.
Hangzhou
Water Front gate,
Zhongmei
pollutant: Intermittent 866 2.38
Huadong 1 0.56mg/l 35mg/l 0.12 tons None
ammonia discharge Moganshan tons/year
Pharmaceuti
nitrogen Road
cal Co., Ltd.
Hangzhou Legal In the
Solid
Zhongmei disposal by factory at
pollutant:
Huadong entrusted 2 866 / / 464.95 tons / None
hazardous
Pharmaceuti qualified Moganshan
solid waste
cal Co., Ltd. units Road
Hangzhou Legal In the
Solid
Zhongmei disposal by factory at
pollutant:
Huadong entrusted 2 866 / / 541.84 tons / None
general
Pharmaceuti qualified Moganshan
solid waste
cal Co., Ltd. units Road
Hangzhou
Air Roof of the
Zhongmei
pollutant: Organized boiler room 17.7
Huadong 1 28.5mg/ m 50mg/ m 0.467 tons None
nitrogen emission in Building tons/year
Pharmaceuti
oxide No. 25
cal Co., Ltd.
Hangzhou
Air Roof of the
Zhongmei
pollutant: Organized boiler room
Huadong 1 3mg/ m 20mg/ m 0.049 tons / None
sulfur emission in Building
Pharmaceuti
dioxide No. 25
cal Co., Ltd.
Hangzhou
Air Roof of the
Zhongmei
pollutant: Organized boiler room
Huadong 1 6.9mg/ m 10mg/ m 0.109 tons / None
dust and emission in Building
Pharmaceuti
fume No. 25
cal Co., Ltd.
Hangzhou Water Continuous 1 7278 Meilin 8.24 6-9 / / None
60
Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
Zhongmei pollutant: emission Avenue
Huadong pH (southweste
Pharmaceuti rn side)
cal
Jiangdong
Co., Ltd.
Hangzhou
Zhongmei
7278 Meilin
Huadong Water
Continuous Avenue 141.369
Pharmaceuti pollutant: 1 294mg/L 500mg/L 99.71 tons None
emission (southweste tons
cal COD
rn side)
Jiangdong
Co., Ltd.
Hangzhou
Zhongmei
Water 7278 Meilin
Huadong
pollutant: Continuous Avenue
Pharmaceuti 1 8.99mg/L 35mg/L 3.049 tons 7.069 tons None
ammonia emission (southweste
cal
nitrogen rn side)
Jiangdong
Co., Ltd.
Hangzhou Organized Environmen
Zhongmei emission tal
Huadong
Exhaust gas protection
Pharmaceuti 6 1.94 60mg/L 0.28905 5.14 tons None
cal VOCs workshop,
Jiangdong 7278 Meilin
Co., Ltd. Avenue
Hangzhou Organized Environmen
Zhongmei emission tal
Huadong Exhaust gas
protection
Pharmaceuti Sulfur 1 /(None) 100mg/L 0 0.38 tons None
cal workshop,
dioxide
Jiangdong 7278 Meilin
Co., Ltd. Avenue
Hangzhou Organized Environmen
Zhongmei emission tal
Huadong Exhaust gas
protection
Pharmaceuti Nitrogen 1 /(None) 200mg/L 0 7.54 tons None
cal workshop,
oxide
Jiangdong 7278 Meilin
Co., Ltd. Avenue
Hangzhou
Environmen
Zhongmei Legal
Solid tal
Huadong disposal by
pollutant: protection
Pharmaceuti entrusted 2 / / 280.56 tons / None
hazardous workshop,
cal qualified
solid waste 7278 Meilin
Jiangdong units
Avenue
Co., Ltd.
Hangzhou
Environmen
Zhongmei Legal
Solid tal
Huadong disposal by
pollutants: protection
Pharmaceuti entrusted 4 / / 7633.4 tons / None
General workshop,
cal qualified
solid wastes 7278 Meilin
Jiangdong units
Avenue
Co., Ltd.
Huadong Water Along
Medicine Intermittent National
pollutant: 1 8.1 6-9 / / None
(Xi’an) discharge Highway
PH value
Bohua 310, Liuye
61
Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
Pharmaceuti River,
cal Co., Ltd. Huayin City
Huadong Along
Medicine National
Water
(Xi’an) Intermittent Highway
pollutant: 1 36.8mg/l 50mg/l 0.498 tons 3 tons None
Bohua discharge 310, Liuye
COD
Pharmaceuti River,
cal Co., Ltd. Huayin City
Huadong Along
Medicine Water National
(Xi’an) pollutant: Intermittent Highway
1 0.37mg/l 8mg/l 0.005 tons 0.48 tons None
Bohua ammonia discharge 310, Liuye
Pharmaceuti nitrogen River,
cal Co., Ltd. Huayin City
Huadong Along
Medicine Water National
(Xi’an) pollutant: Intermittent Highway
1 8.8mg/l 15mg/l 0.12 tons / None
Bohua total discharge 310, Liuye
Pharmaceuti nitrogen River,
cal Co., Ltd. Huayin City
Huadong
Compliant
Medicine Solid
disposal by
(Xi’an) pollutant: In the
entrusted 3 / / 59.73 tons / None
Bohua hazardous company
qualified
Pharmaceuti waste
units
cal Co., Ltd.
Huadong
Air
Medicine Raw
pollutant:
(Xi’an) Organized medicine
volatile 1 / 60mg/ m / / None
Bohua emission No.1
organic
Pharmaceuti workshop
compound
cal Co., Ltd.
Huadong
Medicine Air Raw
(Xi’an) pollutant: Organized medicine
1 / 30mg/ m / / None
Bohua hydrogen emission No.1
Pharmaceuti chloride workshop
cal Co., Ltd.
Huadong
Medicine Air Raw
(Xi’an) pollutant: Organized medicine
1 / 20mg/ m / / None
Bohua hydrogen emission No.2
Pharmaceuti chloride workshop
cal Co., Ltd.
Huadong
Medicine Air Raw
(Xi’an) pollutant: Organized medicine
1 / 20mg/ m / / None
Bohua particulate emission No.2
Pharmaceuti matter workshop
cal Co., Ltd.
Huadong
Medicine Air Raw
(Xi’an) pollutant: Organized medicine
1 / 45mg/ m / / None
Bohua sulfuric acid emission No.2
Pharmaceuti mist workshop
cal Co., Ltd.
Jiangsu Water 9 Haidubei
Intermittent 1 8.4 6-9 / / None
Joyang pollutant:
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Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
Laboratorie PH value discharge Road
s Co., Ltd.
Jiangsu 9 Haidubei
Water
Joyang Intermittent Road 22.401
pollutant: 1 119mg/l 500mg/l 3.375 tons None
Laboratorie discharge tons/year
COD
s Co., Ltd.
Jiangsu Water 9 Haidubei
Joyang pollutant: Intermittent Road 1.156
1 0.147mg/l 35mg/l 0.004 tons None
Laboratorie ammonia discharge tons/year
s Co., Ltd. nitrogen
Jiangsu Water
Joyang pollutant: Intermittent 9 Haidubei 1.486
1 10.6mg/l 45mg/l 0.301 tons None
Laboratorie total discharge Road tons/year
s Co., Ltd. nitrogen
Jiangsu Water
Joyang pollutant: Intermittent 9 Haidubei 0.164
1 1.71mg/l 8mg/l 0.048tons None
Laboratorie total discharge Road tons/year
s Co., Ltd. phosphorus
Legal
Jiangsu Solid In the
disposal by
Joyang pollutant: factory at 3148.7tons/
entrusted / / / 586.7 tons None
Laboratorie hazardous Haidubei year
qualified
s Co., Ltd. solid waste Road
units
Dosing
section of
workshop
101,
fermentatio
n section of
workshop
101, dosing
section of
workshop
104 (shared
Jiangsu Air
by 107 and
Joyang pollutant: Organized 16.93tons/ 42.7409
5 108), 12.5mg/m 60mg/Nm None
Laboratorie particulate emission half year tons/year
fermentatio
s Co., Ltd. matter
n section of
workshop
104 (shared
by 107 and
108), and
drying
section of
workshop
104 (shared
by 107 and
108)
Construction and operation of pollution prevention and control facilities
1. Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd.
(1) Waste water
Name of pollution
Status of
prevention and control Treatment process Processing capacity Time of operation
operation
facilities
Waste water treatment Original 600 tons/day; Out of service
Facultative + November 1993; technical
system of the old sewage 800 tons/day after to be
fluidized bed transformation in 2007
station technical transformation dismantled
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Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
December 2001; technical
Waste water treatment transformation in 2014 (IC
Facultative +CASS+
system of the new 2,200 tons/day and air flotation added) Normal
air flotation
sewage station IC tower process dismantled
in 2022
(2) Waste gas
Name of pollution
Processing Status of
prevention and control Treatment process Time of operation
capacity CMH operation
facilities
Level 2 water spraying + surface cooling + Normal
DA010（35#-1） 15000 2017
activated carbon adsorption/desorption
DA011（35#-2） Level 2 water spraying 22000 2013 Normal
DA012（40#-2） Activated carbon + horizontal spraying 6000 2019 Dismantled
DA013（32#-1） Level 2 alkali liquor spraying 22000 2013 Dismantled
Level 2 water spraying + surface cooling + low-
DA014（36#-1) 27000 2017 Normal
temperature plasma + Level 1 water spraying
DA015（40#-1） Level 2 water spraying 24200 / Dismantled
Two levels of alkali liquor spraying + all-in-one
(photocatalytic oxidation + plasma + activated
DA016（18#-1） 16000 2019 Normal
carbon) + inorganic nano catalytic deodorization
equipment + Level 1 water spraying
DA017（19#-1） Combustion tower / 2018 Dismantled
DA018（19#-2） Combustion tower / 2018 Dismantled
Level 1 water spraying + photocatalytic Normal
DA019（3#-1） 20000+52000 2019
oxidation
Two levels of water spraying + condensation+ Normal
DA020（36#-2） photocatalytic oxidation + activated carbon + 10000 2019
inorganic nano-catalysis + water spraying
Level 1 water spraying + Level 1 alkali liquor Stopped
DA021（16#-1） 12000 2012
spraying
Level 1 water spraying + Level 1 plant oil and Stopped
DA022（16#-2） 30000 2014
water spraying
Condensation + Level 1 alkali liquor spraying + Stopped
DA023（27#-1） 15000 2009
all-in-one + Level 1 alkali liquor spraying
Level 2 alkali liquor spray + condensate tank +
DA024（33#-1） 48000 2019 Dismantled
common Level 1 alkali liquor spraying
Dust removal with cloth bag + high-efficiency
DA025（32#-2） / 2017 Dismantled
filter
DA026（34#-1） Level 2 alkali liquor spraying 54000 2008 Dismantled
DA027（7#-1） Level 2 alkali liquor spraying 26000 2015 Normal
DA028（6#-1） Level 1 water spraying 12200 2016 Normal
Level 2 alkali liquor spraying + photocatalytic Normal
DA029（18#-2） oxidation + activated carbon + Level 1 alkali 16000 2018
liquor spraying
Level 1 water spraying + Level 1 alkali liquor Normal
DA030（18#-3） 5000 2017
spraying
2009 Normal
DA031（25#-2） Low-nitrogen combustion + high-altitude 8000
(The low nitrogen
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Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
emission transformation
completed in
December 2019.)
2009 Normal
(The low nitrogen
Low-nitrogen combustion + high-altitude
DA032（25#-1） 8000 transformation
emission
completed in
December 2019.)
DA033（1#-1） Oil fume purifier / / Normal
Two levels of water spraying + activated carbon Stopped
DA034（27#-2） 15000 2011
adsorption/desorption
Photocatalytic oxidation + Level 1 alkali liquor Stopped
DA035（27#-3） 22300 2016
spraying
DA036（8#-1） Level 2 water spraying 25000 2017 Normal
Level 2 water spraying + surface cooling + Normal
DA037（13#-1） 25000 2017
activated carbon adsorption/desorption
Level 1 water spraying + photocatalytic Stopped
DA038（28#-1） 22000 2011
oxidation
Level 2 water spraying + common Stopped
DA039（28#-2） 48000 2011
photocatalytic oxidation
Level 1 water spraying + Level 1 alkali liquor Stopped
DA040（29#-1） 22000 2011
spraying
DA041（33#-2） Level 1 water spraying 18600 2012 Dismantled
DA042（10#-1） Level 1 water spraying 20000 2016 Normal
Level 1 alkali liquor spraying + photocatalytic Normal
DA043（15#-1） 25000 2018
oxidation
Level 1 alkali liquor spraying + Level 1 water Normal
DA044（43#-1） 45000 2014
spraying
DA045（46#-1） Level 1 water spraying 3000 2015 Normal
DA046（46#-2） Level 1 water spraying 25000 2015 Normal
DA047（46#-3） Level 1 water spraying 30000 2015 Normal
DA048（23#-1） Two levels of water spraying 7000 2019 Normal
(3) Solid waste
Name of pollution
prevention and control Treatment process Processing capacity Time of operation Status of operation
facilities
Standardized storage 160 tons March 2012
Standardized storage; legal
Hazardous waste warehouse
disposal by qualified units
Standardized storage 240 tons March 2010
Standardized storage 7 tons March 2010
Standardized storage; legal
General solid waste yard
disposal by qualified units
Standardized storage 30 tons June 2004
2. Construction and operation of pollution prevention and control facilities of Hangzhou Zhongmei Huadong
Pharmaceutical Jiangdong Co., Ltd.
(1) Waste water
Name of pollution Treatment process Processing capacity Time of operation Status of operation
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Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
prevention and control
facilities
Phase I sewage treatment Primary sedimentation 1500tons/day March 2016 Normal
station + EGSB + facultative + aerobic +
advanced treatmen
Phase II sewage treatment EGSB + facultative +aerobic + 8500tons/day July 2019 Normal
station advanced treatmen
(2) Waste gas
Name of pollution Treatment process Processing Time of operation Status of operation
prevention and control capacity
facilities CMH
East fermentation Level 2 alkali spray May 2016 Normal
DA001 45000
exhaust + Photocatalytic oxidation
West Level 2 alkali spray + May 2016 Normal
DA002 fermentation Photocatalytic oxidation 40000
exhaust
North dry exhaust Level 2 alkali spray May 2016 Normal
DA003 80000
gas
Exhaust gas from Level 2 alkali spray May 2016 Normal
DA004 the wastewater 50000
treatment station
Ingredients and Level 2 alkali spray + May 2016 Normal
DA005 20000
other exhaust gas Photocatalytic oxidation
Exhaust gas from Level 1 alkali spray May 2016 Normal
DA006 10000
ingredients
Exhaust gas Level 1 alkali spray May 2016 Normal
arising from + Photocatalytic oxidation
DA007 20000
quality control
and R&D
South dry exhaust Level 2 alkali spray May 2016 Normal
DA008 80000
gas
Frame exhaust Level 2 alkali spray + May 2017 Normal
DA010 40000
gas Photocatalytic oxidation
Exhaust gas from Level 2 alkali spray May 2017 Normal
DA011 drying and 20000
cooling silo
Dry 7m exhaust Level 1 alkali spray May 2016 Normal
DA012 20000
gas
Dry 18m exhaust Level 1 alkali spray May 2016 Normal
DA013 20000
gas
Exhaust gas in Active carbon+ alkali spray Normal
DA014 A small amount June 2019
tank area
Water spray +RTO+ alkali June 2019 Suspend
DA015 RTO exhaust gas 100000
spray
Vogli preparation Bag dust collecting June 2019 Suspend
DA016 A small amount
exhaust gas 1
DA017 MP exhaust gas Photocatalytic oxidation 44000 June 2019 Suspend
Super-resistant Alkali spray + June 2019 Suspend
DA018 fermentation Photocatalytic oxidation + 20000
exhaust gas Water spray
DA019 X8 exhaust gas Acid spray + Water spray 6000 June 2019 Suspend
Vogli preparation Bag dust collecting June 2019 Suspend
DA020 A small amount
exhaust gas 2
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Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
Quality Alkali spray + June 2019
DA021 inspection Photocatalytic oxidation + 30000 Normal
exhaust gas water spray
Hydrochloric acid Alkali spray + water spray June 2019 Suspend
DA022 exhaust gas 10000
refined from AK
Spray drying Bag dust collecting + water June 2019 Suspend
DA023 A small amount
exhaust gas 1 spray
North exhaust gas Alkali spray + June 2019 Suspend
DA024 fermented from Photocatalytic oxidation + 90000
AK water spray
South exhaust gas Alkali spray + June 2019 Suspend
DA025 fermented from Photocatalytic oxidation + 90000
AK water spray
Exhaust gas from Alkali spray + water spray June 2019 Suspend
the phase II
DA026 58000
wastewater
treatment station
Alkali spray + June 2019 Suspend
Central control
DA027 Photocatalytic oxidation + 8000
exhaust gas
water spray
DA028 YT exhaust gas Alkali spray + water spray 4000 June 2019 Suspend
Spray drying Bag dust collecting + water June 2019 Suspend
DA029 A small amount
exhaust gas 2 spray
Alcohol exhaust Alkali spray + water spray June 2019 Suspend
DA030 gas refined from 1000
AK
(3) Solid waste
Name of pollution Treatment process Processing capacity Time of operation Status of operation
prevention and control
facilities
Standardized storage Standardized storage; legal
10tons March 2017
Hazardous waste disposal by entrusted
warehouse Standardized storage 200tons qualified units
May 2021
Standardized storage 20tons March 2016 Standardized storage; legal
disposal by entrusted
Standardized storage 15tons March 2016 qualified units
General solid waste yard
Standardized storage 40tons July 2019
Standardized storage 30tons July 2019
3. Construction and operation of pollution prevention and control facilities of Huadong Medicine (Xi’an) Bohua
Pharmaceutical Co., Ltd.:
(1) Waste water
Name of pollution Treatment process Processing capacity Time of operation Status of
prevention and control operation
facilities
Fenton oxidation + 250 tons/day July 2012 Normal
Waste water treatment
facultative +
system of the sewage
aerobic+MBR+
station
Ozone oxidation
(2) Waste gas
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Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
Name of pollution prevention and control facilities Treatment process Time of operation Status of operation
Waste gas treatment unit of raw medicine No. 1 workshop Alkali spray + dry filter October 2020 Normal
(filter cotton) +UV
photolysis + activated carbon
adsorption
Waste gas treatment unit of raw medicine No. 2 workshop Level 2 alkaline water spray November 2019 Normal
+ dry filter +UV photolysis +
activated carbon
(3) Solid waste
Name of pollution Treatment process Storage capacity Time of operation Status of operation
prevention and control
facilities
Hazardous waste warehouse Standardized 60 tons January 2012 Standardize storage; legal disposal
storage by entrusted qualified units
4. Construction and operation of pollution prevention and control facilities of Jiangsu Joyang Laboratories Co., Ltd.:
(1) Waste water
Name of pollution Treatment process Processing capacity Time of operation Status of operation
prevention and control
facilities
Waste water treatment Air floatation tank + hydrolysis 300 tons/day December 2014 Normal
system of the sewage acidification + IC tower + UASB
station pool + A/O pool + O pool +
secondary sedimentation tank
(2) Waste gas
Name of pollution prevention and Treatment process Processing Time of Status of
control facilities capacity operation operation
CMH
Waste gas treatment unit of the Level 1 water spray + moisture 10,000 2014 Normal
extraction section of workshop 101 separator + photocatalytic
oxidation + level 2 activated
carbon adsorption + high-
altitude discharge via 25m
exhaust pipe
Waste gas treatment unit of the Level 1 water spray + moisture 2,000 2019 Normal
fermentation section of workshop separator + level 2 activated
101 carbon adsorption + high-
altitude discharge via 25m
exhaust pipe
Waste gas treatment unit of the Level 1 water spray + moisture 22,000 2017 Normal
drying section of workshop 101 separator + level 2 activated
carbon adsorption + high-
altitude discharge via 25m
exhaust pipe
Waste gas treatment unit of the Cyclone separator + level 1 5,000 2014 Normal
dosing section of workshop 101 water spray + high-altitude
discharge via 15m exhaust pipe
Waste gas treatment unit of the level 1 water spray + moisture 75000 2021 Normal
fermentation section of workshop separator + level 2 activated
104/107/108 carbon adsorption +high-
altitude discharge via 25m
exhaust pipe
Waste gas treatment unit of the Level 1 water spray + moisture 10,000 2015 Normal
separator + photocatalytic
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Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
extraction section of workshop 104 oxidation + level 2 activated
carbon adsorption + high-
altitude discharge via 25m
exhaust pipe
Waste gas treatment unit of the Cyclone separator + level 1 5000 2015 Normal
dosing section of workshop water spray +high-altitude
104/107/108 discharge via 15m exhaust pipe
Waste gas treatment unit of the Level 1 water spray + moisture 20000 2015 Normal
drying section of workshop separator + level 2 activated
104/107/108 carbon adsorption
Waste gas treatment unit of Level 1 water spray + moisture 40000 2019 Normal
pretreatment basin and domestic separator + photocatalytic
waste yard of workshop 103 and 303 oxidation + level 2 activated
carbon adsorption +high-
altitude discharge via 25m
exhaust pipe
Waste gas treatment unit of Level 1 water spray + moisture 10,000 2015 Normal
workshop 106 separator + photocatalytic
oxidation + level 2 activated
carbon adsorption + high-
altitude discharge via 25m
exhaust pipe
Waste gas treatment unit of the Level 1 water spray + moisture 20,000 2019 Normal
extraction section of workshop 107 separator +photocatalytic
oxidation+ level 2 activated
carbon adsorption + high-
altitude discharge via 25m
exhaust pipe
Waste gas treatment unit of the Level 1 water spray + moisture 40,000 2019 Normal
extraction section of workshop 108 separator + photocatalytic
oxidation + level 2 activated
carbon adsorption + high-
altitude discharge via 25m
exhaust pipe
Waste gas treatment unit of Level 1 water spray +high- 20000 2019 Normal
workshop 109 altitude discharge via 25m
exhaust pipe
Waste gas treatment unit of sewage Level 1 water spray + moisture 15000 2021 Normal
station 303 separator + photocatalytic
+high-altitude discharge via
25m exhaust pipe
(3) Solid waste
Name of pollution Treatment process Processing capacity Time of operation Status of operation
prevention and control
facilities
Hazardous waste warehouse Standardized storage 300 tons October 2020 Standardized storage; legal
disposal by entrusted
qualified units
Domestic waste yard Standardized storage 3 tons March 2015 Chengdong Garbage Disposal
Station
Environmental impact assessment of construction projects and other administrative permits for environmental protection
69
Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
All construction projects of the above four subsidiaries of the Company have be declared, constructed and accepted
in strict accordance with the requirements of “three simultaneous” for environmental protection, have passed
environmental impact assessment, and met the requirements of environmental impact assessment for construction
projects. The Company has obtained the pollutant discharge permit and the discharge permit of urban sewage into the
drainage pipe network according to the environmental protection requirements.
Hangzhou Zhongmei Huadong Pharmaceutical Jiangdong Co., Ltd. obtained the environmental assessment
approval for the Bering tablet production renovation project on April 22, 2022. Jiangsu Jiuyang Biopharm Co., Ltd.
obtained the pollutant discharge permit according to the environmental protection requirements. The valid period is
from February 28, 2022 to February 27, 2027.
Emergency plan for environmental emergencies
The company has established a comprehensive emergency response plan for environmental emergencies,
standardizes the emergency handling of environmental emergencies, and minimizes the impact on human health caused
by the leakage of environmental risk substances into the air, water or soil due to fire, explosion, leakage or other
unexpected emergencies. And environmental hazards, continue to improve the company's emergency response
capabilities for sudden environmental pollution incidents. The company has comprehensively established the emergency
plan for environmental emergencies, standardized the emergency treatment of environmental emergencies, minimized
the harm to human health and environment caused by the leakage of environmental risk substances to air, water or soil
due to fire, explosion, leakage or other unexpected emergencies, and continuously improved the emergency response
capacity of the company for environmental pollution emergencies. The above four subsidiaries of the Company have
compiled and established the mechanism of “Emergency Plan for Environmental Emergencies”, revised and improved it
regularly according to the requirements.
Jiangsu Jiuyang Biopharm Co., Ltd. organized an emergency plan drill for fire environmental incidents in May
2022.
Environmental self-monitoring scheme
The above four subsidiaries of the Company have all established the mechanism of “Self-monitoring Scheme for
Pollution Sources” which has been put on record in the environmental protection authorities, and all the monitoring data
are reported according to the regulations.
Administrative punishment caused by environmental problems during the reporting period
Impact on the
Company/subsidia Violation production and Rectification
Reasons Punishment
ry name description operation of the measures
listed Company
The Company need
to stop
The Company fails immediately the
Jiangsu Joyang to re-apply for a Types of pollutant production of the
A fine of
Laboratories Co., discharge permit to emissions are No major impact product and
RMB228,000
Ltd discharge increased discharge
pollutants pollutants
according to the
discharge permit
Other environmental information that should be made public
None
Carbon emissions reduction measures and effects during the reporting period
√ Applicable □ N/A
In the first half of 2022, Hangzhou Zhongmei Huadong Pharmaceutical Jiangdong Co., Ltd., a wholly-owned
subsidiary of the Company, continued to use biogas for power generation, reducing the emission of methane, hydrogen
sulfide and other pollutants, and continuously carried out measures such as water saving and consumption reduction in
the workshop to reduce the emission of pollutants.
In the first half of 2022, Jiangsu Jiuyang Biopharm Co., Ltd., the holding subsidiary of the Company, conducted
technical transformation of air pipelines to optimize pipeline layout, reduce air resistance, and improve air utilization
rate, which can save 60,000 kWh per month. With the lean project, the power consumption of a single batch of
products dropped by 13%, the consumption of tap water by 19%, and the consumption of steam by 8% in the first half
of 2021.
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Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
In the first half of 2022, Hangzhou Zhongmei Huadong Pharmaceutical Co., Ltd., a wholly-owned subsidiary of
the Company, carried out frequency conversion transformation on the tap water pressurization system and tail gas
treatment system in Xiangfu Qiao plant, which is expected to save 380,000 kwh of electricity annually; it adjusted the
service time of some high-power electrical equipment to avoid peak and fill valley, with estimated annual electricity
cost savings of 150,000 yuan; it rectified or banned the use of electricity for non-process steam, which can save
approximately 1,000 tons of steam per year; it implemented duty mode for air conditioners in the production area to
reduce the consumption of energy such as air conditioning steam, chilled water and electricity during non-production
hours; it carried out energy-saving and consumption-reduction technical transformation for the sewage treatment
system and optimized the sewage treatment control index to reduce the use of compressed air and save electricity and
energy, which can save more than 10,000 kwh of electricity per month.
Other information related to environmental protection
None
II. Social responsibilities
Since the normalization of the COVID-19 pandemic, the Company, as a provincial and municipal emergency
medicine and equipment storage unit, has actively participated in the fight against the pandemic, performed social
responsibilities, paid close attention to the epidemic situation, actively coordinated the production enterprises, and
optimized the inventory structure of provincial physical reserves and emergency medical materials; it has scrambled to
implement the organization, mobilization and coordination of pandemic prevention materials, and made every effort to
speed up the transportation of emergency security materials to ensure supply, curbing the spread of the virus with practical
actions.
71
Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
Section VI. Important Matters
I. Commitments made by interested parties such as the Company’s de facto controller,
shareholders, related parties, acquirer(s), and the Company that are fulfilled during
the reporting period or unfulfilled by the end of the reporting period
□ Applicable √ N/A
The Company does not have commitments made by interested parties such as the Company’s de facto controller,
shareholders, related parties, acquirer(s), and the Company that are fulfilled during the reporting period or unfulfilled by
the end of the reporting period.
II. Controlling shareholders’ and related parties’ occupation of non-operating funds
of the listed companies
□ Applicable √ N/A
No such case during the reporting period.
III. External guarantees in violation of provisions
□ Applicable √ N/A
No such case during the reporting period.
IV. Employment and dismissal of accounting firms
Whether the half year report was audited
□ Yes √ No
The Company’s half year report was not audited.
V. Explanation given by the Board of directors and the Board of Supervisors
regarding the “non-standard auditor’s report” issued by the accounting firm for the
current reporting period
□ Applicable √ N/A
VI. Explanation given by the Board of Directors regarding the “non-standard
auditor’s report” for the prior year
□ Applicable √ N/A
VII. Bankruptcy reorganization
□ Applicable √ N/A
No such case during the reporting period.
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Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
VIII. Litigations
Major litigation and arbitration
□ Applicable √ N/A
No such case during the reporting period.
Other litigations
√ Applicable □N/A
Whether
Amount Litigation
Basic litigation estimated Progress of Litigation
involved (arbitration) Disclosure Disclosure
(arbitration) liabilities are litigation (arbitration) result
(unit: judgment date index
information formed as a (arbitration) and impact
RMB10,000) execution
result
Some judgments
have taken
Summary of Some cases
effect and are
matters that do not are being The summary of Not meet the
under execution,
meet the disclosure filed, some litigation matters disclosure
some have not
standards for 4,153.96 No are under has no material standards for /
yet taken effect,
major litigation trial, and impact on the major
some are
(arbitration) some have Company litigation
pending, and
(domestic) taken effect
some are in
progress
Summary of
matters that do not The summary of Not meet the
meet the disclosure litigation matters disclosure
In trial, with no
standards for 143 No In trial has no material
decision made
standards for /
major litigation impact on the major
(arbitration) Company litigation
(overseas)
IX. Punishment and rectification
□ Applicable √ N/A
X. Integrity of the Company and its controlling shareholder and actual controller
□ Applicable √ N/A
XI. Major related transactions
1. Transactions related to daily operations
√Applicable □N/A
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73
Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
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Marke 1,423. r’s Marke
ng any’s purch purch d 0.12% 6,500 No 12,20 cninfo
t price 87 accept t price
Pharm contro ase ase transa 22 .com.
ance
aceuti lling ction cn
bill
cal shareh decisi
Co., older on-
Ltd. makin
g
proces
s
Subsi Marke
Beijin
diary t price
g Cash,
of the deter http://
Grand banke
Comp Drug Drug mined May www.
Joham Marke 1,640. r’s Marke
any’s purch purch by the No 12,20 cninfo
u t price 0.13% 4,000 t price
Comp 06 accept
Pharm contro ase ase 22 .com.
any’s ance
aceuti lling cn
relate bill
cal shareh
older d
Co.,
transa
74
Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
Ltd. ction
decisi
on-
makin
g
proces
s
Marke
t price
deter
mined
Wuha
Subsi by the
n
diary Comp
Grand Cash,
of the any’s http://
Pharm banke
Comp Drug Drug relate May www.
aceuti Marke 1,315. r’s Marke
any’s purch purch d 0.11% 2,000 No 12,20 cninfo
cal t price 25 accept t price
contro ase ase transa 22 .com.
Group ance
lling ction cn
Sales bill
shareh decisi
Co.,
older on-
Ltd.
makin
g
proces
s
Marke
t price
deter
mined
Hangz Subsi by the
hou diary Comp
Cash,
Grand of the any’s http://
banke
Biolo Comp Drug Drug relate May www.
Marke 1,551. r’s Marke
gic any’s purch purch d 0.13% 2,000 No 12,20 cninfo
t price 1 accept t price
Pharm contro ase ase transa 22 .com.
ance
aceuti lling ction cn
bill
cal shareh decisi
Inc older on-
makin
g
proces
s
Marke
t price
deter
mined
Pengl Subsi by the
ai diary Comp
Cash,
Nuok of the any’s http://
banke
ang Comp Drug Drug relate May www.
Marke 1,303. r’s Marke
Pharm any’s purch purch d 0.11% 3,000 No 12,20 cninfo
t price 97 accept t price
aceuti contro ase ase transa 22 .com.
ance
cal lling ction cn
bill
Co. shareh decisi
Ltd. older on-
makin
g
proces
s
Yunna Subsi Drug Drug Marke Marke 939.2 Cash, Marke May http://
0.08% 2,000 No
n diary purch purch t price t price 9 banke t price 12,20 www.
75
Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
Leiyu of the ase ase deter r’s 22 cninfo
nshan Comp mined accept .com.
g any’s by the ance cn
Lixian contro Comp bill
g lling any’s
Pharm shareh relate
aceuti older d
cal transa
Co., ction
Ltd. decisi
on-
makin
g
proces
s
Marke
t price
deter
mined
Leiyu Subsi by the
nshan diary Comp
Cash,
g of the any’s http://
banke
Pharm Comp Drug Drug relate May www.
Marke 478.8 r’s Marke
aceuti any’s purch purch d 0.04% 500 No 12,20 cninfo
t price 3 accept t price
cal contro ase ase transa 22 .com.
ance
Group lling ction cn
bill
Co. shareh decisi
Ltd. older on-
makin
g
proces
s
Marke
t price
deter
Sheny mined
ang Subsi by the
Yaoda diary Comp
Cash,
Leiyu of the any’s http://
banke
nshan Comp Drug Drug relate May www.
Marke 279.9 r’s Marke
g any’s purch purch d 0.02% 700 No 12,20 cninfo
t price 7 accept t price
Pharm contro ase ase transa 22 .com.
ance
aceuti lling ction cn
bill
cal shareh decisi
Co., older on-
Ltd. makin
g
proces
s
Marke
Guan t price
Subsi
gdong deter
diary
Leiyu mined Cash,
of the http://
nshan by the banke
Comp Drug Drug May www.
g Comp Marke 151.9 r’s Marke
any’s purch purch 0.01% 350 No 12,20 cninfo
Pharm any’s t price 1 accept t price
contro ase ase 22 .com.
aceuti relate ance
lling cn
cal d bill
shareh
Co., transa
older
Ltd. ction
decisi
76
Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
on-
makin
g
proces
s
Marke
t price
deter
mined
Xi'an Subsi by the
Yuand diary Comp
Cash,
a new of the any’s http://
banke
Beilin Comp Drug Drug relate May www.
Marke 216.6 r’s Marke
Pharm any’s purch purch d 0.02% 300 No 12,20 cninfo
t price 8 accept t price
aceuti contro ase ase transa 22 .com.
ance
cal lling ction cn
bill
Co., shareh decisi
Ltd older on-
makin
g
proces
s
Marke
t price
deter
mined
Chang
Subsi by the
shu
diary Comp
Leiyu Cash,
of the any’s http://
nshan banke
Comp Drug Drug relate May www.
g Marke r’s Marke
any’s purch purch d 28.93 0.00% 150 No 12,20 cninfo
Pharm t price accept t price
contro ase ase transa 22 .com.
aceuti ance
lling ction cn
cal bill
shareh decisi
Co.,
older on-
Ltd.
makin
g
proces
s
Marke
t price
deter
mined
Chang
Subsi by the
chun
diary Comp
Leiyu Cash,
of the any’s http://
nshan banke
Comp Drug Drug relate May www.
g Marke r’s Marke
any’s purch purch d 200.7 0.02% 150 Yes 12,20 cninfo
Pharm t price accept t price
contro ase ase transa 22 .com.
aceuti ance
lling ction cn
cal bill
shareh decisi
Co.,
older on-
Ltd.
makin
g
proces
s
Xi'an Subsi Drug Drug Marke Cash, May http://
Yuand diary t price Marke 109.5 banke Marke www.
purch purch 0.01% 550 No 12,20
a of the deter t price 8 r’s t price cninfo
ase ase 22
Detia Comp mined accept .com.
77
Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
n any’s by the ance cn
Pharm contro Comp bill
aceuti lling any’s
cal shareh relate
Co., older d
Ltd transa
ction
decisi
on-
makin
g
proces
s
Marke
t price
deter
Grand
mined
pharm
Subsi by the
a
diary Comp
Huan Cash,
of the any’s http://
gshi banke
Comp Drug Drug relate May www.
Feiyu Marke r’s Marke
any’s purch purch d 6.15 0.00% 550 No 12,20 cninfo
n t price accept t price
contro ase ase transa 22 .com.
Pharm ance
lling ction cn
aceuti bill
shareh decisi
cal
older on-
Co.,
makin
Ltd.
g
proces
s
Marke
t price
deter
mined
Anhui Subsi by the
Leiyu diary Comp
Cash,
nshan of the any’s http://
banke
g Comp Drug Drug relate May www.
Marke r’s Marke
Pharm any’s purch purch d 24.83 0.00% 550 No 12,20 cninfo
t price accept t price
aceuti contro ase ase transa 22 .com.
ance
cal lling ction cn
bill
Co., shareh decisi
Ltd. older on-
makin
g
proces
s
Marke
t price
Grand Subsi deter
Bioph diary mined
by the Cash,
armac of the http://
Comp banke
eutica Comp Drug Drug May www.
any’s Marke 232.2 r’s Marke
l any’s purch purch 0.02% 550 No 12,20 cninfo
relate t price 7 accept t price
(Chon contro ase ase 22 .com.
d ance
gqing) lling cn
transa bill
Co., shareh
Ltd. older ction
decisi
on-
makin
78
Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
g
proces
s
Marke
t price
deter
mined
Hangz by the
hou Comp
Cash,
Junlan Share any’s http://
banke
Pharm holdin relate May www.
Drug Drug Marke 13,00 r’s Marke
aceuti g d 4,931 0.27% No 12,20 cninfo
sales sales t price 0 accept t price
cal enterp transa 22 .com.
ance
Tradi rise ction cn
bill
ng Co. decisi
Ltd. on-
makin
g
proces
s
Marke
t price
deter
mined
Leiyu Subsi by the
nshan diary Comp
Cash,
g of the any’s http://
banke
Pharm Comp relate May www.
Drug Drug Marke r’s Marke
aceuti any’s d 341 0.02% 650 No 12,20 cninfo
sales sales t price accept t price
cal contro transa 22 .com.
ance
Group lling ction cn
bill
Co. shareh decisi
Ltd. older on-
makin
g
proces
s
Marke
t price
deter
mined
Guan
Subsi by the
gdong
diary Comp
Leiyu Cash,
of the any’s http://
nshan banke
Comp relate May www.
g Drug Drug Marke 176.8 r’s Marke
any’s d 0.01% 220 No 12,20 cninfo
Pharm sales sales t price 4 accept t price
contro transa 22 .com.
aceuti ance
lling ction cn
cal bill
shareh decisi
Co.,
older on-
Ltd.
makin
g
proces
s
Yunna Subsi Marke Cash,
http://
n diary t price banke
May www.
Leiyu of the Drug Drug deter Marke 219.9 r’s Marke
0.01% 350 No 12,20 cninfo
nshan Comp sales sales mined t price 9 accept t price
22 .com.
g any’s by the ance
cn
Lixian contro Comp bill
79
Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
g lling any’s
Pharm shareh relate
aceuti older d
cal transa
Co., ction
Ltd. decisi
on-
makin
g
proces
s
Marke
t price
deter
mined
Chang
Subsi by the
chun
diary Comp
Leiyu Cash,
of the any’s http://
nshan banke
Comp relate May www.
g Drug Drug Marke r’s Marke
any’s d 21 0.00% 73 No 12,20 cninfo
Pharm sales sales t price accept t price
contro transa 22 .com.
aceuti ance
lling ction cn
cal bill
shareh decisi
Co.,
older on-
Ltd.
makin
g
proces
s
Marke
t price
deter
mined
Chang
Subsi by the
shu
diary Comp
Leiyu Cash,
of the any’s http://
nshan banke
Comp relate May www.
g Drug Drug Marke r’s Marke
any’s d 10.52 0.00% 73 No 12,20 cninfo
Pharm sales sales t price accept t price
contro transa 22 .com.
aceuti ance
lling ction cn
cal bill
shareh decisi
Co.,
older on-
Ltd.
makin
g
proces
s
Marke
t price
deter
Hangz mined
hou by the
Joint Comp Cash,
Jiuyua http://
ventur any’s banke
n May www.
e of Drug Drug relate Marke 358.1 r’s Marke
Gene 0.02% 1,200 No 12,20 cninfo
the sales sales d t price 6 accept t price
Engin 22 .com.
Comp transa ance
eering cn
any ction bill
Co.,
Ltd. decisi
on-
makin
g
proces
80
Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
s
Marke
t price
deter
mined
Hangz
by the
hou
Comp
Tangy Joint Cash,
any’s http://
angyu ventur banke
relate May www.
an e of Drug Drug Marke r’s Marke
d 94.06 0.00% 1,100 No 12,20 cninfo
Pharm the sales sales t price accept t price
transa 22 .com.
aceuti Comp ance
ction cn
cal any bill
decisi
Co.,
on-
Ltd.
makin
g
proces
s
Marke
t price
deter
mined
Hangz Subsi by the
hou diary Comp
Cash,
Grand of the any’s http://
banke
Biolo Comp relate May www.
Drug Drug Marke r’s Marke
gic any’s d 55.17 0.00% 150 No 12,20 cninfo
sales sales t price accept t price
Pharm contro transa 22 .com.
ance
aceuti lling ction cn
bill
cal shareh decisi
Inc. older on-
makin
g
proces
s
Subsi
Marke
diary
t price
of the
deter
Hangz Comp
mined
hou any’s
by the
Tangy joint
Comp
angyu ventur Cash,
any’s http://
an e banke
relate May www.
TCM Hangz Drug Drug Marke 272.8 r’s Marke
d 0.02% 1100 No 12,20 cninfo
Outpa hou sales sales t price 2 accept t price
transa 22 .com.
tient Tangy ance
ction cn
Depar angyu bill
decisi
tment an
on-
Co., Pharm
makin
Ltd. aceuti
g
cal
proces
Co.,
s
Ltd.
22,67 50,94
Total -- -- -- -- -- -- -- --
2.01 3
Details of bulk sales returns N/A
Actual performance during the
reporting period where the total N/A
amount of daily related transactions
81
Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
is estimated by category for the
current period (if any)
Reasons for the large difference
between the transaction price and
N/A
the market reference price (if
applicable)
2. Related transactions involving the acquisition or sale of assets and shares
□ Applicable √ N/A
No such case during the reporting period.
3. Related transactions of joint external investment
□ Applicable √ N/A
No such case during the reporting period.
4. Associated claim and debt transactions
□ Applicable √N/A
No such case during the reporting period.
5. Transactions with financial companies who are related parties of the Company
□ Applicable √N/A
No deposit, loan, credit or other financial business between the Company and the related financial companies
6. Transactions between the financial companies controlled by the Company and the related
parties
□ Applicable √N/A
No deposit, loan, credit or other financial business between the financial companies controlled by the Company and the
related parties.
7. Other major related transactions
□ Applicable √N/A
No such case during the reporting period.
XII. Major contracts and their fulfilment
1. Entrustment, contracting and leasing
(1) Entrustment
□ Applicable √N/A
No such case during the reporting period.
82
Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
(2) Contracting
□ Applicable √N/A
No such case during the reporting period.
(3) Leasing
□ Applicable √N/A
No such case during the reporting period.
2. Important guarantees
√ Applicable □ N/A
Unit: RMB ten thousand yuan
External guarantees of the Company and its subsidiaries (excluding guarantees for subsidiaries)
Disclosu
re date
of the Guarante
Actual Actual Period
announc Type of Counter- e for a
guarante Guarante date of guarante Collatera of Fulfilled
ement guarante guaranty related
ed party e Cap occurren ed l (if any) guarante or not
related e (if any) party or
ce amount e
to the not
guarante
e Cap
The Company’s guarantees for its subsidiaries
Disclosu
re date
of the Guarante
Actual Actual Period
announc Type of Counter- e for a
guarante Guarante date of guarante Collatera of Fulfilled
ement guarante guaranty related
ed party e Cap occurren ed l (if any) guarante or not
related e (if any) party or
ce amount e
to the not
guarante
e Cap
Hangzho
u
Zhongm
Joint
ei
April 28, May 22, liability
Huadon 80,000 53.66 One year No No
2020 2020 guarante
g
e
Pharmac
eutical
Co., Ltd.
Hangzho
u
Zhongm
Joint
ei
April 28, June 9, liability
Huadon 80,000 685.07 One year No No
2020 2020 guarante
g
e
Pharmac
eutical
Co., Ltd.
Hangzho Joint
u April 28, October liability
80,000 14.92 One year No No
Zhongm 2020 13, 2020 guarante
ei e
83
Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
Huadon
g
Pharmac
eutical
Co., Ltd.
Hangzho April 21,
u 2021
Zhongm
Joint
ei
January liability
Huadon 80,000 8,282 One year No No
13,2022 guarante
g
e
Pharmac
eutical
Co., Ltd.
Hangzho April 21,
u 2021
Zhongm
Joint
ei Decemb
liability
Huadon 80,000 er 10, 61.71 One year No No
guarante
g 2021
e
Pharmac
eutical
Co., Ltd.
Hangzho April 21,
u 2021
Zhongm
Joint
ei
March liability
Huadon 80,000 4,000 One year No No
23,2022 guarante
g
e
Pharmac
eutical
Co., Ltd.
Hangzho
u
Zhongm
Joint
ei
June 2, June liability
Huadon 10,067.1 8,053.68 No No
2021 1,2021 guarante
g
e
Pharmac
eutical
Co., Ltd.
Hangzho
u
Zhongm
Joint
ei
April 28, May liability
Huadon 85,000 7,742 One year No No
2022 25,2022 guarante
g
e
Pharmac
eutical
Co., Ltd.
Huadon April 28,
g 2022
Medicin
e (Xi’an)
5,000 One year
Bohua
Pharmac
eutical
Co., Ltd.
Huadon April 28, 16,000 One year
84
Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
g 2022
Medicin
e
Ningbo
Sales
Co., Ltd.
Huadon April 28, One year
g 2022
Medicin
15,000
e
Huzhou
Co., Ltd.
Huadon
g
Joint
Medicin
April 21, March liability
e 18,000 5,000 One year No No
2021 25,2022 guarante
Shaoxin
e
g Co.,
Ltd.
Huadon
g
Medicin
e April 28,
Shaoxin 18,500 One year
2022
g Co.,
Ltd.
Huadon
g
Medicin
e Supply April 19,
2019 Ten
Chain 20,000
years
Manage
ment
(JinHua)
Co., Ltd.
Huadon April 28,
g 2022
Medicin
e
(Hangzh
3,000 One year
ou)
Biologic
al
Products
Co., Ltd.
Jiangsu April 28,
Jiuyang 2022
Biophar 7,000 One year
m Co.,
Ltd.
Huadon April 21,
g 2021
Septemb Joint
Medicin
liability
e 24,000 er 2,000 One year No No
guarante
Wenzho 9,2021 e
u Co.,
Ltd.
85
Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
Huadon April 21,
g 2021
Septemb Joint
Medicin
liability
e 24,000 er 2,000 One year No No
guarante
Wenzho 15,2021 e
u Co.,
Ltd.
Huadon April 21,
g 2021
Joint
Medicin
October liability
e 24,000 1,980 One year No No
21,2021 guarante
Wenzho
e
u Co.,
Ltd.
Huadon April 21,
g 2021
Novemb Joint
Medicin
liability
e 24,000 er 990 One year No No
guarante
Wenzho 22,2021 e
u Co.,
Ltd.
Huadon April 21,
g 2021
Novemb Joint
Medicin
liability
e 24,000 er 990 One year No No
guarante
Wenzho 23,2021 e
u Co.,
Ltd.
Huadon April 21,
g 2021
Decemb Joint
Medicin
liability
e 24,000 er 990 One year No No
guarante
Wenzho 14,2021 e
u Co.,
Ltd.
Huadon April 21,
g 2021
Decemb Joint
Medicin
liability
e 24,000 er 990 One year No No
guarante
Wenzho 15,2021 e
u Co.,
Ltd.
Huadon April 21,
g 2021
Decemb Joint
Medicin
liability
e 24,000 er 990 One year No No
guarante
Wenzho 16,2021 e
u Co.,
Ltd.
Huadon April 21,
g 2021
Decemb Joint
Medicin
liability
e 24,000 er 990 One year No No
guarante
Wenzho 20,2021 e
u Co.,
Ltd.
Huadon April 28,
g 24,000 One year
2022
Medicin
86
Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
e
Wenzho
u Co.,
Ltd.
Huadon
Joint
g
April 21, March liability
Medicin 15,000 6,000 One year No No
2021 25,2022 guarante
e Lishui
e
Co., Ltd.
Huadon April 28,
g 2022
Medicin
15,000 One year
e
Daishan
Co., Ltd.
Huadon April 28,
g 2022
Medicin
e Cunde 2,500 One year
(Zhoush
an) Co.,
Ltd.
Huadon April 28,
g 2022
Medicin 14,300 One year
e Lishui
Co., Ltd.
Hangzho
u
Zhongm
ei
Joint
Huadon
April 21, January liability
g 70,000 6,197 One year No No
2021 20,2022 guarante
Pharmac
e
eutical
Jiangdon
g Co.,
Ltd.
Hangzho
u
Zhongm
ei
Joint
Huadon
April 28, May liability
g 70,000 1,289 One year No No
2022 26,2022 guarante
Pharmac
e
eutical
Jiangdon
g Co.,
Ltd.
Hangzho
u
Joint
Huadon
April 21, March liability
g 5,000 2,300 One year No No
2021 25,2022 guarante
Pharmac
e
y Chain
Co., Ltd.
Hangzho April 28,
u 2022 5,000 One year
Huadon
87
Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
g
Pharmac
y Chain
Co., Ltd.
Huadon April 28,
g 2022
Medicin 10,000 One year
e Jinhua
Co., Ltd.
Huadon
g
Pharm
aceuti
cal
Joint
Invest
July 16, June 62,074.3 liability Three
ment 63,758.3 No No
2021 30,2022 2 guarante years
Holdi
e
ng
(Hong
Kong)
Limit
ed
Huadon
g
Pharm
aceuti
cal
Invest
April 28,
ment 70,000 One year
Holdi 2022
ng
(Hong
Kong)
Limit
ed
Sinclair Novemb Joint
er 23, May liability Three
Pharma 40,000 9,763.8 No No
2018 21,2020 guarante years
Limited e
Sinclair Novemb Joint
er 23, July liability Three
Pharma 40,000 2,440.95 No No
2018 30,2020 guarante years
Limited e
Sinclair Novemb Novemb Joint
er 23, liability Three
Pharma 40,000 er 1,627.3 No No
2018 guarante years
Limited 16,2020 e
Sinclair Novemb Joint
er 23, February liability Three
Pharma 40,000 2,440.95 No No
2018 4,2021 guarante years
Limited e
Sinclair Septemb Joint
er 17, 12,204.7 March liability Three
Pharma 2,440.95 No No
2020 5 30,2021 guarante years
Limited e
Sinclair Septemb Joint
er 17, 12,204.7 April Three
Pharma 3,254.6 liability No No
2020 5 19,2021 years
Limited guarante
88
Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
e
Sinclair Septemb Joint
er 17, 12,204.7 May liability Three
Pharma 3,254.6 No No
2020 5 26,2021 guarante years
Limited e
Sinclair Septemb Joint
er 17, 12,204.7 August liability Three
Pharma 1,627.3 No No
2020 5 11,2021 guarante years
Limited e
Sinclair Septemb Septemb Joint
er 17, 12,204.7 liability Three
Pharma er 1,627.3 No No
2020 5 guarante years
Limited 14,2021 e
Sinclair March
16, 2021 Three
Pharma 17,521
years
Limited
Sinclair March Joint
16, 2021 April liability Three
Pharma 14,016.8 14,016.8 No No
8,2021 guarante years
Limited e
Sinclair March Joint
Decemb
16, 2021 March liability
Pharma 14,016.8 14,016.8 er No No
17,2021 guarante
Limited 31,2024
e
Sinclair Joint
July 16, January liability Three
Pharma 36,912.7 36,912.7 No No
2021 13,2022 guarante years
Limited e
Sinclair
April 28,
Pharma 58,600 One year
2022
Limited
Total guarantee cap Total actual
for subsidiaries guarantee amount
approved during the 418,900 for subsidiaries 139,797
reporting period during the reporting
(B1) period (B2)
Total actual
Total approved
guarantee balance
guarantee cap for
for subsidiaries at
subsidiaries at the 939,397 217,097
the end of the
end of the reporting
reporting period
period (B3)
(B4)
Subsidiaries guarantee for subsidiaries
Disclosu
re date
of the Guarante
Actual Actual Period
announc Type of Counter- e for a
guarante Guarante date of guarante Collatera of Fulfilled
ement guarante guaranty related
ed party e Cap occurren ed l (if any) guarante or not
related e (if any) party or
ce amount e
to the not
guarante
e Cap
Hangzho Joint
u April 21, January liability
20,000 3,036 One year No No
Zhongm 2021 25,2022 guarante
ei e
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Huadon
g
Pharmac
eutical
Jiangdon
g Co.,
Ltd.
Total guarantee Total guarantee
cap for subsidiaries cap for subsidiaries
approved during the 20,000 approved during the 3,036
reporting period reporting period
(C1) (C1)
Total approved Total approved
guarantee cap for guarantee cap for
subsidiaries at the 20,000 subsidiaries at the 3,036
end of the reporting end of the reporting
period (C3) period (C3)
Total amount of the Company’s guarantees (i.e. the sum of the above-mentioned 3 kinds of guarantees)
Total guarantees cap Total actual
approved during the guarantee amount
438,900 142,833
reporting period during the reporting
(A1+B1+C1) period (A2+B2+C2)
Total actual
Total approved
guarantee balance
guarantee cap at the
959,397 at the end of the 220,133
end of the reporting
reporting period
period (A3+B3+C3)
(A4+B4+C4)
Proportion of the actual guarantee amount
(i.e. A4+B4+C4) in the Company’s net assets 12.69%
Including:
Balance of guarantees for shareholders, de
0
facto controllers and their related parties (D)
Amount of debt guarantees provided directly
or indirectly for the entities with a liability-to 113,644
asset ratio over 70% (E)
The total amount of guarantees exceeds 50%
0
of the net assets (F)
Total guarantee amount of the above-
mentioned three kinds of guarantees 113,644
(D+E+F)
For the unexpired guarantee, a guarantee
liability has occurred or there may be a joint
/
liability for satisfaction during the reporting
period (if any)
Note of external guarantees in violation of
/
prescribed procedures (if any)
Notes on the Guarantee Provided in Multiple Forms
□ Applicable √ N/A
3. Entrusted finances
□ Applicable √N/A
No such case during the reporting period.
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4. Other significant contracts
□ Applicable √ N/A
No such case during the reporting period.
XIII. Other major events
□ Applicable √N/A
During the reporting period, the company did not have other major matters that need to be explained.
XIV. Major events of subsidiaries
√Applicable □N/A
Huadong Ningbo Medicine Co., Ltd. ("Huadong Ningbo"), a holding subsidiary of the Company,
has officially entered into liquidation due to the expiration of its operation. This liquidation is under the
auspices of the court. Ningbo Beilun court has selected and designated an intermediary institution to set
up a liquidation group according to relevant procedures, which will preside over the liquidation. During
the liquidation of Huadong Ningbo, the Company does not have a dominant position in the liquidation
and does not have a controlling relationship over Huadong Ningbo. According to the relevant provisions
of the Company Law and Accounting Standards for Business Enterprises, Huadong Ningbo will be no
longer included in the consolidated scope of the Company’s financial statements from December 31,
2021. As of the end of the reporting period, the Company has designated personnel to actively
participate and cooperate in the subsequent liquidation of Huadong Ningbo, which is not expected to
have a significant influence on the Company’s operating results.
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Section VII. Share Change and Shareholders
I. Changes in Share Capital
1. Table of Changes in share capital
Unit: share
Before the change Change in the period (+/-) After the change
Capital
Number Proportio New Bonus reserve Number Proportio
Other Subtotal
of shares n shares share conversio of shares n
n
I. Shares
subject to
condition 47,745 0.00% 0 0 0 68,415 68,415 116,160 0.01%
al
restriction
1. Shares
held by 0 0.00% 0 0 0 0 0 0 0.00%
the state
2. Shares
held by
state-
0 0.00% 0 0 0 0 0 0 0.00%
owned
corporatio
ns
3. Shares
held by
other 47,745 0.00% 0 0 0 68,415 68,415 116,160 0.01%
domestic
investors
Including:
held by
domestic 0 0.00% 0 0 0 0 0 0 0.00%
corporatio
ns
held by
domestic 47,745 0.00% 0 0 0 68,415 68,415 116,160 0.01%
natural
persons
4. Shares
held by
0 0.00% 0 0 0 0 0 0 0.00%
overseas
investors
Including:
held by
overseas 0 0.00% 0 0 0 0 0 0 0.00%
corporatio
ns
0 0.00% 0 0 0 0 0 0 0.00%
held by
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overseas
natural
persons
II. Shares
1,749,761 1,749,693
without 100.00% 0 0 0 -68,415 -68,415 99.99%
restriction ,803 ,388
1. RMB
1,749,761 1,749,693
ordinary 100.00% 0 0 0 -68,415 -68,415 99.99%
shares ,803 ,388
2.
Domestic
ally listed 0 0.00% 0 0 0 0 0 0 0.00%
foreign
shares
3. Foreign
shares
0 0.00% 0 0 0 0 0 0 0.00%
listed
overseas
4. Others 0 0.00% 0 0 0 0 0 0 0.00%
III. Total
1,749,809 1,749,809
number of 100.00% 0 0 0 0 0 100.00%
shares ,548 ,548
Reasons for the changes in share capital
√Applicable □N/A
During the reporting period, the Company held the first meeting of the 10th Board of Directors on June 1, 2022,
adopted the Proposal on the Appointment of the Company’s Deputy General Manager, and agreed to appoint Mr. Wu
Hui, Ms. Zhu Li and Mr. Zhang Jianfei as the Company’s deputy general manager. The term of office starts from the
date of deliberation and approval by the Board of Directors and ends on the date of expiration of the term of the 10th
board of directors. Since Mr. Zhang Jianfei holds 80,000 ordinary shares, in accordance with the provisions of the
Company Law, the shares transferred by the Company’s senior managers each year during tenure shall not exceed 25%
of the total shares of the Company held by him, and 60,000 shares held by Mr. Zhang Jianfei are restricted shares; as
Ms. He Rufen no longer serves as the employee supervisor of the Company, the supervisor shall not transfer the shares
of the Company held by him within half a year after his resignation according to the provisions of the Company Law,
and the 33,660 ordinary shares held by Ms. He Rufen are restricted shares.
Approval for changes in share capital
□ Applicable √N/A
Transfer of shares
□ Applicable √N/A
Progress of share repurchase
□ Applicable √N/A
Progress of reducing repurchased shares through centralized bidding
□ Applicable √N/A
Effects of changes in share capital on the basic earnings per share, diluted earnings per share for the most recent year
and the most recent period, the net assets per share attributable to the Company’s shareholders of common shares and
other financial indicators
□ Applicable √N/A
Other disclosures the Company deems necessary or required by securities regulatory authorities
□ Applicable √N/A
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2. Changes in restricted shares
√Applicable □N/A
Unit: share
Number of
Number of Number of
Shares Lifted Number of
Restricted Restricted Reasons for
Name of from New Restricted Date of Lifting
Shares at the Shares at the Restricted
Shareholder Restrictions Shares during Restrictions
Beginning of End of the Ssales
during the the Period
the Period Period
Period
In accordance
with the
provisions on
restricted sale
Management
Zhu Li 22,500 0 0 22,500 by directors,
lock-up shares
supervisors and
senior
managers
within tenure
In accordance
with the
provisions on
restricted sale
Management
Zhang Jianfei 0 0 60,000 60,000 by directors,
lock-up shares
supervisors and
senior
managers
within tenure
In accordance
with the
provisions on
restricted sale
Management
He Rufen 25,245 0 8,415 33,660 by directors,
lock-up shares
supervisors and
senior
managers
within tenure
Total 47,745 0 68,415 116,160 -- --
II. Issuance and listing of securities
□ Applicable √N/A
III. Total number of shareholders and their shareholdings
Unit: share
Total number of common Total number of preference shareholders
shareholderss at the end of 96,073 with restoration of the voting rights at the 0
the reporting period end of the reporting period (if any) (see
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Note 8)
Particulars about shareholders with a shareholding ratio over 5% or the Top 10 shareholders
Total The The Pledged, marked or frozen
common number of number of
Share- Changes in
shares held common common
Name of Nature of the
holding at the end shares held shares held
shareholder shareholder reporting Status Amount
ratio of the with without
period
reporting trading trading
period restrictions restriction
China Domestic
Grand non-state- 730,938,15 730,938,15 171,860,00
41.77% 0 0 Pledged
Enterprises, owned 7 7 0
Inc. corporation
Hangzhou
Huadong State-
288,000,00 288,000,00
Medicine owned 16.46% 0 0
Group Co., corporation 0 0
Ltd.
Hong Kong
Securities
Overseas
Clearing 2.76% 48,323,471 15,862,958 0 48,323,471
corporation
Company
Ltd.
Industrial
and
Commercia
l Bank of
China
Limited-
China- Others 2.07% 36,180,052 32,467,903 0 36,180,052
Europe
Healthcare
Hybrid
Securities
Investment
Fund
China Domestic
Securities non-state-
1.27% 22,186,818 0 0 22,186,818
Finance owned
Co., corporation
China
Constructio
n Bank
Co., Ltd. -
ICBC
Credit Others 1.03% 18,000,037 7,999,987 0 18,000,037
Suisse
Frontier
Medical
Equity
Fund
Shanghai
Gao Yi
Others 0.48% 8,378,920 8,378,920 0 8,378,920
Asset
Manageme
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Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
nt
Partnership
(L.P.) - Gao
Yi
Xiaofeng
No. 2
Zhixin
Fund
Norges
Overseas
Bank- 0.41% 7,219,991 4,443,762 0 7,219,991
corporation
Equity fund
China
Constructio
n Bank
Corporatio
n-Huitianfu
Medical Others 0.40% 6,958,369 4,885,369 0 6,958,369
and Health
Care Mixed
Securities
Investment
Fund
China
Foreign
Economy
and Trade
Trust Co.,
Ltd.-
Foreign
Trade Others 0.39% 6,794,200 6,794,200 0 6,794,200
Trust- Gao
Yi
Xiaofeng
Hongyuan
Collective
Fund Trust
Plan
Strategic investors or
general corporations
become the top 10
N/A
shareholders due to the
placement of new shares
(if any) (see Note 3)
Explanation on associated
relationships or concerted The Company does not know whether the above-mentioned shareholders are related parties or
actions among the above- whether they are acting-in-concert parties with one another.
mentioned shareholders
Description about above-
mentioned shareholders’
entrusting/being entrusted N/A
with and waiving voting
rights
Special instructions for N/A
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Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
the existence of special
repurchase accounts
among the top 10
shareholders (if any) (see
Note 11)
Shareholding of the top 10 shareholders without trading restriction conditions
Type of stocks
Number of the trading unrestricted stocks held at the end of the Report
Name of shareholder Type of
Period Amount
stocks
RMB
China Grand Enterprises, 730,938,15
730,938,157 ordinary
Inc. 7
stocks
RMB
Hangzhou Huadong 288,000,00
288,000,000 ordinary
Medicine Group Co., Ltd. 0
stocks
RMB
Hong Kong Securities
48,323,471 ordinary 48,323,471
Clearing Company Ltd.
stocks
Industrial and Commercial
Bank of China Limited- RMB
China-Europe Healthcare 36,180,052 ordinary 36,180,052
Hybrid Securities stocks
Investment Fund
RMB
China Securities Finance
22,186,818 ordinary 22,186,818
Co.,
stocks
China Construction Bank
RMB
Co., Ltd. - ICBC Credit
18,000,037 ordinary 18,000,037
Suisse Frontier Medical
stocks
Equity Fund
Shanghai Gao Yi Asset
RMB
Management Partnership
8,378,920 ordinary 8,378,920
(L.P.) - Gao Yi Xiaofeng stocks
No. 2 Zhixin Fund
RMB
Norges Bank-Equity fund 7,219,991 ordinary 7,219,991
stocks
China Construction Bank
Corporation-Huitianfu RMB
Medical and Health Care 6,958,369 ordinary 6,958,369
Mixed Securities stocks
Investment Fund
China Foreign Economy
and Trade Trust Co., Ltd.- RMB
Foreign Trade Trust- Gao 6,794,200 ordinary 6,794,200
Yi Xiaofeng Hongyuan stocks
Collective Fund Trust Plan
Description of the related
relationship or concerted
action between the top 10 The Company does not know whether the above-mentioned shareholders are related parties or
common shareholders of whether they are acting-in-concert parties with one another.
unrestricted shares, and
between the top 10
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common shareholders of
unrestricted shares and the
top 10 common
shareholders
Description of the
participation in margin At the end of the reporting period, among the top 10 common shareholders of the Company, there
trading business of the top were no shareholders holding the Company's shares through the margin trading and securities lending
10 common shareholders account.
(if any) (see Note 4)
Whether the Company’s Top 10 common shareholders or the Top 10 common shareholders without trading restriction
have carried out any agreement to repurchase transaction during the reporting period
□ Yes √ No
No such case during the reporting period.
IV. Changes in shareholding of directors, supervisors and senior managers
√Applicable □N/A
Number
Number
of Number
of
Shares restricted of
restricted
held at Shares Shares Shares shares restricted
shares
the increased decreased held at the granted at shares
Tenure granted at
Name Title beginning during the during the end of the the granted
status the end of
of the Period(sh Period(sh Period beginning during the
period ares) ares) (shares) the
of the reporting
(shares) reporting
reporting period
period
period (shares)
(shares)
(shares)
Chairman Incumben
Lv Liang 0 0 0 0 0 0 0
, Director t
Li Honorary
Departing 0 0 0 0 0 0 0
Bangliang Chairman
Director Incumben
Kang Wei 0 0 0 0 0 0 0
t
Niu Director Incumben
Zhanqi t 0 0 0 0 0 0 0
Zhu Director Incumben
Feipeng t 0 0 0 0 0 0 0
Director Incumben
Ye Bo 0 0 0 0 0 0 0
t
Zhu Director Incumben
0 0 0 0 0 0 0
Liang t
Jin Xuhu Director Departing 0 0 0 0 0 0 0
Gao Independ Incumben
Xiangdon ent t 0 0 0 0 0 0 0
g Director
Independ Incumben
Wang
ent t 0 0 0 0 0 0 0
Ruwei
Director
Independ Incumben
Yang Lan ent t 0 0 0 0 0 0 0
Director
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Independ Departing
Zhong
ent 0 0 0 0 0 0 0
Xiaoming
Director
Independ Departing
Yang Jun ent 0 0 0 0 0 0 0
Director
Bai Superviso Incumben
Xinhua r t 0 0 0 0 0 0 0
Zhou Superviso Incumben
Yanwu r t 0 0 0 0 0 0 0
Superviso Incumben
Qin Yun 0 0 0 0 0 0 0
r t
Dong Superviso Incumben
0 0 0 0 0 0 0
Jiqin r t
Xu Superviso Incumben
0 0 0 0 0 0 0
Zhifeng r t
Zhu Superviso Incumben
0 0 0 0 0 0 0
Yinhua r t
Liu Superviso Departing
0 0 0 0 0 0 0
Chengwei r
Hu Superviso Departing
0 0 0 0 0 0 0
Baozhen r
He Rufen Superviso Departing
r 33,660 0 0 33,660 0 0 0
Wu Hui Deputy Incumben
General t 0 0 0 0 0 0 0
Manager
Deputy Incumben
Zhu li General t 30,000 0 0 30,000 0 0 0
Manager
Deputy Incumben
Zhang
General t 80,000 0 0 80,000 0 0 0
Jianfei
Manager
Deputy
Zhou
General Departing 0 0 0 0 0 0 0
Shunhua
Manager
Chen Bo Board Incumben
0 0 0 0 0 0 0
Secretary t
Qiu Person in Incumben
Renbo Charge of t 0 0 0 0 0 0 0
Finance
Total -- -- 143,660 0 0 143,660 0 0 0
V. Changes in controlling shareholders or actual controllers
Change of controlling shareholder during the reporting period
□ Applicable √N/A
No such case during the reporting period.
Change of actual controller during the reporting period
□ Applicable √N/A
No such case during the reporting period.
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Section VIII. Preferred Shares
□ Applicable √N/A
No such case during the reporting period.
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Section IX. Information about Bonds
□ Applicable √N/A
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Section X. Financial Report
I. Audit report
Whether the half year report was audited
□ Yes √ No
The Company’s half year report was not audited.
II. Financial statements
The currency unit of statements in the financial notes is: RMB yuan.
1. Consolidated balance sheet
Prepared by: Huadong Medicine Co., Ltd.
June 30, 2022
Unit: RMB yuan
Item June 30, 2022 January 1, 2022
Current assets:
Cahs and bank balances 3,682,953,466.77 4,032,424,555.22
Settlement reserve
Lending to other banks and other
financial institutions
Financial assets for trade
Derivative financial assets
Notes receivable
Accounts receivable 7,454,064,290.97 6,430,482,175.97
Accounts receivable for financing 802,248,535.33 509,190,888.54
Prepayments 229,659,830.03 275,353,134.69
Premiums receivable
Reinsurance accounts receivable
Reinsurance contract reserve
receivable
Other receivables 387,568,284.05 223,707,267.30
Including: Interests receivable
Dividends receivable 3,404,934.45 877,734.45
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Financial assets purchased for resale
Inventories 4,004,905,504.14 3,974,549,648.96
Contract assets
Assets held for sale
Non-current assets due within one
year
Other current assets 40,835,086.03 40,907,922.76
Total current assets 16,602,234,997.32 15,486,615,593.44
Non-current assets:
Loans and prepayments issuance
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments 1,005,658,952.83 984,927,398.68
Other equity instrument investments 250,792,740.36 257,815,844.68
Other non-current financial assets
Real estate properties for
14,088,049.32 14,569,533.94
investment
Fixed assets 3,006,669,793.91 3,077,227,759.84
Constructions in progress 1,756,500,881.94 1,582,125,201.25
Biological assets for production
Oil & gas assets
Right-of-use assets 126,894,326.47 153,724,197.81
Intangible assets 2,263,735,452.78 2,233,450,369.34
Development expenditures 35,704,500.05
Goodwill 2,228,013,021.51 2,138,808,037.01
Long-term unamortized expenses 11,335,988.97 12,425,364.03
Deferred tax assets 157,610,340.81 143,651,186.84
Other non-current assets 1,301,733,649.28 911,062,879.83
Total non-current assets 12,158,737,698.23 11,509,787,773.25
Total assets 28,760,972,695.55 26,996,403,366.69
Current liabilities:
Short-term borrowing 858,688,755.97 1,237,843,228.13
Borrowing from the central bank
Borrowing from other banks and
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other financial institutions
Financial liabilities for trade
Derivative financial liabilities
Notes payable 884,312,495.21 671,964,504.00
Accounts payable 4,117,862,016.06 3,847,719,574.86
Receipts in Advance 1,948,839.03 1,147,425.45
Contract liabilities 59,102,591.78 118,341,141.48
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
Payroll payable 192,932,148.00 168,210,088.82
Taxes payable 551,787,831.96 1,029,610,563.41
Other payables 2,320,887,243.25 1,935,116,784.93
Including: Interests payable
Dividends payable 224,219.60 2,184,219.60
Handling fees and commissions
payable
Reinsurance accounts payable
Liabilities held for sale
Non-current liabilities due within
56,882,586.66 244,256,705.59
one year
Other current liabilities 6,854,102.03 11,386,267.11
Total current liabilities 9,051,258,609.95 9,265,596,283.78
Non-current liabilities:
Insurance policy reserve
Long-term borrowing 1,299,388,765.81 139,178,905.04
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities 70,263,650.58 80,889,403.39
Long-term payables 260,000,441.56 261,903,489.09
Long-term employee benefits
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Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
payable
Provisions 38,220,690.24 39,086,238.25
Deferred income 103,256,922.10 83,521,649.96
Deferred tax liabilities 184,714,029.50 184,908,391.50
Other non-current liabilities
Total non-current liabilities 1,955,844,499.79 789,488,077.23
Total liabilities 11,007,103,109.74 10,055,084,361.01
Owners’ Equity:
Share capital 1,749,809,548.00 1,749,809,548.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserves 2,264,211,002.79 2,229,868,312.11
Less: Treasury shares
Other comprehensive income -146,020,959.74 -47,768,225.80
Special reserve
Surplus reserves 1,021,670,687.31 1,021,670,687.31
General risk reserve
Retained earnings 12,458,919,717.52 11,625,794,001.46
Total owners’ equity attributable to
17,348,589,995.88 16,579,374,323.08
owner of the Company
Minority interest 405,279,589.93 361,944,682.60
Total owners’ equity 17,753,869,585.81 16,941,319,005.68
Total liabilities & owners’ equity 28,760,972,695.55 26,996,403,366.69
Legal representative: Lv Liang
Person in charge of accounting work: Lv Liang
Person in charge of the Accounting Department: Qiu Renbo
2. Balance sheet of the parent company
Unit: RMB yuan
Item June 30, 2022 January 1, 2022
Current assets:
Cash and bank balances 1,539,552,368.34 2,280,519,812.31
Financial assets for trade
Derivative financial assets
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Notes receivable
Accounts receivable 4,230,719,604.60 3,369,254,003.85
Accounts receivable for financing 188,076,139.40 196,523,246.00
Prepayments 72,146,739.36 140,828,160.14
Other receivables 2,026,079,393.91 986,757,703.19
Including: Interests receivable
Dividends receivable 1,000,000,000.00
Inventories 2,080,534,013.80 1,946,036,027.82
Contract assets
Assets held for sale
Non-current assets due within one
year
Other current assets 0.00 20,289.53
Total current assets 10,137,108,259.41 8,919,939,242.84
Non-current assets:
Debt investments
Other debt investments
Long-term receivables
Long-term equity investments 5,064,568,480.23 5,079,071,023.37
Other equity instrument investments 10,100,870.56 10,100,870.56
Other non-current financial assets
Real estate properties for
7,426,227.58 7,659,343.90
investment
Fixed assets 153,399,586.45 160,678,584.54
Constructions in progress 689,460.69 211,760.72
Biological assets for production
Oil & gas assets
Right-of-use assets 6,998,988.33 11,020,708.66
Intangible assets 203,375,661.16 218,720,898.11
Development expenditures
Goodwill
Long-term unamortized expenses 189,850.98 321,067.34
Deferred tax assets 59,886,457.14 47,289,929.98
Other non-current assets 396,808,095.48 406,493,149.98
Total non-current assets 5,903,443,678.60 5,941,567,337.16
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Total assets 16,040,551,938.01 14,861,506,580.00
Current liabilities:
Short-term borrowing 524,080,831.49 630,446,420.72
Financial liabilities for trade
Derivative financial liabilities
Notes payable 547,050,320.54 311,085,944.14
Accounts payable 2,955,614,945.50 2,416,471,973.20
Receipts in advance
Contract liabilities 34,788,963.17 19,690,922.48
Payroll payable 3,729,940.23 9,353,991.58
Taxes payable 74,926,245.39 176,633,138.73
Other payables 803,449,999.96 877,397,177.28
Including: Interests payable
Dividends payable 224,219.60 224,219.60
Liabilities held for sale
Non-current liabilities due within
3,860,492.46 5,939,175.02
one year
Other current liabilities 4,492,075.91 2,494,822.02
Total current liabilities 4,951,993,814.65 4,449,513,565.17
Non-current liabilities:
Long-term borrowing
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities 21,562.38 2,701,526.22
Long-term payables
Long-term employee benefits
payable
Provision
Deferred income 36,850,098.57 38,133,036.03
Deferred tax liabilities 12,511,476.38 12,511,476.38
Other non-current liabilities
Total non-current liabilities 49,383,137.33 53,346,038.63
Total liabilities 5,001,376,951.98 4,502,859,603.80
Owners’ Equity:
107
Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
Share capital 1,749,809,548.00 1,749,809,548.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserves 2,168,451,528.01 2,168,451,528.01
Less: Treasury shares
Other comprehensive income -129,129.44 -129,129.44
Special reserve
Surplus reserves 1,099,526,446.75 1,099,526,446.75
Retained earnings 6,021,516,592.71 5,340,988,582.88
Total owners’ equity 11,039,174,986.03 10,358,646,976.20
Total liabilities & owners’ equity 16,040,551,938.01 14,861,506,580.00
3. Consolidated income statement
Unit: RMB yuan
Item Current period in 2022 Previous period in 2021
I. Total operating income 18,197,963,991.01 17,179,437,902.61
Including: Operating revenue 18,197,963,991.01 17,179,437,902.61
Interests received
Premiums earned
Handling fees and
commissions received
II. Total operating cost 16,516,515,436.25 15,638,788,710.40
Including: Operating cost 12,243,374,078.15 11,589,419,896.59
Interests paid
Handling fees and
commissions paid
Surrender value
Net payment of insurance
claims
Net appropriation of policy
reserve
Policy dividends paid
Reinsurance expenses
Business taxes and 96,083,582.73 88,585,385.20
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surcharges
Selling expenses 3,032,965,177.95 2,978,753,751.45
Administrative expenses 572,048,249.55 534,683,411.33
Research and
566,596,381.67 437,556,684.96
Development(R&D) expenses
Financial expenses 5,447,966.20 9,789,580.87
Including: Interests
39,506,356.40 37,214,555.56
expenses
Interests income 49,960,917.39 38,453,252.17
Add: Other income 81,653,430.69 137,364,653.52
Investment income (Losses are
-53,479,017.66 -54,458,950.28
indicated by “-”)
Including: Investment gains
(losses) in associated enterprise and -43,145,347.52 -22,852,478.03
joint-venture enterprise
Gains on the
derecognition of financial assets
measured at amortized cost
Gains on exchange (Losses are
indicated by “-”)
Gains on net exposure hedging
(Losses are indicated by “-”)
Gains on changes in fair value
(Losses are indicated by “-”)
Credit impairment losses
-71,965,559.59 -38,263,673.24
(Losses are indicated by “-”)
Impairment losses of assets
0.00 3,054,806.20
(Losses are indicated by “-”)
Gains on assets disposal
8,506,580.12 182,307.80
(Losses are indicated by “-”)
III. Operating profit (Losses are
1,646,163,988.32 1,588,528,336.21
indicated by “-”)
Add: Non-operating income 4,341,628.44 834,874.23
Less: Non-operating expenses 8,661,496.73 6,126,908.04
IV. Total profit (Total losses are indicated
1,641,844,120.03 1,583,236,302.40
by “-”)
Less: Income tax expenses 287,938,727.72 240,728,486.55
V. Net profit (Net losses are indicated by 1,353,905,392.31 1,342,507,815.85
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“-”)
(I) Classification by continuous
operations
1. Net profit from continued
operations (Net losses are indicated by 1,353,905,392.31 1,342,507,815.85
“-”)
2. Net profit from terminational
operations (Net losses are indicated by
“-”)
(II) Classification by attribution of
ownership
1. Net profit attributable to owners
1,340,570,484.98 1,300,346,324.85
of the parent company
2. Profit or loss attributable to
13,334,907.33 42,161,491.00
minority shareholders
VI. Other comprehensive income, net of
-98,252,733.94 49,562,711.35
income tax
Other comprehensive income
attributable to owners of the parent -98,252,733.94 49,562,711.35
company, net of tax
(I) Other comprehensive income
that cannot be reclassified into -7,023,104.32 15,091,655.18
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
-7,023,104.32 15,091,655.18
other equity instrument investments
4. Changes in fair value of
credit risk of the enterprise
5. Others
(II) Other comprehensive income to
-91,229,629.62 34,471,056.17
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
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Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
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
arising on conversion of financial
-91,229,629.62 34,471,056.17
statements denominated in foreign
currencies
7. Others
Net amount after tax of other
comprehensive income attributable to
minority shareholders
VII. Total comprehensive income 1,255,652,658.37 1,392,070,527.20
Total comprehensive income
attributable to owners of the parent 1,242,317,751.04 1,349,909,036.20
company
Total comprehensive income
13,334,907.33 42,161,491.00
attributable to minority shareholders
VIII. Earnings per share (EPS):
(I) Basic EPS 0.7661 0.7431
(II) Diluted EPS 0.7661 0.7431
As for enterprise merger under the same control in the current period, the net profit generated by the merged party before the merger
is 0.00 yuan, and that generated during the previous period is 0.00 yuan.
Legal representative: Lv Liang
Person in charge of accounting work: Lv Liang
Person in charge of the Accounting Department: Qiu Renbo
4. Income statement of the parent company
Unit: RMB yuan
Item Current period in 2022 Previous period in 2021
I. Total operating income 9,908,981,203.23 8,825,456,287.77
Less: Total operating cost 9,247,554,807.79 8,358,026,557.10
Business taxes and surcharges 14,000,999.79 8,620,356.90
Selling expenses 227,664,922.41 183,609,392.52
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Administrative expenses 82,342,556.23 84,417,643.06
Research and Development
(R&D) expenses
Financial expenses -396,898.80 3,945,113.42
Including: Interests expenses 27,507,061.68 28,654,116.50
Interests income 32,303,808.77 25,469,215.21
Add: Other income 12,314,150.33 3,491,044.84
Investment income (Losses are
1,013,355,132.27 1,013,064,044.10
indicated by “-”)
Including: Investment gains
(losses) in associated enterprise and -7,439,207.20 -488,201.29
joint-venture enterprise
Gains on the
derecognition of financial assets
measured at amortized cost (Losses are
indicated by “-”)
Gains on net exposure hedging
(Losses are indicated by “-”)
Gains from changes in fair
values (Losses are indicated by “-”)
Credit impairment losses
-91,642,566.80 -37,061,514.45
(Losses are indicated by “-”)
Impairment gains (losses) of
assets (Losses are indicated by “-”)
Asset disposal income (Losses
7,341,180.70 -24,172.29
are indicated by “-”)
II. Operating profit (Losses are indicated
1,279,182,712.31 1,166,306,626.97
by “-”)
Add: Non-operating income 669,874.31 3,934.06
Less: Non-operating expenses 3,286,049.77 232,283.92
III. Total profit (Total losses are indicated
1,276,566,536.85 1,166,078,277.11
by “-”)
Less: Income tax expenses 88,593,758.11 38,782,555.89
IV. Net profit (Net losses are indicated by
1,187,972,778.74 1,127,295,721.22
“-”)
(I) Net profit from continuous
operations (Net losses are indicated by 1,187,972,778.74 1,127,295,721.22
“-”)
112
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(II) Net profit from discontinued
operations (Net losses are indicated by
“-”)
V. Other comprehensive income, net of
income tax
(I) Other comprehensive income
that cannot be reclassified into
gains/losses
1. Changes in
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
other equity instrument investments
4. Changes in fair value of
credit risk of the enterprise
5. Others
(II) Other comprehensive income
to be reclassified into gains/losses
1. Other comprehensive
income that can be reclassified into
gains/losses under equity method
2. Changes in fair value of
other debt investments
3. Amount of financial assets
reclassified into other comprehensive
income
4. Credit impairment reserve
of other debt investments
5. Cash flow hedging
reserve
6. Exchange differences
from translation of foreign currency
financial statements
7. Others
VI. Total comprehensive income 1,187,972,778.74 1,127,295,721.22
VII. Earnings per share (EPS):
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Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
(I) Basic EPS
(II) Diluted EPS
5. Consolidated cash flow statement
Unit: RMB yuan
Item Current period in 2022 Previous period in 2021
I. Cash flows from operating activities：
Cash received from sale of goods or
18,859,480,723.70 19,260,978,489.19
rendering of services
Net increase in customer deposits
and due from banks
Net increase in borrowing from the
central bank
Net increase in borrowing from
other financial institutions
Cash from the premium of the
original insurance policy
Net cash from reinsurance
Net increase in deposits and
investment of the insured
Cash from interests, handling fees
and commissions
Net increase in borrowing from
other banks and other financial
institutions
Net increase in funds for repurchase
Net cash received for buying and
selling securities as proxy
Receipts of tax refunds 11,410,179.66 1,862,175.25
Other cash receipts to operating
264,979,395.43 320,057,319.74
activities
Sub-total of Cash inflows from operating
19,135,870,298.79 19,582,897,984.18
activities
Cash payments for goods purchased
12,623,103,224.34 12,667,873,491.42
and services received
Net increase in customer loans and
prepayments
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Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
Net increase in deposits of central
bank and due from banks
Cash payments for original
insurance claims
Net increase in lending to other
banks and other financial institutions
Cash payments for interests,
handling fees and commissions
Cash payments for policy dividends
Cash payments to and on behalf of
1,600,540,802.72 1,324,178,305.24
employees
Payments of various types of taxes 1,824,842,188.89 1,022,924,459.48
Other cash payments in relation to
2,803,149,672.57 2,829,409,355.93
operating activities
Sub-total of cash outflows for operating
18,851,635,888.52 17,844,385,612.07
activities
Net cash flow from operating activities 284,234,410.27 1,738,512,372.11
II. Cash flows from investing activities
Cash receipts from recovery of
investments
Cash receipts from investment
900,000.00 4,281,616.49
income
Net cash from disposal of fixed
assets, intangible assets and other long- 8,138,807.00 407,737.22
term assets
Net cash from disposal of
subsidiaries and other business units
Other cash receipts in relation to
0.00 4,788,636.47
investing activities
Sub-total of cash inflows from investing
9,038,807.00 9,477,990.18
activities
Cash payments for purchase and
construction of fixed assets, intangible 603,911,034.60 403,137,637.26
assets and other long-term assets
Cash payments for investment 29,400,000.00 120,706,000.00
Net increase in pledge loans 0.00
Net cash paid for acquisition of
270,952,210.17 756,550,801.75
subsidiaries and other business units
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Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
Other cash payments in relation to
100,000,000.00 26,127,840.41
investing activities
Sub-total of cash outflows for investing
1,004,263,244.77 1,306,522,279.42
activities
Net cash flow from investing activities -995,224,437.77 -1,297,044,289.24
III. Cash flows from financing activities:
Cash receipts from capital
30,000,000.00
contributions
Including: Cash receipts from
capital contributions from minority 30,000,000.00
owners of subsidiaries
Cash from borrowing 2,750,601,977.68 1,421,047,085.43
Other cash receipts in relation to
248,207,838.55
financing activities
Sub-total of cash inflows from financing
3,028,809,816.23 1,421,047,085.43
activities
Cash repayment of borrowings 2,144,574,467.10 1,309,701,912.43
Cash payments for distribution of
dividends or profits or settlement of 585,723,656.08 472,827,211.26
interest expenses
Including: Dividends and profits
paid by subsidiaries to minority 1,960,000.00
shareholders
Other cash payments in relation to
20,708,449.20 5,424,076.04
financing activities
Sub-total of cash outflows from
2,751,006,572.38 1,787,953,199.73
financing activities
Net cash flows from financing activities 277,803,243.85 -366,906,114.30
IV. Effect of foreign exchange rate
-26,309,944.30 -423,905.66
changes on Cash and Cash Equivalents
V. Net increase in cash and cash
-459,496,727.95 74,138,062.91
equivalents
Add: Opening balance of cash and
3,580,140,638.17 3,157,407,073.26
cash equivalents
VI. Closing balance of cash and cash
3,120,643,910.22 3,231,545,136.17
equivalents
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Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
6. Cash flow statement of the parent company
Unit: RMB yuan
Item Current period in 2022 Previous period in 2021
I. Cash flows from operating activities：
Cash receipts from the sale of goods
9,993,053,097.54 9,547,450,716.13
and the rendering of services
Receipts of tax refund
Other cash receipts in relation to
322,420,601.02 257,412,395.37
operating activities
Sub-total of cash inflows from operating
10,315,473,698.56 9,804,863,111.50
activities
Cash payments for goods acquired
9,590,776,506.25 9,463,890,457.11
and services received
Cash payments to and on behalf of
157,221,560.98 131,308,524.66
employees
Payments of various types of
436,406,580.06 199,085,236.17
taxes
Other cash payments in relation to
257,469,024.63 440,569,707.04
operating activities
Sub-total of cash outflows for operating
10,441,873,671.92 10,234,853,924.98
activities
Net cash flow from operating activities -126,399,973.36 -429,990,813.48
II. Cash flows from investing activities
Cash receipts from recovery of
50,059,838.75
investments
Cash receipts from investment
0.00 1,003,363,380.00
income
Net cash receipts from disposal of
fixed assets, intangible assets and other 5,936,300.00 237,307.57
long-term assets
Net cash from disposal of
subsidiaries and other business units
Other cash receipts in relation to
245,102,300.59 289,814,850.52
investing activities
Sub-total of cash inflows from investing
301,098,439.34 1,293,415,538.09
activities
Cash payments for purchase and
3,052,228.94 23,188,911.97
construction of fixed assets, intangible
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Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
assets and other long-term assets
Cash payments for investment 36,400,000.00 79,200,000.00
Net cash paid for acquisition of
subsidiaries and other business units
Other cash payments in relation to
433,741,844.00 360,086,340.00
investing activities
Sub-total of cash outflows for investing
473,194,072.94 462,475,251.97
activities
Net cash flows from investing activities -172,095,633.60 830,940,286.12
III. Cash flows from financing activities:
Cash receipts from absorbing
investments
Cash receipts from borrowing 1,146,017,508.00 559,345,278.50
Other cash receipts in relation to
1,109,442,166.67 1,012,500,000.00
financing activities
Sub-total of cash inflows from financing
2,255,459,674.67 1,571,845,278.50
activities
Cash repayments of borrowings 1,255,017,310.01 879,341,384.32
Cash payments for distribution of
dividends or profits or settlement of 567,035,703.19 456,826,281.28
interest expenses
Other cash payments in relation to
983,212,333.68 1,025,043,198.88
financing activities
Sub-total of cash outflows fromfinancing
2,805,265,346.88 2,361,210,864.48
activities
Net cash flow from financing activities -549,805,672.21 -789,365,585.98
IV. Effect of foreign exchange rate
-37,416.55
changes on Cahs and Cash Equivalents
V. Net increase in cash and cash
-848,301,279.17 -388,453,529.89
equivalents
Add: Opening balance of cash and
1,919,097,181.16 1,889,254,142.30
cash equivalents
VI. Closing balance of cash and cash
1,070,795,901.99 1,500,800,612.41
equivalents
7. Consolidated statement of changes in owners’Equity
Amount in the current period
Unit: RMB yuan
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Amount for the first half of 2022
Ownership interest attributable to the parent company
Other equity Oth Tota
instruments Less er Und l
Gen Min
Shar Capi : com Spe Surp istri own
Item eral ority
Pref Perp ersh
e tal Trea preh cial lus bute Oth Tota
erre etua risk inter
capi Oth rese sury ensi rese rese d ers l ip
d l rese est
tal ers rve shar ve rve rve prof inter
shar bon rve
es inco it est
es ds
me
I. Balance at - 11,6 16,5 16,9
1,74 2,22 1,02 361,
the end of 47,7 25,7 79,3 41,3
9,80 9,86 1,67 944,
0.00 68,2 0.00 94,0 74,3 19,0
the period of 9,54 8,31 0,68 682.
25.8 01.4 23.0 05.6
8.00 2.11 7.31 60
the prior year 0 6 8 8
Add:
changes in
accounting
policies
Error
correction in
the prior
periods
Merger of
enterprises
under the
same control
Others
II. Balance at
the - 11,6 16,5 16,9
1,74 2,22 1,02 361,
beginning of 47,7 25,7 79,3 41,3
9,80 9,86 1,67 944,
0.00 68,2 0.00 0.00 94,0 74,3 19,0
the period of 9,54 8,31 0,68 682.
25.8 01.4 23.0 05.6
8.00 2.11 7.31 60
the current 0 6 8 8
year
III. Amount
-
of change in 34,3 833, 769, 43,3 812,
98,2
42,6 125, 215, 34,9 550,
the current 0.00 0.00 52,7 0.00 0.00 0.00
90.6 716. 672. 07.3 580.
period 33.9
8 06 80 3 13
4
(Decreases
119
Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
are indicated
by “-”)
-
(I) Total 1,34 1,24 13,3 1,25
98,2
0,57 2,31 34,9 5,65
comprehensi 52,7
0,48 7,75 07.3 2,65
ve income 33.9
4.98 1.04 3 8.37
4
(II) Capital
contributed 30,0 30,0
00,0 00,0
by owners
00.0 00.0
and capital 0 0
decreases
1. Common
30,0 30,0
shares 00,0 00,0
invested by 00.0 00.0
0 0
owners
2. Capital
invested by
holders of
other equity
instruments
3. Amount of
share-based
payment
included in
ownership
interest
4. Others
- - -
(III) Profit 507, 507, 507,
444, 444, 0.00 444,
distribution
768. 768. 768.
92 92 92
1.
Withdrawal
0.00 0.00
of surplus
reserve
2.
Withdrawal
0.00
of general
risk reserve
3. - - -
507, 507, 507,
Distribution
444, 444, 444,
to owners (or 768. 768. 768.
120
Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
shareholders) 92 92 92
4. Others
(IV) Internal
conversion
of ownership
interest
1. Capital (or
share capital)
increase
from capital
reserve
conversion
2. Capital (or
share capital)
increase
from surplus
reserve
conversion
3. Recovery
of losses by
surplus
reserve
4. Retained
earnings
from transfer
of changes in
the defined
benefit plan
5. Retained
earnings
from transfer
of other
comprehensi
ve income
6. Others
(V) Special
reserve
1.
Withdrawal
in the current
period
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Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
2. Use in the
current
period
34,3 34,3 34,3
42,6 42,6 42,6
(VI) Others
90.6 90.6 90.6
8 8 8
IV. Balance - 12,4 17,3 17,7
1,74 2,26 1,02 405,
at the end of 146, 58,9 48,5 53,8
9,80 4,21 1,67 279,
0.00 020, 0.00 0.00 19,7 89,9 69,5
the current 9,54 1,00 0,68 589.
959. 17.5 95.8 85.8
8.00 2.79 7.31 93
period 74 2 8 1
Amount in the previous period
Unit: RMB yuan
Amount for the first half of 2021
Ownership interest attributable to the parent company
Other equity Oth Tota
instruments Less er Und l
Gen Min
Shar Capi : com Spe Surp istri own
Item eral ority
Pref Perp ersh
e tal Trea preh cial lus bute Oth Tota
erre etua risk inter
capi Oth rese sury ensi rese rese d ers l ip
d l rese est
tal ers rve shar ve rve rve prof inter
shar bon rve
es inco it est
es ds
me
I. Balance at 14,6 15,1
1,74 2,15 - 861, 9,85 559,
the end of 19,8 79,4
9,80 8,08 2,19 680, 2,44 590,
21,3 11,5
the period of 9,54 0,66 1,06 578. 1,59 204.
08.6 13.4
8.00 1.07 9.45 42 0.56 87
the prior year 0 7
Add:
Changes in
accounting
policies
Error
correction in
the prior
periods
Merger of
enterprises
under the
same control
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Others
II. Balance at
the 14,6 15,1
1,74 2,15 - 861, 9,85 559,
beginning of 19,8 79,4
9,80 8,08 2,19 680, 2,44 590,
21,3 11,5
the period of 9,54 0,66 1,06 578. 1,59 204.
08.6 13.4
8.00 1.07 9.45 42 0.56 87
the current 0 7
year
III. Amount
of change in
the current 46,4 901, 947, 61,2 1,00
42,9 009, 452, 07,5 8,66
period
11.6 928. 840. 79.5 0,41
(Decreases 4 52 16 9 9.75
are indicated
by “-”)
(I) Total 49,5 1,30 1,34 42,1 1,39
62,7 0,34 9,90 61,4 2,07
comprehensi
11.3 6,32 9,03 91.0 0,52
ve income 5 4.85 6.20 0 7.20
(II) Capital
contributed 19,0 19,0
46,0 46,0
by owners
88.5 88.5
and capital 9 9
decreases
1. Common
shares
invested by
owners
2. Capital
invested by
holders of
other equity
instruments
3. Amount of
share-based
payment
included in
ownership
interest
19,0 19,0
46,0 46,0
4. Others
88.5 88.5
9 9
- - -
(III) Profit
402, 402, 402,
123
Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
distribution 456, 456, 456,
196. 196. 196.
04 04 04
1.
Withdrawal
of surplus
reserve
2.
Withdrawal
of general
risk reserve
3. - - -
Distribution 402, 402, 402,
456, 456, 456,
to owners (or
196. 196. 196.
shareholders) 04 04 04
4. Others
(IV) Internal
-
conversion 3,11
3,11
9,79
of ownership 9,79
9.71
9.71
interest
1. Capital (or
share capital)
increase
from capital
reserve
conversion
2. Capital (or
share capital)
increase
from surplus
reserve
conversion
3. Recovery
of losses by
surplus
reserve
4. Retained
earnings
from transfer
of changes in
the defined
benefit plan
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Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
5. Retained
earnings
-
from transfer 3,11
3,11
9,79
of other 9,79
9.71
9.71
comprehensi
ve income
6. Others
(V) Special
reserve
1.
Withdrawal
in the current
period
2. Use in the
current
period
(VI) Others
IV. Balance 10,7 15,5 16,1
1,74 2,15 44,2 861, 620,
at the end of 53,4 67,2 88,0
9,80 8,08 51,8 680, 797,
51,5 74,1 71,9
the current 9,54 0,66 42.1 578. 784.
19.0 48.7 33.2
8.00 1.07 9 42 46
period 8 6 2
8. Statement of changes in ownership interest of the parent company
Amount in the current period
Unit: RMB yuan
Amount for the first half of 2022
Other equity instruments Other
Total
Capita Less: compr Specia Surplu Undist
owner
Item Share Prefer Perpet l Treasu ehensi l s ribute
Others ship
capital red ual Others reserv ry ve reserv reserv d
interes
shares bonds e shares incom e e profit
t
e
I. Balance at
10,35
the end of 1,749, 2,168, - 1,099, 5,340,
8,646,
809,5 451,5 0.00 129,1 526,4 988,5
the period of 976.2
48.00 28.01 29.44 46.75 82.88
0
the prior year
Add:
Changes in
0.00
accounting
policies
125
Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
Error
correction in 0.00
the prior
periods
0.00
Others
II. Balance at
the
10,35
beginning of 1,749, 2,168, - 1,099, 5,340,
8,646,
809,5 451,5 0.00 129,1 526,4 988,5
the period of 976.2
48.00 28.01 29.44 46.75 82.88
0
the current
year
III. Amount
of change in
the current 680,5 680,5
period 28,00 28,00
(Decreases 9.83 9.83
are indicated
by “-”)
(I) Total 1,187, 1,187,
comprehensi 972,7 972,7
ve income 78.75 78.75
(II) Capital
contributed
by owners
and capital
decreases
1. Common
shares
invested by
owners
2. Capital
invested by
holders of
other equity
instruments
3. Amount of
share-based
payment
included in
ownership
126
Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
interest
4. Others
- -
(III) Profit 507,4 507,4
distribution 44,76 44,76
8.92 8.92
1.
Withdrawal
0.00
of surplus
reserve
2.
- -
Distribution 507,4 507,4
to owners (or 44,76 44,76
8.92 8.92
shareholders)
3. Others
(IV) Internal
conversion
of ownership
interest
1. Capital (or
share capital)
increase
from capital
reserve
conversion
2. Capital (or
share capital)
increase
from surplus
reserve
conversion
3. Recovery
of losses by
surplus
reserve
4. Retained
earnings
from transfer
of changes in
the defined
benefit plan
5. Retained
127
Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
earnings
from transfer
of other
comprehensi
ve income
6. Others
(V) Special
reserve
1.
Withdrawal
in the current
period
2. Use in the
current
period
(VI) Others 0.00
IV. Balance
at the end of 1,749, 2,168, - 1,099, 6,021, 11,039
809,5 451,5 129,1 526,4 516,5 ,174,9
the current
48.00 28.01 29.44 46.75 92.71 86.03
period
Amount in the previous period
Unit: RMB yuan
Amount for the first half of 2021
Other equity instruments Other
Total
Capita Less: compr Specia Surplu Undist
owner
Item Share Prefer Perpet l Treasu ehensi l s ribute
Others ship
capital red ual Others reserv ry ve reserv reserv d
interes
shares bonds e shares incom e e profit
t
e
I. Balance at
the end of 1,749, 2,168, 3,051, 939,5 4,303, 9,164,
809,5 451,5 311.2 36,33 533,7 382,5
the period of
48.00 28.01 9 7.86 98.88 24.04
the prior year
Add:
Changes in
accounting
policies
Error
correction in
the prior
128
Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
periods
Others
II. Balance at
the
beginning of 1,749, 2,168, 3,051, 939,5 4,303, 9,164,
809,5 451,5 311.2 36,33 533,7 382,5
the period of
48.00 28.01 9 7.86 98.88 24.04
the current
year
III. Amount
of change in
the current 724,8 724,8
period 39,52 39,52
(Decreases 5.18 5.18
are indicated
by “-”)
(I) Total 1,127, 1,127,
comprehensi 295,7 295,7
ve income 21.22 21.22
(II) Capital
contributed
by owners
and capital
decreases
1. Common
shares
invested by
owners
2. Capital
invested by
holders of
other equity
instruments
3. Amount of
share-based
payment
included in
ownership
interest
4. Others
- -
(III) Profit
402,4 402,4
129
Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
distribution 56,19 56,19
6.04 6.04
1.
Withdrawal
of surplus
reserve
2.
- -
Distribution 402,4 402,4
to owners (or 56,19 56,19
6.04 6.04
shareholders)
3. Others
(IV) Internal
conversion
of ownership
interest
1. Capital (or
share capital)
increase
from capital
reserve
conversion
2. Capital (or
share capital)
increase
from surplus
reserve
conversion
3. Recovery
of losses by
surplus
reserve
4. Retained
earnings
from transfer
of changes in
the defined
benefit plan
5. Retained
earnings
from transfer
of other
comprehensi
130
Semi-Annual Report 2022 of Huadong Medicine Co., Ltd.
ve income
6. Others
(V) Special
reserve
1.
Withdrawal
in the current
period
2. Use in the
current
period
(VI) Others
IV. Balance
at the end of 1,749, 2,168, 3,051, 939,5 5,028, 9,889,
809,5 451,5 311.2 36,33 373,3 222,0
the current
48.00 28.01 9 7.86 24.06 49.22
period
Huadong Medicine Co., Ltd.
Chairman of the Board: Lv Liang
August 10, 2022
131