Stock Code: 000028/200028 Notice No.: 2017-43
Short Form of the Stock: Sinopharm Accord /Accord B
China National Accord Medicines Corporation Ltd.
Summary of Semi-Annual Report 2017
I. Important Notice
The summary is abstract from full-text of annual report, for more details of operating results, financial condition and future
development plan of the Company; investors should found in the full-text of annual report that published on media appointed by
CSRC.
No objection statement of directors, supervisors and senior executives
Whole directors attended the Meeting in person for Report deliberation
Prompt of modified auditing opinion
□ Applicable √ Not applicable
Profit distribution pre-plan of common stock or capitalizing of common reserves pre-plan deliberated by the Board in the reporting
period
□ Applicable √ Not applicable
The Company plans not to carry out cash dividend and bonus distribution and capitalizing of common reserves
Profit distribution pre-plan of preferred stock deliberated and approved by the Board in the reporting period
□ Applicable √ Not applicable
II. Basic information of the company
1. Company profile
Short form of the stock Sinopharm Accord, Accord B Stock code 000028, 200028
Stock exchange for listing Shenzhen Stock Exchange
Person/Way to contact Secretary of the Board Rep. of security affairs
Name Chen Changbing
Accord Pharm. Bldg., No. 15, Ba Gua Si
Office add. Road, Futian District, Shenzhen, Guangdong
Province
Tel. +(86)755 25875195
E-mail 0028@szaccord.com.cn;
gyyz0028@sinopharm.com
2. Main financial data and index
Whether it has retroactive adjustment or re-statement on previous accounting data
√Yes □No
1
Reasons on retroactive adjustment or re-statement
Enterprise combined under the same control
Increase/decrease in
Same period of last year
Current Period this report y-o-y
Before adjustment After adjustment After adjustment
Operating income (RMB) 20,524,807,669.57 14,089,052,871.88 20,562,402,047.82 -0.18%
Net profit attributable to shareholders of
556,125,318.19 542,122,083.86 659,078,223.36 -15.62%
the listed company(RMB)
Net profit attributable to shareholders of
the listed company after deducting 546,253,390.00 404,509,408.41 401,762,449.20 35.96%
non-recurring gains and losses(RMB)
Net cash flow arising from operating
228,337,431.40 492,634,062.23 829,582,933.34 -72.48%
activities(RMB)
Basic earnings per share (RMB/Share) 1.299 1.495 1.558 -16.62%
Diluted earnings per share (RMB/Share) 1.299 1.495 1.558 -16.62%
Weighted average ROE 6.41% 9.53% 8.59% -2.18%
Increase/decrease in
this report-end over
End of last period
End of current period that of last
period-end
Before adjustment After adjustment After adjustment
Total assets (RMB) 22,199,774,990.31 21,312,754,511.97 21,316,548,247.95 4.14%
Net assets attributable to shareholder of
8,864,455,086.90 8,450,150,621.93 8,452,426,863.52 4.87%
listed company (RMB)
Note: In October 2016, the Company sell the whole operational assets of Pingshan Pharmaceutical R&D base and
51% equity of subordinate three pharmaceutical industry subsidiaries respectively (including Zhijun
Pharmaceutical, Zhijun Pharmacy Trade and Pingshan Pharmaceutical), through subscribing 15.56% new shares
offering under the name of related party Shyndec Pharmaceutical. Correspondingly, the comparative statement of
the consolidate profit statement for semi-annual of 2017 including the profit data for first half year of 2016 under
the name of above mentioned three companies.
3. Number of shareholders and share-holding
In Share
Total preference shareholders
Total common stock shareholders in with voting rights recovered at
11,793 0
reporting period-end end of reporting period (if
applicable)
Top ten shareholders
Amount of Shares pledged/frozen
Nature of Proportion of Amount of
Full name of Shareholders restricted
shareholder shares held shares held State of share Amount
shares held
Sinopharm Group Co., Ltd. State-owned 56.06% 239,999,991 55,057,700
2
Corporation
HTHK/CMG FSGUFP-CMG
Foreign
FIRST STATE CHINA 2.04% 8,732,491
Corporation
GROWTH FD
China Life Insurance Co., Ltd. – Domestic non
tradition –general insurance state-owned 1.51% 6,454,402
products -005L-CT001 Shen Corporation
China National Pharmaceutical State-owned
1.24% 5,323,043 5,323,043
Foreign Trade Corporation Corporation
Foreign
TARGET VALUE FUND 1.27% 5,449,232
Corporation
GUOTAI JUNAN
Foreign
SECURITIES(HONGKONG) 1.05% 4,489,371
Corporation
LIMITED
China Merchants Bank Co., Ltd. –
Domestic non
Huitianfu Medical Service
state-owned 1.03% 4,430,009
Flexible Mixed Securities
Corporation
Investment Fund
New China Life Insurance Co., Domestic non
Ltd. – Bonus – Individual bonuses state-owned 0.98% 4,199,772
- -018L-FH002 Shen Corporation
Central Huijin Assets State-owned
0.89% 3,804,400
Management Co., Ltd Corporation
VALUE PARTNERS CLASSIC Foreign
0.71% 3,038,918
FUND Corporation
Sinopharm Group Co., Ltd. and China National Pharmaceutical Foreign Trade
Corporation have the same actual controller, which is China National
Explanation on associated relationship among the Pharmaceutical Group Corporation. It is unknown that there exists no associated
aforesaid shareholders relationship or belongs to the consistent actionist among the other tradable
shareholders regulated by the Management Measure of Information Disclosure
on Change of Shareholding for Listed Companies.
4. Changes of controlling shareholders or actual controller
Changes of controlling shareholders in reporting period
□ Applicable √ Not applicable
Changes of controlling shareholders had no change in reporting period.
Changes of actual controller in reporting period
□ Applicable √ Not applicable
Changes of actual controller in reporting period had no change in reporting period.
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5. Total preferred stock shareholders of the Company and shares held by top ten shareholders with
preferred stock held
□ Applicable √ Not applicable
The Company had no shareholders with preferred stock held in the reporting.
6. Corporate bonds
Whether the Company has a corporation bonds that issuance publicly and listed on stock exchange and without due on the date when
semi-annual report approved for released or fail to cash in full on due
No
III. Discussion and analysis by the Management Team
1. Introduction of operation in the reporting period
Dose the Company need to comply with disclosure requirements of the special industry
No
In the first half of 2017, influenced by the fierce competition in external market, GPO bidding procurement, and
the changes in pharmaceutical policies, the overall pharmaceutical industry entered into the “new normal” of
slowdown in growth. Under the leadership of the board of directors of the company, Sinopharm Accord focused
on the annual management theme of “strategic transformation new journey and innovative development new leap”,
promoted the strategic landing, clarified the management ideas, consolidated the management foundation,
enhanced the business unit profitability, and orderly advanced the key works with open, comprehensive, sunshiny,
and positive attitude.
(i) The overall situation of Sinopharm Accord in the first half of 2017
Sinopharm Accord achieved operating income of RMB 20.525 billion, a decrease of 0.18% on a year-on-year
basis; achieved net profits attributable to the parent company of RMB 556 million, a decrease of 15.62% on a
year-on-year basis. The above mentioned item drops mainly because the comparative statement including the
profit statement data (first half year of 2016) of the three industrial enterprises that replace-out in material assets
reorganization occurred in October 2016. The operating income and net profit attributable to parent company has
a y-o-y growth of 3.79% and 6.73% respectively if ignore the above mentioned causes.
Pharmaceutical distribution achieved operating income of RMB15.754 billion, an increase of 1.56% on a
year-on-year basis; achieved net profits attributable to the parent company of RMB 306 million, an increase of
5.50% on a year-on-year basis.
Pharmaceutical retail achieved operating income of RMB 4.888 billion, an increase of 12% on a year-on-year
basis; achieved net profits attributable to the parent company of RMB 99 million, an increase of 30.08% on a
year-on-year basis.
(ii) The overall situation of pharmaceutical industry
In 2017, driven by reform and innovation, the medical reform continued to advance, various policies landed
soundly, and the market changes advanced irresistibly, therefore, we need to not only enhance the self-confidence
in development and maintain the strategic strength, but also seek for new thoughts and ideas and try to promote
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the transformation.
1. Policy level: present the features of “grass-roots sinking”, “wide range”, “focusing
on detailed rules”, and “fast speed”, the profit direction of pharmaceutical industry have changes, while the
policies show diversity and complexity because of the national region.
2. Market level: the whole pharmaceutical industry slows down the growth, the market enters into the “callback”:
in the first half of 2017, the national pharmaceutical terminal sales reached RMB 803.7 billion, an increase of
7.8% on a year-on-year basis; the sales volume growth of three terminals, public hospitals, retail pharmacies, and
public primary medical care, is slowing down year by year.
3. Competition level: the industry mergers and acquisitions of competitors accelerate, directly drive the rapid
growth of sales by scale expansion of stores.
(iii) Main work the company completed in the first half of 2017
1. Strategic transformation - explore the operation mode of wholesale and retail integration
The company established the organizational structure of wholesale and retail integration for strategic
transformation: the headquarters level set up the purchasing management department to promote and establish a
purchasing management system for wholesale and retail integration, at the same time, built variety sharing and
information platform for the whole line joint.
2. Management transformation - double headquarters control mode is clear
Set up strategic investment headquarters, retail operations headquarters, and distribution operations headquarters,
clarify the positioning, adjust the structure, sort out the responsibilities, optimize the functions, and give full play
to the headquarters. Of which:
Retail operations headquarters: sort out the organizational structure and department responsibilities, strengthen the
regional linkage, and enhance the resources integration and professional management capabilities of headquarters.
Distribution operations headquarters: undertake the strategic transformation requirements, match up with the new
structure design, and adjust the structure and personnel.
3. Distribute two-wheel drive - multi-format collaborative progress
(1) Give play to the smart supply chain performance, and deepen the integration of operations
(2) Strategically promote business transformation, and build new competitive advantages
4. Intensively cultivate retail and consolidate management - promote business development by management
improvement
(1) Focus on management, and improve operational efficiency and development quality
(2) Optimize control, and give full play to all functions of the headquarters
(3) Accelerate the expansion of stores, and promote the Omni-channel marketing model
5. Legal operations - adhere to the bottom line to ensure the sustainable development of the company
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2. Matters relevant to financial report
(1) Particulars about the changes in aspect of accounting policy, estimates and calculation method
compared with the accounting period of last year
√Applicable □ Not applicable
The Revise on “Accounting Standards for Business Enterprise No.16 – Government subsidies” Cai Kuai [2017] No.15 issued by
Ministry of Finance on 10 May 2017, and come into operation since 12 June 2017. The government subsidy of the enterprise on 1
Jan. 2017 will count by prospective application, the new government subsidy occurred from 1 Jan. 2017 to the implementation of
above mentioned rules will adjust by the revised regulations. The Company carry out the above mentioned regulation since 12 June
2017 and adjusted relevant accounting policy in line with the revised regulation.
According to the revised “Accounting Standards for Business Enterprise No.16 – Government subsidies”, the government subsidy
with routine activities concerned will reckon in other income. The government subsidy without routine activities concerned will
count in non-operating income. The discount interest funds will appropriate to the Group by the Finance, the correspondingly
discount will be written down by relevant borrowing expenses by the Group. After re-organizing the government subsidies from 1
Jan. 2017 to the implementation of above mentioned rules, the government subsidy with routine activities concerned since 1 Jan.
2017 will re-classified to “Other income” and “Financial expenses” from “non-operating income”. In the period, “other income” has
increased 7,958,493.67 Yuan, the “financial expenses” has 179,700.00 Yuan declined and “non-operating income” has 8,138,193.67
Yuan decreased.
In line with the above mentioned regulation, the content listed under items of “Other income”, “Financial expenses” and
“non-operating income” from January to June of 2017 will be adjusted, however, the adjustment has no impact on the consolidate
and net profit of the Company and consolidate and shareholder’ equity( from January to June 2017), and there are no retroactive
adjustment for the comparative data.
(2) Particulars about retroactive restatement on major correction for accounting errors in reporting period
□ Applicable √ Not applicable
There is no particular about retroactive restatement on major correction for accounting errors in reporting period
(3) Particulars about the change of consolidation range compared with the accounting report of last year
√ Applicable □ Not applicable
Changes of consolidation range found more in annotation VIII
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